Summer Intern Steven Aslin ’18 drafts contracts at UW Medicine Department of Contracts and Payer Relations

The dynamic web of logic and precedent that holds the fabric of our country together, law, has always interested me. I love a good dose of discourse and will argue about anything –so hey, perfect lawyer material!  This inclination led me to Matt Lund, the Director of Contracting and Payer Relations at UW Medicine.  Over a cup of coffee we discussed the flexibility of a law degree, my aspirations, and Matt’s transformation of Assistant Attorney General turned heath care contract warrior.

IMG_0055We determined that an internship at the UW Medicine Department of Contracts and Payer Relations suited my goals. Since starting this summer, I’ve observed the intersection of law, business, and healthcare firsthand amidst unprecedented change within the health care industry, which is moving toward value-based health care.  Previously, the standard for health-care reimbursement was “fee for service” (FFS): hospitals would bill insurance for a service, and the insurance company would cover a previously-agreed-upon portion of the cost. That model worked well for insurance companies and care providers but was only sustainable if all patients had insurance.  In reality, not all patients do, which creates cost inflation that hurts those without insurance the most.

Imagine that a patient with insurance has a knee surgery. The bill shows that the procedure cost 15K and the insurance company paid 14.5K, leaving a $500 co-pay.  Great! The patient pays the $500 and goes on their merry way with a new knee.  However, behind the scenes, “repricing” occurs, which reflects the insurance company’s assessment of how much the surgery should have cost and how much they can pay.  Their calculations, based on national averages, often produce lower overall prices than what the bill listed.  For our hypothetical knee replacement, the insurance company decides it should only cost 9.5k and pays accordingly, leaving the hospital without some of its anticipated money. This system is great for patients with insurance and financially challenging for those without, who in this scenario would pay $15k out-of-pocket without the benefit of re-pricing, either.

The patients who cannot afford insurance cannot afford to pay 15K, so the hospital would eat the cost of this kind of surgery, which causes the hospital to raise prices to compensate in a vicious cycle. Costs go up across the board, fewer people can afford insurance, more people need healthcare that cannot pay, and the amount a hospital must bill keeps rising.

In 2010, the cost-inflation cycle was out of control.  Private insurance was expensive, government medical assistance programs were underfunded, and medical costs for those without insurance were ridiculously high.   These problems were a public health issue because they inhibit preventive medicine for the most at-risk population: people of low socio-economic status. The Affordable Care Act (ACA), passed in 2010, sought to move the healthcare system from a FFS model to a Capitated Payment Model, where a health care provider receives X number of dollars to care for Y number of people in Z community.  This system is supposed to drive medical providers to provide high-quality care while maintaining a cost-effective system. The ACA also helps uninsured individuals by financially bolstering government assistance programs.

My internship, which has been both challenging and rewarding, exists at the heart of this chaos.  The UW Medicine Contracting and Payer Relations Department oversees the legal contracts, contract negotiations, and communications with the insurance providers of UW Medicine.  This means we draft new contracts to fit the new system. I shadow Matt every day during  discussions. I also review contracts, conduct legal research, and draft letters to insurance companies.  My most recent project was a business analysis about compliance regarding UW Medicine’s contract with Premera Blue Cross. The hardest part of this work is probably the healthcare vernacular: there are acronyms for other acronyms!

The most important thing I have learned is that despite all of the administrative policy, facility reforms, and executive leadership, the patients come first.  At Harborview Medical Center, the patients are not the healthy models in AIG commercials; they’re often downtrodden and struggling through difficult times.  It has been sobering, uplifting, and inspiring to be a part of an organization that deals with millions of dollars’ worth of business but remains dedicated to the underserved.  I am inspired every day by the people who I work with and who I work for.  I am a Whittie at heart, but this summer I am proud to say, “Go Huskies!”

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