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.
Obstetrics is a service that Paul Kronenberg, MD, feels his hospital can hang its hat on. Though not as profitable as other more glamorous services, the CEO of Crouse Hospital in Syracuse, NY, felt that obstetrics was where he could build a base for the formerly struggling hospital among women, who make most of the decisions for their families regarding healthcare. Kronenberg, a longtime medical staff leader at Crouse, came aboard as CEO after two failed turnarounds. In this podcast, Kronenberg talks about how, with the help of a dedicated group of leaders, a focus on obstetrics helped led Crouse out of the wilderness.
Imprivata, Inc. and CDW Healthcare have announced today that the two companies have partnered to bring Imprivata's Single Sign-on, Authentication Management and Physical/Logical Security Convergence solutions to the healthcare market. The partnership is designed to answer IT security and authentication management concerns.
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.
Using individual healthcare Web sites that allow patients to share the progress of serious injury or illness, people confronted with health emergencies can keep friends and family updated instantly on how they are doing. Between CaringBridge and CarePages, two of the industry's large patient Web services, nearly 200,000 sites have been created in the past decade. Hundreds more have gone up on private systems sponsored by hospitals.
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.
Motivated by mounting medical costs, lawmakers and executives are urging doctors to prescribe medications online. But older physicians have been reluctant to go paperless, arguing that the upfront costs of going digital fall on their shoulders, while the immediate savings go to pharmacy benefits managers.
California Pacific Medical Center, which runs St. Luke's Hospital in San Francisco, announced in 2007 that it would close the hospital as an acute care institution within a few years, turning it into an outpatient hub. People suffering common acute illnesses such as heart attacks and pneumonia likely would be transferred elsewhere. Under such a scenario, medical care would be reshaped in the city.
New York Gov. Eliot Spitzer has proposed an initiative to pay off student loans for doctors as a reward for working in underserved areas. The proposal would set aside $2 million a year to create a physician loan repayment program that would help as many as 100 doctors each year. If the doctor stays in an underserved area for the minimum requirement of two years, 30 percent of the loan would be paid off, and payments would grow each year to the point where it would be paid off after five years.
California Gov. Arnold Schwarzenegger has proposed a plan to make most enrollees of state-sponsored medical care fill out more eligibility paperwork as a means of saving money. Administration officials expect the rule will result in 122,000 people being dropped from the rolls next year, saving the state $92 million. The proposal could have significant impact on San Francisco's plans to become the first city in the nation to provide insurance to all residents because the city is relying on the state to maintain coverage to existing Medi-Cal patients.
