Insurers see veterans' care as growth business

Health plans are positioning for government contracts to provide mental health care and other services to a growing number of wounded soldiers and their families.

By Emily Berry, AMNews staff. Dec. 10, 2007.

When Health Net held a conference call to discuss its third-quarter earnings, investment analysts pointed out one particular growth industry -- covering mental health services for military members and their families.

Health Net President and CEO Jay Gellert agreed. He called the demand, fueled by the large number of Iraq and Afghanistan war veterans, a "positive surprise, which I think we anticipate to be ongoing."

By "positive," Health Net spokeswoman Margita Thompson said, Gellert meant the business is good for the company. "We want to be in a position to help the returning military members who need these necessary services," she said.

Health Net isn't the only insurer looking at the growing number of returning veterans as a business opportunity, although plans take pains not to sound like they are coldly profiteering on a potential market of thousands of wounded and their families.

Like Congress, the Dept. of Veterans Affairs and the Dept. of Defense, insurers are adjusting to veterans with needs that surpass those of other wars. "We probably have never been in a circumstance like this before," said Steve Tough, Health Net's president for federal health services.

Mary Helen Davis, MD, a member of the board of trustees for the American Psychiatric Assn., said the government is increasingly going to rely on private plans because "I think the [veterans' health] needs are tremendous, and I think they have probably been grossly underestimated."

She and health industry analysts say it is not yet clear what effect the private plans' greater interest in military care will have on physicians, though no improvements in payments are expected from a Tricare and VA system that Dr. Davis said is notorious among doctors for its low reimbursement and bureaucracy.