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Tag: Insurers

The Public Plan–Mutual Assured Destruction?

6a00d8341c909d53ef01157023e340970b-piI typically don’t talk about my travels on this blog but something happened this week that bears reporting.

Whether
the federal government should or should not offer a public health plan
alternative to compete with private insurers in the under-age-65 market
is a hot topic in Washington and in the market.

I recently posted on it in detail: The Public Plan Option for the Under-Age-65 Market—The Biggest Health Care Controversy on the HillThis
past week I met separately with two health insurance CEOs—both
well-known leaders in the business and both from highly regarded
not-for-profit plans.

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The Biggest Health Care Controversy on the Hill

Capital

Since when was a two-tiered health insurance system a Democratic policy goal?

Among Democrats in the Congress and at the White House there is a great deal of interest in creating a government-run health plan in the under-age-65 market. Such a plan would compete with the existing private health insurance market in a head-to-head showdown between private and public health insurance.

Such a plan was part of the President Obama's campaign health proposal—albeit limited to the small employer and individual market. We are told the President’s greatest interest here is in “keeping the private health insurance market honest.” That is, creating competition in order that private insurers do a better job of controlling costs.

While
most observers assume that this would mean paying providers at
Medicare—or even Medicaid—rates the administration says not necessarily.

The respected and non-partisan Lewin Group recently issued a report evaluating the idea, “The Cost and Coverage Impacts of a Public Plan: Alternative Design Options.”
It looks to me to be a credible job. They made the assumption providers
would be paid at Medicare rates—a logical conclusion if the objective
is lowering costs.

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Herzlinger–Enthoven was right all along

In a blog piece called Why Republicans Should Back Universal Health Care Regina Herzlinger says something that I more or less agree with. Switzerland’s system isn’t a bad option. Neither for that matter is Holland’s. Now of course Maggie Mahar has debunked Herzlinger’s notion that there isn’t state regulation of insures and providers in those systems. And Regi also talks a lot of tosh about Medicare, the UK and the evils of the government in the same piece. But I guess she feels she has to do that to keep whatever’s left of her audience (that would be the four Republicans who care about health care, rather than the health care business types who have moved on in pursuit of who now holds the purse strings).

But I’m just left with one little question. Where’s Herzlinger’s mea culpa to Alain Enthoven? After all he’s been promoting the Dutch answer (he basically designed it) since 1978 or thereabouts. And I don’t recall Herzlinger mentioning that in the numerous times she’s been slamming managed competition and its father.

Kaiser Permanente CEO George Halvorson on reform and life after IT

http://vimeo.com/4039344?pg=embed&sec=George Halvorson is the CEO of Kaiser Permanente, and the driving force behind both the HealthConnect EMR implementation and a national player in the health reform debate. I got to talk to him at HIMSS where he’d just finished giving the Monday keynote. We discussed KP HealthConnect, and the impact it’s having internally (good), why KP is making such a high-profile fuss about it (no, they’re not planning on expanding nationally or internationally), what AHIP and the insurers might face in the future (a choice between Canada and Switzerland), whether chronic care management can work without integration (he says yes), and whether the big guys will cast the smaller insurers adrift. You’ll have to watch for that answer.

Glen Tullman, CEO of Allscripts

Glen Tullman, Allscripts CEO is one of the more charismatic, opinionated and politically connected players in health IT. I grabbed a few minutes with him at HIMSS 09 on how he’s positioned Allscripts to be a survivor in the coming consolidation, why he likes CCHIT (he’s a happy cat!), if SaaS (and AthenaHealth) is a real threat, and whether his buddy Barrack Obama (for whom he was on the original fundraising committe) is going to whisk him off to DC any time soon…. 

So what’s the real usual, customary and reasonable price of care?

The Ingenix mess apparently won’t go away. Sen. Jay Rockefeller is now going after the health plans for using Ingenix’ database. Ingenix and some of its customer health plans have already settled with several states, but apparently it’s not enough. Now Rockefeller is after them. And the words are tough. “Fraud”, for one.

Now, health plans don’t exactly have much credibility. And when the politicos find out that Ingenix a) sells tools to help health plans cram down the amount they pay providers, b) sells tools to providers to extract more money from health plans, and c) is owned by the biggest (and not too long ago) baddest insurer on the block, this may get a little more interesting. After all, it’s kind of an arms dealer arming both sides.

