Insurelane Insurance Blog

One of CIGNA Healthcare’s top executives has called for greater access to healthcare information for consumers. Joseph Gregor — the general manager for CIGNA in Western Pennsylvania and Ohio — said that the American healthcare system was “in crisis,” and claimed that creating savvier healthcare shoppers could help fix the problem.

“We've insulated consumers from health-care costs,” said Mr. Gregor, referring to the practice of health insurance companies and care providers treating the actual costs of health procedures as secret. “As a result, they've consumed a whole bunch of it.”

Supporters of price transparency claim that giving people access to information about price and quality will bring market pressure to the healthcare system — which will increase overall quality and lower cost.

As an example, Mr. Gregor said that someone needing a non-emergency appendectomy should be able to easily determine “who does it well and what it costs.”

For now, CIGNA is attempting to create more transparency for pricing of “high-variable cost” procedures. These procedures include MRIs, which can vary in cost by as much as 300% from one care provider to another.

Mr. Gregor also called on insurance companies to take a more active role in providing their members with “health coaches” who can give personalized information about health risks and treatment options.

“(W)e must reach into people’s lives sooner,” said Mr. Gregor.

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After Hurricane Katrina ravaged the Gulf coast states last year, nearly $40 billion in insurance claims were made by home and business owners in the devastated areas.

But in spite of the news coverage over some litigation suits, almost all of the insurance claims were paid and settled without dispute. Of the 1.7 million claims made after Katrina, less than 2% were brought to court.

“Insurance companies strive to settle claims without any disputes with their customers. And the record is clear that in the overwhelming number of cases, that is exactly what happens. They are routinely settled by adjusters with policyholders at the scene without the involvement of attorneys or engineers in a courtroom,” Dr. Robert Hartwig testified to the U.S. House Financial Services Committee’s Subcommittee on Oversight and Investigations. Dr. Hartwig is the president and chief economist of the Insurance Information Institute.

Now insurers are stepping up to more quickly make claims and better reach their policyholders. Insurance companies are increasing the use of global positioning systems (GPS) to more accurately assess damages, and they’re also making claims processing procedures more efficient.

But hurricanes are predicted to become more frequent and severe, and insurers have responded by drastically raising insurance premiums in hurricane risk areas. It’s forcing coastal states to take action to help bring down rates. Many states are taking on the financial responsibility of insuring their residents — as seen in Florida’s Hurricane Catastrophe Fund — and by ensuring that buildings are built to better withstand heavy storms.

In the closing of his testimony, Dr. Hartwig concluded:

“The insurance industry is committed to working in partnership with public policymakers, consumers and business in developing fact-based solutions to the formidable challenge posed by Hurricane Katrina and other disasters, and to continuing our tradition of helping families, businesses and communities wherever and whenever disaster strikes.”

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