Health Plans Face Daunting Tasks. Parity Not High On List of To-Dos

I am attending the California Association of Health Plans annual conference this week and thought I would share some of what I am observing. For starters, Howard Khan, CEO of LA Care Health Plan and Chairman of CAHP Board provided a keynote that immediately established the context where health plans are concerned. He pointed to a giant screen displaying the following external influences on he and his peers in the audience:

1. State budget woes and reductions in Medicaid funding – particularly here in California (Medi-Cal)
2. Unemployment and its impact on membership in plans
3. Looming health care/insurance Reform and all of the work that accompanies it including Individual and Small Group changes
4. The prospects of a Public Health Insurance Option (PHIO), Community Health Insurance Options (CHIO) and the CO-OP (Consumer Operated and Oriented Plans)
5. Medicare cuts and the long-term prospects for Medicare’s viability
6. State regulators and their oversight/enforcement of existing laws
7. Provider relations and ongoing contracting challenges
8. Administering Pay-for-Performance and making information available to consumers
9. Investment portfolios and the beatings the market has taken in the past 18-24 months
10. New rules concerning Broad Spectrum Autism
11. Health Information Exchange (HIE) and unfunded participation in RHIOs
12. Recent HIPAA changes and the continued need for Administrative Simplification
13. and, last but not least, the constant public image issues they face as a result of rising costs and nearly constant debate on TV

I must say, I am not envious. Even I can remember launching new carve-out functions in relation to brand new HMOs and can recall how much employers hoped we could stem the tide of rising costs. Everyone was clamoring for cost savings twenty years ago. We still clamor today though I – like most of the people attending this conference – am not convinced there are many savings on the horizon.Ten years ago our managed care was unpopular. It must be terribly difficult today.

Cost-Shifting Short-Sighted

Cindy Ehnes, Director of California’s Department of Managed Health Care, made an excellent point: expecting healthcare costs to decrease by expecting consumers and subscribers to change their behavior in relation to cost-shifting has NOT worked. For twenty years, co-pays and coinsurance have risen steadily and it hasn’t worked. The total healthcare cost burden continues to rise and is expected to reach 50% of Gross National Product by 2085. We’re on the cusp of 20% in the next 5-10 years. She argued that until ALL of the financial information is available to consumers, they can’t be held accountable for cost control. She argued for innovations in Value Equations for consumers instead.

Eliminate Wastefulness

Margaret O’Kane made an impassioned and totally logical presentation to a rather cool audience. She is President of the NCQA so the cool reception she got stands somewhat to reason. Her first comment hit like a bombshell: “There are too many people getting filthy rich off our dysfunctional healthcare system.” She went on to say that people in America need to know that their health plans are their partners and that the plan is “in their corner”. That’s a dynamic that is sorely lacking. She worried that primary care physicians are getting the shortest end of the reimbursement stick while specialists are walking away with bags of money. She stunned some of us when she declared “I believe healthcare is a right” in a room full of health insurance executives! One of her quality-related remarks really hit the spot. She said “Access to quality data (provider and payer) should be a patient right”. I’ve never heard it said like that and commend her for her convictions.

Shannon Brownlee, author of Overtreated: The Broken Economics of US Health Care, opened her remarks with a quote from the CEO of Starbucks who reports they spend more on health insurance than they do on coffee. She describes the health care system as fragmented and confusing to the consumer. She advocates for an Organized System of Care. If that doesn’t sound like the antidote to what ails us, I don’t know what else could. I think that the behavioral health field in particular has a unique opportunity to become organized in the coming 24 months. She is an advocate of Shared Decision-Making and believes primary care physicians figure prominently into that equation. She illustrated her thesis with evidence that consumers are actually more conservative when it comes to consumption of healthcare than are their providers – when given the appropriate information and tools and asked to participate in the decision-making. I love it! This is precisely what the behavioral health field needs. Providers should be responsible for knowing (really knowing) everything there is to know about the comparative effectiveness of various treatments and the patient becomes responsible for deciding what is medically “necessary” for themselves based on high-quality information, guidance from their insurer where appropriate (think: Health Coaches) and their own values.

Public Option – A Little-Known Secret

Lastly, AHIP (America’s Health Insurance Plans) provided a rather surprising bit of information when Leanne Gassaway presented. The public option (two important versions/models of it in particular), allows the government to assign administration of the plan(s) to Medicare-style Fiscal Intermediaries or third-party administrators in the private sector.  So all of the wrangling there has been over the “government take-over of healthcare” is not quite as it seems on TV. It turns out that the government would finance the infamous Option and outsource it to most competitive private companies. Sound familiar? It should.

Parity?

Among all of the topics on the docket, Parity was painfully missing. Why? Several experts I spoke with said “Until we have regulations, we have nothing to talk about.”