Non-Compliance Is Our Problem
In a recent blog opinion piece (find it here) Ezekiel Emanuel and Jeffrey Liebman assert that the 'end of health insurance companies' is on the horizon. Excerpts:
The New York Times
January 30, 2012
The End of Health Insurance Companies
By Ezekiel J. Emanuel and Jeffrey B. Liebman
Here’s a bold prediction for the new year. 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.
... thanks to the accountable care organizations provided for by the health care reform act, a new system is on its way, one that will make insurance companies unnecessary. Accountable care organizations will increase coordination of patient’s care and shift the focus of medicine away from treating sickness and toward keeping people healthy.
... accountable care organizations will typically be paid a fixed amount per patient, along with bonuses for achieving quality targets. The organizations will make money by keeping their patients healthy and out of the hospital and by avoiding unnecessary tests, drugs and procedures. Thus, they will actually have a financial incentive to hire that nurse for follow-ups.
In addition to providing better and more efficient care, A.C.O.’s will also make health insurers superfluous. Because they will each be responsible for a large group of patients (typically more than 15,000), they will pool the risk of patients who have higher-than-average costs with those with lower costs. And with the end of fee-for-service payments, insurance companies will no longer be needed to handle complicated billing and claims processing, nor will they need to be paid a fee for doing so. Payments can flow directly from an employer, Medicare or Medicaid to the accountable care organizations. A.C.O.’s will require enhanced information systems to track patients and figure out how to deliver more effective care, but this analytic capacity will be directed at improving health outcomes, not at imposing barriers to those seeking treatment.
A.C.O.’s are not simply a return to the health maintenance organizations of the 1990s. Although in both models patients are members of a provider network with a specific group of doctors and hospitals, and both are paid primarily per member rather than per procedure or test, there are big differences between them. H.M.O.’s were often large national corporations far removed from their members. In contrast, A.C.O.’s will consist of local health care providers working as a team to take care of patients who are likely to be members for years at a time.
A few health insurers see this asteroid coming. Wellpoint, for example, bought the clinic operator CareMore for $800 million last summer to make the transition into the A.C.O. business. Others, like the Optum unit of UnitedHealth Group, are developing data analysis services to provide to future A.C.O.’s. If they don’t want to go the way of the dinosaurs, insurance companies will have to find a new business to be in, one that is useful in the new world of coordinated care.
Dr. Don McCanne had this to say in response to the above blog posting (find it here):
The policy community, as represented by Ezekiel Emanuel and Jeffrey Liebman, speaks in glowing terms about idealistic, altruistic accountable care organizations (ACOs) in which health care professionals and institutions join together to improve quality and lower costs. Yet the specifics of the Medicare Shared Savings program that would establish ACOs through the Affordable Care Act (ACA), has only a superficial resemblance to these idealistic models.
The fact that the two largest for-profit insurers in the nation - WellPoint and UnitedHealth - are going after the ACO business is proof that we are in for more of the same. Eliminating private insurers by merely setting up ACOs is a pipe dream. The state insurance exchanges mandated by ACA are exchanges of private insurance plans, not ACOs.
We need to improve Medicare, dump the private insurers including the Medicare Advantage plans, and provide Medicare for everyone. Medicare has been far more effective than the private insurers in controlling costs, and would be even more so if it were our own publicly-financed single payer system.
In the piece by Emanuel and Liebman, they mention the recent purchase of CareMore by WellPoint, the massive for-profit former Blue Cross health plan, as evidence that ACOs will soon be altruistically careing for senior citizens all over the nation. I join Dr. McCanne in skepticism about the prospects of improving patient care within a for-profit framework. There was a recent Atlantic Monthly article describing the CareMore model of health care delivery (November 2011) written by Adrian Slywotzky and Tom Main. It is worth a read. The central thesis, as stated by these authors is that "quality can be improved while costs are being reduced". CareMore's plan for its target population, the infirm elderly, was to accept responsibility for assuring that recommended services were actually utilized by patients. When they found that their patients often failed to show up for doctor appointments, they hired cars to bring the patients in. They increased their staffing for diabetics and persons with heart failure and installed wireless scales in their patients' homes in order to look for ominous weight changes. In other words, they created medical work for themselves. Here is how Slywotzky and Main describe it: "The economic logic behind CareMore is unusual. Every additional service it provides costs money, and the professionals at CareMore have to take on tasks and responsibilities that physicians don't traditionally assume. CareMore employes more staffers per patient than other companies, and they spend more time with patients and their families than is typical. But every dollar CareMore spends saves multiple dollars down the line, resulting in those member costs that are 18 percent below the industry average." Can WellPoint replicate this nationwide? Not if profits trump patient care. And that is exactly what has always been the case in the for-profit health insurance industry. Just because the industry is changing its acronym to ACO, don't count on the investors caring more about patients than the bottom line.
Dr. Joe Jarvis