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Last week I wrote about the confusing incentives for employers who offer health insurance for their employees.  Are the penalties, excuse me, the “assessable payments”, a sufficient deterrent to keep employers in the health care coverage providing business?

Yet those penalties are only the half of it.

The wheel of progress?

Employers also face penalties if their plans fail to measure up to the law’s standards.

• It must have an actuarial value of at least 60
• Employee share of the premium must be “affordable”

The definition of affordable gets interesting.  The cost of employee only coverage cannot exceed 9.5% of household income.

9.5% of household income

Get that?  Household income!

How does an employer know what an employee’s household income is unless both spouses work for the same employer?

And if the employee’s spouse is covered under her own employer plan do you combine both premiums and compare that to both incomes?

Is this over an entire year?

What happens when an employee is on FMLA and continues to pay for their health care?

Or on workers’ compensation?

Or on some form of leave without pay?

But the employer only needs to be concerned IF the employee declines the employer sponsored cover AND IF they purchase insurance on the exchange, AND IF they need a federal subsidy.

If the affected employees continue on the employer sponsored plan, then nothing happens.

No employers will be expected to know:

• household income
• whether an employee purchases insurance on an exchange
• whether an employee gets a federal subsidy
• the actuarial value of the health plan

Through the looking glass

Lurking off in the future is the dark cloud of an excise tax on “high value health plans,” so called “Cadillac plans.” But in the ultimate wisdom of congressional legislators, value here means cost.  This conflicts with the notion of providing a plan that has an actuarial value of at least 60.

Plan sponsors can avoid the excise tax by reducing the cost which they do by reducing the actuarial value.  Since the threshold for the excise tax is not indexed to inflation, employers may face the prospect of choosing between paying an excise tax for offering a “Cadillac plan,” or paying a $3,000 fine for offering a plan that does not meet the 60% actuarial value test.

One of the biggest criticisms of the US health care system is its high adminstrative costs.  A certain portion of that administrative overhead isn’t even counted in the health care costs measures because it is borne by employers.

Does this sound like administrative simplification?  Does this sound like a program designed to encourage employers to offer comprehensive health care coverage?  What will employers do when they need to add additional benefits staff just to keep pace with new regulations that have nothing to do with their core business?

The future of employer sponsored health care faces a challenging future.

Photo Credit:    JL McGee

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Can one have too much health care coverage?

Much of the debate for expanded health care coverage and for a single payer financing and delivery system arises out of concern for people without access to the traditional portals into the health care system: employment, old age, or poverty.

Abundance

But some people can have a whole lot of a good thing and still their medical bills fall through the cracks.

Take Dinah for example.

Consider the ways she had access to health care.

She was employed and had access to employer sponsored health insurance.

She was married and had access to health insurance as a dependent on her husband’s plan.

Her husband died and she became eligible for coverage as a survivor through her husband’s plan.

Her husband also had a retirement from a previous employer and she had access to coverage as a survivor on that plan.

She retired and had access to retiree health insurance from her employer.

She remarried and access to her second husband’s health insurance as a dependent.

She also had Medicare.

And still she could not get her bills paid.

There were mix ups in signing her up for some of those programs and the ones she was enrolled in could not decide which paid first, which was her primary insurance.  She came to us in tears, wanting to discard the insurance she had been paying for because it was “no good,” convinced her only option was to go on Medicaid.

Confusion reigns.

And even when people and systems have it right, confusion reigns.  Each year we get calls from people during Medicare Part D open enrollment?  They are confused and some of the vendors seem to offer extremely misleading and inaccurate information.  Why does it need to be so complicated.

Take Frank for example.

Frank was taking care of his older sister’s affairs.  She was in a nursing home and had access to Medicaid, Medicare Parts A and B and D and her retiree insurance with our plan.  Yet she could not get her prescriptions paid for.  Why?  It seems that the private pharmacy used by the nursing home did not know how to submit claims to any other payer than Medicaid.  That was straightened out.

