May 17-19, 2001
Conference Summary
The Eighth Princeton Conference examined the changing face of managed health care in America, looking at how managed care and other emerging insurance/delivery structures will evolve in the marketplace. The conference focused on the present state of managed care in the public and private sectors, the forces that will shape the future of managed care, and the type of models and structures that are likely to emerge. The speakers included leading researchers, CEOs of major insurers, Representative Nancy Johnson, chair of the House Ways and Means Subcommittee on Health, and Centers for Medicaid and Medicare Services (CMS, formerly HCFA) administrator Tom Scully. The conference was held May 17-19, 2001.
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Note:
A portion of the conference proceedings are available in streaming
video and audio, through the HealthCast network of Kaisernetwork.org.
The conference sessions can be accessed by clicking here. |
Health Insurance Models of the Future
Leonard Schaeffer
Chairman and CEO
Wellpoint Health Networks, Inc.
Industry Response to Market and Government Forces
Schaeffer described the evolution of health benefits, what is happening now, what customers want, what health plans will look like into the millennium and the health policy challenges they will face.
From the 1940s through the 1970s, health insurance largely paid claims. The focus was on inpatient care with limited attention to out patient and pharmacy benefits. With the onset of managed care in the 1980s and 1990s, prepaid healthcare provided more comprehensive benefits and first dollar coverage. Network based products were introduced with a focus on cost control and preventive care.
What is happening now? Consolidation has taken place throughout the industry. Since 1994, 42 plans have been reduced to down to six. Hospitals and medical groups have also consolidated. It is the "big dog" syndrome resulting in bigger and stronger forces in all facets of the health care industry.
Health premiums grew at a rate of over 12 percent in the 1990s. Private sector successfully reduced this growth to a negative three tenths of one percent in 1996. However, in the process of doing this, they "pissed everyone off." Now we are in a period of corrective action, an aggressive catch up period with an upsweep in premiums. Schaeffer warned that costs are going to explode even further.
Key cost drivers include legislative mandates, technology, prescription drugs, hospital and physician costs and an aging population. Higher costs to employers lead to reductions in pay, and employment. Higher premiums in the system lead to larger numbers without insurance. A one percent increase in premiums, results in between 200,000 to 400,000 people losing coverage. Yet states continue to add mandates and increase costs.
Technology drives costs and adds labor content. Old technology never goes away. Prescription drug costs are increasing at a rate of 19 percent per year. In 1999, hospital costs increased four percent and doctors cost 5.5 percent. The baby boomers are aging and people are living longer. This is great, but it pushes health care costs higher.
What do consumers want?
More specifically consumers want information (half of online consumers access the internet for health information), to be involved in decision making about their health, to have help accessing care, and to feel secure that health care coverage will be available an affordable for their lifetime.
What do employers want?
What will health care plans look like in the future? Wellpoint believes that continued success requires a different health security model with a choice of a number of consumer oriented products. Multiple network options will be available. There will be more hybrid products with pieces of HMOs and PPOs. These terms will become meaningless in the marketplace. Defined contributions from employers with employee choice of products is the way of the future.
Services and information should be available to consumers over a lifelong relationship. The gatekeeper model frustrates choice and causes irritation. This will be replaced by consumer oriented case management and disease management. Plans will provide medical concierge services as opposed to being gatekeepers. For example, people will be guided to the appropriate center of excellence. These centers could provide higher quality of care, reducing long-term if not short-term costs. People will look at data to help make plan section and treatment options. Technology dispersion is instantaneous, people hear about it before physicians read about it.
Practice patterns vary widely, and there will be a greater use of national standards and best practices. It is estimated that eight percent of people will consume 70 percent of health care costs. These people know who they are. The challenge is to these people who receive better care quicker. Ninety percent of this eight percent have chronic conditions. Some disease management programs like those for diabetes proved successful in providing great care up front. There is a concern about patients who do follow medical advice. A considerable amount of money is spent on them.
Administrative costs in themselves are not a lot of money, and savings in this area will not change things drastically. Standardized transaction codes will help. A greater payoff in terms of savings and quality will come through working on this issue with doctors and healthcare advocates on quality. This should include providing accurate information on medical errors and the use of scientifically based treatment protocols. An example of bad care is the inappropriate use of antibiotics, which has led to resistance strains of bacteria. Cost and quality could also be improved by providing some appropriate drugs over the counter. For example, Claritin has fewer side effects than the most popular over the counter medicine for allergies, but it is available only through prescription. (Claritin is available over the counter in Canada.)
