Column: Is HMSA’s new health initiative best for patients? Not likely
Hawaii Medical Service Association’s (HMSA) recently cited the success of its capitated Payment Transformation program as the “first and only health plan in the country to pay every PCP in our network a monthly fee,” referring to how it pays its primary care physicians (“Hawaii’s health initiative goes national,” Star-Advertiser, Island Voices, May 15)
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Hawaii Medical Service Association’s (HMSA) recently cited the success of its capitated Payment Transformation program as the “first and only health plan in the country to pay every PCP in our network a monthly fee,” referring to how it pays its primary care physicians (“Hawaii’s health initiative goes national,” Star-Advertiser, Island Voices, May 15). HMSA may be the only, but it was not the first. In the late-1980s, insurers pushed capitated payment plans throughout the country. What was found was that they did not provide quality access to health care — and they were all abandoned.
The reason for this is simple: An insurance plan relying on capitated payment to providers transfers risk from the insurer to the provider. While insurance companies are set up to manage risk through volume monitored by a panel of actuaries, physician practices are not.
A single patient with acute chronic disease could bankrupt a small practice that does not have adequate numbers of healthy patients to offset the increased care costs required for the sick. As a result, physician practices move away from accepting patients with high-demand illness, a strategy still recommended by practice consultants.
As for controlling cost, the physician payment portion of the health-care dollar is only about 10%. Since Payment Transformation only involves primary care physician practices — about 45% of the state’s total number of physicians — a 10% savings through Payment Transformation would represent only one-half of 1% savings (0.5%) to the total health care dollar — barely noticeable in one’s premium, but devastating to independent practices.
According to the Commonwealth Fund, Hawaii has had the highest quality of care in the nation for the last decade. Virtually everyone is insured, and costs per beneficiary to Medicare have been the lowest in the nation.
Our problem has been access to care. We do not have adequate numbers of physicians, particularly on neighbor islands. Instead of focusing on improved quality and costs, while noble, attention should be directed toward improving access to best serve patients.
Physician approval of the Payment Transformation program is low. Twice as many physicians as not say they are unhappy with the program and their practices are weaker because of it.
Physicians cannot reasonably opt out of Payment Transformation. HMSA controls about 70% of the commercial health insurance market in the state, so participation in HMSA insurance is a requirement for practice stability, as well as ethically providing health care access to Hawaii’s residents.
Practices have closed and many more are exploring the closure of their practice for work at one of the hospitals or on the mainland. Yet another setback to improving patient access.
We all agree that the costs of health care are too high to be sustainable nationally. We also agree that our health care system should strive to provide the highest quality with the greatest value.
However, the blunt-sword approach taken to the physician section of health care does not serve to improve either quality or value. For these reasons the Hawaii Medical Association must oppose the current HMSA Payment Transformation program.
Jerry Van Meter, M.D., is president of the Hawaii Medical Association; Christopher D. Flanders, D.O., is HMA executive director.