By Gregg A. Masters, MPH
Today’s post comes to mind via a Tweet this morning courtesy of @CraigJCasey who proferred:
@2healthguru @pfanderson Occupy common sense, like Don Berwick – confirms Medicare wasting 20-30%!! Go big government, single payer
This Tweet is timely mindfulness and context for the wounded politico’s and their aligned think tanks who while not 100% satisfied with the PPACA, none-the-less stitched together a tenuous ‘coalition of the willing’ (i.e., AHIP, AMA, a litany of medical societies, and other allied health professional associations) to advance an arguably ‘less than perfect’ law to move the football and make progress in taming the ‘rapacious appetite’ of the healthcare beast aka ‘borg’.
Since Berwick announced his slightly earlier than expected retirement last week, and the Camp Goodman think tanks of the world, aka the NCPA, ‘celebrate’ the pyrrhic victory of the ‘Hatch/Enzi Gang of 42‘ engineered opposition, (p.s. you may know John Goodman who Uwe Reinhardt once addressed via his ‘Ground Control to John‘ blog post) and who’s claim to fame during the health reform debate was ‘there are no uninsured in America, afterall we all have access to the ER‘ (paraphrased).
Add to the tapestry that HR 676, the single payer option, never saw the light of day in the conservative halls of the US Senate. It extended a ‘Medicare E’ (for everyone) option modeled after the public/private partnership Federal Employees Health Benefits Plan (FEHBP) yet was tossed onto the trash heap of not politically viable options, so we got PPACA, the ‘Act’.
A central part of the Act was the definition and subsequent standard setting for what constitutes an ACO, how they organize, who plays, who pays, when, where, how, and why, etc.. As is often the case in pluralistic America, the lite (compromise) version of an otherwise proven health policy solution or business model is adopted often to no one’s satisfaction. When the intended results don’t materialize, the finger pointing and mud slinging begins – which is where we find ourselves at the moment. Add to that, the chorus of Attorney’s Generals opposition to the individual mandate, a very Republican idea forged via the Heritage Foundation, and you guarantee the continued dysfunctional processing of America finding it’s way into a sustainable healthcare delivery and financing paradigm.
Yet, in this state of compromised mediocrity, we do have reasons for innovation hope via the ACO challenge to the Medicare Shared Savings Program, but also in the minutia of the Centers for Medicare and Medicaid Innovation authorities. While most of the ACO conversation has focused on the final rule, application and certification process, many market driven efforts are emerging where health plans, hospitals, health systems and physician networks or medical groups are creatively collaborating to deliver ‘accountable care’ mostly unfettered by the language in the Act or series of rules which have followed.
So do health plans have a role in the transformation? Or is it inevitable that relentless internecine industry fighting will preclude building consensus towards a system that works, and leverages the inherent strengths of the parties in interest?
The evidence is quite clear, health plans and their associated ‘channel partners’ (from managing general agents to niche product underwriters) who add little if anything to the high value care process are at risk as they provide the least realized value in the healthcare exchange relationship. They must step up or face extinction, but up to what? My suggestion is for health plans to focus on their core strengths by adopting a ‘utility company’ role and work with local managed delivery partnerships. While they may not be a suitable ‘general partner’ to lead the effort, they certainly are an eligible ‘skin in the game’ limited. Why not bring their strengths and skill sets in marketing, underwriting, membership, population and disease management, including clinical pathways and best practices to the table? Lets explore better ways to collaborate vs. compete for the spoils of the ‘churn game’. Extend your horizon above quarterly conference calls to analysts, obsessed with indicia of profit/loss underwriting cycles, to a longer term community benefit frame of reference. Trust your provider partners to stay with you at the alter. Then brand via locally flavored provider partnerships, vs. your corporate nameplate and it’s potential baggage? Start walking the talk, and be the change lest you continue the intractable march into irrelevance. There is much to do!
acowatch.me 
A ‘utility company’ role? Is that what you really want Gregg? What happens when the power goes out in healthcare? People die Gregg. Fragmentation and competition can be good. Often denied by people who could never compete in the private sector.
Too bad Obamacare creates 159 new government bureaucracies and does very little to reform care: tort caps, loser pays, direct pay, more doctors, more competition, etc.
Thanks for reply.
The record seems clear…mostly a value subtraction than addition proposition since they’ve been around.
Absent clear strategic thinking and a long term horizon, they typically play for the churn taking turns with each other based on the inevitable profit/loss underwriting cycle. throw in a little acquisition binge now and then, aided and abetted by an always eager for fees Wall Street, and you have an essentially useless community benefit business model. You do have a pristine exploit and exit set of conditions you get to play in though….
As utility companies, they can generally align with enlightened provider partnerships, and make a mutual commitment to deliver on the triple aim. As I see it (from senior positions in hospitals, health systems, health plans, managed care companies, and physician networks) this is the last hurrah for the private sector to get their act together. However, it must be through a lens that is not singularly focused on quarterly conference calls to analysts.
Just noticed ‘Cobra health’. Seems entirely linked to the continued viability of the employer sponsored model, no?
Good guess, COBRA (the law itself) will be obsolete with guaranteed issue. Which is fine by me, IF there was a way to pay for no udnerwriting. There isn’t, even with government’s deep pockets.
Perhaps rather than a utility company model, a ‘cellular’ model. That DOES NOT mean model on the way telcos operate; it means examine how cell networks operate, and borrow from it.
Think how it would change how health insurers go about their business (forget “health plans”; that whole notion is from the Island of Misfit Marketing Toys). Health insurers would re-build their risk models to assess variance from expected population health, rather than variance from expected treatment transaction volumes.
Right now, insurers treat ALL health care as “LOSSES”. That is, NO health care is “good”, in the sense of “contributing to health”. Revise the model to reward production of health, and insurers start “rewarding” activity that produces it, via more appropriate financial forecasting. (That will also require applying longer-than-one-year forecasting horizons, imposed by financial rather than health care improvement calendars – but that’s a topic for another conversation).
My regrets from missing your comment. I agree. The utility model, is meant to be more in line with health plans understanding their value added contribution to the risk management of the members in their population. We’re seeing movement in this direction c/o Aetna who is modeling and some would say ‘morphing’ into an IT community who also underwrites and manages risk for a portion of the lives they cover. And yes, they also manage ASO clients for which they simply rent their network and collect and admin fee.
I appreciate your time and contribution. Again, so sorry to have missed it earlier.