Discussion is rampant regarding how providers must reform how they deliver healthcare.  Much of this focuses on changing how we pay providers–reducing the role of fee for service and increasing the role of paying for quality and outcomes, and bundled payments to rein in costs.  Not easy, but over time it will, it must, happen.  And when it does come full force, and when the quality and outcomes measures are published to the world, competition will finally start to occur at the right level in healthcare–between physicians; between hospitals–based on hard data.  No more of this “it’s more of an art than a science.”

With payment reform and publication of quality and outcomes data, the providers will need to practice in multi-disciplinary delivery systems (perhaps ACOs) and they will police their own.  If one of their physicians has poor cost, quality, or outcomes scores, they will be dragging down the compensation of the group and the group will respond predictably.  One outcome is that insurers will no longer need to “manage” care–something they didn’t do very well anyway and that only angered the physician community.

So what to do for insurers?  Of course there will be a role for insurers in the future.  They are too large–too well financed to go quietly into the night.  They will continue their insuring and financing functions as in the past.  However, my premise is that there is that other area in healthcare and health which is perhaps the single largest cause of our out of control healthcare costs–what I refer to as “patient responsibility.”  While patients have many responsibilities, the two fundamental responsibilities they should have are  taking proper care of themselves and accessing the healthcare system responsibly.  A huge portion of our population today does neither well.  That must change.

Employers have made attempts in this area with so-called wellness programs which have been largely ineffective.  There are many reasons for this.  Often they are not well designed, nor are they executed with the appropriate communications and enthusiasm.  There are legal restrictions on how aggressive these plans can be.  We cannot penalize the non-compliant.  We can “incent” the compliant.  Within those parameters are design challenges that require skill and legal competence.

I believe the insurer is ideally situated for this role.  They already have the data, and are not subject to confidentiality issues such as those required by HIPAA.  They are large businesses with (one would hope) skilled communications personnel.  Insurers can use individual data to deliver more effective, personalized programs.  Indeed, it is usually about 5% of an employee population that accounts for over 55% of claims expense, so this is not necessarily about swim, gym and weights.  Whoever manages that 5% best wins.  The next most important focus is to keep those at risk of becoming five percenters from falling into that category.  Invasive?  Somewhat, but we must stop being scared of being aggressive.  We cannot continue into the financial abyss.

The key here is to motivate management (yes, the CEO herself) to make this a priority, and to thoughtfully recast the employer/employee compact regarding their health and their coverage.  The next blog will address some ways to do this and possible roles of the insurer.

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