Saturday, August 30, 2014
Who Should Be the Buyer?
If market forces are to be used to control the cost and
quality of health care, there will be a need to decide whether patients or
insurance companies should play the role of buyer.
The pros and cons of selecting insurance companies are
currently being played out in Nebraska where Nebraska Blue Cross Blue Shield is
locked in a contract dispute with CHI Health, formerly called Alegent Creighton
Health/Catholic Health Initiatives Nebraska.
As discussed in an earlier posting, CHI has managed over the years to
get payment rates from Blue Cross that, according to Blue Cross, are ten to
thirty per cent higher than it is paying anybody else for the same
services. CHI admits to receiving somewhat higher rates,
which it justifies by claiming that its high quality services save money by
reducing complications, readmissions, etc.
As indicated in my earlier posting on this subject, attempts by others
to confirm that claim have not been successful.
Based on what one can tell from the newspapers, the two
sides to this dispute appear to be about evenly matched. The absence of a contract will undoubtedly
cause CHI to lose some patients and cause Blue Cross to lose some subscribers
and each seems to think that the other will be hurt more.
The current contract between Nebraska Blue Cross and CHI
expires at the end of August and according to reporting by the Omaha World
Herald it does not appear that an agreement will be reached by that time. The result will be that Blue Cross subscribers
obtaining care from CHI will have to pay out-of-network levels of copays, which
will be much higher than they have been paying up to now.
It seems clear that Blue Cross is able to put more pressure
on CHI than any individual patient or group of patients could. On the other hand, the absence of a contract
will result in some inconvenience and added cost to individuals, to which at
least some of them will object and put the blame on Blue Cross.
My own leaning is to assign the buyer role to well-regulated
insurance companies. But there is
certainly ample room for others to come down in favor of assigning it to
patients.
