Healthcare providers licking their chops in hopes of managing care for Medicare patients in return for a fixed monthly payment may want to talk to the Rock.
Prudential Insurance Company of America has announced that those covered by its supplemental Medicare insurance face rate hikes averaging 28% this year. On its face, this is an isolated example. But it also offers a startling glimpse of what can happen to those insuring care for the aging American population.
Moreover, the Prudential announcement raises the question of whether the federal government has a handle on the realities of healthcare economics. Politicians on both ends of the political spectrum are convinced that managed care will solve the bulk of the Medicare and Medicaid financial problems. Or at least they sound convincing with their matter-of-fact rhetoric and cost-savings proposals during the budget bickering.
We're not so sure it's that simple, especially if quality standards are of concern. Instead, we anticipate more overt rationing of care and the cutting of clinical corners if the ambitious savings targets are to be achieved. But that's the dirty little secret they don't discuss in Washington.
Physicians and hospitals traditionally are positioned as the advocates of their patients. But as medical organizations are formed to reap the rewards of risk, the advocacy role is in jeopardy.
Prudential insures 3.2 million seniors for medical services not covered by Medicare. Higher medical costs were cited for the big rate boost, but so was a jump in claims volume. In other words, Prudential discovered that seniors are living longer and seeking access to costly technology, expensive drugs and outpatient services.
Significant rationing and substandard care probably won't get too far. Providers and patients won't let it. Instead, more money will be plowed into healthcare, thus ensuring the integrity of the system. Some of the cash will come from the pockets of beneficiaries, and some will come from government coffers.
Just don't expect the kind of budget savings that are so easily forecast well into the future. And, if your organization intends to take on risk, be prepared to make some tough calls that could damage your image in the community.