New insurer emphasizes efficiency, preventive care

Family Health Hawaii, the newest insurance company to enter the local market, will offer both lower premiums and superior benefits compared with existing carriers, according to Hawaii’s former insurance commissioner J.P. Schmidt. The founders intend to provide a better product particularly suitable for Hawaii’s small businesses. Their strategy emphasizes preventive medicine, well-coordinated integrative services and a highly efficient administration.

Summerlin was the last carrier to come to the islands and created healthy competition with Hawaii Medical Service Association, Kaiser, University Health Alliance and Hawaii Medical Assurance Association, according to Schmidt. Summerlin’s presence placed downward pressure on the cost of insurance and caused existing carriers to enhance service. After building a solid book of business, it sold out to HMAA.

The founders of Family Health Hawaii have brought on Schmidt as CEO to run a lean organization that will minimize administrative costs and help keep premiums under control. Over time, insurance companies tend to accumulate legacy costs from dated structures and processes. The resources needed for remediation can outweigh the resulting benefits of enhanced efficiency. The key is to establish efficient operations from the beginning. During Schmidt’s tenure as insurance commissioner from 2003 to 2010, he learned a great deal about what makes or breaks an insurance company. Not only did he oversee the launch and sale of Summerlin, he also facilitated the rehabilitation of UHA, which enabled it to regain a solid footing in the market rather than face liquidation.

The new plan also will distinguish itself with an emphasis on preventive services. The Affordable Care Act already mandates that plans across the board offer certain screening tests without charging a deductible or copay to encourage plan participants to use these services. Although all local carriers cover preventive services, Family Health Hawaii is proposing a unique system for predictive modeling that aims to catch medical conditions early. Family Health Hawaii is dedicated to prevention because it is good for both the patient and the plan, according to Schmidt. 

Family Health Hawaii also will cover acupuncture, chiropractic, medical massage and naturopathy.

“We believe that properly utilized, these professional health services support the goal of preventive care and effective disease management,” Schmidt said.

Although such services are covered by some of the other local plans, reimbursement for providers is typically meager. Family Health Hawaii reportedly appreciates the potential for integrative medicine to optimize health and reduce costs. The new plan regards these services as inherently valuable and not simply a marketing tool.

If this proves true, it might very well mean a paradigm shift toward comprehensive, integrative health care that brings together the best of modern medicine and traditional healing arts, with cultural sensitivity employing a whole-patient approach.

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Ira Zunin, M.D., M.P.H., M.B.A., is medical director of Manakai o Malama Integrative Healthcare Group and Rehabilitation Center and CEO of Global Advisory Services Inc. Please submit your questions to info@manakaiomalama.com.