By: Ron E. Peck

I remember many years ago, we received a check payable to “The Fear Group.”  Of course, we quickly realized that the person who issued said payment must have first communicated via the phone with one of our thickly Boston-accented associates.  At the time, I thought it was funny.  Now, I am truly afraid, and fear is no longer a laughing matter.

Why am I afraid?  I believe we are at a tipping point in the American health system.  Yes, I said “health system.”  For those that know me, I don’t confuse health insurance with health benefits with health care.  I do consider those separate and distinct items to all come under the health system umbrella.

I recall when we were intrigued by Accountable Care Organizations, or “ACOs.”  We wondered whether providers would work to maintain health, rather than treat illness, if they were paid a capitated “subscription” fee – meaning they’d receive the same payment whether patients are healthy or sick, and would incur fewer costs (and thus be more profitable) if patients stayed healthy, and out of their offices.  The idea seemed so good, until the COVID-19 pandemic absolutely decimated ACO providers.  Their patients need care, but unlike traditional hospitals, these ACOs couldn’t charge payers hundreds of thousands (or more) for the treatment.

Meanwhile, many payers were hopping on the network replacement bandwagon, with reference-based pricing (or “RBP”) as the favored model.  When large carriers and network payers pay so many of the bills, it was easy to hide amongst the crowd – paying a percent of Medicare rates – and negotiating the occasional balance bill.  Now, with hospitals filled with severely ill seniors – many of whom are on Medicare (and thus paying pennies on the dollar) – no private payer can escape the hospital’s need to recoup every penny of private money.

The list of innovative and promising approaches to medical cost containment that have been beaten to a pulp by the pandemic is long, and I could keep offering examples, but I would like to instead focus on the positives.  I’ve often heard that you can’t have bravery without fear, because bravery is – by definition – the act of facing one’s fears… To be brave, you must first be afraid, and then act despite it.

I am afraid that politicians will leverage the public’s fear – a fear born from this pandemic – to advance agendas that do not benefit us.  They will point fingers at “the insurance companies” when bills aren’t paid.  They will point fingers at “the drug companies” when medication seems to be unaffordable.  Yet, while these entities certainly deserve some of the blame, so too do the hospitals, PBMs, networks, and pharmacies.  So too do the employers, and employees.  Every person that opted to fill a more expensive prescription because it was “easier” than fighting for the less costly option, as long as their own out-of-pocket was the same, has contributed to a system that is failing us.  Every hospital that marks up their prices rather than eliminate inefficiencies, has contributed to a system that is failing us.  The proof is right in front of us.  Medicare patients are filling hospitals.  Some facilities are continuing to operate while others are failing.  Is it because Medicare is paying some hospitals more, and others less?  Or, is it that the hospitals that cannot function while accepting Medicare rates depended solely upon inflated rates and private payers?

COVID-19 and the pandemic only accelerated the arrival of the inevitable.  Whether it was an illness that mostly targets Medicare participants, or a law that implemented Medicare for all, the private payer goose that lays the golden egg was going to dry up eventually.  We must come to understand that in our health system, we are symbiotic.  Providers rely on patients to choose them for care, and rely on payers to collect funds from the many, to pay the claims of the few – in an amount (and speed) that allows the provider to be profitable.  Payers, meanwhile, rely on patients to contribute to the pool of assets with which claims are paid, and take steps to keep the cost of care as low as possible, as well as rely upon providers to improve the health of those patients for an amount they can afford to pay.  Patients meanwhile need the payer to adjudicate the complicated claims and collect funds from the many to pay the claims of the few, while relying upon the provider to improve their health.  When payers place too much of the burden on patients, in the form of co-pays, deductibles, premiums and co-insurance, the relationship is broken.  When providers place too much of the burden on payers, bleeding them dry and demanding payment of amounts that are excessive rather than focus inward on cost cutting efficiencies, the relationship is broken.  When patients place too much of the burden on providers and payers, demanding excessive care and zero financial responsibility, the relationship is broken.

The pandemic accelerated the inevitable, but it also exposed the weak.  It exposed the unprepared.  My hope is that we will come out of this episode with a greater understanding of what works, and what doesn’t, and a new appreciation for the fact that we aren’t opponents – and rather – are parts of one machine.