Aetna’s president was recently interviewed and came down hard on our system of health care in this country. Which is ironic of course as they profit so blatantly from our mismanged care system.
What is his chief complaint? I would have guessed it to be something like rising health care costs are symptomatic of fraud and mismanagement. But instead he targeted transparency in his summation.
Part of the problem he outlined including the contracts that Aetna is forced to sign with medical providers include gag orders which prevent Aetna from disclosing the contracts to the public.
Aetna and the other major health insurance companies are under increasing heat to justify their rate increases which I guess they can’t in that it would violate their contracts with providers.
Due to the scapegoating of the health insurance industry, people tend to blame the rising costs on them instead of the hospitals and doctors that the costs originate from.
Aetna for its part is jumping on the bandwagon by introducing new programs that test pay-for-performance models most involve financial incentives for health care providers but also include pay fines for bad results.
A great point is that Aetna is raising premiums for people in its individual health plans and furhter described the individual market as deteriorating. It “has been in decline over a long time. In New York it took three years.
He went on to point to the failure of the individual market in New York which is a risk pool which many decide not to participate in. And looking at health insurance premiums in New York, there can be no doubt as to the direness of health reform in this battered market.
The health-reform bills need a stronger coverage requirement so people won’t make a “rational” decision to pay the penalty instead of buying health insurance. “I think the individual mandate as currently structured is incredibly weak,” Bertolini said. “The result is it’s going to exacerbate the current problems in the individual and micro-group markets,” he said, referring to coverage for groups with fewer than 10 people in them. Much is riding on how much latitude the federal government gives states to enforce such a mandate, he said. “That could put this whole bill in the balance as to whether it will be successful.” Of course, insurers stand to gain as many as 30 million new customers if health reform passes and extends coverage as planned.
The only way the health insurance companies can control health insurance premiums is when they have a large market share and can forcibly keep down reimbursements. When there is a greater choice in the network it leads to higher costs especially when you consider that when the doctor is popular or a hospital is a must for the insurance company, they must cave into whatever contracts the provider demands.
When the market is dominated on the other hand by a prominent company they can simply get rid of the provider. Aetna has had to include pay raises so to speak for medical providers of more than 20% to large hospital networks.
In Connecticut for example the hospital Hartford had requested a 50% rate increase over three years, Bertolini said. When providers refused to accept Aetna’s lower offer, Aetna ended the contract and sent a letter to its members notifying them of the hospital’s exclusion from its network, which was to have become effective Jan. 1. (Patients with ongoing treatment were grandfathered in until a certain date, and new patients could still receive care there but at the higher out-of-network rates.) “You have to draw the line somewhere,” Bertolini said.
Hartford Hospital providers ended up accepting lower increases of 9%, 9% and 7% over three years, half of what they were looking for, and are now back in the network, he said. Aetna estimates 180,000 members would have been impacted if the termination had gone through.
Finally, Bertolini was asked if health insurers were any closer to settling on a standard and easier-to-understand explanation of benefits form, or EOB. He said he’d like to “get rid” of both EOBs and health-insurance ID cards in favor of an all-digital platform.