But there is one thing that troubles me. I’m quite prepared to believe that Ingenix’s view about what was UCR was different from the local medical society’s view of what was UCR, and therefore that the plans were “under-paying” the consumers and the doctors who serve them.

But let’s remember what Usual, customary and reasonable fees are.

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Will CIGNA Remake The Health Plan Marketplace?

ALP_H_BK_0010America’s health plans are floundering. If their job has been to provide the nation’s mainstream families
with access to affordable care (let’s leave quality out of it for the moment), they have failed miserably, though they were very profitable along the way, at least until Q1 2008. In 2008, the Milliman Medical Index – an estimate of the total cost for health coverage premium and out-of-pocket costs for a family of four – was $15,609. Now it is almost certainly above $17,000, more than the total income of more than one-third of American households.

To many health plan execs, these are simply market dynamics that must be accommodated through new product and service designs. I just attended a health plan conference where the overarching themes were the transition away from group to individual coverage, and the use of incentives and touch points like texting, email, and ergonomic Web interfaces to cultivate member competency, loyalty and retention.

There are important steps forward but, to me, the discussion tiptoed
around the more glaring problem – costs this high have exhausted many
purchasers’ ability to pay, and are rapidly shrinking health plans’ commercial market and profitability.

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Karen Ignagni lie of the day, part 68

6a00d8341c909d53ef0105371fd47b970b-320wiThe big insurers now seem to be doing anything they can to prevent a Medicare-equivalent public plan 
being launched to beat them up. Yes AHIP has apparently decided to throw the schlockmeisters off the boat, and more or less agree to end medical underwriting.

Those of you who listened to my interview with Tom Epstein of California Blue Shield will recall the cognitive dissonance he was suffering when he had to defend Blue Shield and other insurers’ behavior in the individual insurance market (hey, it’s the man’s job), while at the same time calling for policies that would essentially end the individual market and create a near-universal purchasing pool. By definition, that would require some level of uniformity of benefits and some risk-adjustment mechanism, and consequently it would put several currently profitable lines of insurers business out of business—yes I am talking about Tonik and Mega Life & Health among others. In general this might be a good trade for the bigger plans as they’d add a bunch more younger healthier lives at a higher price point (although what Wellpoint’s actuaries and accountants really think about it is yet to be determined—note their opposition to the similar ArnieCare legislation).

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Tom Epstein, Blue Shield of California, on the hot seat

A couple of weeks ago the PR company for Blue Shield of California contacted me asking if I wanted their take on health reform. I somehow suspect that the PR flack concerned wasn’t as familiar with the California rescission issue as I am, or hadn’t checked on THCB’s extensive coverage of it

But Blue Shield of California is an odd case. CEO Bruce Bodaken has been a leader among health plans in looking towards a regulated utility model, and supporting both Arnie-Care and now Obama/Baucus-care. On the other hand, as we’ve discussed numerous times on THCB, Blue Shield has not only been as bad as the rest in terms of bad behavior in the individual market–but has also been the most aggressive of all insurers in defending its right to that behavior in the courts.

Tom Epstein, is an old Clinton White House hand who’s now running Public Affairs at Blue Shield of California. Tom was brave enough to come on THCB, discuss the good, the bad and the ugly, be frank about what they want to happen and to forecast what he thinks might happen in terms of reform, and the potential role of health plans in it. Here’s the interview and I think you’ll find it very interesting.

A Sticky Solution to a Sticky Problem

“Don’t pull the knot tight,” the philosopher Ludwig Wittgenstein once warned, “before being sure you have got hold of the right end.” Those who hope to sort out the tangle of health care spending would do well to heed his advice.

Clearly, there’s been no lack of solutions put forward since the Clintons first put health care atop the national agenda more than a decade ago. But with health care spending still rising at twice the rate of inflation, few have made any real and lasting impact.

Employers (who still pay the lion’s share of health insurance premiums here in the U.S.) know, of course, that keeping employees from getting sick in the first place—and minimizing the severity and duration of their illness when they do—is the first step in reducing this unwelcome “growth sector” of our economy. They understand, for the most part, that healthier employees equal not only lower healthcare costs but reduced absenteeism and greater productivity for the economy as a whole.

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