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POLICY/HEALTH PLAN: Yin and Yang – The wonderful world of health insurers

To find my mots de raison today, you’ll have to click over to Spot-on where I’ve been intruiged by the little legal challenges that Wellpoint’s now facing and spent some time thinking about Yin and Yang – The wonderful world of health insurers. Going back to read The Soul of an HMO article was indeed a trip in more ways than one.

As ever you can come back here to comment.

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Tom LeithG. Leo DuMouchelMatthew HoltspikeG. Hinson, MD Recent comment authors
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Tom Leith
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Tom Leith

Matthew: kudos on the Spot On article. Really terrific. > But we need an objective party to do [managed care] Maybe that’s the role of the regional Quality Improvement Organizations in the future. > The other problem is, we’re a splintered bunch This is what I have wanted The Guild to address. Every doctor knows some other doctor who really ought to be in a different line of work. A well-functioning, un-splintered Guild could address this quietly, protecting everyone’s interests, not least this doctor’s (former) patients. But we have only half a Guild. > Now it is Medicare’s burden and… Read more »

G. Leo DuMouchel
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G. Leo DuMouchel

I’ve been keeping track of health insurer/managed care company financials. The data are from their Annual Financial Reports. As you will see, there has been a tremendous decline in medical costs as a percent of premium and consequently a significant rise in operating margins for health insurers. This is the result of two interrelated factors: 1. Adjusted for acquisitons, UHC and Aetna have significantly reduced their membership from 2002 levels; 2. Trend in states without a large not-for-profit competitor remains in the 12% to 16% range despite medical costs rising annually below 8% in recent years. The recent surge in… Read more »

spike
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spike

I agree that not being sued is a main motivation of HMOs, and so is saving money, but I don’t necessarily see those as bad things. My Managed Care experience comes in the behavioral health sector, where discharging a patient early can result in a suicide. Those are not pleasant lawsuits. But, if the HMO denies care on a patient who later commits suicide, they are liable, so they have to balance the risk with the cost of another day in the hospital. I guess my point is that you talk about risk management like it’s a bad thing, when… Read more »

Matthew Holt
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Matthew Holt

GH. You are totally right >It is probably best left in the hands of a group of expert physicians and public health officials who do not profit from billing for medical care and do not profit from denying medical care and are, instead, salaried to be stewards of evidence-based medicine and best practices. And they have that in the UK. It’s a political process, but no one is accusing NICE of being in it for the money. But in Mass you don’t (yet) have the risk pools you ened because it’s only a real risk pool when you force EVERYONE… Read more »

G. Hinson, MD
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G. Hinson, MD

HMOs manage care according to 1) the balance sheet, 2) science which justifies the balance sheet, 3) the legal department, so as not to hurt the balance sheet, and then 4) other science. Most doctors manage care with the following considerations in mind: 1) what is best for the patient, as long as it does not increase the risk of being sued and is modestly reimbursed, 2) what is best for the patient, 3) what course of action would best protect against a lawsuit, and 4) what reimburses the best. It’s not just that the HMO #1 consideration is often… Read more »

spike
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spike

But you can’t ignore how much the bad press from the ’90s went towards ending the quality care movement. Matthew has that exactly right. “John Q”, “As Good As It Gets”, etc. all villified HMOs for relying on things like science instead of dreams. Approving (and informing doctors of) best practices was great until an HMO told somebody with terminal illness that they wouldn’t pay for a treatment with anecdotal, but not scientific, evidence of its effectiveness. Then all of a sudden it was the big bad HMOs trying to kill people. The reason why HMOs don’t manage care anymore… Read more »

G. Hinson, MD
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G. Hinson, MD

You have to ask yourself, what motivates a health insurer? Does the health of its members motivate it? No. Is it a sense of fairness to its subscribers? No. Health insurance companies are no different than the corner laundry. As a business (not-for-profit or for-profit), it is motivated to take in as much more in premiums than expenditures as it possibly can. Period. Matthew talks about insurance companies as though they have an obligation to the nation’s wellness. They do not (or at least they do not believe the same), no more than the corner laundry has an obligation to… Read more »

Peter
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Peter

In 2005 the reality of medical insurance providers became quite clear. That was the year that I actually needed my insurer, which was BCBS of North Carolina. I required two cataract operations and attempted to understand my out-of-pocket expenses prior to the surgeries. BCBS would not divulge my net costs, that was just the start. The quote I got from University of North Carolina Hospital was only the full retail cost which was $8500 per eye, out-patient clinic. So much for consumerism solving heathcare costs. Anyway I decided to get the surgeries done in Canada for $2500 US$ per eye… Read more »