Challenges to the health care system include the persistent problem of the uninsured, the need to understand and address social values, and optimize tradeoffs between access, cost and quality. Many of the uninsured have family incomes over 200% of the federal poverty level (FPL). Survey data shows that these people overestimate what it would cost to buy insurance. Many do not know affordable health plans are available. Schaeffer endorses the joint HIAA/Families USA proposal to expand Medicaid eligibility to people up to 133% of FPL, expand SCHIP up to 200% of FPL, and provide tax credits to encourage the purchase of coverage.
There are also concerns about what constitutes an insurable event, should lifestyle drugs (like Viagra in some instances) be covered? Who should cover clinically unapproved therapies or alternative therapies? The drug Paxil is being advertised to relieve "social anxiety." Is it an insurable event? Who should fund experimental treatments? There are also some serious concerns with the Medicare program. Medicare is hard to run from HCFA, impossible to run by Congress, but even worse to run through the courts.
There are four stake holders in the purchase of health care: consumers, purchasers, providers, and health plans. In providing services, there are tradeoffs between cost, quality, and access. The choice is to optimize outcomes for one group at the expense of the other three, or alternatively to maximize and have four almost winners.
In conclusion, Americans have access to best healthcare ever but cannot make it work for everyone. The belief is that medical science can cure everything including death. In market economy things will be resolved, but it will be difficult. Americans have a personal stake in this and should have input in its resolution.
Questions and comments:
The first question was on cultural competence. Schaeffer responded that his company is organized by market segments so they can meet the demands of their customers better. People in his organization speak 63 languages. However, more needs to be done to understand cultural context, and the way different people experience the health insurance system.
Someone asked about the coverage of non-physician practitioners and alternative therapies. Schaeffer responded that these groups try to be licensed by the state and use this for leverage to obtain reimbursement for their services. Chiropractic medicine is a cult. There is no scientific basis for it, but it works. It may be the laying on of hands, or just doing nice things to folks. Wellpoint tries to provide these ancillary benefits if only by providing discounts for these types of services.
The final question was, what would it take to encourage Wellpoint to go into Medicare+Choice program? The response was basically, "when it becomes a good business opportunity." There are geographic inequities in payment rates that need to be worked out. Schaeffer expressed outrage that companies who took the windfall profits in the early days of the program are now dumping the seniors they profited from.
[back up to Part 3 presentations list]Managed Care in the Future
Mark Pauly
Chair, Health Care Systems
The Wharton School, University of Pennsylvania
Defined contributions and e-care can go together and potentially increase consumer choice at reduced administrative costs. There is a wide range of uncertainty surrounding the impact of e-health and a considerable range of possible outcomes. E-health possibilities exist in the area of internet insurance administration, insurance exchange, for managing care, and assisting in the administration of defined contribution strategies. These possibilities for efficiency may be even more attractive in a slowing and more sober economy.
The purpose of this presentation was to offer thoughts on the likely impact of these ingredients on larger groups, small groups and the individual market. It was concluded that the greatest possibilities for e-health exist for small firms in the area of electronic administration, for providing wider plan and provider choice, and in implementing true defined contribution plans (voucher).
Small group market. Health care administrative costs for small business account for approximately 25 percent of premium costs (for large companies administrative cost can be as low as 12 to 14 percent and for individual plans can run as high as 50 percent.) These costs are for selling, billing and underwriting. Selling and billing costs are higher because firms need to be persuaded to get insurance and then to continue to pay their bills. Electronic systems could increase plan options and reduce administrative costs. The ideal would be to move from the current situation of high cost and few choices to lower cost and many choices.
Individual insurance market. Internet and administrative exchanges combined with a tax credit (voucher from government) could significantly alter this market. The real problems of the current individual market is that people are "ripped off" regardless of risk. It is not an efficient market in which to search for low premium plans. Theoretically, an e-market could be created, but Pauly used the analogy of a Field of Dreams "if we build they will come" to emphasize the uncertainty of this type of insurance exchange. He noted that individual coverage only accounts for six percent of the total insurance system.
Large group market. Entrepreneurs would like to make a big score in this market, but opportunities are least likely. There are less net advantages for these companies to shift coverage options because their administrative costs are already low. They have market power so premiums are already negotiated. No large firm is likely to offer e-Managed care alone, but could possibly offer it as a boutique product.
