The Rebellion of the Buyers

By JOE FLOWER

Did you catch that headline a few weeks back?

An official of a health system in North Carolina sent an email to
the entire board of the North Carolina State Health Plan calling them a bunch
of “sorry SOBs” who would “burn in hell” after they
“bankrupt every hospital in the state.”

Wow. He sounds rather upset. He sounds angry and afraid. He
sounds surprised, gobsmacked, face-palming.

Bless his heart. I get it, I really do. Well, I get the fear and
pain. Here’s what I don’t get: the surprise, the tone of, “This came out
of nowhere! Why didn’t anyone tell us this was coming?”

Brother, we did. We have been. As loudly as we can. For years.

Two things to notice here:

What is he so upset about? Under State Treasurer
Dale Folwell’s leadership, the State Health Plan has pegged its payments to
hospitals and other medical providers in the state to a range of roughly 200%
of Medicare payments (with special help for rural hospitals and other
exceptions). In an industry that routinely says that Medicare covers 90% of
their costs, this actually sounds rather generous.What is the State Health Plan? It’s not a payer,
that is, an insurer. It’s a buyer. Buyers play under a different set of rules
and incentives than an insurer.

Payers are not Buyers

That #2 is key: Insurers
are paying for your healthcare with your money, the premiums you pay them.
Under the Afforda...

Source: The Health Care Blog - August 15, 2019 Category: Consumer Health News Authors: Christina Liu Tags: Economics Health Policy buyers health economics health reform Joe Flower Payers Source Type: blogs