"It sent a message to the entire health care community...that we had to change"

Discussion in 'Healthcare/Insurance/Govt Healthcare' started by Greenbeard, Feb 14, 2012.

  1. Greenbeard
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    Greenbeard Gold Member

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    NPR took a look the other day at the aftermath of Deval Patrick's controversial decision two years ago to wield a tool few governors (outside of the northeast) can and do: health insurance rate review. Over the past few years, most of the New England states (e.g. Maine, Rhode Island, Connecticut) have rejected or pared back premium increases requested by insurers who couldn't justify them, but none on quite so grand a scale as Massachusetts in 2010.

    These stats are correct. The average insurance premium in Massachusetts in the 2nd quarter of 2012 will be rising 1.8 percent, down from 16.3 percent in the 2nd quarter of 2010.

    The point of interest here (to me) is that it illuminates a theme I've harped on again and again: the importance of the balance--or struggle--between insurers and providers to the cost and price issue.

    In Massachusetts, as in a number of states, it's not hard to believe that the balance tips in favor of certain providers. Last year the Coakley report on health care trends in Massachusetts highlighted the fact that despite large variations in what different providers are being paid--"the difference in payments made to the lowest paid versus highest paid hospital in each major health insurer’s network exceeds 170%, and for two health insurers, exceeds 300%"--the data suggests "there is no correlation between hospital price and quality" in the state.

    In that case, the question becomes how to give insurers the leverage they need to avoid exploitative reimbursement rates and increases from dominant providers, or how to light the fire under their asses to wield the leverage they already have. Two years ago many liberals thought a "robust" public health insurance option (with reimbursement rates initially pegged to Medicare's, plus five percent) was the best way to do this, other folks think some form of all-payer rate setting is the best way to approach the problem.

    In Massachusetts, Patrick went about it by denying insurer premium increases. That's the significance of the quote from the president of BCBS, the state's largest health insurer: "It sent a message to the entire health care community and the business community that we had to change."

    They might be a little hasty in giving the global payments too much credit; the Alternative Quality Contract BCBS is testing out isn't really intended to be evaluated before its first five years of operation are up and we're not quite there yet. But the fact that insurers in the state are standing up to providers and stepping up to demand value for their dollar is a promising sign. Still, the article is right in pointing out that they've still got a ways to go toward fixing the payment and delivery dysfunctions in their system.
     
    Last edited: Feb 14, 2012
  2. del
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    del BANNED

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    Health insurance premiums poised for quick rise - Boston.com

    Most health plans represented at yesterday’s program at Waltham Woods Conference Center, sponsored by the New England Employee Benefits Council, estimated that their “cost trend’’ increase - a combination of overall medical claims and the price of doctors visits, tests, and procedures - declined to between 6 and 8 percent during the past year but is likely to return to between 8 and 10 percent this year and next.

    Insurers said they were able to limit base rate premium hikes partly because they had planned for higher health care use and also because they were starting from a larger premium base after years of hefty increases. Many employers pay more than the base rate because of additional factors such as their location or the age of their workforce.

    Some executives said they hope premium increases could remain moderate even if underlying health costs rebound, citing changes in plan designs that boost copays and deductibles, narrow networks of physicians available to members, or ask members to pay more for care from higher-priced providers. “We want to see this industry moving toward the members having more skin in the game,’’ said Eric Swain, vice president of sales and account management for insurer UnitedHealthcare of New England.

    yeah, it's working perfectly


    :eusa_eh:
     
  3. Greenbeard
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    Greenbeard Gold Member

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    Aside from the utilization question (which is what the co-pays and deductibles are aimed at mitigating in a blunt way), what you've bolded is what I'm talking about here.

    The point of tiered or narrowed networks is, at least in part, to shift the leverage from provider back to the insurer. When insurers are unable or unwilling to exclude providers from their network (or charge enrollees more for using them), the providers have the upper hand when negotiating reimbursements. If insurers are able to assert themselves, as many can but have historically failed to do in Massachusetts, then they can put the brakes on those kinds of provider-induced increases.

    The second page of that article gets at my point even more directly: in flexing their muscles during contract re-negotiations, Massachusetts' insurers are finding they can get surprisingly decent terms when they actually try (particularly in pursuing value via quality improvements and care coordination).

    Like I said, it's a promising shift.
     
    Last edited: Feb 14, 2012
  4. del
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    del BANNED

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    that would be nice, because i'm tired of paying the highest rates in the country. of course, many doctors have opted out and started boutique practices, and this also has a chilling effect on the number of people entering medicine and practicing it here.

    i had a great doctor, but i had to get another when he started charging $4000 above and beyond insurance to be a part of his practice. i was assured, however, that he would make housecalls.
     
  5. AmericaFirst88
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    AmericaFirst88 Member

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    Health insurance companies charge too much, doctors and hospitals charge too much, makers of medical equipment charge too much, medical schools charge too much. The whole system charges too much, because people need it and they can get away with it.
     
  6. Greenbeard
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    Greenbeard Gold Member

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    Two more interesting rate review stories this week, both also out of New England.

    The first is from Rhode Island, the state with probably the most robust rate review authority, following reforms a few years back. Not only do they have the nation's only dedicated health insurance commissioner, that commissioner has seen fit to make approval of rate increases contingent upon certain commitments by health insurers to payment and delivery system reforms in the state.

    A few days ago, that insurance commissioner, Chris Koller, answered a request from BCBS for a small premium increase with a directive for a smaller premium decrease.

    WRNI: RI health insurance commissioner orders 1.1% rate decrease
    The other story is out of Maine, where regulators have gone back and forth with Anthem BCBS in recent years as to whether the state has stepped over the line in approving smaller premium increases than Anthem requested. The answer for now would seem to be no.

    Maine’s Top Court Backs State Authority To Limit Health Plan’s Profits
     
  7. Quantum Windbag
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    Quantum Windbag Gold Member

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    Couldn't justify them? Since when? The appeals panel overturned the rate caps imposed in Massachusetts, but the insurers chose to abide by a settlement. In other words, the insurers decided to cut their rates even though the increases were found to be justified.

    Is there a reason you didn't mention the appeal going against the state? Would it have spoiled your narrative to put some actual facts in the post?
     
  8. Greenbeard
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    Greenbeard Gold Member

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    Not interested in another of your misguided attempts to start a pissing contest. Insurers in Massachusetts have started to change the way they do business with providers due to the signal sent by the Patrick administration's intervention via the rate review process. The states' insurers are at long last moving away from a place where providers say "jump" and they ask "how high?" by pursuing aggressive contract renegotiation, capitated arrangements, the tiered networks del highlighted, and so on. That's the point of the thread.

    That isn't my narrative, that's a direct quote from the President of the largest health insurer in the state.
     
  9. Oddball
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    Oddball BANNED Supporting Member

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    He's only here to distribute the e-mail blasts he gets form Cass Sunstein and David Plouffe. ;)
     
  10. Quantum Windbag
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    Quantum Windbag Gold Member

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    Sure they have, they are selling less expensive plans, and that is allowing idiots like you and Klein to argue that Romneycare works.
     

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