Friday, August 07, 2009

The Blackwaters of universal healthcare?

A BusinessWeek cover story claims that the health insurance industry has "already won" the healthcare reform battle. That is, by 1) neutering public plan proposals and 2) reducing mandatory minimum coverage guidelines, the industry has (pardon the expression) ensured that any emerging reform bill, with its coverage mandates and subsidies, will actually boost industry profits.

In a prior post I buried the lede, so excuse a retweet. One subtext of the BizWeek article is a kind of backhanded tribute to the healthcare giants' strength in diversification, through subsidiaries that provide plan administration, data crunching, software, etc. In a way, the article undercuts its central premise -- that the insurance industry will gut "universal" coverage -- by suggesting that giants like UnitedHealth are equipped to survive in almost any payment system. One unspoken possibility the article points toward is that the health insurance industry might complete an already partial transformation from insurer to administrator. Terhune and Epstein note the role in public healthcare of one UnitedHealth subsidiary:

United's AmeriChoice unit is the largest government contractor administering state Medicaid programs for the poor and federally sponsored plans for children. AmeriChoice's revenue rose 34% last year, to $6 billion, and it has 2.7 million people enrolled. Those numbers should continue rising under reform since congressional Democrats are proposing an expansion of Medicaid to help achieve universal coverage. More of the working poor would qualify for Medicaid, and AmeriChoice can sell itself to states as the leading service provider.

The authors might further have noted that more than half of Americans who get their health plans from their employers are in self-funded plans. These plans are for the most part run by so-called third party adminstrators (TPAs), some of which are owned by the largest health insurers; UnitedHealth owns the third-largest, UMR. I suppose -- and need to read further -- that Medicare Advantage plans amount to another form of plan administration without financial risk. Add in the revenues that conglomerates like United get from data processing subsidiaries -- noted by BizWeek -- and health reform of any kind could ultimately prove to be win-win for the "insurers." Even under a single payer system, American style, they might be lucratively employed as the Blackwaters of healthcare delivery.

Related posts:
MedPAC: Obama's rudder for the healthcare battleship
The Times points another arrow at fee-for-service
Did Obama read Atul Gawande? cont.

1 comment:

  1. i love how businessweek is the crusading investigatory trustbusting journalist force out there now--they had a great one on "the subprime wolves are back" about how the same executives who ran predatory lending companies are making a second killing modifying (or "modifying") loans