Friday, August 04, 2006

Managing Care vs. Benefit Packages

The recently enacted Massachusetts program for reducing the number of uninsured includes provision for subsidizing health insurance on an income-related sliding scale for those with incomes of less than about $60,000 per year for a family of four.

According to an article in the August 2, 2006 issue of the Boston Globe, the intent is to give four competing managed care companies the right to enroll the beneficiaries of subsidized coverage. These companies now provide managed care for Massachusetts Medicaid.

The theme of the article was the proposed requirement that the package of benefits offered by the four companies be basically similar. A couple of the companies complained about that. They wanted to design their own package of benefits.

They were not very specific about their reasons, but my suspicion is that a standardized package forces them to compete mainly on the basis of price and customer service. That requires them to manage care – something they would rather not do.

It will be interesting to see how it turns out. If one or more of the companies actually succeeds in providing care more efficiently, that could attract a lot of attention.

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