Pauly explored two options of defined contribution programs. The first option is to give employees back the money on health care to spend on almost anything they want. This might more properly be called "undefined contribution." The second option is an electronic medical savings account (MSA). Employers would set a fixed contribution level, or provide a voucher for insurance. The employer would be protection against health care cost inflation. They could set the target for whatever amount they wanted to spend on health.
Pauly said that e-managed care may be the "wavelet" of the future. The internet may be used to make old options available in electronic form, and there is some value here. A fuller use of e-help would allow employers and/or employees to build their own managed care network or build their own preferred provider network (PPO). The question remains how to avoid adverse selection. One would have to find a way to move people to providers who give a discount, without steering people with greater needs to a particular plan. You can’t allow individuals to select the plan that meets their current needs (existing providers). If people stay with existing providers, these providers have no incentive to lower their charges.
Pauly concluded that the greatest potential for e-health is to provide lower cost options in the small group market, unknown potential in the individual market, and less likely in the larger group market, but may be offered as a boutique option.
[back up to Part 3 presentations list]
John Danaher
President and COO, HealthMarket
Danaher spoke about the development of e-health products -- how and why they came about. He then examined likely developments of these products and companies in the near future.
First, there was and is widespread dissatisfaction with current managed care products, restricted choice, and unpredictable rate increases. The market is similar to having three or four colors of Model T Fords. Second, at the same time the internet was taking off. He noted that health is the top reason people go to the Internet. This demonstrates that consumers are demanding more health care information and it represents an incredible source of sales potential.
Third, the products formed with an understanding that employers are becoming more cost conscious and employees are increasingly being exposed to first dollar costs. Double digit premium increases are on the horizon, at the same time the economy is softening. Employers are moving to what Reinhardt referred to as "teenage defined contribution." Under this model, employers still organize care options and spread risk, but contributions are capped and employees pay out-of-pocket for more expensive plans.
There has been substantial interest in e-managed care by venture capitalists. Nearly half a billion dollars has been pumped into this industry over the past year. There are a number of characteristics common to these new plans that represent an alternative to managed care. These products give employers predictable rate increase and employee members a wider choice of provider options. Employees may select any providers they want creating their own network. Under this system, providers and hospitals post their own prices, and market themselves. The possibility is to create a marketplace by arming consumers with price and quality information.
A range of products would be available with varying levels of risk – from medical savings accounts and self-created PPOs to various degrees of open and closed networks. Existing products and established players could take and blend products and have them available through e-health companies which would serve as a clearing house of information on price, provider characteristics, and plan options. The health care delivery organizations would post their own fees.
What about quality? E-managed care organizations stay away from directly providing information on quality. Several sources of information would be available on quality: self reported data, public databases (new vendors are coming up with quality data all the time), and information reported by plans that they collect. The e-health organization would not declare that one particular hospital or provider group was best. It would give the people the information and they could decide. It would be an open access network, but with price ramifications for particular choices.
Medical management strategies will change from heavy-handed medical management to a medical concierge model. Defined contribution programs combined with e-health will lead to a wider range of flexible products and empower consumers to manage cost and delivery systems. Employees will drive decisions and assess the value of particular providers and particular benefits.
Employers have responded favorably to the possibility of these changes. They like administration saving and simplification, increased ease of access, the emphasis on more personalized care, and the see it as a potential way to hold down health care costs. Defined contribution programs have tremendous potential for making employees more cognizant of cost and empowering them to meet their individual health care needs. The real test will come with the open enrollment period coming January 1, 2002.
[back up to Part 3 presentations list]
Lee Newcomer, MD
Chief Medical Officer
Vivius, Inc.
New Models of Manage Care using the Internet
The goal of Vivius is to reinvent healthcare purchasing by creating an open marketplace driven by personal choices and values. The model has three components:
The network will provide information on board certification, specialty, location, practice group, and a provider statement about treatment style. There will be no quality data for the first year, but the system provides incentive for providers and hospitals to provide this data. Physicians and other providers would set their own price. Consumers would be shown a monthly rate for a particular physician. Rates would be adjusted for age and sex.
