True believers understand the perils of faith. The "Way," however you define it, is not necessarily the easiest path, or the most popular path, or even the most expedient one. Sirens will sing their songs -- of ease, popularity, expedience -- to lure believers. The most ardent worshippers will sometimes stray.
For believers in the private sector, the tale of the Medicare HMO marketplace is a kind of Abraham-in-the-wilderness challenge. Believers in the primacy of the private sector see these organizations as far superior to anything organized by big government. (True believers abhor big government). Their credo holds that the private sector is inherently more efficient -- and profitable. At this altar, profits are a sacrosanct talisman.
This congressional session, believers are being asked to compromise their faith.
The tale begins in mid-20th century with the surge of health maintenance organizations. Established largely by non-profit organizations, these HMOs required employers to pay a capitated payment per employee. In return for that money, the HMOs promised to take care of employees' health. HMOs featured preventive care, including immunizations and screenings, as well as triage-systems that relied on primary care physicians (and nurses) to funnel patients to specialists. Also, these systems generally employed board-certified physicians who followed established treatment guidelines.
For-profit HMOs recognized the possibilities of such an enclosed system: if the HMO could care for people at a lower cost than employers paid under a traditional system, the HMO could profit. Many of the cost-cutting (profit-generating) measures helped both the patients' wellbeing and corporate bottom lines: preventive care, limited formularies, emphasis on primary care physicians, restrictions on emergency room visits, though patients railed against some of the more egregious cost-cutting moves, like same-day mastectomies, "gag" rules that kept physicians from discussing all possible treatments, and arbitrary "denials" of payment. At times, measures that enhanced corporate health harmed employees' health. Yet the notion of an integrated system, with a primary care physician at the entranceway, remained valid.
From inception, Medicare followed the traditional insurance model, leaving patients free to pick their physicians, including specialists; and Medicare imposed minimal practice restrictions on physicians. It did not limit visits to specialists.
By the end of the last century, though, many working people belonged to HMOs. Why not let those people continue in that system, once they retired? And why not introduce into Medicare the same option for HMOs that had proven profitable for the working population?
Medicare HMOs came into being. They were private sector, for-profit entities. And they promised to take care of enrollees' health -- indeed, they promised a richer benefits package (many included coverage for pharmaceuticals) at a lower cost to enrollees.
True believers in the private market cheered. They hoped to shrink "traditional" Medicare, as more and more Americans opted into HMOs.
Today about 18% of Medicare enrollees belong to an HMO.
The problem is costs: these private-sector plans cost taxpayers more than "traditional" Medicare. Democrats in Congress want to reduce that differential.
No surprise: the HMOs are lobbying to save their subsidy. They argue that under a reduced payment scheme, some HMOs would close, or withdraw from some markets, abandoning enrollees. Those HMOs are correct: in the past, some HMOs have withdrawn from markets. An HMO is a business and businesses do expand and contract, depending upon their bottom-line numbers.
Believers, though, confront a challenge to faith. On the one hand, if they honor the rule of profits, and ask that Medicare HMOs cost no more than traditional "big government" Medicare, then they may be shrinking the Medicare HMO sector. In short, they will be pushing Americans out of private-sector plans, into the arms of government insurance. On the other hand, if they insist on Uncle Sam's subsidizing these organizations, the believers are abandoning the profit-rule that has under-girded their faith. It's apostasy either way.
Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email firstname.lastname@example.org.
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