Annual Report…
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Each year, Harvard Pilgrim publishes an annual report — which usually focuses on some issue — or set of issues — in health care. Over the past few years, we’ve written about transparency in health care, on how Harvard Pilgrim the employer manages our own health benefit plans, and on how we structure and deliver customer service, to name a few. This year (2006, actually), we decided to take a look at rising health care costs. The paper version of the report is available here at Harvard Pilgrim, but it’s also available as a PDF online. I hope readers of this blog will check out the 2006 annual report, and if you have thoughts or comments, share them. The point of this site — and this year’s report — is to engage in a discussion about health care generally and health care costs and quality in particular. Hopefully, this report can be the start of an ongoing discussion between and among Harvard Pilgrim and others about what might work and why.
We seek this dialogue because we really do believe that just doing what we’ve all been doing isn’t going to be enough.
Now that’s an annual report! (Normally they put me to sleep.) Top marks for telling a story.
Extremely well done, Charlie. If I didn’t know better, though, I might think your annual report is sending me a message not to try to be a low cost/high quality provider in this marketplace — because there are currently no incentives to do so. I know you don’t believe that, though — so please give your version of the simple message I or other hospital administrators could use with our Boards of Directors as to why that is a good path for our hospitals at this time.
Hey Paul - As I’ve said before, there are three reasons to pursue a low cost/high quality strategy. First of all, the biggest payor of all - Medicare - is building a case to start paying for services based on quality and cost criteria. And while it will be blunt and unilateral, it will affect 30-40% of most providers’ revenue streams. Second, public entities - state governments, for example - and the employer community to a lesser extent, are demanding more and more data on quality and cost. That trend will continue. Third, there is a limit to how heavily the private carriers and payors can cross-subsidize Medicare and Medicaid. We already pay 120-130% of Medicare and 135-150% of Medicaid (depending on the study). There are limits to how big this disparity can get before the employers - and the public payors - will start saying, “Medicare rates for everybody.” Not being relatively low cost at that particular moment would be, shall we say, disruptive.
16% of GDP is a scary figure. That politicians have been given the power to make change and yet do not — quite the contrary, they take the nation many steps backwards (cough, prescription drug supplement signed into law, cough) — is even scarier. How will anyone be able to get or afford care in the future? Honestly, what will stop the 16% from becoming 30, 50 or even all of our GDP by the time baby boomers are in the ground?
It’s a remarkable annual statement that HPHC has put out…
Kevin - someone once said health care is 2% of GDP away from croaking the US economy. In other words, when it was 6% of GDP, the world would end if it got to 8%. When it got to 8%, people said the economy would crash if it got to 10%. When it got to 10%, people said, “12%.” And on and on. I don’t know when we hit the tipping point. The US still generates more jobs and more economic activity than any other nation on earth, despite our high health care costs. Part of it may be due to the fact that so far, more spending on health care is not all bad - it improves quality of life and capability to be productive for lots of people. Stuff that used to take a week in the hospital and three weeks in rehab to recover is now day surgery. Medications, in many cases, dramatically improve people’s quality of life. There has to be some positive benefit for society in all that. But - there’s a seminal moment out there somewhere, I just don’t know where it is. I can tell you, though, it’s not, apparently, 16% of GDP. Maybe it’s 18%(!!).
i work with a company that has Harvard Pilgrim Health Care. as with all health insurance carriers the premiums continue to rise as well as the deductibles (the company continues to chose the best plan and make it as affordable for the employees and the company as possible - the company pays for 50% of the insurance with the employees covering the remaining 50% through payroll deductions). we received your pamphlet “that’s right. we’re talking expectations, truth and ideas”. it is a very slick presentation. i am curious as to why Harvard Pilgrim is seemingly pushing a narrow network products idea. i am very wary of a “narrow network products” view point. what exactly are the benefits of such a system and what exactly is lacking in such a system. health care in this day and age is not all about the money. it is about protecting ourselves’ and families’ health. as a citizen of this country, i am tired of the spinning from various businesses, insurance being the top most irritant. i want a fair and affordable plan for myself and the other employees at this company. we all work hard. we all pay our dues whether it is taxes or insurance premiums. we want a fair deal from our chosen doctors and insurance carrier without our health or pocket book suffering. i appreciate this venue you have started. i would like to see a little less promotion and more dialog with other insured persons. thank you for your time.
Charlie - It would have been interesting if you provided info to your HPHC members on where their premium dollars specifically end up (assuming you are allowed to do this). This would include line items like primary care, lab, specialists, drugs, inpatient hospital stays, surgical day cases and diagnostics. Further, detail for HPHC members what percentage of HPHC members are covered by each provider network and how much each network receives of the total medical dollars to care for their patients. I think members would be very surprised that a significantly disproportionate amount of dollars are going to certain provider networks to treat their patients (i.e. Partners covers 20% of all HPHC members but receives 35% of all medical dollars paid out). The recent addition of 60 more doctors to the Partners network (40 of whom are PCPs) continues to demonstrate that they can attract providers by offering them access to their much better contracts. If everyone takes this “if you can’t beat them join them” approach and you’re paying everyone at Partners’ rates then you will really see how high health costs can go here in eastern Massachusetts.