A New Spin on an Old Theme..Health Insurance

The Sept 15 issue of Businessweek has a feature on healthcare. It’s called “Hospitals and Insurers Try Flat Fee – Again”. What is presented first is a maligning comment on managed care of the ’80s and ’90s. The unexplained complaints simply assume insurers are greedy, I suppose by denying subscribers their contracted benefits and in turn lousy healthcare as a result. I am assuming their explanation here. The idea proposed in the “new” plan, is very unclear as presented in this article. Example: in Massachusetts BXBS of Mass and Caritas Christi Health Care, the former an insurance company and the latter a healthcare facility/hospital, want to switch from insurance carriers paying hospitals for each service performed on a patient to flat fee per patient yearly, adjusted for age and illness. Now how would that actually work? Does the insurance pay this annual flat fee to a subscribing hospital at the beginning of each year for each pt who choses that hospital..meaning that the patient would have to go to that hospital if ill? Or if you break a leg does the insurance company pay a flat fee for a broken leg set? No matter if the cost of care should exceed this fee say if clot develops or some other complication occurs? The CEO of Caritas says by accepting a flat fee it will allow Cariras to offer cost-efficient care with an emphasis on preventing illness. Now just how would this work??? BXBS chimes in saying they can cut what they pay by 1/2 with flat fees.
Okay, so I see how if you tie the providing facility and the hands of providers down with a tested and found wanting contract, how the insurers would make more money. But does this even adequately support the healthcare facility and its many expenses in providing care??? Caritas claims it can be fair to patients and doctors with builtin safeguards to assure flat fees will please both. ….but the article does not explain how??? What kind of safeguards? None of this is explained. You cannot manipulate the true value of numbers… but I suppose you can hide their existance. One nonprofit executive says managed care is the only way to control costs. He states that the providers will have to work within the amount of money provided from flat rates each year. The resisters are stated to be the providers… that may be true but only specialists are singled out as the ones loathed to make the change because primary care would, I think, reduce the need for their services?? Is that true??? It is a question that needs answering, with proof, that is.
So then the article jumps off on the rise in the total cost of services blaming the rise on unnessary procedures just to pump profits.. What are these much maligned procedures and where is the evidence.? Seems to me that in this article there is no substance to back any of the accusations up… they may in fact be true but I certainly don’t see it. The article goes on to state that 1/3 of procedures are unnessary care. Oh really!!! And how is that??? And then they claim this produces quanity over quality citing incentives for docs and hospitals to produce more. This is a legitimate argument. But show how quality is compromised.
It seems that the safeguards set up in the new plan may be that the insurer pays a flat fee per patient and then walks away from the case. The docs and the hospitals can then order as many tests as they want (or as few), do as many procedures as they want or not..implying the quality of care will improve and waste will be reduced. This also elimnates the insurer bean-counters docs complain about so much in the current system. So, if the docs want more pay they will have to tighten their belt by eliminating services they may feel are necessary and of course those they are doing just to pump profits..and which services are those????. And here is the clinker: the undocumented assumption that quality will improve. It may indeed improve but there is no evidence in this article to truly support this, and the connections are not there. . Then bonuses will be given to those docs who come in under fees paid. Will care quality automatcially improve? Really? As for quality of care an example is given (a rather sideways one at best). It has to do w/ coronary bypass surgeries where the quality is measured by readmission rates. What?? That’s what they said!!! I find that connection bogus at best and mostly desperate.. In the example cited readmissions fell 44% under a capitation system where the insurer paid a flat rate for each operation. Well my question is does that number include those who didn’t make it (died) so were not around for readmission, and/or those who fell ill and were simply not readmitted and either got worse or better on thier own. If a hospital administator comes to a surgeon and says “You are readmitting too many of your cases, please stop or I may not be able to renew your contract in the future.”, what is likely to happen???? A no brainer!!!! Right? My hunch is the surgeon will think twice before readmitting. Do we really want this? And what about lab tests? Are unneeded test frequently ordered??? I don’t know. Surely in a teaching facility this is likely to happen. But this can probably be solved with centrally located electronic records, a much needed requirement in the healthcare industry. And did it occur to anyone that sometimes, I would guess often, tests are ordered to protect the doc against liability if a case doesn’t turn out well. I can just hear the mediocre attorney making a case out of “If only you had ordered a such and such test Mrs. Whoever would be with us today!!!” I doubt it would have much sway with a jury for the doc to defend himself/herself with a “The insurance wouldn’t pay for it” statement.
And finally the idea that fee for service fails to contain cost because it focuses on fixing problems instead of preventing them. And why do we continue to focus on illness and not prevention? This is a no brainer!!!! It is because illness is what comes the way of healthcare providers. The average person, and I include myself, simply don’t think about illness and prevention of much of anything when we/I are feeling well. Not smart I admit but healthcare only bubbles up to the surface when there is a problem. As I recall some managed care plans of the past, HMO’s, allowed for very low cost (to the subscriber) health exams and certain routine tests. It failed basically because of over utilization. Many more subscribers utilized this benefit than predicted. The providers were not being paid by the insurer nor the subscriber, combined with treatment that was severely discounted by the insurance carriers to the providers. So the providers began an internal triage of sorts rationing care to staunch the bleeding of resources they didn’t have. So how will flat fee plans enhance preventive care? It is beyond me!!! I think this poorly made argument is without merit when the untouched 800 lb gorilla in the room is the subscriber/patient. There is no place where the subscriber is held accountable for his or her health or lack of. How many studies have been done that measure patient noncompliance with recommended treatment, especially as it relates to containing costs? Take for example the man who refuses to take his HBP meds because it often reduces his libido…he claims he doesn’t feel bad and when he takes the meds he cannot get it up. And he doesn’t believe in the concept of HBP as the silent killer. And what about the proud, long term smokers??? And drinkers??? What about the young, upstart males who engage in high risk behavior…causing broken bones, lacerations, contusions, organ injury and on and on, who continue time and time again to continue the injury-risk behavior. And what about the guys who fight, with fists, knives and guns..all their injuries are preventable. Then there are the mentally ill who go off their meds because, again, their libido is affected. So here you have it as stated by me… 1. an industry of payers(insurers) who exist for profit to their executives and shareholders, profits and nonprofits alike, 2. healthcare providers who exist for their own means of providing for themselves and their families with some left over for the stress and risks (they take all the risks, by the way) and 3. the subscriber/patient who expects cadillac care and a freeride with no responsiblility beyond their insurance premiums. The only entity not required to take any responsiblity for reducing costs is the subscriber/patient.
So now the cycle has come full circle.
It never ceases to amaze me that when considering our current financial crisis no one holds the quality of services given by the providers of these services, yet when it come to healthcare, the most deeply personal of all human services, the public wants it all and holds the providers not only to the strictest of standards, but by God, resents every penny they earn albeit a fraction of the manager of their failed retirement fund. So as a final word I’d much rather pay my physician more and the hospital that maintains me more than to go “duh, okay” to the financial managers who bilked a large segment of our populice and are now residing on the beaches of the Bahamas counting the cash assets in their Caymen bank accounts. The financial mangers do far more to ruin lives, break families for far more money than a herd of physicians could do or ever have done. So do you want cash or do you want care?


3 Responses to “A New Spin on an Old Theme..Health Insurance”

  1. Thank you for this great post.

  2. […] A­ N­­e­w Spin­­ on­­ a­n­­ Ol­d The&#17… […]

  3. […] A­ N­e­w Spi­n­ o­n­ a­n­ O­ld T­he­me&#… […]

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