We were pleased to see the Tampa Tribune publish a smart, enterprising story that took a different angle on an important facet of health reform. Richard Mullins’s piece on Medicare Advantage plans, something of great interest to Florida readers, offered new depth and questioned the all-too-common assertion that increasing transparency and consumer information will cure the sickness in the private insurance market.
Most reporting on Medicare Advantage plans—that is, what there’s been of it—falls into predictable “he said/she said” patterns. One group charges that the government is overpaying plan sellers; sellers counter that they provide unique benefits for the extra dough. Mullins broke this pattern and looked at the rating J.D. Power and Associates gave the call centers operated by WellCare Health Plans, a big seller of Medicare Advantage policies.
Mullins wrote that, in December, J.D. Power praised WellCare for its “outstanding customer service experience” in handling calls from Medicare and Medicaid recipients. In the next graph, he reported that, two months later, federal regulators ordered the company to stop selling policies to Medicare beneficiaries because of its “persistent” failures in handling customer appeals and calls from patients who could not get the critical medicines to which their drug plans entitled them. Mullins summarized the government’s case:
For two years, regulators said, WellCare’s “performance was substandard in numerous areas and WellCare was one of the overall worst performers among all plans.
What gives? It’s money, Mullins reported. The insurer paid J.D. Power more than $50,000 for call center “certification” and the right to use the J.D. Power brand name in advertising, promotions, and marketing materials sent to potential customers. Company reps could also mention the rating when they had customers on the phone. Mullins’s compelling story clearly explained what was wrong with this less-than-arms length arrangement. “The business relationship between J.D. Power and WellCare presents the potential for a conflict of interest,” he wrote. The story also noted potential flaws in the survey itself; for example, only a few of the survey questions focused on whether the company solved customers’ problems. Mullins quoted experts who warned consumers to be skeptical of business ratings in general.
Indeed, the health care ratings business has run amuck. J.D. Power, which rates companies and products in various industries, is one of some seventy-five businesses and government organizations that rate managed care plans and lots of other health care providers. (There are more than 175 for hospitals.) These groups, some for-profit and some not-for-profit, hope to capitalize on the push for increased consumer information, cloaking themselves in the blanket of consumer choice. But as Mullins showed, many purveyors of ratings also help themselves. “Most popular ratings are downright deceitful,” Robert Berenson, a senior fellow at the Urban Institute, told me.
Several years ago, at the end of a long ratings project, a consulting actuary I worked with asked this question: “What does all this really mean?” Yes, what does it mean, especially now that there are seventy-five different health plan rating schemes floating around? Whose ratings are legitimate? How are they derived? What’s in it for those who construct the ratings? How are consumers to understand any of them if they follow the usual marketplace advice and shop around? Shopping among seventy-five rating schemes to pick a health plan? You’ve got to be kidding!
The media have quite a task explaining all this to audiences who are susceptible to advertising influence, and to pols who think consumer transparency—as well as the example set by Medicare drug benefit sellers like WellCare—will save the day. Missouri congressman Roy Blunt told The New York Times that he saw Medicare’s prescription drug benefit as a model for health reform. It’s “a good pattern of how a competitive marketplace works.” Journalists in Missouri, take note.