Tuesday, March 21, 2006

Economic Indicators

Transparency isn’t always about providers. For example, Washington (the state, not the city) is about to implement a new financial information law. Set to take effect this June, the new law requires the insurance commissioner to put together a database of health insurers' financial information. The twist: the database will be web-accessible.
So what info will be included? Everything from medical loss ratios to administrative costs, including average premiums per member per month, financial surplus levels and profit margins. Pretty comprehensive.
Is this an idea whose time has come, or a debacle in the making? I would say somewhere in the middle: for one thing, it will make it harder for carriers to "poor mouth" in their bids to raise rates or cut reimbursements. On the other hand, there are certainly intangible factors at work in the marketplace, which this new tool won't be able to quantify.
It will be interesting, too, to see if (when?) other states follow Washington's lead.
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