I attended a Texas State Innovation Models Initiative
Stakeholder meeting, an initiative of the federal government to design and test
innovative health delivery and payment models with the intent of lowering
health care costs. I should clarify, the
intent, I believe, is NOT to lower health care costs, rather it is to lower
government expenditures on health care. Those
are two entirely different goals.
Lowering health care costs saves money for everyone, lowering the
government’s health care expenditures nets saves money for the government. I don’t see any substantive efforts to cut
total expenditures on health care, there may be some REAL efforts going on
somewhere in the vast country of ours, I just don’t see them.
The meeting was conducted by a private company, Health
Management Associates, a consulting company that will collect information from
various locations and parties throughout the state and submit a report to the
Texas Health and Human Services Commission.
The two company representatives who led the meeting are former state
employees. Now wrap your head around this,
the government hired retired government employees to tell the government how to
save money. Doesn’t that sound a bit
oxymoronish?
The target audience was health care providers and health
care payers. Consider these two groups
for a moment. Health care providers,
they were mostly referring to physicians and hospitals, want to increase their
revenue, cut their costs, and simplify their processes. The payers are insurance companies and
managed care organizations that seek to increase their revenue, cut their costs
and simplify their process. These two industries have engaged in a cat and
mouse ritual, the providers submits claims to the payer. It is in the provider’s financial interest to
extract as much money from the payer as it can; and it is in the payer’s
financial interest to reimburse the providers as little as possible. The missing element in this equation is the
source of health insurance premiums, America’s employers and those private
citizens who purchase health insurance.
Wrap your head around this, the government wants to spend
less on healthcare, and the healthcare industry wants to improve its bottom
line. Am I the only one who sees the
inherent contradictions? Caught in
between the proverbial rock and the hard place are health care consumers and
purchasers of health insurance. Will the
consumer have better health outcomes?
Will insurance purchasers, mostly employers, have lower premiums.
Enter the government’s initiative to reduce expenditures. It is pitting competing interests of the
government’s expenditures, the provider’s interest and the payer’s interests,
against one another. The challenge to
the payers and providers is to come up with innovative ways to cuts costs. Caught in the cross hairs is the American
public, the same public that is actually funding all of this activity. After the meeting, a hospital executive
commented about the low profit margin for hospitals, lost in his analysis is
the total dollar amount in profits.
While salaries are growing at 2 to 3%, and inflation is at, or below,
that rate, insurance premiums continue to increase by more than 8% annually.
