Monday, May 24, 2010

The Pendulum Giveth, the Pendulum Taketh...

I was an HMO executive at the time and remember well sitting in that darkened movie theater.  The Helen Hunt character said, clear-as-day, "______ HMO, ______ pieces of ____!  Think of the spiciest, nastiest words you can and insert them into that sentence and you'll understand how tobacco company executives feel.  The movie, "As Good As It Gets", contained a single mom's struggle to obtain adequate health care services for her ill son.  The pretext was a vehicle only as it helped spark the relationship between Hunt's character and the one played by Jack Nicholson.  The underlying merits of the health care coverage/access issue at stake was preposterous, but that didn't matter to the movie audience who erupted into wild applause at Hunt's three-bad-words-in-one-sentence commentary.  You know a backlash is in full swing when an audience vigorously claps in the middle of a mainstream movie at an insult lobbied by one of the characters.

The heart of the matter is that, back then, the health maintenance organization movement was continuing along its predestined path to control health care costs by selectively restricting access to providers and services.  As a general rule, in order to cut waste you need to direct care to the most efficient providers and you must eliminate duplicative and unnecessary services.  Some view that as rationing.  Helen Hunt's character clearly did.

So the HMO industry responded.  Networks were opened up, benefits were expanded, and the industry witnessed the return of fee-for-service medicine.  Pay-for-performance and bonus structures based on quality outcomes were introduced as a mechanism for inducing responsible behavior among providers.  Sticks gave way to carrots.

But the pendulum is clearly coming back the other way now.

Last week, the Massachusetts legislature advanced a bill requiring small group insurers to offer restricted networks to spur premium savings.  Yes, requiring smaller provider networks.  That means limiting choice.  What would Helen Hunt say?

And today, The Boston Globe reports that insurers, emboldened by the public scrutiny of the Partners system, reports from the Attorney General's office about payment discrepancies that are not tied to performance and quality, and a more activist legislature when it comes to health care costs, are reaching out to providers seeking payment cuts.  We have already seen benefits packages being stripped and the reimbursement cutting will not only narrow choices, but prompt closed network models of care delivery.

It will be interesting watching this unfold.  Interesting until the next backlash...

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