Vivius would also help physicians set prices based on a target income, but doctors can set any price they want. There will also be the option for doctors to get paid based on fee-for-service (FFS). This will be converted so that consumers see a month rate and providers are paid FFS. To assist consumers in selecting a panel, providers supply recommendations for other providers. For example, if one clicks on recommendations from a primary care physician, they will see all the specialists, hospitals and other services that he or she likes to work with.
This is how it would work. Take a family of four and enter demographics. In most families, it is the woman who makes caregiver selections. In this case, the woman would select the hospital, physicians, and other providers that will comprise her network. She selects the level of copayment. In selecting providers she may use on-line descriptions of treatment style, select her existing provider, or draw on other sources of information for these choices. She can see a particular doctor’s recommendations for other specialists. Based on focus groups, she will make between one and three choices. As she builds this network, she can see the price consequences of each decision, and can adjust her choices based on this information. One can even see expenses attributed to individuals in the family. These selections can be changed at any time.
The system provides choice with accountability. If one selects a high price provider this is reflected in the premium. Providers are signing up. At first, physicians’ thought about giving themselves a raise, then they look to see what everyone else in charging. If a physician or practice is full, they will charge more. If they are just building a practice they will charge less. All the players need to test the system and learn how to compete.
[back up to Part 3 presentations list]Questions and Comments:
Donald Moran: Asked about enrollment numbers.
Danaher: Responded that the companies are pretty far along, but the real test for enrollment will come January 1, 2002, the next open season.
Steve Lieberman: Asked if copayment selection would lead to adverse selection (people who thought they would use more care would select lower copayments).
Newcomer: Said that this would be the case, but that premiums will reflect this selection bias.
Allen Dobson: Queried about the need for reserves to provide security that the e-industry will be around to meet its obligations.
Newcomer: We do not assume risk so in that sense we are different from an insurance company. We team with insurance partners who control initial premiums and pass payments through to providers. We get paid with a portion of each transaction.
He added that providers would be given a choice about how much risk they want to take, ranging from full risk to fee-for-service. Companies and individuals will decide on a budget each year, and this may lead to system wide savings.
Uwe Reinhardt: At some point, will data on quality be available?
Newcomer: At the beginning hospitals will provide data on themselves.
A question was asked about what physicians thought about this program.
Newcomer: Responded that physicians love it. They get to set their own rates that are adjusted for different people by age and sex. Hospitals are struggling a bit more with it.
Barbara Cooper: Asked about the problem of risk selection.
Newcomer: Responded that risk is adjusted using straight actuarial techniques.
Kathy King: Pointed out that large companies are not going to defined contribution plans.
Newcomer: Agreed that these companies are not going to move in this direction in any big way. Therefore, their efforts are focused on the small group market.
Danaber: Noted that there are a number of innovative leaders of large companies who want to explore these options.
Dan McGowan, President Health Insurance Plan of NY: Stated that doctors do not function like individuals in many parts of the country, but act as part of larger groups and associations.
Newcomer: Physician groups are accommodated in this model. In fact, larger groups working together can offer a discount for selecting the entire group. Alliances and new products may form to gain market share.
Ruth Given, Deloitte Research: What is the business model, how do you make money? What is to stop existing HMOs from stealing this model?
Newcomer: Revenue is collected on the same model as the credit card industry – a transactional model. We receive four percent from everyone who receives services through the network of doctors, hospitals, and insurance companies. Existing HMOs will have a difficult time stealing this model because it takes time to build these systems. Further, it is protected by patent.
John Danaher: Added that some simpler forms of this model, providing basic web enabled services, will be available across existing plans. However, a more fully integrated health market model requires a significant investment of funds to develop new systems.
[back up to Part 3 presentations list]
Industry Perspectives on Managed Care’s Future
John Rowe
President and CEO, Aetna Inc.
Rowe announced that they would continue to be in business. We are in a phase of medical cost inflation. Aetna was one of the first companies to experience cost increases in the system and this has spread to all plans. Legislative mandates, technology, aging population, etc are driving costs. The impact of a slowing economy and loosening labor market will vary across companies.
Currently, consumers and doctors see insurance companies as in the middle, and would like them to get out of the way. We need to get the basics right and provide good basic service -- for example, answering phones quickly and providing simple and correct information. We need to be reliable and do what we say. The "bells and whistles" are further down the list of importance.
