cur-mud-geon: anyone who hates hypocrisy and pretense and has the temerity to say so; anyone with the habit of pointing out unpleasant facts in an engaging and humorous manner
The more things change, the more they stay the same; at least that seems true in health care insurance today.
A new program was announced by Aurora and Anthem Blue Cross Blue Shield (and another by Aurora and Aetna Insurance) in which employers get a break on the price of health insurance in return for the employees and their dependents being required to use an Aurora provider. Two of the larger employers in the area have announced their decisions to participate in this new approach to delivering health care. GE is using this approach in a self-funded program and Roundy’s is using it in an insured program offered by Anthem. We can expect many more such announcements in the near future since employers are crying out for cost stability/reduction in their health insurance expense area.
Aurora is betting that it can control the costs of providing required health care to the point that it guarantees about an 8% savings. That is also typically coupled with a contract term longer than one year, as well. These programs are being referred to as part of the accountable care organization (ACO) movement being touted by the Federal government.
This is all reminiscent of what were called HMOs (Health Maintenance Organizations) starting in the early 70s. At one time there were 13 of these HMO programs operating in the Greater Milwaukee marketplace. Those plans typically used smaller networks that enabled providers to be paid so much per person per month (capitation) and having to deliver the necessary care to that person at that cost. If they succeeded in delivering care for less or to less people in a given month, they pocketed the difference as profit. If they spent more than they received, they lost money. Aurora is also hoping to lock up a bigger share of the market since it has hungry competitors and big facilities costs.
The big rub is that employees and their dependents in many cases will be required to change providers. That was a significant problem in the HMO era and I suspect nothing has changed in that respect over the years since many HMOs became, essentially, PPOs (Preferred Provider Organizations) with much broader networks to answer the demands of the covered people for more choice.
Will ACOs last as long as HMOs? We won’t know for several years. Will PPACA (ObamaCare) interfere with or help in the development of ACOs? We won’t know for several years. Will other ACOs emerge? Yes; there is already another that has been formed in this area. Will employees and dependents be happy with ACOs? We will probably also have to wait for a year or two to see whether the promises made are delivered upon, and whether or not members are satisfied or still want to see their old providers.