Recently the President convened a group of insurance executives and business owners to the White House to discuss the current state of healthcare and to reinforce his desire to provide healthcare to more Americans. In a recent post on June 22nd
by Inside Health Reform stated:
"All sides in Monday's meeting involving President Barack Obama, health insurance executives and state regulators agreed that more needs to be done to confront rising health care costs, including addressing pharmaceutical costs, but the conversation did not produce concrete plans, participants said. One participant said the president balanced promises to hold insurers accountable for their rates with acknowledgments that some cost drivers are outside of their control."
Now reality is starting to hit. Renewal rates for 2010 are starting to surface, and again we will be facing double-digit increases. We can yell and scream at the insurance companies for increasing their rates but if we step back and see the big picture the insurance companies are in a no win situation. If providers continue to increase their billing rates the insurance companies have to increase rates to cover the increase in billing costs. When this happens guess who gets the blame - the insurance company, not the healthcare provider.
If we are going to truly have health reform we need to have the employer, payer AND provider at the table to discuss what a RATIONAL reimbursement should look like. Until we establish a rational reimbursement approach, we will never "bend the curve" in healthcare. We will continue to view insurance companies as the evil empire while increases in healthcare charges go unchecked.
As NCN we believe you must have a rational reimbursement that is fully transparent to the provider, patient and payer. Until this is fully adopted there will be more meetings with the president at the White House scolding the insurance carriers who have little control on cost drivers.
The cameras, press conferences, town hall meetings, picketing, etc. have come to a screeching halt since the health bill was signed into law. It has been moved aside in the 24-hour news cycle with outrage and disgust at the recent oil disaster in the gulf and overhauling financial institutions and the "to big to fail" mentality.
Healthcare reform is now left in the hands of staffers, special interest groups and a team of bureaucrats who have to now write the specific regulations and details around the spirit of the health reform bill. Leading the charge will be the Department of Health and Human Services (HHS). In response to the recent law being passed, HHS has established a new office charged with implementing the health insurance provision in the new law. On April 19th the Office of Consumer Information and Oversight became operational. This office is responsible for ensuring compliance with the new insurance market rules (which still have not been written). It will also be responsible for providing oversight and guidance for the state-based insurance exchanges and temporary high-risk pool programs. They will be using temporary staff drawn from the existing ranks of HHS employees but are aggressively hiring people to fill roles to achieve the goals before them. With this in mind, here are a few observations:
- Confusion and frustration will be a common theme with employers, payers and consumers. Employers will begin (if they have not already) reviewing their health plans for 2011 in the next few weeks and it is hard to know what to do when the specific timing of mandates and language around mandates are unknown.
- Consultants and brokers will be looked upon as experts and telling employers what to do. They have always been viewed this way but their role in the upcoming renewals will be different. They will have to present new and different approaches if they are going to maintain their relationships with their clients.
- We are at a tipping point. New ideas have to be presented and implemented. We all know healthcare costs will NOT come down. They will increase and increase substantially so employers will have to see "game changing" ideas if they want to maintain their coverage for their employees.
We live in interesting times and over the next few months we will see a growing sense of frustration. NCN is prepared to handle these trying times with proven innovative approaches that dramatically reduce the healthcare spend by replacing traditional methods of managed care (no longer effective) with a rational, transparent and defensible approach to healthcare payment.
With the recent health bill that's been passed, a number of things have started to come to light. One in particular is fear that the insurance companies will start increasing premiums immediately. In response to this the Senate health committee brought together four experts to present their viewpoints on setting standards, or more importantly, evaluating any type of premium increase. An article appeared in the New York Times
on Wednesday, April 21, dealing with the responses of some of these people who testified. I was particularly interested in comments made by Grace-Marie Turner from the Gaylen Institute. She said that she was highly doubtful that the new health reform package will succeed in lowering insurance costs. Turner said, "Capping premiums without recognizing the forces that are driving up costs would be like tightening the lid on a pressure cooker while the heat is being turned up."
In doing further research on the Galen Institute, I found this video from Ms. Turner; at NCN, we highly support her viewpoint. With all the regulations that will surely be coming about in the near future we believe this will do nothing to control costs. The only way to effectively control costs is on two fronts:
- 1. To have better information in the consumer's hands to help them understand what things truly cost, versus what things are being charged.
- 2. Once a bill comes in for care rendered, that the value of the bill has been benchmarked against other providers in a way that develops a rational, transparent pricing.
At NCN, we've been doing this for the last several years in helping develop a rational payment system. Until we deal on these two fronts, we will continue to have irrational pricing, consumers not engaged in the process and an unrealistic expectation of what healthcare reform will really do. The dirty little secret that we all must come to grips with is this:
- prices will continue to go up, and
- the federal government will continue to put more regulations on the insurance companies to control premiums.
But no one has been addressing the actual excessive charges and cost-shifting that are occurring in today's marketplace. Until we do that, we are destined to have a single-payer system at some point in time.