The latest edition of the Health Wonk Review is over at Wing of Zock, and you’ll definitely want to check it out. My favorite article in the HWR comes from The Healthcare Economist, aka Jason Shafrin, writing about the success of the healthcare system in Grand Junction, Colorado. Healthcare in Grand Junction has been in the national press quite a bit over the past few years, and I’ve written about it several times too.
Dr. Shafrin is absolutely correct in his assertion that one of the main parts of the equation in Grand Junction is that there’s a relative monopoly by Rocky Mountain Health Plans in terms of the health insurance market there, and also by the Mesa County Physicians Independent Practice Association when it comes to physician affiliation. Replicating what they have in Grand Junction would absolutely be more difficult in communities where the health insurance market is more evenly divided among several insurers and/or where the physicians have not banded together the way they have in Grand Junction.
I agree with Jason that it would be difficult to achieve Grand Junction’s results without their health insurer and physician characteristics. But I don’t think it’s impossible. Essentially, what they’ve done in Grand Junction is set things up so that doctors are paid the same amount regardless of whether they’re treating a Medicaid patient or a patient with RMHP. The doctors said they didn’t want any financial incentive for seeing privately insured patients over those with public health insurance, so the money is pooled and then divided equally for each patient.
This is a scenario that I could see being implemented even without a monopoly by one health insurance carrier. Grand Junction aside, if we look at the whole state of Colorado, the top 70% of the health insurance market is comprised of ten carriers. I wonder if it would be possible for medical offices to set up agreements whereby they pool money received from those ten carriers and from Medicare, Medicaid, and CHP+. Then instead of paying physicians directly from the health insurer depending on the insurance coverage of each specific patient, the doctors could simply be paid either a salary or an average reimbursement for each patient, regardless of which insurance that patient had. This would require some restructuring in terms of how medical billing is done, but it would allow medical offices to continue to negotiate competitive contracts with private health insurers (and the higher the contracted rate, the more total dollars the medical practice would have to put into their payment pool).
One of the major factors that contributes to the success of the system in Grand Junction is that doctors there are ok with receiving lower total incomes than they would in other areas that don’t function the way Grand Junction does. When you pool Medicare and Medicaid payments together with private health insurance payments, the public health insurance reimbursements drag down the average payment. In order to make sure that people with public health insurance are receiving equal access to healthcare (which they currently do not, especially those with Medicaid), the per-patient average reimbursement for physicians would have to decrease, since it would mean that more lower-paying patients would be treated. The caveat that doctors would have to be willing to work for a little less money is especially true of specialists, which is where the highest incomes are.