State may outsource health plan

Private firm might take over management of care plan

By Adam Wilson | The Olympian • Published December 04, 2008

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State employees' favorite health insurance plan will move to private management next year, which the Health Care Authority says will entice more doctors to accept it.

The Uniform Medical Plan is the most popular among public employees, covering 181,000 people across the state and 25,000 in Thurston County. Not coincidently, it also has the lowest monthly cost to employees: $82 for full-family coverage.

The plan is based on a network of health care providers who agree to accept a flat payment rate set by the Health Care Authority, which runs the plan.

'Make it better'

Authority Director Steve Hill said it's increasingly rare to see such a government-run insurance plan, and he wants to contract with a private company to oversee all of it.

"Our goal is to make it better. And we have very specific goals about what 'better' is: a better cost trend; a better, more complete network; better consumer engagement; more tools available to plan members," Hill said.

He noted Harrington Health, located in Bothell, handles much of the plan's operations already, including appeals from customers.

Request for bids

The state requested bids this week for a four-year contract to administer the entire program, including recruiting health care providers to accept the plan.

Instead of using the flat-rate system, the contractor would also negotiate with individual hospitals and doctors over what the plan will pay for their services. And it would engage customers in improving their health, such as offering tips to control high blood pressure.

The idea is to attract one of the big businesses in health insurance, such as Aetna and United Health Care, which can offer their own call centers and larger lists of participating health care providers, Hill said.

"I think we're at a big disadvantage in terms of the network, in terms of being able to communicate around this consumer-awareness, wellness-awareness capability that these big plans will bring to the table," he said.

Sending management to a private company should expand the number of providers in the network, but should not change the premiums, co-pays and deductibles of the plan, said Greg Devereux, executive director of the Washington Federation of State Employees.

"If for some reason, long term, the cost was driven up by greater access, we would not support it. But I don't see that happening," he said.

The proposal would mean sending work now done by state workers in Seattle to the winning bidder on the contract, Devereux added.

"There's some advantages to it, because it would give far more access to more providers to state employees," he said. "At the same time, we represent some of the employees that would be affected, so we want to make sure they're protected."

The state hopes to name a winning bidder for the Uniform Medical Plan contract by April.