But Frank made an astute observation.  He said each time he called one of these “pieces of the pie” as he called them, he would get a little bit more information.  He complained that each of the pieces barely understood their own role and no one understood how all of these pieces fit together.  “If they can’t see the whole picture, how do they expect an ordinary person like me to figure this out?”

Or the members who battle workers’ compensation in part to pay the medical bills for their work related injury and also to have income to pay the insurance premiums that pays for the medical bills for their non-work related medical bills.

Single payer is needed not just to provide for the have-nots, but also to bring order into a chaotic system for the haves.

Photo credit:    Stijn

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During the healthcare reform debates, Republicans and others argued that malpractice awards and the litigation surrounding them contributed to the high cost of health care in this country.

Don't wander off the beaten path

I suggest they might be looking in the wrong courtrooms.

Last week I wrote about the new age 26 rules and the costs that don’t get counted towards the already outrageous costs of health care, costs that are born by employers as they split hairs on eligibility rules.

Rather than a simple system of universal eligibility that opens one door to everyone, the United States has built a system of silos that forces Americans to navigate a maze of rules that makes distinctions based on relationships, age, residence, economic status, and other criteria.

Some get lost trying to find the right door.

Some end up in court.

In fact, there are whole industries built around two such silos, and that overhead is not counted towards the cost of health care.  Such expense only makes sense in a through the looking glass world where ideology trumps practicality.

QMCSO

We hear of deadbeat dads (and moms).  But often the child needs, not just financial support, but access to health care.  The effort to obtain financial support from the non-custodial parent is often accompanied by an effort to obtain medical coverage from that parent’s employer.  That results in Qualified Medical Child Support Orders (QMCSO).  Every county in the United States has a bureaucratic apparatus that keeps this system oiled.  It took federal legislation in 1993 to standardized and streamline an even more cumbersome process  so that disputes about medical child support didn’t devolve into disputes about local processes and definitions.

There is a court that adjudicates the dispute between the employee with health care coverage (the non-custodial parent) and the custodial parent.  And then there is a child welfare agency inside the court system or county government that enforces the QMSCO and mediates between employee, employer, custodial parent and child.

There needs to be someone at the employer sponsored health plan who receives, responds and processes these documents.  A small plan may not encounter a QMCSO very often so they may lose an occasional day or day and half as they try to figure out what this strange multi page form means or is asking them to do.  A larger plan sponsor may have a dedicated staff member or even a department.

Who pays for this elaborate dispute resolution process erected soley to determine a child’s eligibility for health care?

Did I hear someone express a concern about government bureaucracy driving up the cost of health care.  I would love someone to challenge me on this, but this cost does not show up in the National Health Expenditures accounting.  It does show up in our tax bills, because it is paid for from local tax dollars – tax dollars that are already stretched thin.

And how does it add value to the health and the health care of the nation’s children?  How do you justify that cost compared to a system of universal eligibility?

Workers’ Compensation

Workers’ compensation was designed to provide an efficient system for responding to workers’ injured on the job.  It was intended to be a no-fault system, but has degenerated into a highly litigious one.

When employers dispute a workers’ compensation claim they are disputing both the wage replacement and the cost of medical care.  Medical care is eating up an increasing percentage of total workers’ compensation cost.

When a workers’ compensation case is denied initially, the claimant may appeal the decision to a higher administrative process and sometimes to a court.  Meanwhile, if the claimant has other insurance, the other insurance will pay related medical expenses.  Most plans have an exclusion for work related injuries.

As an aside, does it even make sense for an employer sponsored program to have an exclusion for work related injuries?  Only in a world that feels the need to have different insurance companies pay for each type of claim.

If the claimant wins their appeal, the payment is made to the claimant and not to the insurance companies who already paid the medical bills.  Every insurance company has an Other Party Liability department whose responsibility it is to track down exactly those situations in which someone else might be paying for medical claims it already paid for.