The past decade has seen increasing consolidation. Well-run companies will continue to grow. The system will become increasingly stratified with a wide range of options. Some companies are still going to offer expensive high end products. HMO will also return for those elements of the economy with loosening labor markets and tighter operating margins. The tendency towards self-insurance for large employers will continue. With continued medical cost inflation, companies assume that their employees are healthier than other company’s employees, and they can save money by self-insuring.
Employer expenditures are not just related to acute care. There are considerable costs associated with absences from work. Studies have shown that PPO patients have less short-term disabilities costs, so there are advantages to have multiple options.
E-health models are interesting, but we do not know where they are going. The hope is that it serves the consumer better. We are on the sidelines waiting to see what happens. E-business is important, and represents opportunities for administrative efficiency.
Advances in quality information will be important, but we are not there yet. No one is willing to pay quality yet. There will be a movement from an accreditation model to a performance based physician centered model. There may also be a movement away from local plans towards and big national plans that have more capitalization, products, and product options to offer. But it is still unclear how this will play out.
[back up to Part 3 presentations list]
Charlie Baker
President and CEO, Harvard Pilgrim Health Care
Baker began by noting wide consensus among conference presenters on the current environment. Health care costs are being driven by technology, pharmacy costs, an aging population, and increased consumer demand for open access. The original contract with HMOs, wide benefits and limited choice of provider, has been eroded. Consumers want access to all providers and all health plans. The Balanced Budget Act of 1997 (BBA) has had a profound impact on the health plans. The billions of dollars lost by hospitals and other providers over the past few by reduced Medicare payments, have been shifted to the private sector.
The population-based care management model has also been lost. Kaiser is still around and committed to this model because they have such a huge foothold in the markets that they are in. However, the prepaid group model has lost; even though it has done a better job coordinating care. Part of the reason for this is demagoguery on the part of providers. Another reason is the widespread but misguided belief that choice equals quality.
We are currently experiencing 12 to 15 percent cost increases, more than three or four times the general inflation rate. Twenty to 30 percent of these costs could easily be defined as administration, and these costs can be reduced. Harvard Pilgrim has the goal of reducing plan administrative costs as well as administrative costs of employers, hospitals and providers. The Internet can be a valuable tool in this effort. It can be used for things such as "on-line" enrollment, eligibility queries, and basic data transfers. Providers and hospitals are very receptive to the greater use of this technology. Plans need to think about reductions in administrative costs on all sides and establishing new behavioral patterns based on point and click. The health care system has a tremendous amount of data, but it is largely unavailable when needed. We need a new set of decision support tools driven by benchmark data and quality improvement.
The target markets of firms like Harvard Pilgrim are small and medium size firms. With respect to defined contribution arrangements, Baker said that nothing happens as quick as people think. People are particularly cautious about making changes in health care systems. What providers want first is simplicity. People have to believe that you are going to be there, security is the key for the consumer. Our goal is to clean up administrative stuff first, and move then move to the point where quality data on provider laptops is used to improve service delivery and outcomes.
[back up to Part 3 presentations list]Dick Pettingill
President and Executive Vice President
California Division, Kaiser Permanente
Pettingill suggested that some old problems of the past are reemerging in the health care system. In addition to premium increases, the next crisis in California may be in health care infrastructure. Sixty percent of hospitals are on the verge of insolvency. All forces are coming together without an understanding of larger policy issues.
The next generation of managed care will create value through integrated (managed) models of care and vertical integration of care (prevention, ambulatory, hospital, home care, etc.) The key will be to manage quality and health outcomes in a price competitive environment. Healthcare system change comes in "dog years." Everything takes seven year to happen.
Reducing administrative costs through the use of e-health can derive value. Kaiser Permanente’s goal has been to invest in clinical integration, manage variations while not stifling innovation. Care management is instituted throughout the organization using clinical data and scientifically based guidelines. Internet relationships with members are becoming increasingly essential. Currently, 74 percent of our members have access to the Internet. E-health will be used for such things as appointment making, filling prescription drugs, and facilitating the transfer of information from provider to member. Shared control and trust between provider groups and plan is needed.
Integrated delivery systems are capital intensive. Kaiser owns 28 hospitals and some need to be updated. Determinants of success will be the ability to provide quality care that is customized to the individual, good access to primary care physicians, and clinical based systems based on the best science and information systems data. Community benefit and social purpose are also highly held values by Kaiser.
Five thoughts of where integrated models are going:
Pettingill was guardedly optimistic that this model would survive and grow in the future.
Questions and Comments:
Are we moving towards defined contribution plans?
