Managed Care - October 2008 - (Page 22) offer more flexible, affordable policies,” she said in a recent article on Medscape. “That means rolling back mandates and regulations that have made health insurance so expensive in the first place — including community rating, guaranteed issue, and a tightly regulated insurance market that has dried up competition — and they should immediately advance initiatives that provide new subsidies for the uninsured to purchase this more affordable private insurance.” Managed care has a big stake in the outcome of that debate. Who makes the sacrifice? As calls for reform spiked in the run-up to the election, managed care organizations may have provided added ammunition to their most outspoken critics with comments intended to soothe some troubled investors. Last spring, as a lineup of the country’s biggest and best known health plans gathered with analysts and investors to review some sorely disappointing quarterly profit numbers, the talk turned to cutting costs by throwing all their leveraged market weight to win lower rates from providers and raising premiums, too. The emphasis was on improving the bottom line. “We will not sacrifice profitability for membership,” Angela Braly, the CEO of WellPoint, told analysts last spring. Those are fighting words to Kirsch. Profitability, he says, is exactly what should be sacrificed in making health care more affordable. And new regulations can do just that. Getting 90 percent of premiums to go toward health care costs with the rest set aside for administrative costs and profits would be one simple way to reduce costs. “Employers and consumers are interested in seeing that what you have has value,” says Kirsch. “That was the original idea of managed care.” Now, the industry is more interested in profit than health, he says. /Laszewski, though, is betting that the whole reform movement will get whittled down to three much more modest areas that most members of Congress can agree on. “Most likely what we will have is a bill that makes it easier for small employers to access insurance, offering some financial assistance; a bill having to do with health information technology; and we’ll have to deal with the physician payment problem again,” he says. Come New Year’s Day, 2010, physicians will be looking at a proposed 20 percent cut in Medicare payment rates. That has to be fixed, and the easiest way is by doing what they did this year: Cut it out of Medicare Advantage. “The only place there is an incredible pot of money in Washington D.C., period, is Medicare Advantage,” says Laszewski. Congress will move to equalize the rates for both lower cost traditional Medicare and Medicare Advantage, and that will probably trigger an exodus of health plans out of the government program. AHIP’s Ignagni, though, doesn’t believe that lawmakers will readily cut support — and benefits — for a program that has signed up large numbers of constituents who are happy with what they have now. “I’m not saying they won’t go back,” says Ignagni. “But I think that members of Congress are going to be looking very carefully at how it impacts their constituency.” The no-change option Ultimately, nothing may happen, notes Goodman, if a Republican president squares off against a Democratic majority in Congress. He thinks that could be good. “Gridlock is better than doing the wrong thing,” says Goodman. “I know there’s a desire to do something, but most of the proposals would not improve cost and quality and most wouldn’t improve access. “What a lot of people in the business world think is that health care reform will relieve them of the burden of providing health care insurance,” says Goodman. “When you look at the left, all they have in mind is making employers pay even more than they pay today. This is why gridlock is in some ways likely. Everybody’s idea of reform is getting somebody else to pay for health care.” Absent real reform, the pressure will continue to build. Laszewski doesn’t see any reason 2009 ultimately won’t look a lot like 2008. Or, for that matter, 1976. “Every year since 1976, when Carter got elected,” says the analyst, “people have been telling me this can’t go on.” Yet, it does. MC 22 MANAGED CARE / OCTOBER 2008
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