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EP #68 Flatlining Podcast Recap
Last week Ron and Matthew discussed two topics of recent news interest, one is the North Carolina legislature’s approval of Blue Cross Blue Shield of NC to set up a for-profit entity and Matthew talks with Ron about his recent posting on Linked In where Ron provided his insight on insurance companies wanting to have physicians take on “more risk”. Ron explains his thoughts on these payer’s talking point and he doesn’t pull any punches.
Earlier this year the N.C. State Legislature approved with bi-partisan support Blue Cross Blue Shield of N.C. (BCBS-NC) to set up a for profit holding company, which means that BCBS can purchase businesses without any oversight from the state legislature. Insurance commissioner Mike Causey has been a strong opponent of this action stating that the profits that BCBS makes won’t be returned to policy holders in form of lower premiums.
Ron said this action by BCBS-NC is not without precedence, he said that about half of all BCBS entities operate this way. He doesn’t think this change will make any sudden changes to the healthcare landscape, but he did point out that it is legitimate to be concerned when a long-time non-profit entity is now looking toward profit based structure. He said you have to wonder if there is going to be a conflict between the company’s and the patient’s goals.
Matthew asked if this seemly quick approval was related to the recent change over of the N.C. State health plan moving away from BCBS-NC, but Ron thought these are two unrelated issues. The state’s new health plan alignment away from BCBS-NC will not be executed until 2025.
In other BCBS news, Matthew brought up an article in Becker's Payer Issues that reported BCBS-NC intends to purchase all 55 FastMed urgent care locations in North Carolina. Matthew said that BCBS-NC has already been a non-controlling minority investor in FastMed since 2012. Ron explained this is a continuation of the trend of health insurance companies acquiring more portions of the health care delivery system.
Ron said this is concerning as payers acquire a variety of components, such as ambulatory care centers, surgery centers and the like. He pointed out that now over 50% of physicians work for or are “owned” by another entity and not in an independent practice. To illuminate further, Ron said that United Health Care (UHC) now employs or is affiliated with over 70 thousand physicians in the U.S. and is the largest employer of physicians in the country.
Matthew asked Ron about the impact of the payers to continue to consolidate services under their control and what does mean to us if ten years down the road an insurance company is running most urgent care facilities? Ron pointed out two reasons for his concern, one is that it limits competition and free market forces, the other concern Ron brings up is that insurance companies are exempt from anti-trust laws, so he said they can do things without fear of being investigated for anti-trust violations. As a consumer, Ron said that he wasn’t sure how much transparency there is in these sorts of arrangements and wondered how many patients are going to be aware that their provider is employed by their payer and may question whether the physician’s actions are being directed by the insurance company.
Ron recently posted on Linked In about an exchange he had with a managed Medicaid payer on the topic of risk and providers. He first gives a good primer on insurance companies, explaining they are in the business to manage risk, that’s how they make money. He explained that “If the insurance company is trying to push off risk, it’s because it’s in their best interest to do so.”
The comment that got Ron’s attention was that the payer essentially said that physicians needed to take on more “risk” with regards to patients, further intimating that for years doctors were billing and billing with little or no regard to quality of care or saying that doctors could be incentivized to improve care with financial rewards. Ron, having represented and worked with thousands of physicians over the last three and half decades took offense to this comment and pointed out that the population in question is Medicaid, and physicians lose money when seeing these patients. However, he said most feel called to serve this population out of their passion for providing care to the most vulnerable.
The last comment from the payer, said providers don’t have chips in the game, and Ron, as well as any independent physician, knows providers have most of the chips in the game, because as Ron pointed out, physicians have to make payroll, pay the utilities, and when a Medicaid patient misses an appointment, the provider still has to cover all the costs associated with visit, not so with the payer.
Ron summed up that his frustrations with the payer’s attitude was this idea that physicians needed to take on risk for a population that doctors already see at a lower cost, and the insurance company makes money on this Medicaid product.