Friday, April 15, 2011

Don't worry. High quality exists elsewhere.

I have great admiration for the folks at Health Care for All, an advocacy group here in Massachusetts, but they appear to have missed a major point about health care reform.

Here's the story. The state insurance exchange agency, the Connector Authority, recently offered a new option for the subsidized insurance plan offered under state auspices by Network Health. To save money, Network Health proposed and the Connector approved a limited network that excludes the hospitals in the Partners HealthCare system. This was in recognition of the dramatically higher rates charged by PHS hospitals and the doctors who work in those hospitals.

In choosing to exclude those hospitals but include other ones in the highly competitive Eastern Massachusetts market, the executive director of the Connector found that the result "must and does meet our network adequacy standards."

Now, along comes Health Care for All:

Health care advocates said they were pleased that the state was able to keep the program intact and affordable for patients, despite steeply rising health care costs.

Amy Whitcomb Slemmer, executive director of the advocacy group Health Care for All, said she is concerned, however, about narrowing patients’ choices for medical care. She said the group will watch to make sure residents get the care they need.

“Limiting networks is a short-term solution to our long-term problems of redesigning the health care system so it meets the needs of consumers’’ and controls costs, she said.

I am worried that HCFA people may have believed the President when he said we could have access, choice, and lower cost. We know it is just not possible in the current insurance market environment in Massachusetts. As long as there are out-of-market prices for some hospitals, the fastest and best way for an insurance company to save money is to exclude those high-priced providers.

(By the way, nor will it be possible as ACOs are created and global payments are adopted, a policy result supported by HCFA. You need to put aside some aspect of consumer choice if these initiatives are to be successful.)

The good news is that there are several lower cost systems that are of high quality. So, we don't have to worry about whether "residents get the care they need" under the Connector Authority's decision.


Barry Carol said...

I find it disheartening that there seem to be so many people who think everyone should have access to virtually any healthcare service, test, procedure or drug that might benefit them even slightly, that they should be able to get it from any provider who offers it, and that someone else should pay for it. While I’m sure they mean well, they never squarely face up to just how much this vision costs, who should pay for it and whether or not the society can afford it. Maybe they think we can just raise taxes as much as necessary on a small group of high income people and everyone else can have a free ride. That won’t work. I’m reminded of a quote that I think is attributed to the writer, James Joyce. It’s “The force of idealism is lost when it fails to recognize the reality of things.” Or, as numerous others have said many times: “We can have our healthcare good, fast or cheap. Pick any two.”

Brad F said...

You will want to read this from WaPo:

Maybe someone is listening.

Jon said...

From Facebook:

I think it is important to note that this organization is too often noted in the press and elsewhere as the health care consumer voice in Massachusetts. In reality they are the voice of taxpayer subsidized consumers--a very important constituency, but far from all consumers. Sometimes I feel that small businesses are held back from cost saving tools, marketplace equality and true consumer choice and power in order to politically protect their constituencies.

Keith said...

Once again, you don't need to limit the choice of these more expensive hospitals and exclude them from insurance plans; you simply need to price the extra costs into the patients co-pays and deductibles, much like what is done for paharmaceuticals that exist on different tiers depending on there price. Consumers can then make the choice of whether they will pay the extra cost to go to a Partners Hospital.

Not everyone can get the Mercedes; some will have to buy the Ford Focus. That doesn't mean you sacrifice quality health care. Maybe what is given up is the fancy fountain and lobby, the flat screen TV in the room, and the concierege service. And just maybe the CEO isn't paid a seven figure salary with a fat bonus at the end of the year!

Anonymous said...

I like Ken's idea of pricing high cost services out, but tiered copays sends a perception of quality that hurts our low cost, high quality providers. Probably overcome-able though.

Through these limited network options at the Connector, capitation rates are going down below current rates, which goes against all health care inflation trends. I'm curious to hear what people think in terms of whether this reduction reflects a true recalibration of the cost of the system, meaning that limited networks can be sustainable and replicable. Or, there may still be variables out there that may challenge the viability of a limited network? Will hospitals rates within a limited network gradually equalize, or will we see a repeat of the system at large, where previously low cost settings develop an "enclosed limited network" clout, and drive costs back up again.

Anonymous said...

Barry, the reason that people think the way you describe in you,r first sentence is that, except for your word 'everyone' that is exactly what they have been getting up to now! So that HAS been their 'reality.' Now someone must take away the candy. Once again, we are collectively the victims of our own original good intentions.


Anonymous said...

Barry: "free ride" is a rather harsh,judgmental, unfair comment. Not everyone on this plan is a slacker, uneducated and the like. Some have had very unfortunate situations that landed them needing the states insurance. what has happened to sense of community?
Although many of the folks involved in healthcare for all have a sense of community, I do not agree with them in totality.
I am not saying I have a better idea or plan; but I am saying not everyone is out for a "free ride.

Barry Carol said...

Anon 8:14 AM –

My free ride comment referred to the notion that the middle class and even upper middle income folks can be exempted from paying higher taxes to contribute toward making our healthcare system, along with other federal entitlement programs, more sustainable while concentrating the entire incremental tax burden on those making more than $200K per year (single) and $250K (couples). It was not intended as an indictment of those who need healthcare with or without subsidies. The fact is that any solution to these issues that includes raising taxes will require sacrifice from a much broader spectrum of the population than high income people alone.