Health reform is coming. This looks to be a huge win for private insurers – millions of potential new members signing up for mandated coverage. Unless, of course, the industry proves itself completely incompetent.
That’s a real possibility.
Today’s New York Times reports that no fewer than eight (8) health insurers selling Medicare Advantage and/or Part D products are facing sanctions from HHS (reg. req.) for offenses ranging from terminating members with AIDS and HIV to fraudulent marketing practices to a 27 minute hold times in customer service call centers to failing to pay claims.
The most visible problems have been marketing-related, with seven companies voluntarily agreeing to stop marketing in June while they figured out how to do it ethically and within the law. The voluntary suspension was lifted in September.
These are the private sector companies, the ones who are supposed to be so good at delivering what the customer wants at competitive prices, at innovation and service and responsiveness.
From here, it looks like what they’ve been really good at is getting paid a premium (Medicare Advantage plans get paid, on average, 8-11% more than the ‘regular’ Medicare program’s total costs) to deliver lousy service. Their poor business practices came to light after CMS responding to seniors’ complaints, asked WellCare, UnitedHealth, Coventry, and others to clean up their acts.
The health plans complain that formulary rules, marketing requirements, and other CMS guidelines are too complex or hard to understand or contradictory – and in some instances their complaints are probably valid.
That’s beside the point. The private sector is supposed to be better at delivering value for money than government. So far, Wellpoint, United, WellCare et al have done nothing to support that theory.
What does this mean for you?
If you’re a single payer advocate, you get to sit back and watch the private sector prove your case.
Joe,
I think you’re right in that the insurers are unlikely to deliver what consumers want– as private sector entities they’ve been completely focused on serving the needs of employer-purchasers of health, who are more worried about the budget and the complacency of the 80% of the well employees than the 10-20% who are actually heavy users of the system. I go into this more in in my blog entry about what employers want from the health system: http://consumerfocusedcare.blogspot.com/2007/08/jobs-healthcare-is-hired-to-perform_20.html
What this highlights isn’t that single payor should win, but that we need to reorient primary care and other services to serve 80% of the mostly well population.
If private insurance is to be a replacement for the Govt version, then let it be the way Walmart handles their vendors. Let the Govt set the mandate, if you can not do it at least at a cost equal to ours (the Govt) with better service, perfomace and product, then you don’t do it at all.