Does this system contribute to the efficient delivery of health care services?  It is only moving money around.

Who pays that bill?

Age 26 – Things I have learned.

Questions posed on the blog MoneyFunk have taught me some things about the age 26 requirement since my post last week.

• It does not apply to “stand alone” retiree plans
• It does not apply to children who are on Tri-Care, the program offered to the families of soldiers and sailors in the military.
• At least one employer seems to think it does not apply to prescription drug programs.
• Everyone is confused about the effective date.

Some people react to these bureaucratic quirks by suggesting a return to the status quo ante.  I argue that they highlight the illogic of the current system that depends on hair splitting and disaggregation.

We need to move to a single system of simplified eligibility – a simplified mechanism of delivering patients into the health care system. It will make for a more efficient delivery system, more efficient labor markets and more efficient business enterprises.

Photo Credit:  JLMcGee

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Hoops

The recently passed Patient Protection and Affordable Care Act (PPACA) does much to promote long term reform of the way physicians are paid for their services.

But could something be done now to simplify the system for both patients and their doctors?

Many health care policy experts tout the current payment system as a major contributor to distorted incentives within the current health care delivery system

Fee for service reimbursement promotes more procedures, surgeries, images, etc. at the expense of patient listening time.

So the PPACA implemented a number of pilot programs to promote efforts to develop more global approaches to reimbursement.  I have discussed some of these in previous posts.

Payment reform now

But there may be intermediary steps that can be taken now to simplify a system that makes sense to no one; sometimes not even the insurers who administer them.

Example one – payment confusion.

A patient, someone I know well, gets a referral from their doctor for physical therapy.  Since I have had some experience with physical therapy and with health insurance, she asks my opinion.  I advise her to go on line to her insurance carrier’s webs site and check if certain physical therapists are in her network.  She does that and identifies a physical therapists in the network and close to her home.

Again, acting on my advice, she calls in advance to confirm that the practitioner still is contracted with this insurance carrier.  She is reassured and schedules a series of appointments.  Several weeks later she gets an Explanation of Benefits (EOB to the cognoscenti) and the insurer has paid nothing.

Her immediate reaction is to cancel all of her remaining appointments.  I persuade her to contact customer service and she if she can get a better explanation than that offered by her Explanation of Benefits.  She is told that the doctor is an out of network doctor and consequently she is liable both for an out of network deductible and for “balance billing” – charges over and above the amount negotiated and approved by the insurance carrier.

“How can this be?” she says to me.  “I looked the provider up on the carrier’s web site, I called the therapist, I don’t understand.”

We got on the phone together and I was able to learn from the customer service agent that this therapist was, in fact, signed up as an HMO provider, a PPO provider, but not as an “Open Access” provider.  Many carriers have developed “open access” networks that are less restrictive than the traditional HMO networks.

The patient contacted the therapist who was more than willing to clear this administrative oversight.

But why should she?

This was a small physical therapy office with only two full time professionals.  They need to hire a support staff that will keep track of all of these different provider reimbursement agreements for each of the countless insurance carriers that she may or may not encounter.

Each reimbursement arrangement will have its own peculiarities, its own administrative procedures and its own customer service contacts.

For whom does this make sense?  Certainly not the patient and certainly not the provider.  Yet, isn’t that who this system is supposed to serve?

Example two – payment confusion

A patient goes for his annual heart check up with the same practice he has always used.  Only this time, the bill is not paid in full as it has been in the past.

The initial inquiry to customer service yields a response similar to patient one – this is an “out of network” provider and the patient must pay the out of network deductible.  Further probing by me elicits some additional information.  This practice is a “participating” provider, but not a “preferred” provider”.  This is more than a bit confusing, because this member has always had PPO coverage.  PPO means Preferred Provider Organization.  What is going on?

What changed is the patient.  He got older, he retired and he enrolled in Medicare.  He still retained the same insurance.  He is one of the lucky few who have employer sponsored health insurance as a retiree.

