Rebuttal and Comment to ‘NYT Op Ed: Emanuel Editorial is Irresponsible and Naive’

By Vince Kuraitis

Zeke Emanuel’s editorial in the New York Times — The End of Health Insurance Companies — really got my blood boiling. It’s irresponsible and naive. Former Obama advisor Emanuel “predicts”:

By 2020, the American health insurance industry will be extinct. Insurance companies will be replaced by accountable care organizations — groups of doctors, hospitals and other health care providers who come together to provide the full range of medical care for patients.


Provoking and demonizing health plans might have had populist appeal and political value in 2009, but in 2012 it’s an unnecessary attack on a constituency that has potential to be one of the administration’s best allies in advancing accountable care.

Prior to ACA reform legislation, health plans had the wrong economic incentives — the rules of the game were not consistent with good public policy:

  • Health plans had incentives to AVOID risk, not manage risk. They were economically incentivized to avoid high risk patients (with preexisting conditions) and to get rid of patients that became sick
  • Health plans had minimal incentives to CONTROL systemic costs — they could pass them on in the form of premium increases.

ACA changed incentives and disrupted the payer business model:

  • Health plans will longer be allowed to avoid high risk patients; they must accept all comers
  • Health plans must MANAGE, not avoid costs. Health plans are abandoning their old business models.
  • What are we seeing in the marketplace? Almost all health plans are embracing the vision of accountable care and need to shift the system from Volume to Value. Health plans could be administration’s biggest friend in revamping the health care delivery non-system.


Emanual mislabels the trend that is occurring. It’s not about Accountable Care Organizations (ACOs), it’s about incentivizing and promoting “accountable care.” ACOs are one experimental model toward achieving accountable care; varied collaborations among private payers, hospitals and doctors are other experimental models.

Emanuel seems also not to have noticed that care providers have a lot of hesitations about the ACO model — at best we have some early adopters trying them out. There is no stampede.

Provocation as a tactic might have some political value when stakeholders are dragging their feet and resisting change. Provocation as a tactic when industry stakeholders are lining up to help you achieve administration objectives — well, that’s just plain dumb. Emanuel would be much wiser to take credit and praise health plans, not to bury them.

1. On February 2nd, 2012 at 1:22 pm, Gregg Masters (@2healthguru)said:

Go Vince…

I will take the counter point position, though I suspect at some level this may be a semantic argument at core.

I agree with Emanuel’s basic argument. Health plans are dinosaurs, not just from a populist perspective. Once upon a time the GHAA was a group or revolutionaries committed to making a difference. Today, it’s a ‘meet the new boss, same as the old boss…’ experience.

Health plans remain the weakest link in the value proposition of healthcare financing and delivery food chain.

Nice to see you recognize the contributions of the Act as some of its provisions do indeed level a playing field that was impossible to discern between self funded health plans, state regulated health insurance practices, and that slice of Federalism which standardized at least the HMO sector.

Yet, health plans today resemble little if any of their prior selves as ‘risk managers’ or delivery system architects and co-managers, i.e., an indemnity carrier acquiring an HMO book if business if you will. Remember Aetna’s acquisition of US Healthcare? #epicfail…

Other than the individual market, health plans have morphed into risk avoidant transaction processors, with an underwriting churn of 2 – 3 years of recycling commercial accounts. They insure precious little.

If health plans are to survive and add value, if not enable, the emerging ‘accountable care’ industry, it will be as defacto ‘utility companies’ partnering with local and regional delivery systems. They do have their core skills sets (including underwriting, marketing, member/provider administration, and private label product development) that can add value to the healthcare delivery proposition. Yet it remains to be seen if the vision exists to enable this purposeful transformation. There is some evidence to warrant optimism.

Irresponsible, I don’t think so. Also, the ACO industry need be unbundled to understand it’s components. This is not a homogeneous effort.

As a historically reform resistant industry, who’s maximized returns under a fee for services paradigm, you seem to cut a considerable degree of slack for an industry-wide culpability to NOT heal a long failing, and unsustainable business model with precious little community benefit.

2. On February 2nd, 2012 at 1:59 pm, Vince Kuraitis said:

Gregg, Thanks for your comment. Agree, our differences might be more semantic than real.

I’ll go so far as to acknowledge that Zeke’s scenario of health plan demise is “plausible”, but he loses me when he “predicts” this will happen. When there is uncertainty in the marketplace, it’s far more constructive to develop plausible scenarios rather than try to be a fortune teller.

Prior to ACA, health plans had the wrong policy and economic incentives. You can choose to call them “evil”, or you can change the rules of the game. ACA does the right thing in changing the rules of the game.

Agree that health plans have a long way to go, but in my talks with health plan execs, the “get it” – they understand the need for change and that the old business model is not viable.

Cutting health plans slack? As a consultant I work across industry segments, so I’m not writing as an spokesperson. I agree health plans have a lot of morphing to do.

Fundamentally though, I think we would agree that we need to build a more collaborative health care system. Zeke’s editorial throws rocks at a time we need to be throwing flowers.

Vince Kuraits is the publisher of the blog where this post originally appeared. For Vince’s bio, click here.


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