Cost controls can't be sidestepped in 2009

October 1, 2008

In the wake of the upcoming presidential election, experts say both candidates cater to the public by assuring that everything will change, but neither candidate has offered up meaningful dialogue about the most needed change of all - reducing costs.

The momentum building up to election day and the uncertainty for your business's future probably keeps you and other managed care executives up at night.

Georganne Chapin, president and CEO of Hudson Health Plan, a managed care Medicaid provider, says candidates appease the public by saying everything is going to change, but neither candidate has opened meaningful dialogue about the most needed change of all-reducing costs.

At the state level-even in Massachusetts-the "hard stuff" has not even begun, she says. Politicians and others driving reform haven't even scratched the surface of meaningful cost-control decisions.

Chapin also agrees with analysts' attitudes regarding the richness of benefits as a determinant of higher premiums. Obama's government-run plan, which is proposed to compete with private plans, would set minimum benefit standards that could drive up premium costs and make it more difficult for Americans to afford the products. Likewise, McCain's plan could result in administrative costs rising as more members enter individually into the private market.

"Because it's now seen as a patriotic thing for people to have insurance...we're going to end up with a lot of really awful insurance programs and tremendously underinsured people," Chapin says.

This, too, does little to control costs.

WORK TO DO

According to our own State of the Industry survey, which included nearly 500 responses from readers of MANAGED HEALTHCARE EXECUTIVE, more than one-fourth (25.9%) of respondents believe health plans will make the most progress on healthcare reform in 2009 rather than state governments (16.6%), the federal government (16.2%), consumer advocacy groups (10.6%), or providers (8%). The indicator makes sense for several reasons: because competition will insist that health plans continue to reinvent themselves; because government progress tends to be slow; and because providers have less incentive to reform the system.

"Everybody in the developed world has some type of planning process and ongoing discussion about where it makes the most sense to put healthcare money and how to affect the health of the population, not just the health of the various institutions," Chapin says. "We're really far from that here in the United States. It's cost shifting on steroids."

Your challenge and opportunity in 2009 is to further your role as the voice of reason in controlling runaway costs.

Julie Miller is editor-in-chief of MANAGED HEALTHCARE EXECUTIVE. She can be reached at julie.miller@advanstar.com