But some clause somewhere in those provider reimbursement agreements means that the same insurance paid when he was under 65, but not over 65.

A better approach

It is time we developed a single reimbursement methodology for all providers.

That does mean that all providers get paid the same.

It does mean that each provider is paid the same amount regardless of who he or she treats.  Within that system, there can be different degrees of patient responsibility for different groups.

The system may decide that a provider in a rural area may get paid more or less than a similar doctor in an urban area.  It would endeavor to pay those providers with better performance more than those who could not meet the outcome targets.  There could be many other differentiators but one theme will prevail – doctors will know and understand the system they are getting reimbursed by.  And it will not inconvenience patients.

Doctors can opt out of the system, but they cannot pick and chose insurance carriers.  If they are outside of the system their patients will be 100% responsible for all expenses they incur.  The insurance carriers will have no responsibility.

That is the kind of payment reform that would make a real difference.

Photo Credit: Flickr, The Smithsonian Institute

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When you are up to your neck in alligators, its hard to remember that someone needs to drain the swamp.

The American Alligator

Last week, I wrote about the tax on “Cadillac plans”.  This past week, BHO reached an agreement with labor unions, the primary voice of the opposition to taxing so-called “Cadillac plans”.  The tax is still there.  My suggestion didn’t seem to make it into the discussion.  I was busy dealing with alligators.  That’s my day job.

One of our carriers had a computer glitch (a nice euphemism) that disrupted coverage for many people.  Here is a typical example of the kind of fires we had to put out – a woman went to the doctor’s office and the doctor could feel a lump in her breast but would not order a mammogram because the office had contacted the insurance carrier and had learned (incorrectly) that she had no coverage.

These incidents prompted me to wonder.  If we had a single payer health care system, couldn’t we have the same problems?

After all, we will certainly still have computers.

But we won’t have people moving from plan to plan because they changed jobs.  We won’t have people losing coverage because they lost their job, or because they got sick, lost their paycheck and therefore could not afford their health insurance premium.

Doctors and hospitals will know who is paying their bills and therefore might show a bit more patience with administrative errors.  After all, if a computer error like that should occur in a single payer system, it likely would affect a high percentage of their patients.

There would hopefully be a sense of shared crisis, not one that abandons people in a time of acute need.

Oh, and the tax compromise reached recently.  It is still a bad idea.  Now it is just an acutely complicated bad idea.

And it will do absolutely nothing to make our health care system less fragmented, less chaotic, and more humane.

It just lets in more alligators and stops up the drain even more.

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This morning driving to work I listened to a story on NPR Morning Edition.  It described the effort to build Charles Babbage’s Difference Engine – a mechanical predecessor to today’s computer.  Babbage died before he could ever complete his machine but modern engineers have recreated it.

The analogy with health care struck me.  Congress is building a Babbage machine in an era of super computers.

And we dare to call it progress?

Charles Babbage Difference Engine

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In a recent report on National Public Radio (NPR) about a gang  rape in Rcihmond, CA, one person asked the question. “Where has all the humanity gone?”

The same question  can be asked in the current debate on national health care reform.

Is this our big tent? Photo by JL McGee

Where has all the humanity gone?

We are talking about Americans here

The politicians are wiling to deny undocumented immigrants access to the proposed Health Insurance Exchange.  But that is not enough for some.  They are afraid that hospitals will use federal funds to treat undocumented immigrants in the emergency rooms.

Aren’t some of these very same conservatives, also Christians?  Aren’t they familiar with the story of the Good Samaritan?  In case they forget, the moral of that story is doing good to your enemies.  Oh that’s right, Christian values don’t apply to government, because government funds are involved.  Unless, of course, its abortion.  Then then “Christian” values apply because government funds are involved.

By the way, since most countries in the world have some form of national health insurance, what about sending the bill for undocumented immigrants back to the country of origin?

