40 protesters who rallied to keep supportive services such as emergency care and obstetrics at Saint James Hospital in Newark, NJ. Newark United to Save Saint James, a group of hospital employees, residents and church leaders led the charge in this and four other rallies, in an effort to save this and Columbus Hospital in the city's North Ward. The two hospitals were sold in January by Cathedral Healthcare System. Catholic Health East has agreed to maintain a 24-hour satellite emergency room, prenatal clinic and mental health clinic at Saint James, but those at the most recent rally fear the services will not remain there for long and are asking for a minimum five-year agreement.
Working in partnership with two South Florida universities, Boca Raton (FL) Community Hospital had originally scheduled to begin construction this year on a large academic medical center. Instead, a $42 million loss is pulling attention away from the $600 million project. The hospital's new chief executive officer could not say when construction would begin and acknowledged the project could fall apart if revenue and the overall economy don't improve.
About one in five patients treated last year at Kenneth Hall Regional Hospital in East St. Louis, lacked insurance, and another 40 percent were covered by health programs for the poor that pay less than the cost of care. As a result, Kenneth Hall has lost an average of $3 million a year in the last five years. In addition, these losses would have been double without a buoy of grants, rental fees for hospital space and other revenue streams.
Many are still rightly skeptical about the potential of consumer-directed healthcare. Cynics see it as a chance for employers to cut their exposure to healthcare costs. Realists say to ensure that consumer-directed care works, at least initially, companies will have to spend at least as much as they currently do on managed care--at least until their employees are comfortable with their expanded decision-making. Optimists say that CDP is a tidal wave that will remake healthcare into a quality-based industry, governed by the efficiency of the marketplace. Oh, and by the way, saving money along the way.
As the consumer-directed healthcare concept enters the second half of its first decade, any of the above scenarios could still come true. But I think--and readers, you're on the front lines, so please weigh in with your opinions--that real success in improving quality and keeping price increases down will come down to two factors: making sure employees don't feel like they're getting shafted, and making sure those same employees have enough decision support so that they don't feel like they're shouldering the burden of navigating the horribly confusing healthcare payment system all by themselves.
Vik Kashyap, surprisingly, isn't in the optimist's camp. You'd expect him to be nothing but a rabid booster of consumer-directed care, given that his company's fortunes--and a good portion of his personal welfare--depends on CDP's eventual success. As chairman and CEO of a company called MyCanopy.com, Kashyap believes in the power of the consumer. But he also believes in giving consumers the tools to achieve that power. And those tools have little--necessarily--to do with health savings accounts or health reimbursement accounts.
MyCanopy allows companies that want to provide health insurance for their employees to use Web tools to pick their own insurance plan, with no restrictions other than the amount their company gives them to pay for their own insurance. They can purchase a PPO or HMO if they want to-and if they can afford one. In any case, they shop for the best deal they can directly.
Kashyap argues that in the current iteration of consumer-directed healthcare, the consumer is often not present.
"What I mean is that healthcare companies in general have not had to establish a direct financial relationship with consumers to date," he says. "This kind of education of current employees requires a lot of handholding."
He says MyCanopy can handle that handholding, calling it "the Expedia of healthcare." That remains to be seen. But at the very least, his cadre of clients seems happy with MyCanopy's efforts so far. And these aren't mom-and-pop outfits that don't know how to navigate healthcare's Byzantine payment system. They're huge healthcare-oriented behemoths like CVS-Caremark, Coventry Healthcare and big financials like Wachovia, Fifth Third Bank and The Hartford.
I can already hear the complaints. The consumer isn't ready to take on first-dollar costs for healthcare--even with the cushion of a health savings account. Look how Americans in the aggregate manage their credit card bills or their mortgages, for Pete's sake. Right on both counts. It will be a disaster, you might say.
Yes, it might. But what we currently have isn't working either.
Hospitals and other healthcare providers will likely have to bolster their collection efforts, regardless, to get the deductible or coinsurance amounts for those people who haven't fully funded their HSAs. That's a problem. But I think we can all agree that healthcare costs can't continue to rise at double-digit rates. To use another shopworn expression, we're all caught between a rock and a hard place.
And that is why I still think, despite all the missteps that have led us to this point, that consumer-directed healthcare has a chance to really change the industry for the better. Maybe consumer-directed care will end up being the healthcare equivalent of what Winston Churchill said about democracy: the worst form of government--except for all the others that have been tried.
Could these be the best of times for health insurers? According to this report, yes, but there are a host of dark clouds on the horizon. Health plans are seeing limited future opportunities to consolidate, Medicare Advantage plans aren't likely to be as lucrative in the future, and building out in the individual market increasingly looks like a down-and-dirty way to grow.
Florida Gov. Chrarlie Crist and the Legislature may be on the verge of taking a significant step to reduce the number of uninsured in Florida. Crist and the insurance industry appear to have agreed that adult children should be allowed to stay on parents' policies until the age of 25 or 30, even if they're no longer in school. The governor has also proposed expanding Florida Kidcare to include all uninsured children in the state.