The End of Health Insurance CompaniesSmall Group Medical ...

The End of Health Insurance Companies

The New York Times (1/30, Emanuel and Liebman) suggests that by 2020, ?Insurance companies will be replaced by accountable care organizations ? groups of doctors, hospitals and other health care providers who come together to provide the full range of medical care for patients.? One of the factors in the potential demise of insurance companies stems from ?the [limited] amount of risk sharing?because the insurers charge premiums that vary, depending on the health of an individual or a group of employees, and use their data and market power to identify healthy people to cover and unhealthy people to exclude from coverage. (The health care law?s total ban on exclusions for pre-existing conditions will begin in 2014.)? Another contributing factor is due to ?insurance companies?[imposing] barriers ? like requiring prior authorization for tests and treatments and denying payment for covered services, which forces patients to appeal ? to discourage patients from using the medical services for which they are insured and to attempt to avoid paying for those services.?
In contrast to the current health insurance companies, ?accountable care organizations will typically be paid a fixed amount per patient, along with bonuses for achieving quality targets. The organizations will make money by keeping their patients healthy and out of the hospital and by avoiding unnecessary tests, drugs and procedures.? ?In addition to providing better and more efficient care, A.C.O.?s will also make health insurers superfluous. Because they will each be responsible for a large group of patients (typically more than 15,000), they will pool the risk of patients who have higher-than-average costs with those with lower costs. And with the end of fee-for-service payments, insurance companies will no longer be needed to handle complicated billing and claims processing, nor will they need to be paid a fee for doing so.? To personalize care, ?A.C.O.?s will consist of local health care providers working as a team to take care of patients who are likely to be members for years at a time.?
According to the reporter?s opinion, the final reason the end of health insurance companies is on the horizon is because, ?A.C.O.?s?will lead to a better form of competition in health care markets. Today, consumers have to choose among insurance plans with a bewildering array of copayments, deductibles and annual out of pocket maximums ? choices that few of us are any good at making. In the A.C.O. model, consumers will choose a primary care physician and the team of doctors and hospitals that are in the same group. Choosing a doctor and provider group is a responsibility that consumers want to have and are likely to be much better at.?

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Source: http://ebs-inc.net/blog/?p=208

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