It is easy to pick on immigrants, because most of us don’t know immigrants,  But there are lots of people that will be affected by health reform that we do know.

Americans are missing in this discussion

The public is losing its focus as Congress drones on about abstract details: public option or no public option,  this tax or that tax, this subsidy or that subsidy, this amendment or that amendment.  Will it cost 1.0 trillion over ten years or 1.01 trillion over ten years and how much is a trillion anyway?  Didn’t we spend that much in the sixty days before Bush left office?

We need to refocus the debate on the humanity.

We need to refocus the debate on people, real Americans, Americans who in most cases want to be in the workforce.

Jonathon Cohn wrote a wonderful book in 2007, Sick, the Untold Story of America’s Health Care Crisis.  What made the book so compelling is that he weaved an explanation of how the system works and doesn’t work with the personal narratives of  ordinary Americans who fell into the rabbit holes of America’s health care system.

Personal narratives

Now is when personal narratives need to be pushed to the front.

Jonathan Cohn isn’t doing it any more.  Now he’s inside the beltway and caught up in political navel gazing  for The New Republic.

Keith Olbermann of MSNBC made the strongest pitch yet for considering the humanity of the issue.

But his free clinics have not received much play in mainstream media and certainly don’t seem to have punctured the beltway barrier.  Rich Stockwell, MSNBC Countdown Senior Producer, wrote a moving description of the free clinic he visited in New Orleans on November 16^th.

New Orleans, La. — – It happened as I watched a 50-something woman walk out, after spending several hours being attended to by volunteer doctors. “She’s decided against treatment. A reasonable decision under the circumstances,” the doctor tells us as she heads for the next patient. The president of the board of the National Association of Free Health Clinics tells me why: “It’s stage four breast cancer, her body is filled with tumors.” I don’t know when that woman last saw a doctor. But I do know that if she had health insurance, the odds she would have seen a doctor long ago are much higher, and her chances for an earlier diagnosis and treatment would have been far greater…

Health reform is not about Democrats or Republicans or who can score political points for the next election, it’s about people. It’s about fairness and justice in a system that knows none. I’d defy even the most hardened capitalist-loving-conservative to do what I did on Saturday and continue to pretend that the system in place right now is working.

Countdown chose to highlight and raise money for the Association of Free Clinics because we knew the work they do is so vitally important and we wanted to show in real terms how great the need is. We invited several politicians to attend so they could see first hand how critical the situation is. All declined. Some explained that they talk with constituents all the time and know very well of the need for reform.

Mr. Stockwell reported on the clinic visitors:

• 83% are employed
• 90% had two or more diagnoses
• 82% had life threatening conditions

Bill Clinton is one of those who chose to ignore the event.

How is the reaction of Bill Clinton or any of the other Senators different form one commenter on a blog who wrote

Old people die all over the world every day. With or without health care

Ronald Reagan was called the great communicator in part, because he translated his political agenda into personal narratives.

The narratives that I hear every day include:

I can’t go to work because I’m sick and I can’t go to the doctor because I can’t afford my health insurance premiums.

I have no money, and I may lose my house, how am I going to pay this health insurance premium?

I am supposed to go on Medicare but my doctor won’t accept Medicare.  I’m scheduled for surgery.  I don’t want to change doctors.  What am I to do?

I just learned that my daughter, who is living with her mother, has no health insurance.  She has a tumor.  Can I add her to my health insurance plan?

The waitress I met who was approaching eligibility for Medicare.  In her entire working career she only had health insurance for five years.

Health care should not be so complicated.  Those making policy need to hear hear from humanity.

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There is nothing simple about our health care maze.  Fixing it is not easy.

I prefer to look for the simple.  The complexity will evolve naturally.

Congress prefers to start with the complex and make it more so.

Spreading the medical risk

There  are two major challenges to fixing the customer side of the health care mess – spreading the medical risk and spreading the financial costs.

