Quality Schmality!

Managed Care Magazine is an excellent resource for exploring the trendy topics in Heath Care. The way managed is defined most people with health insurance have managed care which can be HMO/POS/PPO plans. Health care management is defined by the types of restrictions that are placed on the care delivery. HMOs have the most restrictions where the network of doctors is smaller, to see a speciallist you need a referral from a "gatekeeper" and they scrutinize whether hospital stays are necessary or put a limit on the length of a hospital stay. There are also no out of network benefits except in an emergency. In a PPO setting basically the "management" comes down to who is in your network. In practice most PPOs have an expansive network and a doctor in the network has to literally commit fraud or demand an exorbitant fee amount to be kicked out of the network. This leads to PPOs not being very good at controlling costs or directing people towards the most efficient providers. On the other hand HMOs generated a backlash because they were perceived as too restrictive in what they would cover and the choice of doctors. I think that part of the shift away from HMOs has to do with the people making the decisions about benefits and their personal preferences for their health plan. Another reason was the understandable backlash from physicians who weren't getting paid as much from the HMOs and were on the hook for some of their patients expenses. HMO reimbursment is much more complicated - and if doctors didn't have certain analytical capabilities they could get into serious financial hot water. Anyways with the unsustainable cost growth in PPOs now there are 2 hot methods of trying to slow the cost trend by getting consumers more involved in selecting more efficient providers. 1. Consumer Driven Health Plans - involving consumers by giving them a pot of money, a high deductible and hopefully cost and quality information. 2. Tiered Networks, selecting a subset of the full PPO network based on efficiency and theoretically quality. Then giving people an incentive to go to the selected providers by cost sharing differences. From experience I am highly sceptical of either to do anything meaningful to slow cost trends. But to even work on the margins there needs to be good data and information available to base decisions on. This article gives a nice rundown on where these efforts stand right now.