Here is a posting from Atlantic Information Services, Inc. It has some quotes from John Gorman who has a consulting group for Medicare Advantage Insurance Companies. (maybe if this IMO thing doesn’t work out, I could become a consultant??)
Anyway, John’s pretty much dead on here. MA companies cannot compete with Medicare in terms of claims paying efficiency. Medicare is a well-oiled machine when it comes to cutting claims checks (3% of Claims cost goes to admin). I’ve written at length a while back about some of the ways which Medicare hides or understates it’s actual cost (one quick example is that none of the CMS staff employees are included in admin cost).
Regardless of this, MA companies must be better, smarter, faster, etc. than Original Medicare. The bar, frankly, isn’t too high at present. 3% admin costs means there isn’t much meat on the bone for network management, case and disease management, utilization management, pharmaceutical management, benefit design, care coordination, information systems (quality measures), etc.
Essentially, you can take 3 decades of developments in best practices for MCO’s and throw it out the window, taking us back to the “indemnity model” of the 1970′s, I suppose.
As John Gorman says, “. . . if health plans don’t have something to say about what they can do to contribute to a better outlook for the fiscal solvency of Medicare, then we might as well all just hang it up and go home. . .” ‘Nuff said!
Here’s the link! http://www.aishealth.com/Bnow/hbd121008.html
Re-reading, I think I might sound a bit naive here. . . I think that many MCO’s have acted like pigs (along with mortgage companies, wall street firms, etc., etc.). I’m hoping that the MCO’s now “get it” with respect to their role in the economy and society. I see signs that they do. Otherwise the government will do it for us! We have a pretty solemn responsibility not only to profit but also to improving quality and outcomes to a population who deserves our best efforts. One would think both can be achieved by private citizens and private industry???