Wednesday, June 22, 2011

Health Care Reform: Medicaid Implications

Far be it for me to claim that I have the (best/only) answer to our health care fiasco.  However, before searching for solutions, we need to know & understand the problem.  Last week, I noted how more primary care physicians (Disclaimer:  I am a primary care physician) improve Medicare beneficiary outcomes at a lower cost. This week, I thought I'd point out a recent study looking at how publicly traded Medicaid managed care plans compare to non-publicly traded ones with regard to cost & quality.

Specifically, the Commonwealth Fund, started in 1918, noted that the publicly traded plans, who answer to shareholders, spent more money on administration, compared to the non-publicly traded ones.  As a result, the publicly traded Medicaid plans also spent less money on actual patient care, eg medical loss ratio.  Of course, money isn't everything.  But in this particular situation, quality of care, as measured by vaccinations, well-child visits, and the usual blood pressure, LDL, HgbA1c parameters, etc fared worse in the publicly traded plans.

The authors were benevolent and offered up explanations for their findings.  For instance, perhaps the larger publicly traded plans had higher administrative costs to handle the greater number of enrollees.  Perhaps they had greater expenditures for information technology.

However, I am not so sanguine.  Just follow the money.  A publicly traded company is beholden to its shareholders, not its enrollees and membership.  My opinion, and it's just my opinion, is that the higher administrative costs are to pay for employees to deny & delay care, thus lowering actual patient care expenditures.  As a patient (I'm human, after all!), my premiums continue to go up.  As a physician, my reimbursement continues to decline.  And in fact, many of my colleagues are forced to hire staff to deal with all the road blocks to care put up by these health plans.

In the end, has your quality of care improved?  Have you gotten out of your plan what you put into it?  Not likely if the CEOs of the major health care plans all hauled in several million dollars in compensation last year!  For instance, Ronald Williams, the exiting CEO of Aetna, made off with $14 million in stock as a bonus on top of $6 million in salary.  That's a lot of money that could have gone towards diagnostic tests, procedures, and therapy.

I guess things could be worse.  I suppose a health care plan could pay its CEO $124.8 million for a year's work.  Don't think this could happen?  How could we so quickly forget United Health's William McGuire remuneration for 2005?

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