Senator Clinton will roll out her health plan tomorrow, but in the roll-up last week she pointedly singled out the health plans as a big part of the problem.

 

"I intend to dramatically rein in the influence of the insurance companies. They have worked to the detriment of our economy and of our health-care system."

 

There has been a lot of discussion and progress lately on the transparency of doctor and hospital pricing and performance. But health plans are also very important, costly system players. What about the transparency of their pricing and performance? At this point, nearly all health plan costs and performance are opaque to the purchasers who buy coverage and to the vendors whose services they broker.

 

Many organizations are now publicly reporting hospital quality. And if the court ruling isn't overturned this coming week, CMS will turn over physician claims data sets from 4 states and DC to the advocacy organization Consumers' Checkbook, which has pledged to make the refined information a publicly-accessible resource. (The sets will be purged of patient-specific data.)

 

As provider performance levels become clearer, there is every indication that health plans will focus on pegging payment levels to them. This is a prospect that has many doctors uneasy about the motives and methods of those analyzing cost and performance.

 

Just because you're paranoid, though, it doesn't mean they're not out to get you. While its ridiculous to dismiss health care analytics out of hand - the tools I've seen are, for the most part, superb - it is not foolish to suspect that health plans, who are just as much into the business of making money as everyone else in health care, don't occasionally spin their information to advantage. Bring up the topic of health plan negotiations with any doctor or hospital executive, and be prepared to get an earful on this topic.

 

The enmity is palpable. Whle they're not exactly the most objective or balanced group themselves, the AMA published a 2007 update to its study of health insurance in America, concluding that

 

"physicians across the country have virtually no bargaining power with dominant health insurers and health insurers are in a position to exert monopsony power, that is, the power to lower the price paid for services below the price that would prevail in a competitive market...Because the managed care contracts between physicians and health insurers impact so many aspects of the patient-physician relationship, the severe imbalance in bargaining power demonstrated by this study is an urgent matter that must be addressed by policymakers."

 

The family physicians took a more pro-active approach. In October 2005, the American Academy of Family Physicians' (AAFP) Congress of Delegates passed a resolution calling on the organization to develop a

 

"national clearinghouse for the purpose of collecting data regarding undesirable business practices of health care insurance companies and use the information to identify trends and to develop effective policy to promote fair payment for physician services."

 

In a just published Medscape survey article, the journal Family Practice Management teamed with AAFP to ask family doctors to rate health plan business practices. As you might expect, the news wasn't good. There were 32 most commonly rated plans. The average rating was a C-, with doctors assigning the best grades, a C average, for "timeliness of payments," "member eligibility and benefits information," and "the payer's Web site." When it came to "the contracting process," the plans got Ds, on average. It's worth mentioning, I suppose, that the plans that got the best ratings, each earning a C+, were at Blue Cross and Blue Shield of Florida (here in my hometown of Jacksonville), Regence Blue Cross/Blue Shield in Washington and Oregon, and MVP Health Plan in the Northeast.

 

The deeper problems, of course, are that physicians haven't collaborated as a group to leverage their clinical and financial data, and so don't have an independent data source on cost and performance. The data they use to contract with is most often provided to them by their adversaries, the health plans. They remain dis-united and uninformed, the worst possible position when it comes time to negotiate health plan contracts. And, of course, the health plans, as a rule, haven't shown much interest in helping the physicians find a more level playing field.

 

On the other side of the health plan business, purchasers have an equally difficult time dealing with the plans. Michael Moore's Sicko presented evidence that many insurance companies spend their time not paying for claims (and that they should all be abolished). But a provocative piece in last month's Forbes, Slicko, argues that the plans do exactly the opposite, paying for many unnecessary and inappropriate procedures. Since the health plans make a percentage of the total cost, this piece argues that they drive cost up as much as possible.

 

There are now well-developed tools to accurately assess health plan performance and begin to hold them accountable. An evidenced-based instrument, eValue8, developed by the National Business Coalition on Health, "makes it possible to both define vendor performance expectations and to evaluate their performance."

 

About a year ago, the Florida Health Care Coalition conducted an interesting study of the performance of different Florida health plans. Some of the plans didn't fare so well and, after the Miami Herald published a writeup, I received irate calls asking why I would have said this study was important. The answer was that the coalition had used the eValue8 methodology, which I knew to be credible. I told the reporter that this was a good approach without knowing what the results were.

 

We won't make meaningful headway to stabilize the cost explosion or the other problems of the health care crisis until we start have real purchasing decision-support tools for all the industry's vendors. If we're going to have a private sector health system that responds to the market forces we claim to believe in, then the companies that provide those services must be accountable through transparent pricing and performance. The companies would prefer we just rely on them to do the right thing, of course, but only an innocent should buy that argument at this stage of the game.

 

There are many related issues, but here's an important, timely one. If health plan operations aren't transparent, then Pay-for-Performance can't possibly work. If health plans change the reimbursement incentives from FFS (being rewarded for providing more services) to P4P (being rewarded for providing only the right services), they will almost certainly drive down unnecessarily untilization and cost. But if we, the providers or the purchasers, can't see what the results of those incentive changes are, how do we know how much was saved, and whether any of it was shared with the doctors and hospitals who produced the savings, or returned in the form of lower premiums to employers?

 

While Senator Clinton may be a little unfair in picking only on the health plans, she is probably correct from a political perspective. Getting change that matters will absolutely require the same level of health plan transparency as the plans are now demanding of the providers.

 

It will also require transparency in the drug, device and supply chain sectors which now consume close to 40% of all health care dollars.

 

There's just one thing to remember. It's relatively easy to pick on the doctors and the hospitals. They're fragmented and their influence is modest. But when we start demanding that health plans, drug companies and device companies be accountable, we'll see what kind of influence can really be marshaled by the health care industry.