There are many Americans who are beginning to question the contributions big insurance companies make to our health care system. And I’m not just talking about lefty advocates of a single-payer system. Corporate executives are also wondering why we need the big insurers and whether higher-quality and more cost-effective care could be provided to employees if they didn’t have to deal with health insurers at all.
I wrote a few months back that my former CEO at Cigna once said that what kept him up at night was the possibility that Americans — business leaders in particular — would ultimately conclude that insurers were an unnecessary expense. He used the term “disintermediation,” a fancy word that means “cutting out the middle man.”
News out of Seattle this summer undoubtedly has caused the big insurance CEOs to lose more than a bit of sleep. Boeing, the world’s largest aerospace company and one of the Seattle area’s largest employers, announced that it has decided to forego the services of an insurance company and to contract directly with two of the Northwest’s largest hospital systems to provide care to its 27,000 employees and 3,000 retirees in the region.
Boeing is actually teaming up with a couple of recently formed accountable care organizations, which represent a new way of financing and paying for medical care. Encouraged by the Affordable Care Act, ACOs typically comprise a set of physicians — specialists and primary care doctors — and hospitals that work collaboratively and accept some of the financial risk of providing care to a particular population of patients. Some ACOs also include insurance companies. But many do not.
The idea behind the more than 600 ACOs that have been created nationwide is that when doctors and hospitals work together in such arrangements, they get rewarded financially for keeping and making patients healthy — rather than getting paid based solely on the number of tests and procedures they do.
What distinguishes the Boeing ACOs, aside from the fact that no insurers are involved, is that they are among the first ACOs that are employer-driven. You can be certain that big employers all over America will be paying close attention. If the Boeing ACO experiment demonstrates savings, expect to see many more in the near future.
“The advantage for Boeing will be that they can take the middle man out of the equation between the patients and the health system,” Dr. Elliott Fisher, director of the Dartmouth Institute for Health Policy and Clinical Practice, was quoted as telling The Seattle Times. “It may be able to reduce cost, in part because of the simplification of not having the insurance mechanism in the middle.”