Group Health Throws a Bone to Health Care Reformers Looking to Avoid a Public Option

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Group Health Cooperative became a puzzling model of health care reform a few months ago when politicians looking for a compromise to contentious proposals for a public option landed on the notion of cooperatives. As SW noted in a September article, the organization has not offered substantially lower premiums here, and at least one former patient says he went bankrupt trying to keep up with the costs.

But as proposals aimed at stimulating more cooperatives continue to wind their way through Congress, Group Health announced yesterday that it is lowering premiums for Medicare patients by between 8 and 77 percent as of January 1. Spokesperson Mike Foley says that the move is not a reaction to the spotlight thrust on the organization, nor is it meant to influence the Congressional debate. Instead, he says it is the result of months-long number crunching which projects that Group Health's investments in primary care and electronic record keeping will result in lower costs and allow the organization to maximize reimbursements from the federal government. (So the feds would likely pay more not less, despite the premium drop.)

Nevertheless, Foley is not blind to the political implications.

"It may be seen as evidence that our model is working," he says.

Still, not all of Group Health's Medicare patients will necessarily be pleased. While premiums are going down, some co-pays--like those for CT scans and long-term nursing care--are going up. Foley says some of the increases are designed to change behavior, such as unnecessary demands for radiology tests.

And Group Health's premium drops are exclusively reserved for the 65-and-older set. Foley says other premiums, which are not linked to federal reimbursements, may actually rise come January.

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