A new report from the usually sensible Commonwealth Fund got lots of media attention this past week. The report –“Competition Among Medicare’s Private Health Plans: Does It Really Exist?” –quickly led to headlines like “Is private-sector Medicare becoming a monopoly? [PBS]” and “Robust Medicare Advantage competition almost non-existent [Modern Healthcare],” and “Health insurance is staggeringly uncompetitive in America, and is poised to get even worse for everybody [Quartz].”
It sounds like Medicare Advantage is headed for disaster, but is this really the case?
The Commonwealth report’s major findings are summarized in one sentence, likely the one that grabbed media attention: “Using a standard measure of market competition, our analysis finds that 97 percent of markets in U.S. counties are highly concentrated and therefore lacking in significant [Medicare Advantage] plan competition.”
Are the House and Senate giving us a false choice for how to control health care costs in Massachusetts? Aren’t there other options?
A few major themes have emerged from the two payment reform proposals and highlight the fact that they fail to align incentives for patients to be more involved in the purchase of their health insurance and their health care.
For example, even with full transparency of cost and quality (which is a huge lift on its own) for many patients, high-cost still correlates with higher quality in medicine. A recent report from Attorney General Coakley proved this theory wrong, but simply providing patients with cost data without placing the right incentives in their health plan to choose the low-cost high-quality provider will result in many selecting the most expensive care. As a result, these proposals will fall short of sustainably bending the cost curve.