Wednesday, July 30, 2014
Doctors and Insurance Companies
Should insurance companies have the right to overrule
doctors?
That question is currently being debated indirectly in the
Massachusetts legislature.
Massachusetts has recently experienced a spate of deaths
related to recreational drugs and the families of addicts are pressing the
legislature to require health insurance companies to cover inpatient
treatment. The insurance companies, with
the support of a number of organizations and individuals in the treatment field, claim
that inpatient treatment of drug addicts has been demonstrated to be outmoded and
usually unnecessary.
The issue was the subject of a lengthy article in the July
29 issue of The Boston Globe discussing two bills dealing with it, one in each
house of the legislature. Reading
through it, I was struck by the following sentence appearing in all innocence about
a third of the way through:
“Especially worrisome to insurers, both bills limit
insurers’ ability to override treating physicians’ decisions.”
In my day, the very idea of insurers overriding medical
decisions would have been rank heresy, but apparently no more. Now it seems as though it is well enough
accepted that insurers can openly claim the right to do it.
I think it is something to worry about. But the medical profession has brought it on
itself. By failing to require its
members to adhere to best practices, it has created the need to which insurers
are responding.
I hope the day is not too far off when capitation will be
the dominant form of payment and decisions about effective treatments are made
by providers. I would much rather those
decisions be in the hands of my local hospital and its medical staff than in the
hands of insurance companies trying to maximize value for investors.
Saturday, July 19, 2014
There is something of a flap going on in Massachusetts over
the desire of Partners Health Care System (formed by the merger of
Massachusetts General Hospital and Brigham and Women’s Hospital) to acquire
three more hospitals in the Boston area, two in the north shore and one south.
Partners has for some time dominated health care delivery in
eastern Massachusetts. Its reputation is
such that it would be nearly impossible to sell a health insurance policy in
the area that didn’t cover its services.
Taking advantage of that, Partners has been able to leverage health
insurance companies into paying it considerably higher rates than are paid to
other providers. That has caused some
grousing, but up until now not enough to spur much in the way of action.
Partners’ proposed acquisitions require regulatory approval
and a few weeks ago Martha Coakley, the state’s Attorney General, announced
that she had reached agreement with Partners on conditions that would allow
them to proceed, subject to approval by the Suffolk County Superior Court. That has produced a small storm of
protest. Competing hospitals have filed
objections. Two gubernatorial candidates
have come out against it. Now the
state’s Health Policy Commission, an advisory group, has expressed
reservations. The story has received
coverage in the local press.
In my mind, the Partners merger should never have been
allowed. Its almost sole purpose of
gaining negotiating power with payers was clear at the time to anyone who understood
health care institutions and has been confirmed by its actions ever since. But people have not wanted to believe
that. We have been very slow to accept
that health care providers are not simply organizations engaged in the healing
ministry, but also entities that engage in economic behavior. When they find themselves with economic
power, they exercise it.
Maybe we are becoming more realistic about the matter.
Saturday, July 12, 2014
Buying Care
I have always been skeptical about the popular idea that healthcare
would be better if consumers (i.e., patients) had an incentive to pick
providers based on cost and quality.
One reason for my skepticism is that the psychology
prevailing at times of illness or injury doesn’t seem to me to be conducive to
cool judgments about where to get care.
Another was illustrated by a front page story in the July 6 issue
of the Omaha World Herald headlined Best
bang for buck at hospitals is no easy call.
It seems that Blue Cross Blue Shield of Nebraska is asking Alegent
Creighton Health hospital and physicians to lower their rates which, it claims,
are some 10 to 30 per cent higher than those of comparable systems. Alegent claims the difference is justified by
higher quality which reduces things like complications and re-admissions.
The World Herald tested the claim by comparing ten systems
in the area, using 20 Medicare price and quality measures. Based on the evidence, as shown in 12 lists
and 12 bar charts, the World Herald decided that the insurance company’s claim
was justified, but took a full page of text to explain its conclusion.
Even so, the article conceded that there was evidence on
both sides of the issue. For example,
each of the ten hospitals ranked first in one category. Seven ranked last in one. Imagine, then, a patient faced with a medical
need trying to go through a similar process.
Creighton, the hospital that gave rise to the issue, ranked first in
four categories and last in five.
If we want to employ market forces in an attempt to make
health services both better and more efficient, I think there is no avoiding
dependence on insurance companies to develop packages that they claim offer the
best value and then convince consumers that they are right.
