Despite the pall of uncertainty that has put the health care industry into a brain lock, real reformers are still at work.
The national legislation, which won’t kick in fully for two years, has claimed huge proportions of mind share in the industry. The various players wait nervously as federal and state regulators write rules and regulations to flesh out the Congressional concoction.
Leaders of the health insurance companies uniformly respond, “I don’t know” or “We’re not quite sure” of what they are going to bring forward under ObamaCare. Insurance agents and consultants are equally befuddled.
They know that he individual mandate, if it survives legal tests, will double the number of single policies from about 14 million to 28 million. That’s a huge new market, where the big insurers currently have only a small percentage of their business. They will bring new products to the individual market, but their final form will depend on the rules coming down on what constitutes acceptable coverage in the minds of the mandarins drafting the mandates.
At the broker or agency level, agents are still trying to figure out if they will still be in business. Will middlemen survive in the face of mandated exchanges that will offer policies through the government in one manner or another?
Some figure that they will be “navigators” who will help companies through the thicket of federal and state regulations.
In states like Wisconsin, where Republicans are in charge, free market structures will be maintained as much as possible under the new law. The state exchanges will be minimal in what they do. So agents figure to be around after 2014.
Meanwhile, they and their business clients cope daily with the real problem in health care, the issue unaddressed by the new law, the hyperinflation that plagues the country at all levels.
There is good news in the private sector: Bold moves at the ground level are making waves not yet noticed by the wonks in government, the think tanks, the media and academe.
Here are some data points on real reform that add up to a change in the game:
- Humana, a major health insurance company, is putting in its own on-site primary clinic for 1800 employees. It will include full wellness and prevention programs. They are joining a stampede of large employers whose own clinics will take back the front end of the supply chain and provide truly proactive care. The new clinics are an antidote to the reactive care that typifies American health care. The on-site clinics constitute a disruptive business model.
- QuadMed, which contracts to operate on-site clinics, is going nationwide at a furious pace. It’s up to 250 doctors and 11 clinics, and its just getting going.
- United Healthcare will be coming out with a new mobile “app” that allows people to buy interactive primary care at a low cost on their smart phones. Expect more low price alternatives to big system medicine at the primary care level.
- Self-insurance, long thought to be viable for companies with 500 or more employees, is being offered to firms as small as 15 employees. The small self-insured companies will need stop-loss coverage at low levels, but they will benefit directly if they apply best practices for health cost management.
- Transparency on prices is advancing — finally. Humana, United and Anthem all offer versions of transparent net prices (after discounts).
- The next step is bundled prices for episodes of care that we all can understand. That’s starting to happen, too.
- The stampede toward consumer-driven healthy plans roars ahead, and the criticisms of those plans from the cheap seats are slowly disappearing as study after study demonstrates that incentives and disincentives make a difference in the purchase of health care.
The magnitude of health care inflation screams out for disruptive technologies, and more importantly, disruptive business models. The existing model is flat-out busted on the economic side.
It’s up to leaders in the private sector, especially the payers, to drive real reform. Those who have the gold rule, and the payers have the gold. They write the checks.
Reform can come from the inside of the health provider corporations. That’s happening as lean disciplines are introduced at institutions like Theda Care in Appleton, Wisconsin, Gunderson and the Cleveland Clinic. But reform moves a lot faster if customers are demanding improvement in value for their dollars spent.
