AHIP: It’s Not Cost Shifting, We’re ‘Unleashing Patients’

By Gregg A. Masters, MPH

Seriously folks, you’ve got to hand it to the PR firm supplying the American Health Insurance Plans (AHIP) with the brilliant, timely and thematically near argument resistant messaging copy just revealed via a .PPT preso titled ‘Health Care Innovation in the Context of Rising Health Care Costs‘ and delivered by Karen Ignani, aka to some as ‘Darth Vader’.

Perhaps brilliant does not capture the pure genius of the campaign, but lets pull back the cover a bit. Stay with me as I walk you through some thought process and history.

The practice of cost shifting has been a fact of life in American health care since the birth of the Medicare and Medicaid programs. Shortly after passage the ratcheting down of very generous third party reimbursement programs built on cost plus, and ‘you tell us what’s a reasonable charge’ for this procedure systems, the prospective payment system was introduced and the Government started to clamp down on their payment liability, thereby pushing onto the private payor market (mostly an indemnity, charge based liability system). Seeing the obvious writing on the wall, and enabled by both state and federal legislation payers re-branded themselves as ‘managed care plans’ and began to ‘cap’ the full burden of this cost shifting via selective contracting (both HMO and PPO), deploying a series of professional and institutional pricing tactics including case rates, per diems (both tiered and global), conversion factors, resource based relative value system (RBRVS), prepayment, capitation, percent of premium and other forms of limiting payments to providers, globally speaking.

The net effect of this ‘dance’ though modulated by a series of disabling public backlashes to the premise of the success in the managed care formula, essentially watered down the primary model that seemed to produce results for a brief period of time in the mid 90s, i.e., medical cost inflation dipped to zero and below.

Fast forward two decades, and the pace of healthcare consumption of GDP has more than resumed it’s upward march, and the rapacious appetite of the health care borg remains as unquenched as ever.

Yet this time, we’re entering an era with a mantra of ‘patient empowerment’ aided via the exploding and enabling series of platforms, devices, sensors, applications and mega availability of connectivity to the cloud as a service provider to perhaps once and for all enable informed choice, and thereby modulate the healthcare borg’s appetite.

The timing could not be more exquisite. The move by health plans on their own right into the high deductible (or consumer directed) health plan market has been received by a large ‘yawn’ for the most part. The scant research available to suggest that HDHP’s do not compromise access and quality and thereby contribute to poorer overall population health status are mostly sponsored by the industry and questioned by some as to their credibility.

But add to that the appeal of the mhealth, quantified self, personal responsibility for one’s health ethic, etc., and throw in the wellness and prevention agenda sensibilities, and voila, you have a compelling formula to appeal to a growing subset of the health care consumer and provider marketplace (from @Qliance to @CarePractice).

Brilliant? You betcha! Will it work, well that jury is still out. To get some context on the question, check out a recent webinar titled: ‘How Social Media is Revolutionizing the Healthcare Industry‘. You might want to pay particular attention to the exchange between Adam Bosworth, aka @adambosworth, of Keas and James Kean, aka @JamesRKean of @wellnessFX.

What’s this got to do with ACOs you say? More on that one in the next post.


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