Healthcare Reform Blog > July 2011 > Employed physicians: Déjà vu all over again or stellar strategy?

Employed physicians: Déjà vu all over again or stellar strategy?

Josh KelleyContributor: Josh Kelley
Topic: Insurers employing physicians

Employment of physicians by national health insurers is on the rise, as recently reported by Kaiser Health News and The Washington Post. Among those getting in the doctor-hiring game are UnitedHealth Group, WellPoint, Humana and CIGNA. These for-profit carriers see an opportunity to reduce unnecessary medical care and reduce costs.

If successful—and the verdict appears to still be out—this merging of payers and providers could fit nicely within the framework of federal healthcare reform, which is designed to reward cost savings and restrict large insurance premium increases. The much-discussed accountable care model of care, in particular, may be easier to develop if health plans and physicians are working directly with each other.

Of course, health plans have employed physicians before and, for the most part, that strategy backfired. A notable exception is Kaiser Permanente in California.

Yet, something bigger might be occurring here. Health insurers know that an element of the political establishment would like to do away with their industry entirely, by setting up a single payer system that would leave managed care organizations out in the cold. For now, MCOs have escaped this fate and the challenge of competing against a public insurance plan option, which was removed from healthcare reform legislation passed by Congress.

But in case elected leaders in Washington get the itch to once again do away with the private health insurance industry—or at least cut into its customer base by offering a public option—what better way for carriers to prevent such a scenario than hire the providers who deliver the medical services everyone needs? Once health insurers become heavily entangled in the employment of physicians, and in some cases the ownership of hospitals, it becomes much less feasible to do away with managed care organizations.

Cost savings are nice. But in the long term, insurers may view physicians as a key to their survival if the political winds turn against them in the future.

Posted on: 7/15/2011 3:07:41 PM | with 0 comments


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