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An Appeal to Health Plans to Close Essential Funding Gaps
It is sometimes worth stating the obvious. While the US healthcare system is the most expensive in the world, key segments are underfunded. Behavioral and primary care lead that list. These funding gaps are obscured by constant business activity (e.g., consolidation, new products), but these “essential” clinical services (per the Affordable Care Act) have never been funded at essential levels.
The consequences for care access and quality are great, as we know from prestigious reports each year. Repeating those statistics is less important than stating the obvious. Many proposals for healthcare reform are reasonable, but we will not reverse these deficits without bold thinking. We need to focus directly on reducing these egregious funding gaps, or we will just tread water.
We need sustained, long-term solutions that bring more funding into the healthcare system for frontline care. Diverting funds from elsewhere (i.e., rank ordering needs) is both divisive and unlikely to reach the goal. Toward this end, we need leadership from experts in the payer community.
The payers best able to lead on financial issues are employers, governments, and health plans. Each knows that underfunding is self-defeating. Yet health plans are unique. The other 2 are not fundamentally healthcare enterprises, and they focus mainly on 1 insurance sector. Health plans occupy every sector and own large, growing swaths of the healthcare market.
Closing these funding gaps means increasing insurance rates steadily over time. This must be industry-wide and not disadvantage any one company. This is a disruptive suggestion with immense complexity. Yet leaders should help us manage through the complications and challenges if the main goal is correct. Are health plan leaders willing to do that?
Our Poorly Funded Essential Services
Our country’s failure to properly value primary care is best seen by comparison. Primary care in the US, as a percentage of total costs, is half that of other wealthy countries. Experts see this as driving our poorer health outcomes. For example, while 30% of our physicians are PCPs, Canada reports 50%. Health status improves as primary care spending grows, and for outcomes like life expectancy, one can see a dose-dependent response.
Yet statistics have lost their shock value. The industry now debates new value-based financing models. Rewarding clinical outcomes over service volume may be welcome, but value-based formulas offer no guaranteed funding for essential care. Meanwhile, primary care shrivels as PCPs retire and medical graduates select other specialties. This has other causes, but specialty healthcare funding is a big one.
The need to invest more in behavioral healthcare is equally straightforward. It is clear in the dismal access rates for disorders like depression and substance use disorders, as well as in unmet clinical needs in primary care. Two clinical realities—behavioral comorbidity and unhealthy behavior—are key drivers for costs attributable to chronic conditions. About 75% of total healthcare costs are for chronic care.
Health Plan Leaders Need Focus and Grit
Health plans know these facts well, and yet they have not responded with enthusiasm for greater funding. Instead, they offer assurances that healthcare delivery systems will address these concerns with population-based funding. While global funding brings welcome attention to population health, it strains credulity to think health systems will close these gaps when health plans have not done so.
What about legal mandates as a path to change? These governmental tools must be used sparingly. Funding mandates rarely survive the political process. They often get mired in calls for more persuasive research, even though studies rarely stiffen the will to act. The missing element is leadership.
Health plans are the best leaders here due to a few unique skills. Building provider networks and paying claims are fairly routine. Clinical functions (e.g., utilization, quality) are well-developed and amenable to formal delegation. However, health plans are unique for their analyses of vast proprietary data sets. These skills boost their inherent funding power, and few health systems possess such expertise.
Health plans have a bird’s eye view of our healthcare system. They have the knowledge, stability, and strength to pursue a long-term plan to close behavioral and primary care gaps. The pandemic has produced a new level of public outrage about the behavioral care gap, and this could be the leading edge of change. We need to seize on opportunities when they appear.
It is common to make any healthcare funding increase contingent on reducing cost elsewhere. However well-intentioned, such arguments constitute a slow-motion funding rejection. We should avoid those debates and focus instead on adequately funding all essential services. They all contribute to health, whether relying on the surgeon’s knife, the correct medication, or non-judgmental, empathic listening.
Health plans may decline the guiding role described here, regarding it as ill-conceived since most people are not fully insured with them. However, this is about leadership. Health plans prosper from both risk-based and ASO contracts, and they gain an understanding of every population’s needs. Who better to recognize and act on the obvious failings of our healthcare system?
Ed Jones, PhD, is currently with ERJ Consulting, LLC and previously served as president at ValueOptions and chief clinical officer at PacifiCare Behavioral Health. Norm Ryan, MD, is a primary care physician who has held senior medical executive roles with Alere Health, UnitedHealthcare, and Humana.
The views expressed in Perspectives are solely those of the author and do not necessarily reflect the views of Behavioral Healthcare Executive, the Psychiatry & Behavioral Health Learning Network, or other Network authors. Perspectives entries are not medical advice.
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