Excerpt

Health insurance now takes many forms as employer-based plans have moved from indemnity plans into a variety of models, including HMOs and PPOs, which have captured the majority of market share. With little variation among health insurers, there is an increase in tiering of co-payments and fees.

All of this is occurring at a time when consumers are demanding more access to health care and more choices of where to obtain it. Countering this are the efforts of insurance companies to differentiate care and costs through quality ratings and financial disincentives. Their goal is to persuade consumers to make less expensive health decisions. Private payers and employers are rewarding both physicians and health care institutions that treat according to standards derived by consensus, which include the opinions of, but are not dictated by, clinicians. The Center for Medicare and Medicaid Services (CMS) is both imposing more restrictive rules and driving toward “pay for performance” in which “extra” money will reward those who treat according to CMS-promulgated standards, and those who don’t will get less money.

Among the few bright spots are new technology to improve clinical and administrative oversight, as well as innovative business models to coordinate financing and delivery of health care. …