Be Careful What You Wish For…
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The show is pretty much the same - every time. Public sector entity gets in budget trouble, cuts have to be made, and providers who do business with the public sector get hammered - hard. It’s happened with Medicare at the federal level for years, and it happens with Medicaid at the state level with some frequency as well.
Well, the show is back in town, as state governments face declining revenues. In Massachusetts, the state is not only cutting Medicaid payments prospectively - it’s cutting Medicaid payments for some providers retrospectively - simply choosing not to make payments to them they had planned on and expected.
I must say, each time this happens, I can’t help but wonder if the hospital operators and physician leaders who think a single payor like Medicare For All is a good idea ever stop to think about how these agencies deal with their financial problems. When they have a problem, they unilaterally whack their provider community hard - in ways private sector payors would never consider.
And then those same providers who think Medicare For All is a great idea turn to the private health plans they do business with and say, “Hey - you need to help solve my Medicare/Medicaid deficit - which just got worse.”
Sheessh. All I can say is, “be careful what you wish for.”
Charlie - The other factor here is that hospitals and providers serve very different communities. You have local suburban and teaching hospitals that supplement Medicare and Medicaid volume with a significant line of business with the private plans like BCBS, HPHC and Tufts. These hospitals like Mass General, Children’s, Newton Wellesley, Winchester and South Shore can at least make up some of the Medicare and Medicaid cuts by seeking increases from the private payor mix. However, other largely urban areas largely don’t have this opportunity as nearly their entire case mix is Medicaid and Medicare…. they have hardly any private plan patients. These include hospitals such as Carney, Brockton, Boston Medical Center and Cambridge. Without the supplemental political payments and with the retroactive AND prospective cuts from Medicaid and Medicare these hospitals could be facing a “perfect storm” as the economy continues to force the government run programs they survive on to heavily reduce reimbursements and subsidies.
Sean — That’s why, in the end, for transparency to be truly effective, we’ll need to collect and post publicly what public payors par for services too - not just what private payors pay. Gettting Medicare and Medicaid to play here will be a lot of work - because they tend to underpay - make that UNDERPAY - relative to what the private payors pay. In the absence of public disclosure, it’s hard to draw too many conclusions about who’s cross subsidizing who - but the public release of the private data should create a lot more interest in the public payor data than we have now.
As Ronald Reagan once said: The ten scariest words in the English language are, I’m from the government and I’m here to help you.
Did you miss this article from the LA Times? Apparently “private sector payors” are doing exactly what you say they’d never consider.
Duncan - Have now seen the article. Thanks for sharing. While I get your point - that private payors aren’t always great business partners either - I need to point out that the article you link to references the fact that the markets in which disputes between payors and providers run hottest tend to be ones in which health plans have consolidated. As a result - and I’m paraphrasing the authors here - providers (and probably employers and members) don’t feel like they have a lot of options to choose from when disputes over what’s covered and what’s not arise. And in the end, neither side steps up and does what needs to be done to clean up the administrative dispute.
I wonder if this isn’t exactly the scenario that would play out under a single payor. The markets HPHC operates in all have more than three carriers - and we compete - on a number of fronts - including on our ability to get our administrative act together and make our claims processing systems work the way are supposed to. We know our provider network, and our customers, have options - good ones - to choose from, and it forces us to be accountable business partners.
That said, I’d offer up two other key points in response to the article. First, almost all private health plans support independent third party reviews for claims in dispute - which in most states, is done by the state department of public health or the state department of insurance. This makes most of us pretty careful about not paying claims that might be overturned on review. And second, sometimes, it really isn’t our fault - hard as that may seem for many to believe.
But like I said - this is a call I believe the provider community will have to wrestle with in the not too distant future - and while I understand the attractiveness and simplicity of one payor, people should appreciate that that comes with its own set of risks and downsides as well.