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AMA Delegates Support a Shift Away From Employer-Negotiated Insurance

MANAGED CARE February 1997. © MediMedia USA
News and Commentary

AMA Delegates Support a Shift Away From Employer-Negotiated Insurance

MANAGED CARE February 1997. ©1997 Stezzi Communications

The AMA has withdrawn its backing of employer-sponsored health insurance in favor of promoting individually owned policies. Its House of Delegates voted in December to support individually purchased insurance as "preferred method."insurance as the "preferred method" to cover employees.

The AMA has historically supported employer-provided insurance and just three years ago backed a federal bill mandating that all employers purchase health insurance for their workers. Now, to fund private insurance, the AMA has called for tax changes that would give employees the same breaks that employers now receive. A majority of delegates supported the change, but some raised the point that many doctor-run networks are trying to sell their services to large employers. The AMA contends that individuals controlling their health care options would improve opportunities for physician networks and improve the doctor-patient relationship.

Many large companies oppose any changes in tax breaks, but in the long run employers would probably prefer to quit the health benefit business, says Sean Sullivan, president of the National Business Coalition on Health. "Separating the people who use care from those who pay for it is economically a bad idea," says Sullivan.

Health plans are concerned that administrative costs for individual policies would send premiums through the roof. Plus, employers have more clout than individuals in holding HMOs accountable for providing high-quality care, says Bo Piela, spokesman for the Massachusetts Association of HMOs.

Humana will cut 700 to 900 jobs nationwide to slow the tide of receding earnings, the company has announced.

Humana posted a net loss of $10 million during the first nine months of 1996.

The layoff, accounting for about 5 percent of Humana's 18,000 employees, will be largely in administrative positions, the company says.

Humana isn't the only plan to trim staff. Healthsource, which operates HMOs in 16 states, has said it would lay off 32 employees, and HealthCare USA in Florida has dropped 22 of 125 staffers.

— Paul Wynn

The federal government estimates that about 10.5 million Americans under 65 purchased their own health insurance in 1994. Buying individual health insurance is most common in the Mountain states, among self-employed people and farm workers.

Percentage of population aged 18 to 64 having individual health insurance in selected industries

Source: U.S. GENERAL ACCOUNTING OFFICE REPORT: PRIVATE HEALTH INSURANCE

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