Last year's AHIP Institute was all about "bending the curve," but the health insurance industry seems to have collectively thrown in the towel on that task, in the short term.  The issue of the day is transparency, more pointedly the lack thereof, and how that's skewing the market.

Presidential hopeful Tim Pawlenty, the former two-term Republican governor of Minnesota, kicked things off by skewering health care reform--not necessarily its objectives, but its execution--and touting programs launched in Minnesota to get pricing and quality data--costs for the most 100 common procedures, physician score cards and prescription pricing--into the hands of consumers so they could do apples to apples comparisons when buying health care.

In his mind, the biggest flaw in this system as we know is that consumers don't have any idea how much what they're buying actually costs. "It's pretty simple. Go to two weddings, one with a open bar and one with a cash bar, and you're going to see two vastly different kinds of behavior," he said.

But here we hit a wall in the march to efficiency. When it was pointed out that many of these mandates are baked into the Affordable Care Act, Pawlenty pushed on through, saying the entire act should be repealed and we should leave it up to the states to decide what constitutes quality by coming up with their own measures to do so. "Politicians shouldn't be deciding what quality measures should be, the medical community should," he said.

Fair enough, because one thing that's apparent at AHIP is that accountable care, as currently being defined by CMS, has in the words of one speaker become a dirty word (or phrase, more to the point.) Health insurers are gung-ho about the concept but not the particulars of the federal ACO program. The Mayo Clinic's recent decision to not pursue designation as an ACO is a case in point, and it might be just the first case of vanguard organizations jumping ship. And protesters outside the conference were calling for a whole different type of reform--a single payer system.

But where, exactly, does that leave the industry? Another issue that kept cropping up during presentations is how much geography affects care, and costs. The federal government spends 2.5 times more on Medicare patients in Florida than it does in Minnesota; if you live in Southern California, you're six times more likely to have a hip replacement than a similar patient living in New York; the list of care and price disparities is endless, and a huge roadblock to making financial and clinical sense out of this current mess.

As former Senate Majority Leader Tom Daschle pointed out, we need to stop thinking that we have a national health care system and recognize what we have is a collage of health care sub-systems that in many ways play by their own rules. While Pawlenty bemoans the "top down" structure of health reform, I'm a bit nervous about the idea of trying a "bottom up" approach. Some state governments and commercial insurers have been very aggressive and innovative in trying to get a handle on controlling costs, and there's a lot of best practices emerging from this conference.

But left to their own devices, I think state medical societies and legislators would have wildly disparate notions of what constitutes best care--and a fair price for that care--and if we played out this string, we would be left with an even more Balkanized state of affairs than we have now. Just look at the hash being made with the emerging state insurance exchanges, where state regulators can mandate insurance programs, including coverage for certain conditions and procedures.

I thought the entire point of health reform was to stabilize the market by creating systematic approaches to population health and creating a coherent way to convey standard information on quality and price indicators. As much as I want the free market to reign, I think we need a blueprint and cattle prod, at least in the short term, to make the health care industry move toward accountable care in an orderly fashion. There's a lot of innovation happening in the market, but in many cases the only way you're going to hear about it is coming to a conference like AHIP (or reading HDM, of course).


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