Risk Sharing or Risk Shifting?

About 15 years ago, I had my first and only trip to the Emergency room (for my own injury). I was in San Diego and had been showing off, doing my Mary Lou Retton imitation on the edge of some planters outside the movie theatre. I had my hands in the pocket of my sweatshirt, took a misstep and went face first into the concrete.

As most head wounds do, this one bled like a waterfall, creating a rather dramatic scene. When we entered the ER, we were fortunate to get relatively prompt attention. The triage nurse asked me, “What happened?” My husband, in his most helpful way proceeded to try to explain.

The nurse cut him off rather abruptly, told him to wait outside, that she wanted to hear from me. I couldn’t help but chuckle. I am grateful that she was so protective, but domestic violence simply isn’t a part of our life. I explained my adventure and she went on to prepare my wound to be seen by the doctor.

It really wasn’t much. When I fell, I guess I was able to turn my head so I didn’t break my rather formidable proboscis, and merely cut my head with my glasses.

When the doctor came in to do his embroidery, he was pleasant and thorough. I asked how he ended up in that hospital. He explained that he had worked for Kaiser and simply wanted a change. “To see how the other half lived”, he said.

I questioned him about the Kaiser system, since most of the statistical information reflected positively on the system. He said that the best part of working there was the team approach to medicine. Doctors consulted regularly in group meetings about the patients. Typically the sickest or most confounding were the subject. He felt the collaborative approach served the patients well.

Most folks that move into our area are disappointed that Kaiser is not an option. They had positive experiences in the Kaiser system. I quizzed him about the occasional negative comments I heard. He explained it simply. “When a patient has a bad experience with an individual physician, they complain about that doctor. But a Kaiser patient tends to indict the whole system.” That made perfect sense. We see that with negative hospital experiences as well.

Author Bruce Jugan opined in a California Broker magazine article that Kaiser has some PR work to do. More importantly the article talked about the fact that “Kaiser continues to lead the field in the CA small group market by consistently offering the lowest rates through a comprehensive health care delivery system where the doctors, hospitals and insurance company act as one entity.”

It reminded me when in 1989, Redding Medical Center was in financial trouble and looking to sell. I attempted to organize local employers to petition Kaiser to buy the hospital and set up shop. Interestingly, that resulted in a bit of a smear campaign against me by a few local doctors, (but that’s a story for another time.)

The most important feature of this article highlighted one of the “behind the scenes” facts about the ACA (Affordable Care Act aka Obama Care). The ACA established risk sharing arrangements among the insurance companies to mitigate the risk of having to “take all comers” under the new guaranteed issue rules.

Mr. Jugan reported the following 2017 results of the risk sharing payments:

Anthem Blue Cross of CA RECEIVED $199 million.

Blue Shield of CA RECEIVED $ 136 million.

Kaiser PAID $312 million..

Kaiser paid more than any other insurer. He further cites “The Actuary” magazine acknowledgement that the formula is flawed. It does not account for plans that have more advanced approaches to care management. It actually penalizes plans with lower premiums. What many do not understand is that Kaiser Doctors share in the financial risk of the system. It’s in their best interest to see that care is delivered in the most appropriate setting and that the patient stays healthy.

This is the antithesis of the “fee for service” model that simply reimburses providers based on charges for each transaction.

One of the biggest frustrations for patients in our area is the lack of coordination of care. Individuals must be their own advocate. There is no one in charge of truly coordinating our care. Primary care providers are so overworked and overbooked that they are seldom able to conference with specialists to discuss the path for patient care. The patient is left to see different specialists, and hope for the best.

This is just one more component of the system that is broken. It becomes dramatically apparent in underserved rural areas like ours.

P.S. Reminder: open enrollment for Medicare Parts C and D ends December 7th. Don’t wait if you are changing plans!

Margaret R. Beck
Margaret Beck  CLU, ChFC, CEBS started her insurance practice in Redding in 1978. As an insurance broker/consultant,  she represents businesses and individuals as their advocate.  She assists in choosing proper products, compliance with complex benefit laws and claims issues once coverage is placed. All information in her column is provided to the best of her knowledge, subject to final regulation by the respective agencies. Questions to be answered in this column can be submitted to info@insuranceredding.com. Beck's column is also published in the Redding Record Searchlight.
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5 Responses

  1. Avatar Beverly Stafford says:

    Since you are an advocate for your clients, it would seem logical that you could start a business for everyone in need of assistance with the grossly over-complicated medical system. My husband had been seeing the same specialist for over 20 years; then when he needed to see him, he was told by a very snippy front office person that he would need a referral from a regular physician. Huh? Apparently the office had sent a reminder notice which we didn’t receive (honest, we always open mail from medicos but we didn’t receive the notice. Did they really send it? Was it a Post Office error? Who knows.); therefore he was out of compliance with the Medicare rules of being seen every two years. So we had to start all over with a regular physician. That was fun. It took over three weeks for the specialist to receive the referral, then another three weeks for an appointment to see the specialist. So there’s six weeks of wondering if he had colon cancer. Perhaps an advocate could have helped.

  2. Avatar Sue Keller says:

    Thank you, Margaret, for keeping us informed with this tricky, complicated insurance business.

  3. Avatar Judy Salter says:

    Always helpful. Thank you yet again for giving us the info we need.

  4. Avatar Richard Christoph says:

    Thanks Marge, for yet another illuminating insight into the extraordinarily complex US health care system. Your columns are indispensable.

  5. Avatar Beverly Stafford says:

    Margaret, what’s your opinion on something resembling Medicare for All? Or better yet, the same coverage that Federal politicians – Congress, POTUS, SCOTUS – receive for all?

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