| What we can do,
however, is impart some general information - some dirty little secrets,
if you will - that can help you understand any health plan you
might have. Since many of the specifics regarding what's coming to
you under your health plan are ultimately negotiable, all you really need to know is enough to
help you decide when and how to negotiate. (You may also want to check out
the send-up DrRich gives health plans in his Grand Unification Theory, especially Section
4 - Secrets of Managed Care, and Section
5 - Portrait of a Modern HMO.)
Four dirty little
secrets
DLS # 1 - All health
plans are businesses, and they need to make money.
Everyone understands that for-profit
health plans need to make money, of course - that's why they exist in the
first place. If they don't make a profit, their shareholders become
quite angry, and highly-placed and highly-paid executives lose their jobs.
What many have not grasped yet is that even not-for-profit health plans
need to make money. The days when not-for-profits could garner
sufficient funding from charitable contributions are long gone. Now,
they have no choice but to depend on the bond market for their
funding. And pleasing the bond market is very similar to pleasing
the stock market; nonprofits that lose money are left for dead. For
this very good reason, then, the behavior of for-profit and not-for-profit
health plans has become, for all practical purposes,
indistinguishable. They are businesses, and their bottom lines had
better be in the black.
DLS # 2 - You can't
make money taking care of sick people.
Sick people are extremely expensive, and the more sick people health plans
must take care of, the less money they make. Indeed, while it
appears that not even health plans have realized it yet, it is most likely
impossible for health plan to turn a profit purely by operating
their core business (i.e., by providing health care to their
subscribers.) As DrRich points out, the heady profits turned by many
HMOs during the mid-1990s came instead from acquiring
community property for pennies on the dollar. Now that all the
likely charitable organizations have been fully absorbed in most major
cities, and HMOs are left with having to operate that core business for
the money they make, most are in serious trouble.
DLS # 3 - Patients
aren't customers; they're cost centers.
Very few patients go out and buy their own health insurance. Most receive
their health insurance through their employers, the government, or not at
all. Thus, patients don't really have the power to shop around and
choose among health plans (except within very strict limits), nor do they
have any true power to walk away from the health plans presented to them.
Their lack of the ability to choose a plan, and the ability to exit a
plan, essentially
destroys any claim they may have to the title "customer."
Indeed, their economic position in the health care system is more akin to
that of "commodity." (They are, in fact, called by the industry
"covered lives," and are traded back and forth like pork
bellies.) Thus, health plans see relatively little reason to afford
patients the same respect that businesses traditionally afford their
customers.
It's even worse than that,
however. Not only are patients not customers, they're also the main obstacle
(along with their doctors) standing between the health plan and the money
it must make. Patients are merely a cost center. Customers may
always be right, but patients are merely a threat to the bottom line.
DLS # 4 - Encourage
the healthy; discourage the sick.
While the health care system ostensibly exists for the sick, the health
care system as controlled by today's health plans is actually geared up to
please the healthy.
If you're running an HMO, you
want to encourage healthy young families to sign up for your HMO
instead of Joe's down the street (their only other choice). You will
collect premiums for each member of this young family, and
odds are, you will get to keep most of that money. You want to treat
these young families very well, both so they will stay with you, and so
they'll tell their (young) friends to join your HMO. You will treat
the sorts of illnesses experienced by young families - conditions like
appendicitis, strep throat, and childbirth - with great efficiency and a
minimum of red tape. You will give them mammograms, and memberships
to health clubs. And when you conduct your "patient satisfaction
surveys" (an important tool used to convince employers that your HMO will
make their employees happy) these enrollees - who are likely to constitute
85% of all your enrollees - will say they are "satisfied or very
satisfied" with your services.
On the other hand, you want
to discourage the elderly and the chronically ill. You don't mind
paying to treat an illness once, as long as it's gone after that.
What really gets your goat is having to pay for an illness that isn't ever
going to go away. Why, you'll just keep paying and paying.
There are many ways to discourage the chronically ill from joining your
HMO, or from staying in it if they've already joined. (DrRich
describes these methodologies elsewhere.)
The easiest thing to do is simply let the red tape accumulate, and thus to
drain the will from the patients and their doctors, so they'll just stop
pursuing more expensive treatment modalities out of sheer
exhaustion. With tried and true management techniques, you can keep
these malcontents to under 15% of your enrollees - and your patient
satisfaction surveys won't be affected very much.
Now that you've got
the general idea, let's turn to
what you can do to try to survive such a health plan. The big difference
between managing your doctor and managing your
health plan is that appealing to any underlying sense of right and wrong,
or of professional ethics, is utterly hopeless when it comes to health
plans. You want your health care and they want to keep the money.
Just keep that in mind - and ignore all those commercials they spend your
premium dollars on, with the soft lights and soothing voices, protesting
how much they truly care about you - and you'll be in the right frame of
mind for what you must do.
Next: Surviving your
health plan
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