Louisiana Health Insurers Face New Challenge Post-Katrina
There's an interesting story today over at the Insurance News Network, regarding the daunting task ahead for insurers in hurricane-ravaged Louisiana. Only this time, the spotlight is on the health insurance industry, not the property and casualty folks.
The daunting task? Rebuilding provider networks after losing thousands of members in the wake of hurricanes Katrina and Rita.
Most hospitals in the flooded portions of Louisiana still haven't reopened and many healthcare providers evacuated the state along with the rest of the residents, reports the INN, which has caused a "chicken and egg" situation for the Louisiana health insurance industry.
"If you don't have the membership, it's hard for you to build the network," says Michael Taylor who works for Towers Perrin, a management consulting firm.
Among the list of challenges, Taylor says that renegotiating physician contracts is one of the largest problems—the physicians who have stayed in the area will likely charge higher fees to compensate for seeing fewer clients. And then there are the expenses that come with opening a new office.
The INN article seems to underscore that the businesses just can't get a leg up in Louisiana. And while this may seem disconcerting, I remain impressed with the stamina and level of commitment of residents to get their communities back in order. I'll be interested to see when and how these communities rebuild their infrastructures, and how insurers cope with the new reality in the Gulf States.
