Who Are the CDHC Pretenders?

Last month, I wrote in this blog about Dr. Benjamin Brewer who reasoned that since his practice covers 80% to 90% of what the average person would ever need a doctor for, he could have covered his salary for 2007 and the costs of all his staff and overhead for less than $20 per patient per month, including maternity and hospital care. Of course, he could not implement such a payment plan with his patients because the Illinois Department of Insurance would prosecute him for running an unlicensed insurance company.

So what about the doctors who practice “concierge” medicine — charging an annual fee to patients in exchange for customized care including house calls? They are not fairing much better. It seems that they are drawing the ire of some big health insurance companies.

An article published in the Houston Chronicle and posted on ahiphiwire.org said that United Healthcare has confirmed it is dropping four Houston area doctors from its network in April because the company disapproves of their so-called “concierge medicine” model. The story said that Cigna also is condemning the practice, in which physicians charge an annual retainer of $1,500 to $1,800 for patients who then receive more personal care.

The article quoted a Cigna spokesperson as saying, “Charging membership fees to guarantee access is a violation of our contract terms and may result in termination.” Well I say, maybe it is time to change the contract.

As the Houston Chronicle article points out, concierge care is considered by some to be a revolt against the modern health care system where diminishing Medicare and insurance payments have forced doctors to herd dozens of sick patients through their offices in five-minute increments every day. I would add that it is also a rejection of the system that says that the insurance plan is the one that controls the financial relationship between the patient and the medical provider. How can we expect consumer-directed health care to gain acceptance when some health plans are so adamant about protecting the status quo that they will kick doctors out of their networks for being so bold as to deal directly with a patient when pricing their services?

While both United and Cigna market consumer-directed health plans, this may be a litmus test to help identify those who truly endorse the concept and those that do not. The article points out that other major health insurers, including Aetna, Humana and Blue Cross Blue Shield of Texas, consider concierge care just fine so long as patients are clearly informed that the insurers will not re-imburse any of the retainer.

“Humana would not exclude doctors practicing this model of care from our networks,” said Dr. Mark Netoskie, medical director of Humana, Houston. “It is the consumer’s choice whether or not to pay for these additional services.”

While that may not exactly be the answer that people with Health Savings Accounts (HSAs) want to hear, it at least sounds like a more market-driven philosophy to me.

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Education is Key to CDHC Future

I spent the early part of this past week attending the CDHC/Prepaid Expo in Las Vegas which is described as the premier strategy conference for employers and employer groups to efficiently and profitably deploy consumer-directed health care plans.

The conference described itself as powering the movement toward consumer-driven health care, by bringing together employers, banks, account custodians and providers to help shape the future of the industry. The conference invitations suggested that from consumers to insurance carriers, consultants to administrators, and providers to pharmacies, each stakeholder must understand the opportunities, challenges, and benefits of consumer-directed health care, and how to best introduce the most relevant accounts to employers and consumers. So true.

My biggest take-away from the conference was the fact that prepaid and debit card technology may have finally out-stripped the capacity for employers and employees to comprehend its use. It is clear that the card processors now have the ability to produce a card that can access several “buckets” of funds from which to pay for health care expenses. One might have an HSA, HRA, FSA, line of credit all on the same card, and I applaud this innovation. This choice of products will give employers the ability to structure a health plan that best suits the needs of their employees. The problem is that the general knowledge among consumers, and even insurance agents and employers, needs to catch up in order to make these sophisticated financial products widely used.

I noticed many employers who attended the conference just asking for the basics. “Does anyone have a template that shows how to implement a consumer-driven health plan?” “Uh, no.”

The question for all of the stakeholders listed above is: Who will do this education? Will it be the card processors, the issuing banks, the insurance carriers, the insurance brokers, the “industry”?

I would suggest that all of the above need to work together to create a climate of ongoing education that will help employers and their employees understand the benefits and uses of consumer-directed health plans. The degree to which we are successful will not only determine the future of the CDHC industry, but will determine the future of health care financing and delivery in the US.

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