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Francine Hardaway Headshot

The New Cigna: Not Your Father's Health Plan

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Health care reform isn't over. For patients, it has just begun. The health plans are beginning to figure out how they will survive and thrive under the new rules, and the way forward is, according to one managed care exec, to change how providers are paid. This will have consequences.

Jeffrey Kang, MD, chief medical officer for Cigna, has some thoughts on this already:

"It's important to measure and provide incentives for better outcomes... not for improved processes or certifications achieved. Some examples of outcomes to measure might include smoking cessation, weight loss, lower blood pressure, and lower total cost of care. Incentives should be around pay-for-performance...not for shared insurance risk.

"We as health plans are better off continuing to hold that insurance risk because we have the actuaries and the capital...Health plans can then focus on really trying to create payment methods that give people incentives to improve quality, lower cost or penalties if they miss these targets." Cigna has eight pilots offering incentives for quality, outcomes and lower total healthcare costs.

As for wellness and disease management, Kang notes, "From a benefit design perspective, the legislation did get it correct" by focusing on first dollar coverage for prevention and screening.

Cigna should be one of the thought leaders in this aspect of the reform, because they were around 25 years ago when this was tried before under the term "health maintenance organization." The HMOs (disclaimer: I did the marketing for one of the first) thought that if they could keep people healthy, they could lower the cost of care.

They tried everything. They held classes, they provided patient education films and leaflets, they put up big posters in doctors' offices. None of it worked.

Finally, they "capitated" the doctors. A doctor received $X per patient per year, whether he saw that patient once or one thousand times. A patient had to be seen by a PCP (primary care physician) before he could make an appointment with a specialist.

Capitation was supposed to be a way to quell rising costs and encourage doctors to keep their patients healthy. But doctors resented being gatekeepers and fought back by refusing to participate in some HMOs, and the patients responded by rising up in hordes to protest lack of access to care. During this period, if your employer changed plans, you likely had to leave your doctor.

Buoyed by patient support, some doctors began backing out of capitated HMOs altogether, and employers began to buy a new product: the PPO -- a plan where the patient could choose the doctor, and there were fewer gatekeepers. That's how patient choice got to be such a big issue in the last health reform debates. Patients learned that under an HMO they couldn't choose which doctor they wanted to see, but had to see a doctor in their plan.

Never mind that most patients couldn't choose a doctor wisely in their wildest dreams, especially while sick.

This time around, we have marvelous sources like HealthGrades and Yelp, two services that further distort the process of patient choice through advertising or subscriptions.

Cigna took a lot of flak the last time around for being a horrible HMO. So, by the way, did Kaiser. This time, executives of both are emerging as thought leaders in the cost control space.

I hope we don't go through the same thing we went through in the 80s. It could have been wonderful (yes, I'm biased because Intergroup, the HMO I worked with, started with pure motives) but it ended up dreadful. And we literally can't afford to have that happen again.

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