Two health care stories – Which do you believe?

As a way to keep my knowledge of the benefits business current, I read many articles, attend seminars, webinars, and industry conferences, and read all the press releases and announcements. My Google Alerts sends me the news I want every day. One major area of interest is how the market is addressing the rising cost of health care. As I had written in a recent blog my company just got a 16% increase and I think we are reaching the tipping point. I am looking for the business models that can control the cost of health care.

What I have discovered is that there are two different narratives playing out in the market. One narrative represents around 95% of all the “noise” and the other just 5%. The 95%er’s consume the publications and have speaking engagements at all the conferences. They put out press releases almost daily and make wild claims as to how their businesses are growing. Yet I find myself believing the 5%er’s. Their message appeals to my logic and understanding of the business. I think there is hope that health care costs will come under control. However, their message is getting drowned out by the noise created by the 95%er’s which could lead to a false perception of where the health care market is going.

In sports there is a saying that “practice makes perfect”. Well that works if you are practicing the right things. If you practice doing something the wrong way you will master the wrong way. In this healthcare debate, discussion, or whatever you want to call it, if you spend your time listening to and believing the pretenders version of where they think the health care business is going you may actually change your business and start practicing the wrong thing. Who you listen to or believe may matter.

There is a better more believable story developing. One that has a chance of controlling health care costs. One that properly places incentives so that providing better care while reducing costs is rewarded. One that as a consumer myself I would find as a more attractive model than most of the current health insurance/health care models.

When people ask me what I think. I don’t sugarcoat things I simply say “I think it is a bad idea.” Don’t waste your time. Often they don’t want to hear this if they have an agenda. So here is what I think.

• Private Exchanges – Bad idea – 30-year old idea – that does not control health care costs.
• Self-insured for smaller and smaller groups – squeezes the balloon – temporary solution that does not control costs.
• Wellness Programs – Nice try – won’t control costs – may make people feel better – could improve productivity.
• Wellness Programs where you charge employees more who don’t take biometric tests – bad idea – employees will rebel. They should rebel.
• HSA’s – Needed but don’t not control costs.
• Large employers collaborating to negotiate with providers – Why? Is this what employers should be doing? Another squeezing of the balloon. What about the rest of us?
• Decision Support Tools – Help you choose the best high cost product that will continue to go up.
• Captives – Simply another risk pool where costs will still go up, up, up in time.
• ObamaCare – A joke. More cost shifting in the end. That’s why my costs went up 16%, again.

All these tactics simply squeeze the balloon. You can push the numbers around but the numbers only get bigger not smaller. Anyone who understands medical underwriting or actuary knows this is the case.

So who should you be listening to? Aetna and their CEO Mark Bertolini; Kaiser; Partners Healthcare; Intermountain Healthcare; University of Pittsburg Medical Center; Evolent Health; Apple. I am sure there are many more. These firms are painting a much different picture of the future of healthcare in America. However, I don’t see them at benefits conferences. They don’t publish in benefits magazines. They don’t make grand claims of having some new invention. They are simply trying to figure out a way to improve the health care system in America. What they have in common is they see getting the providers in the risk business as the solution. This moves the risk from employers and traditional insurers to the providers. They may not all be perfect but they are trying to bend the cost curve.

These two narratives are playing out. One continues to promote fee for service. The other promotes capitation to a much larger degree. I don’t know who will win in the end, because these stories are still being told. But I know what makes sense to me.

2 responses to “Two health care stories – Which do you believe?

  1. I agree with you nearly entirely. My main question is that the largest single costs that hammer most plans are the very large catastrophic claims are not being addressed by any of the many approaches you note. Secondly, the biggest group of providers are seldom at any of the benefits conferences, either. Yet their message is generally: You just are not paying us enough. It is as we are speaking entirely different languages.

    As for our situation, we are seriously looking at variations of reference based pricing and narrowing networks as much as possible and having to stand firm when our members (employees and eligible family members) complain that they can’t go where they want.

    So here is what would be a different approach: Make the federal government the “stop loss” insurer. Pick a dollar number – say $100,000 – where any excess is billed to a central federal insurer. This is not all that different than what we have done with other forms of insurance against the risks of catastrophic events. While there are many details to be worked out – this would eliminate the need for all kinds of tortured actuarial work to set prices for numerous insurers.

    We have spent way too much time dealing with the small claims – when the claims that are killing most of us are the catastrophic event claims costs.

    Maybe this won’t work – but I would at least like to hear some discussion around this concept instead yet more presentations of ideas that we know do not work.

    Like

    • Patrick – Small claims should come under an HSA and paid for by the consumer. Insurance should protect against a catastrophic event that will cause lasting financial harm. Small claims are nothing more than reimbursement plans. That being said moving to capitation would handle larger claims too. Provider systems would have the incentive to handle such situations more cost effectively. Obviously this is a big debate. I know what isn’t working.

      Liked by 1 person

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