guthealthcare.com

Just a second.  What about outcomes?  What about quality?

Well, what about them?  

The fact is, nobody in our FTP vignette has any incentive to really want to know about outcomes - except as they may be incidentally useful as a marketing tool.

Gekko for one doesn't have any reason to care about clinical outcomes.  His outcome is measured by his profit.  So as long as he's making money, his outcome is good - and data on clinical outcomes would only serve to threaten what is now a nice, clean picture.  Unless pushed, he sees no reason to invest his resources in collecting such data.

What about Dr. Smith - the PCP who has to decide whether to refer his patients with heart problems to cardiologists in the more expensive Valley View group or those in the less expensive Cormatic Group?  Wouldn't he want to know which group has the better clinical results? Certainly he would, on a professional level.  But subconsciously, he realizes that if he had that data, it might give him the wrong answer - there's at least a good chance that the more expensive group might turn out to achieve better results.  That would certainly complicate his referral decisions.  

And what about the cardiologists of the thrifty Cormatic Group?  Do they really want outcomes data? Well, why should they?  They're already getting the referrals.  

Doctors in the profligate Valley View Group are the only ones who really have a good reason to care about clinical outcomes since, if they turn out to have more favorable outcomes, it might help to exonerate their expensive ways.  But even if they take the time and expense to examine the outcomes they achieve in their own practices, there is no way for them to get the comparative data from competitive groups.

So, while there is plenty of talk about outcomes in the Gekkonian HMO world, when you analyze the mechanics, it is difficult to find anyone slogging away in the trenches who really wants to know about them.

But surely, you might be thinking, somebody wants to know about quality.  What about the patients? What about the employers who are paying the bills?  

Gekko knows about patients. When patients are faced with a choice between an HMO that's "free" or an indemnity plan that might cost them an extra $50 or $100 a month, he just knows they're going to pick the HMO. And while they're picking it, they want to feel good about it. They deeply, sincerely, and desperately want to hear that they're making a good choice.  They want to hear what a high quality HMO they're being forced to join. And that's where quality and marketing come together. To Gekko, quality is marketing.

This is why HMOs over the past few years have gotten away from advertising (and implying ready access to) their fancy, state-of-the-art, high-tech services. Instead, they've gone all fluffy, emphasizing warmth, concern, and caring, through filtered lenses and soft music.  When you join our HMO, it's like joining a family.  What a good choice you've made.

Okay, you might reply, but what about employers?  Don't they want to offer high-quality healthcare to their employees?  Well, sort of.  What most of them really want is to offer adequate healthcare without losing their shirts on it.  

My own eyes were opened on this issue several years ago when I attended a retreat, sponsored by my hospital, that featured a panel discussion by a group of prominent local employers.  When asked how they go about assuring themselves that the health coverage they buy for their employees provides high-quality care, the captains of industry responded thusly: "We make widgets, we don't assess healthcare quality.  We don't know how, and we don't want to know how. So we've got to be practical about it.  To us, quality means quiet.  As long as we don't hear more than the average number of complaints from our employees, the health coverage we provide is, by definition, good enough."

Men and women like Gekko long ago figured out what their paying customers (i.e., the businesses that purchase health insurance for their employees) want.  And because of what his customers want, Gekko can define quality simply as keeping the volume of complaints down to an acceptable level (and, of course, keeping FTP out of the newspaper).

Now, to be sure, efforts are being made on several fronts to actually measure quality in healthcare, and some of these efforts are having an impact. But in general these efforts are not originating with Gekkonian-style HMOs, or even from healthcare providers.

FTP - 12 years later

The end game is near for Gekko, and none too soon, because running FTP for 12 years has aged him. Continuing to grow his company throughout this time has been a real challenge. The vast preponderance of FTP's growth once came from expansion into new cities, and especially from the acquisition of public assets.  But it's long since become impossible to find new areas in which to expand, and worthwhile community hospitals ripe for takeover are no longer growing on trees.

For the last 5 years Gekko has been able to continue FTP's growth cycle by acquiring smaller HMOs every 18 months or so, and in doing so he eventually developed a national presence for FTP.  He's even become a regular on CNBC.  But even that means of growth is now drying up. Smaller HMOs that would be suitable acquisition targets have become very hard to find.

The time has finally arrived when, for the first time, Gekko has to try growing FTP's revenues solely by providing healthcare to patients. This has turned out to be harder than Gekko ever thought it would be.  Despite the fact that he continues to turn up the heat on his physicians - cutting their reimbursement schedule every year and raising the bar for getting their end-of year payouts - FTP's revenue is stagnant, and even shows signs of dropping.  

HMOs have long since penetrated the healthcare market so thoroughly that, in most of FTP's cities of operation, the indemnity insurance plans are no longer players.  This means FTP isn't competing against indemnity plans any more; instead it's competing against other HMOs.  Consequently it has become very difficult for Gekko to keep his premiums as high as he'd like. In a couple of cities, FTP has actually gotten into some very nasty bidding wars.  

And now that the large majority of Americans are already enrolled in HMOs, cherry-picking the healthy enrollees has become virtually impossible.  Even making the chronically ill feel unwelcome is no longer effective, since most sick people have finally realized that one HMO is pretty much like another. There's no point in their changing health plans any more.

Patients in general are becoming more vocal, as are the Congress and the state legislatures, about HMOs conducting themselves dishonorably.  Gekko fears that one or more of the various proposals on a Patients Bill of Rights may eventually end up taking away even more of his prerogatives for making money.

Then there are the rumblings Gekko is hearing in high places about how for-profit healthcare is robbing society of its precious healthcare premiums. It may still be a ways off, but Gekko now thinks it's increasingly likely that, some day, for-profits will be outlawed and the government will take over the whole shebang. That wouldn't be fair, of course but Gekko's a realist.  He doesn't insist on providing fairness, nor does he insist on receiving it.  This is business, after all.

His run as CEO of FTP has already lasted far longer than he had ever thought it would.  He has set himself up for a platinum parachute for when the time comes for him to "retire," of course, but even now he is imagining grander exit strategies. For instance, perhaps he will be able to engineer an acquisition of FTP by one of the two or three even larger HMOs. Gekko would no doubt do quite well under such a scenario. But sometimes, if he's really thinking expansively, he can see himself playing a key role in negotiating the final buyout of FTP (and all the other remaining for-profit HMOs) by an even more massive and even more affluent entity - that is, by the feds.