The Los Angeles Times ran a great series last week called "Shedding Risk" in which it detailed through compelling human stories the erosion of the health insurance market. It’s definitely worth finding the time to read.
Matthew has talked about this eroding model for a while, including in a speech about three inconvenient truths that he gave to health plan executives in March.
Here are four key paragraphs from the first article in The Times‘ series to give you a sense of the articles:
At the heart of the problem is the clash between the cost of medical care and insurers’ need to turn a profit.Today, four publicly traded corporations — WellPoint Inc., UnitedHealth Group, Aetna Inc. and Cigna Corp. — dominate the market, covering more than 85 million people, or almost half of all Americans with private insurance.On Wall Street, they showcase their efforts to hold down expenses and maximize shareholder returns by excluding customers likely to need expensive care, including those with chronic diseases such as asthma and diabetes. The companies lobby governments to take over responsibility for their sickest customers so they can reserve the healthiest (and most profitable) for themselves.Meanwhile, insurance premiums are becoming a heavier burden on employers, many of which say that rising healthcare costs cut into their ability to compete and, in some cases, to survive.
Here are Matthew’s three inconvenient truths to the insurance execs:
First, you’ve done very, very well for the past several years. But
the chances that you will be able to keep running your businesses in
the same manner in a decade or so are very low. In fact if you keep
running your businesses the same way the chances are good that you
won’t be in business. That may not matter to those of you close to
retirement, but it probably does matter to everybody else.
Second the world is changing under your feet, and if you intend to
be a health insurance company that contributes value to society, you
have to understand the changes that are happening in that wider
society. I’m not just talking about American Idol and the ability to
track minute by minute developments in the life of Lindsay Lohan,
although of course that’s a crucial component of societal change. I’m
talking about the significant advances in technology and business
leading to significant changes in the way we purchase, consume
and—yes–produce health-care services.
Third, I’ll tell you some potentially good news. Although I’m
essentially on the same speaking circuit as the Liberals who think that
Hillary Clinton is too right wing, I’m here to tell you that there is a
role for an intermediary between the consumer and the healthcare
system, and that intermediary need not be the government. That’s
because, if the right incentives are created, healthcare organizations
— on both sides of the payor – provider divide — can substantially
add value to society, by improving the healthcare delivered and the
health outcomes produced at a substantially lower cost. But this is
only good news if you’re prepared to fundamentally change your
organizations, so that, when society finally demands better performance
from its healthcare system, you are ready.