In popular culture, the term "HMO" has for years been little more than a profanity. Sometimes it's an adjective, as in "HMO bastards," sometimes a noun, such as "@#*&%&! HMOs." Watching an old rerun of my favorite show, "The West Wing," the other night, I was struck by a story line about the deputy chief of staff who was eager to sue his HMO over an unpaid claim of $50,000 for open-heart surgery resulting from a gunshot wound. It seems he failed to get prior approval for the surgery while lying unconscious in a pool of blood. Putting aside the fact that nobody with federal-employee health coverage would need that approval or owe such an out-of-pocket sum for emergency care, what was notable was the banality of the scenario. It's simply accepted that this is something an HMO would do.
Contrast this with a recent trip I took to Washington to attend the re-christening of the merged health insurance industry association now known as America's Health Insurance Plans. Later, I sat among some 700 rank-and-file health plan workers in town to attend a meeting about the new Medicare drug benefit. It was surprising how interested these people seemed in ensuring better quality of care for seniors.
AHIP ("A-hip" in common parlance) has given itself a new mission statement. The preamble states, "We believe that the American people are ready to embrace bold measures that directly address the root causes of diminished access, inconsistent quality and accelerating costs in the U.S. healthcare system." The group backed the idea of paying providers only for demonstrable quality of care and creating disease management programs for such illnesses as diabetes, hypertension and congestive heart failure, which account for the majority of controllable health system costs.
It occurred to me that if this rhetoric was for real, there might be an opportunity for the maligned health plans to take the lead on fixing our healthcare system's fundamental ills of too-high costs, vastly uneven quality of care, dearth of evidence-based medicine and failure to invest in needed IT.
I understand the irony here. Health plans' merger mania, huge paydays for chief executive officers, double-digit premium increases and sky-high profits are ample evidence of their own complicity in the health-spending crisis (See story, p. 18). Nevertheless, they are strategically placed to take the lead in achieving cost-efficient and high-quality care. Whether that is possible while continuing to achieve the kind of profitability investors have come to expect is unknown.
Why health plans and not providers and government? Providers lack the incentives to invest billions in streamlined care and don't usually have the kind of patient relationships conducive to disease management. Government can and likely will continue to expand its fledgling efforts to control costs and improve quality, but Medicare is at best a clumsy tool for modernizing the care delivery process.
The new Medicare law puts health plans at the center of any efforts to keep that program's costs in check. They have been thrown a huge bone-estimated at up to $46 billion over 10 years-that puts them on the hook for making Republican dreams of competition and cost control in Medicare come true.
Regardless of whether that competition comes about, the rest of the healthcare world needs someone, anyone, to take the lead on fixing a broken system of care. If access to care is really so important, the quality and cost problems have to be addressed, and history has shown that payment is the only reliable incentive. Government and employers hold the purse strings, but it is health plans that cut most of the checks. The wave of consolidation has given many plans the economies of scale, patient populations and clout to carry out their high-minded goals. The only question left is whether they are truly up for this challenge.