Public plans and chronic care
Filed under: Cost Control, Proposed Legislation, Public Plan
Professor John V. Jacobi, Seton Hall University School of Law
The public plan question continues to permeate health reform discussions. Last week, surprising analysis from the CBO seemed to be leading some Democrats to support stripped-down reform. On Sunday, polling data was published showing overwhelming support for a public plan that could compete with private plans in a reformed marketplace. Senator Conrad has proposed a “health cooperative” as a “compromise” between those for and against public plans, suggesting that a plan operated by and for its members could serve many of the functions of a public plan, without presenting the political problems presented by public plans - which he regarded as insurmountable.
Tim Jost and Tim Greaney in previous posts here and here have raised important concerns about cooperatives. Cooperatives, as they point out, are not new; in the form of mutual insurers, non-profits, and Blues, things very like what Senator Conrad describes existed for decades. Unfortunately, they have mostly wandered from their community mission to mimic the business practices of for-profit insurers. Senator Conrad may be agreeing on forms of oversight and organization of a “cooperative” that may lessen the gulf between his original proposal and those of public plan proponents.
What does this have to do with chronic care? Reform 2009 has focused on access and the uninsured, although cost is certainly another driver. It is now well-known that health costs are not homogeneously spread; instead, a small number of people need most of the expensive care each year. Many of these people need expensive care because they are living with multiple chronic illnesses. Care for chronic conditions is often poorly coordinated, and the costs of care are increasingly shifted to the patient in the form of copayments, coinsurance, and deductibles.
Current draft reform bills gesture to the need to coordinate chronic care. The House June 19th House version, at section 1178, would create “fully integrated dual eligible special needs plans” to “optimize” the health and well-being of people eligible for both Medicare and Medicaid, with serious chronic illnesses, and at section 1302, would create a Medicare medical home pilot program for people with chronic illness. What about those covered in the private marketplace? Section 1441 would add as a “consideration” in the Secretary’s setting of health priorities “health care provided to patients with prevalent, high-cost chronic diseases.” The Senate version would directly address the chronically ill in private insurance. Section 101 would amend the National Health Service Act to require health coverage to contain ”care coordination and chronic disease management” activities, as well as “medical home” provisions which, as described further in section 212 of the draft bill, would require the plans to provide for medical teams to coordinate chronic care.
Adding chronic care management provisions to Medicare and Medicaid is a good step. Nudging private plans to provide appropriate chronic care is also a good thing. As Robert Kane (University of Minnesota), Edward Wagner (MacColl Institute), Thomas Bodenheimer (UCSF), and others have increasingly demonstrated, patient-centered, clinically-based chronic care coordination has the potential to greatly improve care and patients’ quality of life. There is increasing evidence that chronic care management can save money, as well.
Private plans - for-profit and non-profit - are aware of advances in chronic care, and to varying degrees have adopted innovative care coordination methods. But they don’t do enough, for two entirely rational reasons. First, employers and individuals switch health insurers frequently, for a variety of reasons, leading insurers to regard members as “theirs” for only a few years. Paying for expensive care (e.g., bariatric surgery for obesity) that pays dividends over a longer time frame, then, pays dividends for their competitors. Second, insurers who do an excellent job maintaining panels of chronic care specialists, and coordinating care among them, risk becoming “sick people magnets,” attracting exactly those people their actuaries tell them will hurt their bottom line. Risk adjustment is a partial corrective, but clearly does not level the playing field enough in a market where marginal profits spell success or failure. Mandating that insurers act against their interests is the right thing to do in this case, but we should not be surprised if they react with less than dizzying zeal.
We all have a chronically ill parent, child, grandparent, or friend whose health has spiraled down because our current delivery and finance systems have failed them. There are many barriers to reversing the trend away from patient-centered, humane, chronic care. One barrier that must be addressed is the structural failure of our competitive health insurance market in this regard. It doesn’t pay to be good at chronic care, and things that don’t pay are, for perfectly understandable reasons, problematic in that marketplace.
President Obama said yesterday that competition from public plans can be “an important tool to discipline insurance companies.” Others have argued that the public plans can serve as a benchmark, or a compass setting, for private plans. In chronic care management, here’s what that might get us. A public plan can be charged with doing an excellent job coordinating chronic care. Private plans can be similarly charged, but, for the reasons described above, they will have strong market interests to avoid that charge. The public plan in this area (as in others) can allow us to recognize, by comparison, how well private insurers are doing at the task we most need them to do: provide care for the ill — for those who really need health coverage and care.
