CEO Contends That Eliminating Financial Risk Allows Medicaid Plans To Focus On Management

The problem with managed care is insurance, says Georganne Chapin, president and CEO of Hudson Health Plan in Tarrytown, N.Y. Her solution to one of the most difficult problems health insurers face involves removing the risk-financing mechanism. Adopting a single-payer health care system would allow plans to do what they do best: deliver patient care, she says.

“I believe in managed care. I just don’t believe in insurance,” she says. “Managed care is the only way to take care of people because it’s designed to give people the right care at the right level and to get waste out of the system.

“Health plans do so many things well and those things are more important than taking risk with money. We do care management, network building, and patient identification. We understand how to work with providers and how to build care teams, and we’ve developed successful ways to provide incentives.

“Eliminating the financial risk-taking of health insurance would be a good thing,” Chapin explains. “If we somehow cut out the current financial mechanism, we would have one big risk pool, meaning a single-payer system. Then health plans could solve our health care problems.

“What we’re doing now is crazy and everyone knows it’s unsustainable,” she adds. “That’s before we implement all aspects of the Affordable Care Act (ACA). And the affordable part of the ACA is perhaps the biggest problem. The law will not make health care affordable because it’s the result of compromises made to get it passed.”

She concedes, however, that the law is significant legislation that begins to address some of the problems that have long plagued insurers, providers, and patients. “It’s great that some people who had no way to get coverage previously, such as children up to age 26, now have health insurance under the law,” she says. “It’s problematic, however, because those children have to live at home or at least in the same area as their parents. But at least it works for some.”

Chapin worries that, when hospitals and physicians form accountable care organizations, many will fail to manage both patient care and the financial risk of delivering care. “We see how hospitals and physicians want to become managed care companies,” she says. “But I’m not sure they’re equipped to handle the risk and I’m not sure that the expectations we have for these organizations are realistic.

“This new system we’re building will still be fragmented,” she comments. “It will still be plagued by temporary eligibility. Those who will be newly insured will be eligible, but only for a short time because many will be unable to afford coverage. That makes all the predictions about how many new people will be covered extremely optimistic. People won’t be able to make their payments because premiums will keep going up. At the same time, fewer employers are offering coverage because they can’t afford it, either.

“It’s easy to be a nihilist, but, in truth, we have to keep doing what we do well and that’s care coordination,” Chapin adds. “Our health plan had a chronic illness demonstration project and our intention was to be the forerunner of the patient-centered health home.”

A social component of care

“We had very sick Medicaid patients in a fee-for-service system and we were paid to do care coordination the way it should be done. We found that, in this population, people’s medical problems have a social component. Medicaid allows us to address those problems and our regular health insurance system does not. So, in truth, we should be fixing both our medical system and our social welfare system together. That’s what we did and it worked.”-

Georganne Chapin [r] with Margaret Leonard, RN

Health Plan 2020

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