Rowe: It will be slow, many large employers are concerned about what happened at Xerox. Defined contribution is a consultant led effort. The companies Rowe talks to are not going to rush to it.
Pettingill: Said that one critical question is how quickly are firms willing to shift costs increases to their employees?
Baker: Companies are already moving to shift more cost sharing to their employees. It will come slowly. Federal tort liability could push companies to defined contribution.
Pettingill: There will be no large-scale immediate shift. Other copays and deductibles will happen first.
Stan Wallack: Mentioned that there is a distinction between choice of health plan and provider, and asked where choice fits in.
Baker: Tufts Health Plan found out that people wanted access to Massachusetts General Hospital (MGH), even if they did not use this system they wanted it available.
Karen Davis: Asked about the availability of benchmark data.
Baker: We have data on cost per episode of care for different parts of the delivery system. Don’t share it with employers. Over time, plan information will find its way to the public. Currently, it is in a form that is too confidential to share.
Lynn Etheridge: What could health services researchers do to help give you the tools to help you do a better job to get more value?
Rowe: Researchers could help develop a tool chest for better managing patients. We have some tools, but we do not have any power tools. We only have a crude capacity to managed care. Rowe said that new ideas and approaches or partnerships that will reduce expenditures and maintain quality would be enormously helpful. A significant problem is that providers hate health plans so partnerships become increasingly difficult.
Pettingill: What government can better is understand the cost of regulation and better weigh the added value compared to these costs. Legislatures are well intended, but add costs that might not be adding significant value.
Baker: The patient protection bill in Massachusetts requires notice to be sent to the beneficiary every time the plan approves a procedure. It might make sense to send something if it is not approved, but this runs into thousands and over time hundreds of letters. They also require that a provider list be sent to all people every year. This is very costly and most people just discard or recycle it.
Al Dobson, Lewin group: Asked Pettingill if Kaiser was planing to rebuild hospitals and how many?
Pettingill: Responded that this is something currently under consideration. He said that Kaiser Permanente is committed to continuing to own and operate our own hospitals to meet the needs of its 6 million enrollees.
Steve Lieberman: From what you all have said managed care will do well under any scenario?
Rowe: If the economy does well, managed care will not do as well. Tight labor markets will loosen managed care, but a huge economy makes room for many different models.
Pettingill: Restated that he was guardedly optimistic about the future of managed care.
Stuart Altman: There is agreement that costs are going up. In the early part of the day, we heard that people should be given more choice and now Kaiser is saying old models might be right. Altman suggested that the economy matters and that people are going to become more concerned with costs and efficiency and less with choice.
Pettingill: Managed care grew too rapidly in the 1990s; too much growth that we could not manage. Do what we do well, get back to basics.
Rienhardt: Made the comment that there is physician glut.
Rowe: There are enough physicians in the aggregate. In places like New York there is a glut, but some rural areas have a significant shortage. Going back to questions about managed care being better or worse off in the future, Rowe said that the definitive answer should be … yes.
Marsha Gold: For a time, staff models were the only form of HMOs? Is it possible to just do some of this is a loose way?
Pettingill: There will continue to be a wide degree of variation in managed care. Maybe at some point WebMD can surround itself with physicians to do things that Kaiser can do, but it will take a very long time if ever.
Luft: Did not believe it would be possible to virtually create and integrate a system like Kaiser’s. He noted that Kaiser is community based and not for profit. He too was optimistic that Kaiser can develop and share a more sophisticated version of care management to better treat the minority of people who account for the majority of costs.
Rowe: At Aetna, eight percent of the people account for 66 percent of costs. How modifiable these cost are is still subject to debate. They are the sickest patients. Maybe there is more room in the 34 percent of regular costs for savings? The portion of Americans in staff model HMOs is very small. This experience may not be as relative to the rest of the country.
Someone mentioned that while Aetna pulled out of Medicare+Choice, Kaiser stayed in.
Rowe: Corrected that Aetna pulled out of half the markets. This was due to high medical cost ratios, and we did not feel that we could offer those patients the care they needed. We are still in 11 markets and would like to continue to participate in this program. We just were not able to make it work.
Pettingill: Said that Kaiser did review the economics but also has a sense of social purpose. Kaiser members are aging into Medicare and the company wants to be there for them. He also believes Kaiser can do a better job at chronic disease management.
[back up to Part 3 presentations list]
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