Healthcare Hullabaloo: Decapitated

We're gonna take you and the Queen
Down to the guillotine
It's somewhere in the heart of town
And when that fella's through
With what he's gonna do,
You'll have no place to hang your crown

You Went The Wrong Way, Old King Louie
by Allan Sherman

First of all, props to Mr. Allan Sherman, the Weird Al" Yankovic of my parent’s generation. I used to love listening to his schtick as a little boy, including this aforementioned chestnut.

Secondly, you gotta hand it to the French … at least the French as they were 200 plus years ago. I am referring to the days of the French revolution. They certainly knew how to deal with a problem.

The French revolution still contributes so much to our modern pop culture. The vision of the guillotine, although I would venture that none of us have ever seen one in action, elicits a strong visceral response with most of us. Decapitation is a very strong statement.

Today I learned of a new type of decapitation, one that is taking place all around us, even though most of us are totally unaware of it. It is decapitation that is being performed by our health insurance carriers.

Let’s rewind 25 years or so to the days when the HMO was in it’s infancy. This new form of health insurance was a radical idea that had to be sold to the subscriber (patient) as well as the provider (doctor).

The selling point to the patient was cost control. Why spend $50 for a doctor visit when you can just join our HMO and pay just a small $2.00 co-pay? The providers were a bit harder sell. They were told that everyone would soon join a HMO and they would need to join the HMO network in order to retain their patient base. Sure, they would receive less money per visit, but this would be offset by a guaranteed patient volume as well as another new concept – capitation.

Capitation was a simple proposal. The primary care physician would become the front line health care provider to a finite group of HMO patients – perhaps several thousand in number. In addition to the co-pay that the provider would collect from the patient each visit, the provider would be paid a monthly fee for each patient that they were responsible for in the HMO – perhaps $10 a patient. This capitation fee was paid whether or not the doctor ever saw a patient – it was an automatic payment each and every month. Many providers found this concept too good to pass up and eagerly joined various HMO networks. Unfortunately for the providers, most found themselves over utilized by the HMO patients, and ended up with a financially losing proposition.

Fast forward, now, to the present day. The rascally HMO companies have slowly but surely changed the entire game in their favor. On the patient side, HMO co-pays have risen substantially. And they now pay as much as a $50 co-pay for each doctor’s visit. In other words, the fiscal advantage of the HMO has all but been erased from the patient’s point of view. Now, the other shoe has dropped on the provider side. Mercy Health Plans, a large Philadelphia based HMO, has recently informed their in-network providers that they are eliminating the monthly capitation fees.

This, of course, leaves more of the money pie for the HMO.

You can be assured that other HMO’s will follow Mercy’s lead if Mercy gets away with this chicanery – and there is no reason why the shouldn’t be able to. The providers cannot simply ‘get out’ of an HMO network without facing a litany of legal obstacles, including patient abandonment – a serious for of medical malpractice. As providers start leaving their HMO networks, you can be certain of an all-out marketing blitz by the malpractice attorneys. Look or the TV commercials on ‘The Price is Right’ - right after the Hoveround spot.

Yes, heads will certainly roll on this move by Mercy – which, by the way, another alliterative that we can attribute to the French Revolutionists.

Snails, anyone?

–
***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/

Who are you? Do you agree with me, disagree with me, or have another perspective to share?

PLEASE put your 2 cents in by leaving a comment or email me at HealthcareBlog@SystematixOnline.com