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.
Wednesday, August 06, 2014
Don Berwick for Governor
Don Berwick is running for governor in Massachusetts.
Healthcare people will recognize Don as the founding and long-time executive head of the Institute for Healthcare Improvement (IHI), the organization that more than any other was responsible for igniting the quality movement in health care. He is a pediatrician who previously had been the chief quality officer for the Harvard Community Health Plan.
Don left IHI to become head of the federal Centers for Medicare and Medicaid during the planning period of Obamacare. Republicans in the Senate were not about to approve the appointment of a liberal like him and so his tenure there was limited to the 17 months allowed for a temporary appointment.
After leaving his federal duties, Don decided to run for governor in his home state and has been actively engaged in that effort.
I’ve known Don since the early 1990’s when he played a role in getting the quality effort under way at Henry Ford Health System in Detroit, where I was working at the time. Being a longtime admirer of him, I’ve been somewhat active in his current political effort. The next step in his campaign is the Democratic primary which takes place early next month. He is running against two established politicians who have the advantage of established political organizations and better name recognition. However, Don has been able to match and exceed them in fund raising.
Readers who don’t vote in Massachusetts will note this as a matter of passing interest. For Massachusetts voters, I recommend voting for Don in the upcoming primary.
Those interested in donating to Don’s campaign or learning more about it can go to www.berwickforgovernor.com.
Saturday, August 02, 2014
The federal Government Accountability Office, a nonpartisan investigative agency of Congress, reports that the Healthcare.gov debacle was caused by management failures.
Just as I suspected.
The GAO finding was reported in an AP article that appeared in the July 31 issue of The Boston Globe.
GAO was quoted as stating that the managers responsible for the project lacked “effective planning or oversight practices” for the development of the web page. It found that “the administration kept changing the contractors’ marching orders….creating widespread confusion” and that “changes were ordered in seemingly arbitrary fashion, including 40 times when government officials did not have the initial authority to incur additional costs.”
Failure of large information technology projects is common in both the public and private sectors. The main reason, in my opinion, is that managers have the mistaken notion that computer projects can only be understood by computer experts. They therefore neglect to decide and declare in specific terms what the project is intended to do and how it is to operate. Then as the project proceeds and they learn how the final product will function, they order changes that disrupt and confuse the planning process – decisions that should have been made before planning started.
Project management remains a large blind spot in the field of administration. Let us hope that the Healthcare.gov debacle becomes a learning experience.