Queens, NY, residents rallied in the state's capital in an effort to save two ailing community hospitals that could close. The state has ordered the company that owns the hospitals to file closure plans following a recent bankruptcy filing. The hospitals have a combined 455 beds and serve about 200,000 patients each year. Some 2,500 people work at the hospitals.
Congressional leaders have agreed on the details of a nearly $790 billion stimulus package, an attempt by the federal government to jolt the economy, create millions of jobs and ease the financial woes facing individuals, businesses, and states. The bill is made up of four broad categories: tax breaks for individuals and businesses, investments in healthcare and alternative energy, funding for infrastructure projects, and aid to state and local governments that includes expanded benefits for individuals who are unemployed and lack health insurance.
Consumer-directed healthcare (CDH) remains a potentially cost-saving, patient-empowering movement, but member buy-in is still not there yet—and the success or failure of these plans may decide whether private health insurers survive.
It's been six years since health insurers started offering health reimbursement arrangements, but the question remains: Are consumer-directed plans merely a way for employers and health plans to shift more costs onto members?
CDH advocates bristle at the question, but not everyone is convinced that CDH plans are the way to go—even those in health plans.
Consider these two facts:
More than 42% of those who took the health plan portion of the HealthLeaders Media Industry Survey 2009 said that CDH is the best hope for healthcare. That result easily outdistanced employer-sponsored healthcare, government-funded universal healthcare, and universal health insurance. However, when looking at that figure another way, more than 50% of health plan respondents in the survey do not believe CDH is the best hope for healthcare.
Those same health plan/managed care folks are not sure that CDH plans actually empower members either. Nearly half of health plan respondents in our survey do not think CDH plans empower consumers and almost 20% don't think they either save money or empower consumers.
One reason for the lingering question is that many see consumer-directed plans as a way to shift costs to members under the guise of patient empowerment.
That cost shift is evident in rising PPO deductibles. Mercer recently reported that the median PPO deductible in 2008 doubled to nearly $1,000. High-deductible PPOs, without consumer products like health savings accounts and patient education, are a cost shift—plain and simple.
High deductibles are the downside to greater consumerism, but there are also pluses to putting members in control of their healthcare. Take, for instance, CIGNA, which recently reported successes associated with its consumer-directed plan, called CIGNA Choice Fund. The consumer plan costs less than PPOs and HMOs, and members in the consumer plan use preventive care, comply with medication, and utilize the best medical practices at the same rate or better than traditional plan members, according to CIGNA.
Health plan members are not interested in consumer-directed plans because they are satisfied with their current health plans and/or fear change, and employers are offering traditional plans that are too similar to consumer-directed plans and/or not educating employees about consumerism. Employers have to offer real alternatives if they want change.
In its purest form, consumer-directed healthcare is about patient empowerment and providing credible health information that is easy to access and understandable. Health plans have started that process by offering cost and quality information for doctors and hospitals, but there is still a long way to go.
For their own survival, it is vital for insurers to improve consumerism. All you have to do is look at Washington. There is a new president who doesn't think much of health insurers and has already laid the groundwork for a public insurance option to compete against private insurers.
If healthcare consumerism fails, not only could it bankrupt health plans members but it may signal the demise of private insurers.
Les Masterson is senior editor of Health Plan Insider. He can be reached at lmasterson@healthleadersmedia.com.Note: You can sign up to receiveHealth Plan Insider, a free weekly e-newsletter designed to bring breaking news and analysis of important developments at health plans and other managed care organizations to your inbox.
The University of Southern California has agreed to pay Tenet Healthcare Corp. $275 million to acquire USC University Hospital and USC Kenneth Norris Jr. Cancer Hospital. Tenet said USC had agreed to retain the 1,600 current employees. The two hospitals, located on USC's health sciences campus in Los Angeles, include 471 inpatient beds. The deal puts an end to a bitter dispute between Tenet and USC over control of the hospitals.
Maryland would set a minimum statewide standard for hospitals on providing free or reduced-price care to patients and prohibit hospitals from filing liens on patients' primary residences under a bill introduced in the General Assembly. The bill would require hospitals to provide free care to patients whose incomes are at or below 150% of federal poverty guidelines. The legislation would also bar hospitals from placing liens on patients' homes, ensure that hospitals provide details to state regulators about their oversight of contracts with collection agencies and attorneys, and require hospitals to provide details about the availability of financial assistance.
Anthem Blue Cross, California's largest for-profit health insurer, has agreed to pay a $1-million fine and offer new coverage to 2,330 people it dropped after they submitted bills for expensive medical care. As part of a deal with the California Department of Insurance, Anthem also will offer to reimburse those people for medical expenses that they paid out of pocket after they were dropped. The company estimated that those reimbursements could reach $14 million. In exchange, California agreed to drop its prosecution of its accusation that the company broke state laws in the way it rescinded members in preferred provider organization policies between 2004 and 2008.