Former Republican Senator Dave Durenberger was always the sensible Republican on health care. He now hangs out in a small institute called the National Institute of Health Policy at a small Minnesota college called the University of St. Thomas. Every so often he puts out great commentary emails. His most recent one contains a really a great description of what happened to health insurance in the late 1990s. You can sign up here. Well worth a read and I’ve reprinted the part about insurance below—Matthew Holt

I’ve watched the ups and downs of health insurance products and “markets” since involving myself as an employer in the 70s in a community-wide effort by large employers to provide employees with a choice of health insurance plans, including the nascent HMO. Our goal was reducing health care costs through informed employees and accountable health plans, creating, in effect, new forms of insurance and competitive markets for insurance and medical services at the community level by using available information and consumer choices to facilitate behavior change.

While experiments like this across the country have been tried with varying success, we are now on the verge of doing a “back to the future” adaptation of our lessons learned. The health reform law (ACA) provides for state-based health insurance regulation, health insurance exchanges and a new emphasis in assisting “smart buys” by employees. Recall what happened to the HMO: It became large national “managed care organizations” like UnitedHealth Care (UHC) who lost community support for their behavior change because savings never stayed with those who earned them.

The success of privatization of the HMO and for-profit medical practice corporations like the PHO movement led many of the 80-plus old-fashioned non-profit Blue Cross Blue Shield plans to go public and sell their community trust to Wall Street short-term profit-takers. Then along came Pat Rooney with his Golden Rule individual indemnity plan and the medical savings account. He sold the idea to Republicans who needed simple solutions that fit with a belief in consumer choice and insurance markets and tax-spending, and to the solo practice AMA community that hated the prospect of informed consumer medical care policies.

As simple solutions to complex problems caught on, Pat sold Golden Rule to United HealthCare for $800 million, UHC and managed care companies began raising their prices back up to double digit annual increases, fought off competitive bidding for private Medicare, feinted at informed consumers with Definity models, and persuaded the Republicans in 2003 to pay them $1.13 on the $1.00 of traditional Medicare to provide beneficiaries with “private insurance.” It’s all in the toilet now that the prospect of real insurance competition is here.

Share on Twitter

1 Response for “Durenberger: Health Insurance Chickens Come Home to Roost”

  1. Ihsan Shanti says:

    “Durenberger: Health Insurance Chickens Come Home to
    Roost”
    [...] Former Republican Senator Dave Durenberger was always the sensible Republican on health care. He now hangs out in a small institute called the National Institute of Health Policy at a small Minnesota college called the University of St. Thomas. Every so often he puts out great commentary emails. His most recent one contains a really a great description of what happened to health insurance in the late 1990s. You can sign up here. Well worth a read and I’ve reprinted the part about insurance below—Matthew Holt[...]
    The Aetna Foundation announces its Call for Proposals focused on obesity, racial and ethnic equity in health and health care, and integrated health care.
    The Aetna Foundation awards grants totaling $250,000 to the Institute of Medicine and AcademyHealth to support racial and ethnic equity in health and health care.
    For more information visit My social Bookmarks:-
    Dr.Ihsan Shanti Facebook
    Ihsan Shanti WordPress
    Ihsan Shanti MD 123People
    Dr.Ihsan Shanti MD Linkedin,
    <a href=Ihsan”>http://www.siliconindia.com/profiles/e7Z6Pzbr/ihsan__shanti_doctor.html>Ihsan Shanti Siliconindia
    Ihsan Shanti Md HealthCare
    Dr.Ihsan Shanti Vital
    Ihsan Shanti MD Doctor

Leave a Reply

FROM THE VAULT

The Power of Small Why Doctors Shouldn't Be Healers Big Data in Healthcare. Good or Evil? Depends on the Dollars. California's Proposition 46 Narrow Networking

Masthead

Matthew Holt
Founder & Publisher

John Irvine
Executive Editor

Jonathan Halvorson
Editor

Alex Epstein
Director of Digital Media

Munia Mitra, MD
Chief Medical Officer

Vikram Khanna
Editor-At-Large, Wellness

Joe Flower
Contributing Editor

Michael Millenson
Contributing Editor

We're looking for bloggers. Send us your posts.

If you've had a recent experience with the U.S. health care system, either for good or bad, that you want the world to know about, tell us.

Have a good health care story you think we should know about? Send story ideas and tips to editor@thehealthcareblog.com.

ADVERTISE

Want to reach an insider audience of healthcare insiders and industry observers? THCB reaches 500,000 movers and shakers. Find out about advertising options here.

Questions on reprints, permissions and syndication to ad_sales@thehealthcareblog.com.

THCB CLASSIFIEDS

Reach a super targeted healthcare audience with your text ad. Target physicians, health plan execs, health IT and other groups with your message.
ad_sales@thehealthcareblog.com

ADVERTISEMENT

Log in - Powered by WordPress.