The merger between HMSA and Hawaii Pacific Health is being promoted as a way to tackle rising healthcare costs by shifting to “value-based” payment systems. This means paying upfront for each member or care episode and holding providers accountable for both the cost and quality of care.
Proponents argue that this approach replaces the fee-for-service model, which they claim drives up care “volume.” However, the real issue isn’t excessive care, but rather a shortage of doctors and limited access to healthcare services.
Despite 15 years of implementing these “value-based” systems through Medicare and HMSA, costs have not decreased. Experts note that this model can create negative incentives, such as avoiding care for patients who are sicker or overcoding to manipulate risk adjustments. Plus, it often leads to increased administrative costs that overshadow any gains from supposedly reducing patient volume.
Historically, Hawaii’s healthcare system functioned well under fee-for-service. In 2009, before the Affordable Care Act, Hawaii boasted the lowest per-capita Medicare spending and universal participation in Medicare, alongside competitive premiums. Today, Hawaii experiences a severe doctor shortage, especially in primary care and psychiatry, largely because of the burdens imposed by the current payment model.
Dr. Mark Mugiishi, CEO of HMSA, advocates for more innovative solutions. He stresses the importance of engaging with doctors rather than solely relying on insurance companies for answers. Changes need to prioritize reducing practice costs and simplifying payment systems. Doctors should have the freedom to spend adequate time with patients without worrying about the financial repercussions. A more straightforward fee-for-service model could potentially save about 15% of total healthcare costs.
If the merger focuses on enhancing “value-based” payment, the situation may worsen, especially in rural areas where healthcare access is already limited.
The voices of healthcare professionals should guide reforms, ensuring that Hawaii’s healthcare system becomes viable again. Listening to their concerns is vital for making meaningful changes that can address the real issues plaguing the state’s healthcare landscape.
For more insights on healthcare systems and their impact, check out resources from Health Affairs for evidence-based research and analysis.
