April 12, 2005
HEALTH PLANS/POLICY: It will stagger you to find out that health care competition may not result in better quality!
Now I want you all to sit down comfortably and drink a glass of water before you read this article. Says here (in a story cribbed from the academic journal Medical Care) that Health care competition may not result in better quality. The study found that HMOs in places where there was less competition between HMOs did better on HEDIS scores. Oddly those where there was more enrollment in HMOs also did better on HEDIS scores (though not as well on consumer satisfaction). All suggesting that a single monopoly HMO probably does best of all on quality. Um, does this sounds like anywhere we know? Well now you've all recovered from the shock, let's review what little that we know on the subject.
a) Competition amongst health plans and HMOs is not about the competition to produce the best quality care. It's about the competition to insure as many as possible of the people least likely to need it. Harsh but fair words.
b) In general health plans have little ability to control what medical providers do, and providers are the ones who do the things that make up HEDIS scores. Consumer satisfaction with health plans has to do with customer service reps, not health care quality which the average consumer wouldn't recognize even if it showed up as their prom date.
c) The more health plans there are in an area the less each plan's ability to get providers to do anything, as they'll be responsible for a very small part of the provider's business
d) As Porter, Enthoven and a host of other bright people have pointed out, competition such as it exists in the US system is in the wrong place (see point a).
And e) no one in the real world, where people and employers vote with their money, cares about HEDIS or has even heard of it.
I hope no one working hard in a health plan feels too offended. Sorry for feeling bloody minded tonight, but my next chore is to do my taxes! I'm sure you understand!