The payer-provider disconnect
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Call it the big disconnect. Thousands of healthcare provider groups face financial ruin. Tens of millions of Americans are losing insurance coverage. Yet private health insurers are doing just fine, thank you.
So far, Congress has responded only to the provider crisis. Social distancing has cut hospital revenue by an estimated 30% to 40%. Local physician practices, with primary care hardest hit, have seen declines of up to 90%.
It’s nearly impossible for actuaries to estimate how much of the lost healthcare spending will reappear in the second half of the year as businesses gradually reopen. Some, certainly. But with 30% of healthcare considered waste, and tens of millions of laid-off Americans returning to work slowly, most of that potential revenue is probably gone forever.
As things stand now, the government is doing everything in its power to reassure providers and payers that not much will change.
Comment by Don McCanne of PNHP: The current pandemic certainly demonstrates the payer-provider disconnect in health care. The private insurers are doing spectacularly well whereas the players in the health care delivery system – many hospitals and especially physicians – are facing a financial crisis.
The view expressed by Merrill Goozner – the editorialist of Modern Healthcare, a publication that covers the medical-industrial complex – provides a lesson for us all. The solution for the disconnect is to have a guaranteed budget (including provisions to fund surge capacity), with him stating, “it’s way past time for designing a seamless system where everyone is covered, and people never fall through the cracks.”
He then suggests that we need mechanisms to switch automatically between private plans and public programs. Of course, this is where he veers off track. The administrative complexity and high costs of such a system are not warranted when you can have a single, seamless public program that covers everyone forever. By acknowledging that a public program must be there as the safety net that the private sector does not provide, he has presented an ironclad case for the single payer model of an improved Medicare that will always be there for all of us, no matter what crises we face.
Jesus: Hey, Dad? God: Yes, Son? Jesus: Western civilization followed me home. Can I keep it? God: Certainly not! And put it down this minute--you don't know where it's been! Tom Robbins in Another Roadside Attraction
May 16, 2020 at 9:13 PM #316155jwirrParticipant
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I can see that here in our small community. The hospital and clinic have almost shut down appointments, services like foot care and physical therapy, etc. I have diabetes and sciatica and call my doctor on the phone if I need something. No more regular 3 month checkups, no A1C tests, etc. I have also stopped my home health provider from coming to my home 3 times a week. I am not doing well without her but it makes one less person coming in and out of the house.
Our doctors are in HMOs so they are still getting a salary but that is based on income to the clinic and the only thing that is clearly making an income for the whole group is the pharmacy. We all still get our meds.
May 17, 2020 at 1:26 AM #316220A Simple GameParticipant
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He then suggests that we need mechanisms to switch automatically between private plans and public programs. Of course, this is where he veers off track. The administrative complexity and high costs of such a system are not warranted when you can have a single, seamless public program that covers everyone forever.
But it would open the door to single payer, and once opened I doubt anyone would be able to close it.
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