Zeke Emanuel’s editorial in the New York Times — The End of Health Insurance Companies — really got my blood boiling. It’s irresponsible and naive. Former Obama advisor Emanuel “predicts”:
By 2020, the American health insurance industry will be extinct. Insurance companies will be replaced by accountable care organizations — groups of doctors, hospitals and other health care providers who come together to provide the full range of medical care for patients.
Provoking and demonizing health plans might have had populist appeal and political value in 2009, but in 2012 it’s an unnecessary attack on a constituency that has potential to be one of the administration’s best allies in advancing accountable care.
Prior to ACA reform legislation, health plans had the wrong economic incentives — the rules of the game were not consistent with good public policy:
- Health plans had incentives to AVOID risk, not manage risk. They were economically incentivized to avoid high risk patients (with preexisting conditions) and to get rid of patients that became sick
- Health plans had minimal incentives to CONTROL systemic costs — they could pass them on in the form of premium increases.
ACA changed incentives and disrupted the payer business model:
- Health plans will longer be allowed to avoid high risk patients; they must accept all comers
- Health plans must MANAGE, not avoid costs. Health plans are abandoning their old business models.
What are we seeing in the marketplace? Almost all health plans are embracing the vision of accountable care and need to shift the system from Volume to Value. Health plans could be administration’s biggest friend in revamping the health care delivery non-system.
Emanual mislabels the trend that is occurring. It’s not about Accountable Care Organizations (ACOs), it’s about incentivizing and promoting “accountable care.” ACOs are one experimental model toward achieving accountable care; varied collaborations among private payers, hospitals and doctors are other experimental models.
Emanuel seems also not to have noticed that care providers have a lot of hesitations about the ACO model — at best we have some early adopters trying them out. There is no stampede.
Provocation as a tactic might have some political value when stakeholders are dragging their feet and resisting change. Provocation as a tactic when industry stakeholders are lining up to help you achieve administration objectives — well, that’s just plain dumb. Emanuel would be much wiser to take credit and praise health plans, not to bury them.
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