Health plans’ two-faced approach

According to AHIP, over the last ten years, private insurers’ hospital costs in California are up 159%.
One hundred and fifty nine percent.
Instead of an intelligent and helpful discussion of the causes and impact, there’s an all-too-familiary orgy of finger-pointing and ‘oh yeah, sez you’ as hospitals blame insurers and insurers wail about the unfairness of it all and everyone complains about Medicare.
Time to call Whine-one-one…
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Here’s what we should be focusing on.
1. Clearly (some) private insurers and health plans cannot – or more likely will not – do anything to control hospital costs. For all their bitching and complaining, this is yet more evidence that health plans have not fulfilled their primary mission – control costs and deliver quality care.
Here’s how a healthplan exec put it: “The report’s focus on California hospital costs just reinforces what we have been saying the past couple of years. Steep increases in medical costs must be addressed. Our country and state cannot sustain this kind of growth,” said Patrick Johnston, president of California Association of Health Plans.
No kidding. I don’t get the AHIP strategy – bitch about government intervention then complain that outrageous health care cost inflation isn’t your fault.
2. Private insurers are clearly asking for help from government – the same government they pillory in their multi-gazillion dollar PR and lobbying campaign as too incompetent to run a health plan.
3. Controlling costs will require health plans to build small, tight, highly-managed networks of excellent providers, an approach most seem quite unwilling to pursue, citing the ‘managed care backlash’ from the late nineties. (there are a few notable exceptions)
Execs, that was then, and this is now.
4. If health plan execs think their life is tough, they should sit behind the desk of a work comp claims exec. Work comp is getting murdered by facility costs; many payers would kill for a 159% increase over a decade.
Last week Kaiser Health News reported several large health plans appear to be frustrated with AHIP and are looking to set up their own DC lobbying entity – albeit one that is a ‘subcommittee’ within AHIP. Evidently they feel the smaller health plans and not-for-profits have hijacked AHIP and aren’t representing their interests.
Bob Laszewski sees a historical parallel: “This reminds me of the early 1990s. In the wake of the insurance industry being made to be the bad guys during the Clinton Health Plan debate, many of the largest members exited the historically dominant Health Insurance Association of America (HIAA) for the competing HMO dominated trade association.
At the time, many observers saw a cynical irony in the move; it was those dominant members that drove much of the policy that got the industry in trouble.”
What does this mean for you?
At this rate we’ll all be covered by the VA health plan in a decade – which is just fine with me. They are the only ones that consistently control costs and deliver quality care.

From Harry and Louise to Thelma and Louise

AHIP – did they jump or were they pushed?
I’m not pointing any fingers, but if I were, all ten would be pointed right at Bob Laszewski.
Yesterday Bob pointed out that AHIP could not possibly have screwed up any more than it did when it released the PwC ‘analysis’ of the Senate Finance Committee reform bill. Here’s how Bob put it.

When you are going to issue a report of the kind AHIP and PwC did–in terms of its intended consequences on a national political debate–you better be sure you can back-up everything you say in simple and unambiguous terms.
The ineptitude on the part of AHIP and PwC is startling. That either organization was not able to clearly and decisively defend their conclusion in the midst of the health care reform finals is one thing. That they couldn’t defend a conclusion that is generally right and consistent with common sense [emphasis added] is even more startling if not aggravating.
But then AHIP starts from way behind anytime it has tried to do anything in this town… there was the Congressional hearing this summer where three of their members told a House committee that they planned to continue retroactively canceling individual health insurance contracts even when they found only inadvertent and immaterial errors on the original applications.
Then, of course, there was the silly $2 trillion cost savings offer they spearheaded at the White House this spring, which Republican Chuck Grassley dismissed as nothing more than “fairy dust.”
When you have that kind of track record and lack of credibility and you want to issue a game-changing report you better have every duck in line. I swear, if AHIP issued a press release on a crystal clear day telling DC the sun was shining no one would believe them [emphasis added].

But you can’t blame Karen Ignani alone – her board, which includes CEOs of pretty much all the big and most of the medium-sized health plans, obviously played a big role in developing AHIP’s ‘strategy’, such as it is. There are some really bright and capable folks on that board, many of whom are likely stunned at the blindingly inept way AHIP tried to make their point – a point that I absolutely agree is entirely valid, and for which there is ample historical support.
Alas, the correctness of their opinion has been overwhelmed by the way it was ‘presented’ – a bucket of cold slops dumped over the heads of the Democrats who were (at the time) warming to the idea of sending forty million more paying customers their way.
Unless…unless Karen Ignani is a secret single payer zealot, the only explanation is they just woefully miscalculated – or the accelerator got stuck…
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(much as I’d like to take credit for the Harry and Louise to Thelma and Louise, I stole it from someone on the toob)