Friend and colleague Bob Laszewski has shined a very bright light on Wall Street’s ignorance about the health insurance business.
Bob notes: “We are way past the time the really smart people on Wall Street (that would be all of you) needed to start asking just what the future of this business is. If the answer you get is that the future of managed care is just to ride an unsustainable health care cost trend rate many more years into the future[bold is mine] you might just want to dig a little deeper this time.”
As usual, Bob is dead on. Health plans make their money by pricing just above trend, selecting risks, and avoiding claims wherever and whenever possible. They are getting (justifiably) hammered by regulators and the press for claims avoidance, and Wall Street may have finally woken up to the inherent problems in the standard health plan business model.
There are far too few health plans that actually do anything remotely resembling ‘managing care” – they manage risk, they manage reimbursement, they manage analysts – but they do not manage care.
I’ve said before, and repeat here – health plans that know how to manage care, particularly for the previously-uninsured, are going to do really well when universal coverage becomes the law of the land.
Unfortunately, there are few plans that qualify.
Apr
24
As my colleague Jon Coppelman presciently headlined way back in 1992 in a Lynch Ryan Report, “Managed Care: Who manages? Who cares?”
Any health plans you’ve seen that are doing a good job managing care? I’ve seen good reviews of Neighborhood Health Plan in Boston, and some of the other Boston-based non-profits like Tufts, but that’s it. Any others?
Spike – Also in Boston, Commonwealth Care Alliance. CCA is a non-profit HMO dedicated to helping the poor and the elderly. It was founded by Dr. Bob Masters who built the Neighborhood Health Plan. CCA is doing great work with fantiastic outcomes, even though it operates nearly entirely in the Medicaid world.