Here's an interesting story that reveals there's always a culprit somewhere in the HMO scheme, it's just not always the HMO.
(The HMO described in this column -- "Mayflower Health Care" -- is
in fact Harvard Pilgrim Health Care. In the column I first wrote, it was
called by its real name. But out of a concern -- the editor's, not mine --
that not all readers who belong to Harvard Pilgrim would be subject to the
benefit changes the column discusses, I agreed to employ the pseudonym.
In fact, all Harvard Pilgrim members *will* experience these changes
sooner or later, so the disugise was probably unnecessary.
I was traveling when this column ran, and thus unable to distribute it
by e-mail. My apologies for the delay.)
THE REASON FOR THE HMO DOUBLE-TALK
By Jeff Jacoby
The Boston Globe
April 5, 2001
An envelope from one of the largest HMOs in New England -- let's call
it Mayflower Health Care -- arrives in the mail.
It is designed to get your attention.
"Open Immediately!" it urges in big bold letters. Then, just below, in
red: ``Important information about your health plan.''
The information inside is indeed important. It indicates that, almost
across-the-board, Mayflower is reducing your
benefits. As of April 1, your copayments and deductibles will be going
up; the percentage of medical expenses covered by insurance will be
coming down.
Trips to the doctor, for example, will now cost you $15, up from $10.
Hospital treatment and day surgery will no longer be covered in full --
you'll be charged a $50-per-day copayment, and only 90 percent of
the balance will be reimbursed.
Coverage for your kids' dental checkups will now stop after age 12, not
13 -- and, as with hospital care, insurance will only pick up 90 percent of
the bill, not 100 percent as before. For nearly all medical services, in fact,
you will have to pay 10 percent of the bill out of your own pocket, on
top of the higher copays.
And that's for care provided within the Mayflower network. The plan
will get even stingier about paying bills you incur
out-of-network. To begin with, you'll have to eat all charges up to an
annual family deductible of $600 (it used to be $500). For inpatient care,
there will be a daily $50 copay. And of everything billed beyond that,
Mayflower will cover only 70 percent.
The envelope was right: This *is* important information about your
health plan. But nowhere inside the envelope is there anything like the
summary you've just read here. There is no warning that your
out-of-pocket costs are about to jump. The cover letter is dull and
unhelpful: "Dear Member, Due to some changes in your benefits package,
you are receiving
new member materials. . . . Please read your materials carefully. . . . If you
have any questions, please call our Member Services Department . . ."
Enclosed with this bland letter is a four-page "Schedule of Benefits.'' In
side-by-side columns of fine print, it itemizes the
coverage Mayflower will provide for various types of medical care. But
there is no summary of the changes, no chart showing how much more
you'll pay for various services, no word of explanation for the higher
fees -- in short, none of the information that a typical member would find
most useful.
Why? What is the point of urging people to open a mailing about their
health plan, then making it all-but-impossible for them to understand it?
What use are a cover letter and benefits schedule that almost all but beg to
be ignored? Why not give members a candid heads-up about what to
expect the next time they have to see a doctor or fill a prescription?
Wouldn't that be better than keeping them in the dark, waiting for them to
erupt in anger or shock when the hospital sends them
a bill they weren't expecting?
The explanation, you surmise, is that Mayflower stinks at
communication. But then you call the Member Services
Department and discover that Mayflower actually employs terrific
communicators -- representatives who answer questions and supply the
information you need calmly, quickly, and clearly. An HMO that can do
that on the phone can do it in a letter -- if it wants to. So why doesn't it
want to?
Because, suggests one HMO executive, your employer -- the company
through which you get your health insurance -- may not want it to.
"It's not unusual,'' says Charles Baker, CEO of Harvard Pilgrim Health
Care, "for employers who pay for insurance to insist on being the
primary communicator to their employees about changes in coverage." An
employer may want to downplay the bad news that copays and
deductibles are going up. It may not want to call attention to the fact
that it is providing different benefit levels to different groups of
employees. Whatever the reason, says Baker, companies often make it
clear that they do not want HMOs to be too up-front about benefit
reductions or increases in the amounts patients will have to pay.
What started out looking like a communications problem thus turns
out to be an unintended consequence of something entirely different: the
linking of health insurance to employment.
Countless Americans get medical coverage through their job, but there
is no good reason why that should be so. After all, who looks to his
employer for auto or homeowners insurance? What makes health
insurance different is a quirk of tax law: Employers can deduct the cost of
providing health coverage for their employees, but the benefit is not
counted as taxable income to employees. The result is a rich subsidy for
workers who give up the right to choose their own medical
insurer and let their employer choose it for them instead.
In the process, they give up something else: economic clout. Insurers
know that it's employers, not patients, who call the shots. That generates
a powerful incentive for insurers to make the needs of employers, not
patients, their highest priority.
If it were up to you, that mailing from Mayflower would have been
unambiguous, frank, and easy to make sense of. But you weren't the one
who hired Mayflower. So it wasn't up to you.
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