PELA’s 2001 annual conference was a great success. “Perspectives” was the theme and there were a lot of them! The Provider Perspective – The Decision Making Process in Purchasing Insurance The conference opened with a lively discussion of several points of view – MGU, Provider, Consultant and Broker. Leading the discussion was Richard Twomey, Director, Healthcare Provider Products, R.E. Moulton, Inc. with support from the remaining panel members Michael Cotton, MBA, President and CEO Mid Valley CareNet; Clifford Frank, President Healthcare Management Solutions, Inc. and Chuck Newton Vice President Evergreen RE.  The discussion centered on what makes a successful carrier/provider relationship. Mr. Cotton and Mr. Frank suggested that we would be better underwriters of this class of business if we took the time to understand the providers and their ability to manage care. Mr. Frank commented that the “implementation (visit) is too late” to meet the client and needs to happen much sooner in the process.

Perspectives and Challenges in the Prescription Drug Marketplace Bart Francescone, Executive Vice President, BeneCard followed with a staggering update on drug trends. Marketing directly to the consumer, drug companies are creating solutions to problems aging baby boomers never realized they had – such as a drug to treat yellow toenails (and the scary fact that people are buying it!). Pharmacists are put in uncomfortable positions as the messenger between the doctor and the patient. In addition, some drugs are catastrophic in their costs running as high is $85,000 –$100,000 per year. The costs for yet to be developed genetic drugs is unpredictable, and may hold little future relief. 

Mr. Francescone suggests that we differentiate between “what we can control and what we can’t”.  We then align incentives for those drugs we can control (higher copes for “lifestyle drugs, widening the spread between generic and brand drugs, etc.).

Latest Developments in External Review Winifred Hayes, PHD – President and CEO, Hayes, Inc. and Hayes Plus, Inc. educated us on external reviews from both a patient satisfaction and a legislative point of view. 40 states have external review statutory mandates and the Federal legislation is pending. Dr. Hayes reviewed the differences between evidence based, criteria based and opinion only reviews and how they affect validity of the review.

Catastrophic Claims Incidence Kathleen Tottle, F.S.A, M.A.A.A.A, Consulting Actuary, NiiS/APEX Group Holdings, Inc. tested our knowledge on catastrophic cases. Her test illustrated just how fast the distribution and frequency of high dollar claims is changing. One of the challenges the PELA market faces is how to develop new approaches on how to forecast and then manage catastrophic claims.

Provider Excess – A Reinsurer’s Perspective Our first day concluded with Todd Gallitz, Vice President, Underwriting, American Re-Insurance Comp giving a “reinsurer’s perspective” on the PELA market and why they are in it. His informative discussion quantified the PELA market at between 300-400 Million. He talked about the difference between rating and underwriting and how that difference could affect the profitability of a carrier.

E-Commerce and Its Impact on the Industry Gary Marx, Managing Director, New World HealthCare Solutions kicked off Day 2 of the conference with a vision of how E-Commerce impacts the PELA industry. Mr. Marx introduced iHealth – innovative evidence based disease management company. With this presentation we got a glimpse into how health care will be distributed and managed in the future.

Compliance Update Ginny McHugh, President, McHugh Consulting Resources, Inc. updated us on the regulatory issues facing the PELA industry today. Compliance is a major issue for the PELA industry with issues ranging from “is it A&H or P&C” to privacy concerns to HIPAA. Interesting and informative, her presentation was one we all shared with our compliance staffs.

We’re Still Talking About the Policy Form? We finished our morning with two consultants from NiiS/APEX Group Holdings, Inc., Adria Garneau, CEBS, Senior Consultant. and Stephen Murphy, Senior Vice President leading an informative discussion on the policy form and its impact on claims. Stressing the importance of detailed definitions of tems such as per diems, global transplants, reported claims, filed claims. The theme was “address it now or deal with it later”.

PELA Industry Issues – Open Forum Back again from last year, was the open forum for PELA industry issues. This discussion, lead by Cathryn Sussman, Account Executive, Allianz Life was a  chance for PELA members to voice their opinions and get their questions answered. We discussed such issues as the impact of prescription drugs, hardening of the market, future of capitation, and new products on the market.

Trials and Tribulations – A Government Contractor in a Management Care Environment Next on the agenda was Executive Director, Finance,Access Medical Group, Edwin Osborne’s interesting description of HMO insolvencies and the surrounding regulatory environment. He spoke of the challenges Medicaid HMOs face in meeting State requirements and staying solvent.

The PELA Marketplace – A Broker’s Perspective Our conference closed with Mark Angaard, Senior Vice President, Towers Perrin Reinsurance, giving a broker’s perspective on the PELA marketplace. For detailed information on this perspective see Mr. Angaards article in this edition of the PELA Reporter. 

In addition, Mark showed us the results of the Towers Perrin study on PELA and capitation. According to their study roughly 80% of this market is driven through brokers. The 2001 PELA conference was one of best-attended and informative conferences. Our goal is to enhance the skills, effectiveness and professionalism of the insurers involved in the PELA market. 

Thank you to all our sponsors who made this conference happen. American RE HealthCare continued their generous tradition of sponsoring the Annual Golf Tournament. NiiS/Apex Group Holdings once more sponsored the Welcome Reception on Sunday evening. Evergreen RE sponsored our dinner Sunday night and R.E. Moulton and Chubb Executive Risk provided breakfast each day.  Once again the board would like to extend a very special thanks to Dorothy Gasparro of HR Options who successfully produced another great conference.

The PELA Board wants to thank all of the speakers and attendees for making this conference a valuable interaction.