New post‐ACA insurance data highlights health insurer spending on health care quality

• DOI: http://doi.org/10.1111/rmir.12144
• Published date: 01 June 2020
• Author: E. Tice Sirmans,Petra Steinorth
• Date: 01 June 2020

Risk Manag Insur Rev. 2020;23:209–218. wileyonlinelibrary.com/journal/rmir

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209

Received: 8 September 2019

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Accepted: 13 April 2020

DOI: 10.1111/rmir.12144

DATA INSIGHTS

New post‐ACA insurance data highlights

health insurer spending on health care quality

E. Tice Sirmans

1

|Petra Steinorth

2

1

Department of Finance, Insurance, and

Law, College of Business, Illinois State

University, Normal, Illinois

2

Chair of Risk Management and Insurance,

Hamburg Business School, University of

Hamburg, Hamburg, Germany

Correspondence

E. Tice Sirmans, Department of Finance,

Insurance and Law, College of Business,

Illinois State University, Normal, IL.

Email: etsirma@ilstu.edu

Abstract

Following the Patient Protection and Affordable Care

Act (ACA), annual financial reports by commercial

health insurers include more detailed information on a

Supplemental Health Care Exhibit. In this new exhibit,

insurers illustrate spending on the provision of medical

services and associated expenses. These expenses, which

were commonly reported as “claims adjustment”and

“general administrative”expenses, can now be allocated

to several new categories of expenses associated with

combatting fraud and improving patient health care

quality. This article illustrates that quality improvement

expenses have increased significantly in the individual,

small group, and large group markets following im-

plementation of the ACA. Of the five types of quality

expenses reported, the greatest proportion of spending

has been toward the improvement of health outcomes

and the most pronounced increase from 2011 to 2017

has been spending toward increased wellness and

health promotion activities, which include activities

such as wellness assessments and coaching programs for

patients with chronic diseases. Given that the ACA was

designed not only to broaden access to health insurance

but also to improve health, analysis of the allocations

to various types of quality improvement activities

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© 2020 The American Risk and Insurance Association

Abbreviations: ACA, Patient Protection and Affordable Care Act; MLR, medical loss ratio; QIE, quality improvement

expenses.