Historically, health care services have been paid for by health insurance companies which accept monthly premium payments from employer groups and individuals. The premium for defined health care services is due whether the insureds under the policy use the benefits or not. Built into the premiums are additional administrative costs including fees paid to insurance brokers and general agents who are intermediaries for placing individuals and employer groups with particular insurers of health care. The insurance company then pools the premium payments for the payment of health care claims as they are presented by providers of care.
In the past 20 years or so we have seen health insurance premiums continue to rise while the benefits covered under the policies offered become more meager. In addition, cost sharing or shifting has increased as a means of curtailing the dramatic rise in health insurance premiums. An interesting trend is providers of care acting also as the payors of care.
A health system exploring these very options is the North Shore-LIJ Health System in New York. Its leader is a visionary and understands the need to get the most out of every dollar for health care. The best care an individual can receive is when the individual leads the effort in taking care of himself or herself. Having a large system with both inpatient and outpatient services available are key factors to making this work.
Consider this alternative means of health care coverage. An individual pays a hospital system a fixed dollar amount for all the care he or she may need. The system is then responsible for using that payment wisely. In other words, keeping that individual well so that few health care dollars need to be expended on the individual’s care. If individuals are provided tools in maintaining their wellness, the individual and the system both win. It is when an individual is not provided daily tools and education to wellness conditions and not managed and become exacerbated costing the health care system more.
It will be interesting to compare the fee charged per individual or family to enroll in such a system with that of traditional health insurance coverage. Further postings on this topic will report the pros and cons of this methodology and whether the net result will be better delivery and payment for health care services.
Let us know what you think. Would you be in favor of paying your local hospital system a fixed fee to cover all services?”