I haven’t read their report in detail, the one that some are claiming proves a governmental healthplan option will quickly dominate all the private plans. But a couple of worthies have, and I suggest you peruse their thoughts if you’re interested.
Merrill Goozner’s take is “the Lewin study may have overestimated the shift to the public plan.”
Roy Poses highlights a potential conflict of interest: Lewin is owned by Ingenix which is owned by United HealthGroup.
I’d be remiss if I didn’t note that I’ve worked with several Lewin folks in the past, and been impressed by their capabilities and intellect. I don’t know what part, if any, they played in the report. I do know that they aren’t the type to slant findings.
But here’s the problem; Lewin’s study assumes the governmental plan would pay Medicare rates, which would enable the Feds to undercut private payers’ premiums by more than twenty percent.
That’s a huge assumption as providers would not have to accept Medicare rates. In fact, as I’ve pointed out before, they could refuse to participate at all, making it kind of hard for the Feds to sell a health plan with few physicians or hospitals in the book.
What does this mean to you?
Question your assumptions.
Apr
12
Are they trying to say that the private insurance companies cannot compete against the government.Maybe its because that they don’t want to compete. If the MA is any indication, the name of the game is to make as much money as they can. Forget about the insurer.
Thanks, Joe, by way of Roy Poses, for pointing out perhaps one of the best-kept secrets in the business. That is, that The Lewin Group, once the go-to company for serious analysis on issues of healthcare cost, particularly in Medicaid and Medicare, became a wholly owned subsidiary of UnitedHealth Group nearly two years ago. I think many in government and industry still think Lewin is an independent broker of information. They are not, and anything they produce needs to be viewed with caution.
It’s amazing how under-reported the United/Ingenix purchase of Lewin was. A Lexis search for the first three quarters of 2007 (the deal was announced in March and closed in early June) produces just four hits: Bloombert, Modern Healthcare, Healthcare Financial Management and the Minn/St. P Business Journal.
Since then, there are few mentions that connect the dots from Lewin to Ingenix to UnitedHealth.
This is the stuff journalists are supposed to do.
Whether hospitals and doctors would participate in a public option is a question of numbers, marginal costs, and how nimble providers are in reducing their own costs. When creating a provider network, there is something of a chicken-and-egg issue: if I think that there will be a huge number of enrollees, I’m going to participate, but if I think the number will be small, I won’t. In many – if not most – hospitals, Medicare is the single largest payor and the single largest source of admissions; few nonspecialty hospitals do not participate. In the same way, if a hospital believes the bulk of patients are going to be in the public option, they will participate, even with a 20% haircut on the reimbursement.