Special E-Mail Bulletin #2
July 2000
Know when to say "No"

Special E-Mail Bulletin

Hi, gang.

Just a very short bulletin this time. I wanted to share a thought with you regarding "crunch time," that moment when you have to make a decision either to take on or renew a financially unacceptable managed care contract or walk away from a fundamentally flawed deal.

I know it's tough, and many providers are reluctant to walk when they fear losing access to patients. But remember that you don't take market share to the bank; you take profitable patients to the bank. If you need concrete evidence of that fact then look at the Medicare HMOs bailing out of the game in record numbers.

Aetna, CIGNA, Pacificare, and many others..... They're making a statement that if HCFA won't pay them enough to keep the doors open and make a profit then they're not going to continue. It's not rocket science -- if the money is not there then the care can't be provided.

So take a lesson from the sophisticated, information-rich healthplans. Hit them with exactly the same argument they're giving the HCFA. When a third party payor (or, heaven forbid, one of your colleagues) offers you $2.50 or $3.00 pmpm to care for a Medicare population forget it -- can't be done! Say "no thanks," shake hands, and walk away.

If the other party wants you they'll negotiate a viable rate. If they won't then don't be overly concerned if you lose the contract and those patients. It's all a matter of dollars and sense. :o)

Gil Weber

Here's just a snippet from an article in the Boston Globe this morning:

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HMO cuts seen hitting 934,000 seniors

Health plans say Medicare underplays; GAO and critics skeptical of claims

By Bloomberg News, 7/25/2000

WASHINGTON - Health plans, complaining that the government underpays them, will drop coverage of more than 934,000 Medicare beneficiaries next year, the Clinton administration said.

The announcement follows the disclosure by several major health insurers, including Aetna Inc. and Cigna Corp., that they will reduce participation in Medicare, the government health insurance program for the elderly and disabled.

The withdrawals for 2001, more than the 734,000 Medicare beneficiaries who lost coverage in the previous two years, will be used by HMO industry representatives to lobby Congress for Medicare pay raises.

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