Spreading medical risk requires that everyone be in the system.  That spreads medical risk evenly between the sick and the healthy.  That can be accomplished by a system of automatic eligibility or a system of required enrollment.

Automatic eligibility describes a single payer system.  All citizens are enrolled by virtue of their citizenship.  To draw from known models, automatic enrollment describes Part A Medicare, Department of Defense medicine, and to a lesser extent, the Veterans Administration.

Funding for those programs is separate from enrollment and may or may not rely on direct participant financing.

A system of mandatory enrollment implies a system of mandatory participant financing.  That is where we bump into the second challenge.

Spreading the financial costs

How do we transfer money from those who have it to those who need it?

This is not a new problem.  Since the creation of Medicare and Medicaid, the federal and state governments have developed a complex and confusing mix of approaches to fund directly or indirectly the recognized social good of delivering health care to those who cannot afford it.  It includes:

• General federal tax revenues
• Specific designated taxes (FICA)
• Tax incentives for employer sponsored health insurance
• Mandates on employer sponsored health insurance
• Federal support of state efforts
• State tax revenues

What’s proposed?

How does the house bill propose to shuffle money from where it is to where it’s needed?

• A 5.4% surtax on Adjusted Gross Incomes (AGI) above $500,000
• A Tax on medical device companies
• An 8% payroll tax on businesses who do not provide health insurance
• Penalty payments on uninsured individuals
• Smaller tax exemption on Flexible Spending accounts

But these don’t quite get the money to where it is needed.  It only makes it available.  Individuals have to apply and have to qualify for what the law call “affordability credits.”

In addition, there are a host of exemptions that will still leave an unacceptable number of uninsured.

In a nutshell, we take money from different pots of private money, we combine it with other pots of public money, assign it to a larger pot of public money that can be remixed with private money and used to buy public or private health care insurance.

A simpler approach

Let me suggest a simpler approach – the germ of which is in the current proposal.

Tax all compensation at 8% – absolutely no exceptions.  The tax should be on all forms of employee and owner compensation, whether it’s wages, bonuses, or compensation to independent contractors.  No exceptions – none. The tax would be directly offset by the employer expense of providing health insurance that meets some minimum standard.  Low wage industries that provide health insurance that exceeds 8% would receive a straight credit for the amount above 8%.

Adjustments would need to be made for small businesses, not just in the level of the tax but also in defining what exactly gets taxed.

A straightforward subsidy

It should be immediately apparent that high wage industries will subsidize low wage industries.  There is no secret to that. It is just more obvious, less convoluted and simpler and less expensive to administer.

This is not un-American

There is a precedent for this way of thinking.  There are companies now that charge their employees a percentage of income.  Some even charge a higher percentage for higher earners.

An even better example is the multi-employer plans.  Almost all multi-employer plans base employer contributions into the benefit trust fund on either compensation or hours worked.

Two employees, one who works 1200 hours and another who works 2400 hours, will both have the same level of benefits. But the money from the first person’s employer will be half of that from the second person’s employer.  There is no complicated bureaucracy to transfer money from the second employee to the first.  It does not matter whether either employee has a family or not.  This design has existed for decades and the participants in those plans like it because they know that there will be years in which they may be the one working 1200 hours.

In order to simplify the process we need to make a change in our fundamental approach to health care financing.  Payments into the system should be based on ability to pay – not on the cost of health care insurance to each individual.

And for those who think this is an atheist plot, I refer them to Acts 4: 34-35.

For the rest, I suggest it simply makes practical sense.

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How often have you heard the phrase, “The United States has the best health care system in the world.”?

What is wrong with that statement is the word “system”.

We could rephrase it – The United States can deliver some of the best health care services in the world (to those who can pay for it).

We could even argue  – The United States has some of the best health care systems in the world: the Mayo Clinic, the Veteran’s Administration, the Department of Defense.

But to assert that we have a system or that Americans (all Americans) receive the best care in the world is a stretch.  Why?

