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Kaiser Health News reported on health insurance companies finding ways to delay or deny payments to hospitals. There has been longstanding tension between health insurers and hospitals, but the tension seems to have risen to a new level: hospital officials in different states apparently tally billions of dollars in late payments.

Kaiser Health News reported on health insurance companies finding ways to delay or deny payments to hospitals. There has been longstanding tension between health insurers and hospitals, but the tension seems to have risen to a new level: hospital officials in different states apparently tally billions of dollars in late payments.

It appears that last year, a number of health insurers accelerated payments to hospitals -- it certainly would not have been a good look for them to be accused of playing financial games during a pandemic. Now, though, as those in the US who want to be vaccinated have been vaccinated, attention seems to be turning elsewhere. It seems that at least some insurers are changing policies and procedures (not surprisingly, Anthem officials wrote to blame the changing rules on "excessive prices" on the part of hospitals). There are some missing details, but Anthem's CFO has publicly explained delayed payments as a response to an uncertain environment. It is unclear why a health insurance company facing an uncertain environment entitles them to delay fulfilling obligations outlined in their agreements with hospitals.

In the current landscape of burnt-out providers and general tensions stemming from the pandemic, insurers and providers can hopefully resolve their differences. It is not difficult to imagine how delaying payments would impose enormous operating challenges for the hospitals -- especially at the scale mentioned in the article. Even if the large health insurers are successful in their short-term plans, the antagonism seems likely to invite a retaliatory response from hospitals when they gain the upper hand.

Kaiser Health News published an article about a COVID test being priced over $56,000. This happened in the summer of 2020, after Congress passed legislation to require insurers to pay for COVID tests so that they would not cost patients anything directly. The amount seems outrageous (for a test that was later listed as $175), and ultimately was deemed a billing error.

Kaiser Health News published an article about a COVID test being priced over $56,000. This happened in the summer of 2020, after Congress passed legislation to require insurers to pay for COVID tests so that they would not cost patients anything directly. The amount seems outrageous (for a test that was later listed as $175), and ultimately was deemed a billing error.

Fortunately, the patient never had reason to think that he had to pay a very large surprise bill, but this incident still shows what can happen in a power imbalance such as when insurers are required to pay whatever price the providers set. The imbalance of power can come through legislation (as in this case), or through consolidation of provider networks (so that all insurers must do business with that network) or by a lack of insurer networks (if no other insurers operate in a given region). Healthier markets will have multiple buyers and sellers, and no requirement to buy at any cost.

Kaiser Health News published a longer article about the state of California taking another look at its oversight of plans that administer Medicaid programs (known in California as Medi-Cal). Surprisingly, Medi-Cal covers almost 40% of the children in California and the article reports that even the state auditor says that "Medi-Cal has failed to hold accountable the managed-care health plans that cover almost 12 million of its nearly 14 million enrollees."

Kaiser Health News published a longer article about the state of California taking another look at its oversight of plans that administer Medicaid programs (known in California as Medi-Cal). Surprisingly, Medi-Cal covers almost 40% of the children in California and the article reports that even the state auditor says that "Medi-Cal has failed to hold accountable the managed-care health plans that cover almost 12 million of its nearly 14 million enrollees."

The state has started to remedy the situation, although the article also reports that "The state's exact strategy is unclear." Apparently, there are metrics that the state currently evaluates the plans on, although they might not be published or widely known about. Additionally, it seems that the state up until now has not taken significant action against plans that performed poorly. Part of the problem is likely related to the small number of participating plans -- administering Medicaid plans is likely a low-margin business, and many counties only have one plan available (operated by the county itself). Curiously, though, the state's largest commercial Medi-Cal insurer, Health Net, has accounted for $2.1 billion of the $2.9 billion in net profits from Medi-Cal since fiscal year 2014. Kaiser Permanente has lost money on Medi-Cal during that time period despite receiving high marks on the quality metrics, suggesting that the incentives laid out by the state might not align well with its goals.

Changes on this scale will take time to show an effect; it would be nice if the state clearly laid out its plans and metrics and publicly displayed individual plan performance on a regular basis. It might also be possible that Medicaid offers too little money for the services that are needed in order to effect meaningful change.

Changing times call for changing practices. Kaiser Health News reported on a recent trend among dental practices to offer membership plans, where regular monthly payments entitle patients to free exams, cleanings, and X-rays. The membership plans also generally seem to offer a discount on other services. If this sounds like a health insurance plan, it is probably because this is similar to how health insurance plans started: a doctor wanted regular payments in exchange for providing services when needed.

Changing times call for changing practices. Kaiser Health News reported on a recent trend among dental practices to offer membership plans, where regular monthly payments entitle patients to free exams, cleanings, and X-rays. The membership plans also generally seem to offer a discount on other services. If this sounds like a health insurance plan, it is probably because this is similar to how health insurance plans started: a doctor wanted regular payments in exchange for providing services when needed.

Growth of these membership plans for dental practices have occurred during the pandemic, when many people lost access to their corporate-sponsored dental plans, and many dentists were willing to give a discount for regular payments. Health care is now probably too complex, with too many different specialties and with some treatments costing hundreds of thousands of dollars, for small doctor offices to offer similar membership plans (in place of insurance). However, the patients and the providers doubtless find something attractive about not having to pay a middeman.

Kaiser Health News published a longer piece on California's plans to spend nearly $6 billion on more comprehensive care for low-income patients. On some level, this plan makes sense in that a low-income patient's health might be determined by more than just access to health care; for example, lack of access to stable housing and nutritious food could undermine the effectiveness of free health care. Apparently, more than 25 regional experiments have shown a more holistic approach to be effective. Critics of the idea appear skeptical that this approach will work on a scale as large as California as a whole, and might be inclined to believe the state's apparent lack of success in providing basic services might preclude their success in more intensive efforts. The chief medical officer of a participating health plan expressed concerns about the readiness of the existing infrastructure to support the initiative.

Kaiser Health News published a longer piece on California's plans to spend nearly $6 billion on more comprehensive care for low-income patients. On some level, this plan makes sense in that a low-income patient's health might be determined by more than just access to health care; for example, lack of access to stable housing and nutritious food could undermine the effectiveness of free health care. Apparently, more than 25 regional experiments have shown a more holistic approach to be effective. Critics of the idea appear skeptical that this approach will work on a scale as large as California as a whole, and might be inclined to believe the state's apparent lack of success in providing basic services might preclude their success in more intensive efforts. The chief medical officer of a participating health plan expressed concerns about the readiness of the existing infrastructure to support the initiative.

Both sides have good points, and testing it out at the next level would be an appropriate next step. The article gives the impression, though, that goals and metrics are not well-defined (e.g. "State officials do not have a savings estimate for the program, nor a projection of how many people will be enrolled."). For example, officials should probably be able to articulate what would happen if they spent this money on the status quo. Without a clear idea of goals and metrics (or with too many conflicting goals), it is possible that the state will go through this exercise and not learn enough through the experience to shape future behavior.