Posted October 1, 2009

By Lou Baldwin
Special to The CS&T

Second in a series exploring health care reform from a local Catholic perspective

Keystone Mercy Health Plan is a niche-managed health care provider. First of all it exclusively serves 300,000 low income Medicaid recipients, and its funding is through per-member government payments rather than employer/employee or inspanidual contributions.

With the economic downturn and the numbers of unemployed and working poor without health insurance reliance on Medicaid is growing.

Secondly, it is a partnership between Independence Blue Cross, the area’s largest health insurance company, and the Sisters of Mercy of the Americas.

But Keystone Mercy is a health management organization (HMO), and as such, it has a stake in the conversation of health care reform.

Two key executives shared their views on health care reform with The Catholic Standard & Times.

Anne Morrissey is CEO of the AmeriHealth Mercy family, which includes similar plans in Harrisburg, Indianapolis, Ind., Louisville, Ky., and North Charleston, S.C. She is a former vice president of operations for Chicago-based CNA Insurance Company and is a registered nurse.

Sister Renee Yann, R.S.M., is senior vice president and chief mission integration officer of Keystone Mercy, and a former director of the hospice program at Fitzgerald Mercy Hospital in Upper Darby.

“We were the original Mercy Health Plan founded in 1993, and in 1996 we formed a 50-50 partnership with Blue Cross and we sponsor it equally,” Sister Renee said. “We are still strongly mission-oriented and the only Catholic-sponsored health management organization in the Philadelphia area.”

As a Medicaid-based HMO, Keystone Mercy must operate under state guidelines, but it must also assume the risk if usage outstrips the state contribution.

This is different from the “public option” that has been discussed because under that model, presumably, the government would assume the risk for cost overruns.

A problem arises in that health care costs have been increasing by about 6 or 7 percent a year, but the state payments for Medicaid patients, which are adjusted annually, have only been increasing about 3 percent, according to Morrissey and Sister Renee. This affects how much they can pay the hospitals and doctors.

“Most hospitals accept our plan, but going forward it makes it difficult for us to negotiate a contract with the health systems,” Morrissey said. “That’s not to say they are being unreasonable. They face the same challenges we do and the funding isn’t there.”

But the underlying issue is how to reduce medical costs, which some believe have gotten out of hand.

“Medical care is the only commodity that you don’t pay for directly,” Sister Renee observed. “There is no control in the system to make people make prudent choices. There is no control on me to say ‘give me every test I want because the insurers will pay for it.’ There is no control over the doctor to say, ‘Oh, give xyz test and we’ll see what happens.’ That’s not to say doctors make imprudent choices.

“I think we have never gotten the notion that there is only so much around and we have to allocate properly, so that people get what they need but don’t overuse services. That’s the whole point of managed care, and I think that is what the essence of what the Obama health care plan is trying to do,” Sister Renee said. “I think he is trying to infuse into the system those kinds of controls so that people make judicious choices. I don’t know if his plan is perfect, but at least it’s an attempt.”

Morrissey agreed with this and also suggested that medicine as practiced tends to be episodic rather than holistic. This can be a problem because it requires many different appointments, which add to expenses.

“If you come in with a cold but your leg is falling off, they may not notice your leg is falling off. We have to develop a system where the person is treated as a whole,” she said.

Has American medicine become overspecialized? “I think there is an element of that,” Morrissey said. “In certain situations there is a huge need for it, but I do think there is an element of overspecialization that increases the cost.” Both administrators agreed health care should be a right not a privilege.

“I do support universal health coverage. I support coverage for immigrants and undocumented aliens. I think if people are living in the United States it promotes the health of all of us if they are well,” Sister Renee said. “I can’t say I’m against a public option.”

Key to any reform, Morrissey said, “is an element of consumer responsibility so that there is a connection between the consumer, the payer and the health system itself,” she said. “I think if we bring all of the elements together effective reform will evolve.”

As Congress and the president ponder how to achieve health coverage for everyone, they might look at organizations such as Keystone Mercy, Sister Renee suggested. “Because of its mission-driven character and history of service to the poor and vulnerable, it is really unique what we are able to bring to this conversation. It certainly makes us very proud and our parent organization very proud.”

Morrissey agreed. Her previous company, CNA, a multi-line insurance company, “was bottom-line driven,” she said. “Moving to this organization was a welcome change because you always have the mission in front of you.”

Lou Baldwin is a member of St. Leo Parish and a freelance writer.