Over the last two weeks I wrote about our fragmented health care system and the closely related fragmented payment system.

I wrote about how patients are equally fragmented, migrating during their lives through several health plans, what I call patient delivery systems.

Why does this matter?

In most measures of health system performance the United States ranks embarrassingly near the bottom or at the bottom among industrialized countries.  From 2000 to 2009 male life expectancy fell six slots to 24^th in the world and female life expectancy fell from 28^th to 35^th.  Some would counter that life style, diet, or poverty had more influence on those drops than health care.

Isn’t that fragmented thinking?  If we had a health care “system” then it would take comprehensive approach to population health.

What are the incentives for doctors and hospitals?  Just as sunflowers follow the sun, health care providers, like the rest of us, follow the money.  And the money is paid for doing stuff, surgeries and tests, for example.  It is not paid for talking with or listening to patients, giving them lifestyle or treatment compliance assistance.

What are the incentives for patients?

Patients often lack the freedom to choose just any doctor.  Their incentive is to change doctors to conform with their current health plan rules.

It is not just patients who change health plans.  I have seen Participants change health plans during open enrollment, because a doctor they wanted was in the new health plan.  A couple of months later, they learn that their doctor is leaving that health plan over some real or imagined dispute.

Patients approach the delivery system through different health plans under different sets of rules regarding covered services, payments and bureaucratic processes. It’s not just that different patients are in different health plans.  The same patient migrates though different systems at different times.

Is it any wonder that doctors are confused and frustrated?

When doctors don’t know the rules

When doctors move in and out of health plan networks

When patients move through health plans – sometimes voluntarily, sometimes not.

When payment depends less on your own talents and more on who your patient is

When information systems are focused first on recovering payments not on coordinating care

When providers are rewarded for doing things, but not for advice, or just plain listening

Is it any wonder that care coordination should fall to the bottom of the priority list?  Not because its undesirable, but because its hard.

Is it any wonder that a long term perspective on patient care is totally lacking?

Disease management – an example

One of the burgeoning trends in the world of employer sponsored health plans are wellness programs and disease management programs. Wellness programs are  programs to promote healthy living.  Disease management programs are designed for people with chronic conditions such as asthma, hypertension, coronary artery disease or diabetes to help them better manage their disease.

Like many other ideas that originate in the United States, it has found strong adherents in other countries.  The Germans have incorporated individual and provider incentives for disease management in their recent reform efforts.  Curiously, the German word for disease management is Disease Management (Germans capitalize the initial letter of “their” nouns).

The logic  for such program is compelling.  That these are relatively new concepts may be puzzling.  But what is truly baffling is that they are not part of the package of services that is included with health care.  Our plan had the option of purchasing disease management services from our health plan, from our pharmacy benefit management firm, or from an independent specialty vendor.

Providers offer little resistance to disease management efforts. But why must they deal with a plethora of vendors?  Why aren’t they the organizing force behind disease and chronic condition management?

Geisinger Medical Center in my home state of Pennsylvania is often cited as model for delivering quality integrated health care to its community in north central Pennsylvania.  Ron Paulus, the Chief Technology Officer for Geisinger wrote in Health Affairs about its strategy for sustaining innovation.  In his conclusion he wrote:

Finally, for many organizations, the spread of value-enhancing collaboration and integration is restricted by regulations that preclude effective collaboration among payers in designing incentive systems and that impede collaboration between hospitals and physicians or among physician practices in a given region. Each payer has its own, largely fee-for-service, payment system—failing to align incentives to enhance value in the way that Geisinger has strived to do. New mechanisms that support collaboration and coordination of policies among private insurers and public programs are needed to achieve replication on a broader scale and sustainability over the longer term.

In other words even an integrated delivery system like Geisinger is thwarted in its efforts to enhance the value of health care by fragmented patient and payment delivery systems.

Does anyone think that health care reform will make the system simpler?