August 2016: The HMO Strikes Back

The CEO of a large managed care corporation was sitting in his office late one night, gloating over his latest acquisitions. Suddenly, with a puff of smoke and the smell of brimstone, Satan appeared before him.

Satan smiled at the CEO and said, "I have a proposition for you. You can win every health care contract you bid on, for the rest of your life. Your colleagues will stand in awe of you, physicians will fear you, and you will make embarrassing sums of money. All I want in exchange is your soul, and the souls of all your friends and the souls of all the shareholders in your company."

The CEO thought about this for a moment, then asked, "So, what’s the catch?"

That joke from the 1990s circulated just before managed care took a nose dive. But here’s a more recent joke.

A hospital CEO and his chief strategy officer were having a conversation about all the physician group acquisitions they had completed and the strategy executive asked the CEO, “What’s different about population health today compared to when we acquired all those practices for our managed care strategy in the 1990s?” The CEO thought for a moment and said, “What’s different is that today we measure things.” The strategy executive thought for a moment and asked, “What do we measure today that we didn’t measure in the 1990s?” Getting flustered, the CEO replied, “We measure how long we have before we retire.”

Clearly, whatever you want to call it, HMOs are making a comeback in the form of population health management. Physician group acquisitions have increased in parallel and many of those acquisitions are not generating the kind of downstream benefits many health systems were expecting. So is there really anything different this time around?