Beware of bold predictions. They’re usually wrong.

Bold predictions make for good headlines but they rarely make for good analysis. Take, for examples, the following:

“The horse is here to stay but the automobile is a novelty, a fad.” President, Michigan Savings Bank, analysis done for Henry Ford, 1903.

“Computers in the future may weigh no more than 1.5 tons.” Popular Mechanics, industry analysis, 1949.

“It will be years – not in my time – before a woman becomes Prime Minister.” Margaret Thatcher, political analysis, 1974.

So when I recently read a New York Times analysis predicting the end of the health insurance industry by the year 2020, I paused to consider whether the authors (two respected health policy experts) had a point to make.

Their basic theory is that the coming of accountable care organizations (ACOs) will make insurance passé and unnecessary. “Accountable care organizations,” they said, “will increase coordination of patient’s care and shift the focus of medicine away from treating sickness and toward keeping people healthy.”  Now that’s a theory we can wholeheartedly embrace.  It has been health plans, working in partnership with physicians, medical groups, and integrated care organizations that have developed and tested models to maximize coordination among providers, provide team care and care management for patients, and promote wellness and prevention.  .

The authors miss important responsibilities assumed by health plans – many of which ACOs would also have to take on.  Health plans are far more than a company to collect premiums and pay claims. They create broad risk pools that help cushion the very sick against catastrophic costs. They meet stringent solvency tests to ensure that when people do get sick or injured, the money is there to pay for their care. And the best partner closely with providers to assume responsibility for a patient population and develop innovative care delivery approaches that improve health and lower costs.

Employers, who help pay for coverage for more than 180 million Americans, recognize the importance of health plans.  They rely on plans to put together benefit packages not only to meet the varied medical needs of their employees, but also to help workers stay healthy. They ask them to develop comprehensive networks of skilled health care practitioners to serve patients in wide-ranging geographic areas of a state, region, or the entire country. And they ask plans to help in measuring and reporting on the quality and cost of care that is delivered to patients.

Health plans have continued to provide essential functions while other models have been tried and found wanting. In the 1990s, for example, prognosticators predicted insurers would be replaced by something called “PHOs,” or Physician Hospital Organizations. Today, PHOs exist only in research literature. Similarly, less than 10 years ago, physician-owned hospitals were the newest wave of change.  Today, legislators and regulators are pushing back by limiting or banning such arrangements.

ACHP was proud to support provisions of the health care law that will help spur the creation of more accountable care in Medicare, Medicaid, and the private sector.  ACOs could provide an important function in aligning incentives between the financing and delivery of care. But for ACOs to succeed for patients, they must be held accountable for both care and costs. If they are not, they may serve just to promote more consolidation among providers, all the while diminishing competition in the market even further.

Health reforms should build on the private health insurance model, while also requiring insurers and providers to make important changes that will lead to improved care and better value. For example, the new health reform law requires that insurers step up and eliminate many of the underwriting practices that were developed to deal with a fractured system of coverage and payments. Providers, for their part, will be more carefully monitored and measured, with payments increasingly rewarding value, not volume.  And patients will take a greater role in choosing coverage and seeking care.

My prediction –and you can hold me to it – is that health plans will continue to play a powerful role in our health care system if they are accountable for total costs, and for the quality of care and health of their patients.  If ACOs prove that they are able to do the same, they, too, will have a role in our health care system.   And patients will be the ultimate winners.

- Patricia Smith
President and CEO, ACHP

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