Insurance Dispatch

In this week's column, we discuss wellness programs, which just got a nice boost from the Fed’s.

Available now at The Medical Blog Network.

Submissions Due...

For next week's CoR (#16!), hosted by Jason Shafrin, the Health Care Economist.

Please submit your entries (or one you like from someone else's blog) by Monday (the 1st):

■ via email

or

■ at Blog Carnival

PLEASE include:

► Your blog's url
► Your post's url
► The trackback url (if applicable)
► A (brief) summary

NB: We're still looking for hosts. If you'd like to host a future edition, just drop us an email.

Introducing Mr Mike...

Mike Feehan, that is, the newest member of Team IB. A graduate of Washington University in St Louis (both Bachelors and Masters), Mike’s worked for 3 major insurance carriers, from entry-level to Senior VP. He’s also been a benefits consultant, and manager of benefits for a plan that included some 30,000 employees, over half of whom are outside the US.

Most importantly, however, he is a lifelong Cardinals' fan, and sold beer at Busch Stadium for several years.

Mike’s resume includes stints as an Aetna VP, as Chief Underwriter for Empire Blue Cross, and as a benefits consultant for Willis of New York. It’s really too bad that he can’t seem to hold down a job.

He currently works for a prominent international organization, which must remain nameless (you read about it every day and wouldn't have any trouble guessing its identity). One thing we can tell you, though, is that Mike brings a wealth of information and insight to our blog, as well as a new perspective: Bob, Bill and I are all agents; it’ll be nice to have a knowledgeable and experienced viewpoint from someone who’s got a different outlook. And being in the Northeast, Mike helps us round out our geographic diversity, as well.

We’re looking forward to working with Mike, and wish all our readers a Happy, Healthy and Prosperous New Year!

UHC Takes a Hit...

Our friend Joe Paduda is no fan of UHC’s executive stock plans, and since he’s on vacation this week, we’ll take up the slack. The Securities and Exchange Commission (SEC) has now launched an official investigation into UHC’s stock option plans. The company says that it’s cooperating with the Fed’s, which should set everyone’s mind at ease.

You may recall that, a few months ago, United’s Dr. William McGuire resigned as Chairman of the Board following a review of his stock options. The company itself also took some financial hits as a result.

Greed, of course, is not the exclusive province of insurers, but this time of year, with so many employers facing double-digit renewals, it sure looks bad when the carrier exec’s get caught with their hands in the cookie jar.

Does She or Doesn’t She…

Well, I don’t know about her hair, but I can make a pretty good guess about her insurance: nope.

Okay, let’s go back to the beginning, and work our way forward.

I occasionally receive calls from distraught folks who are unhappy with their insurance coverage (generally, it’s because they think it’s too expensive; sometimes it’s because they got bad service). Such was the case today, when Melody called with a problem: she’s had an HSA for several years now (well, it started life as an MSA, but evolved along the way). Her agent has left the business (a not unusual occurrence), and the carrier’s home office staff has been, according to Melody, less than helpful. In the meantime, her premiums have increased to unacceptable levels, and she’d like to switch.

Hey, we’re here to help.

So I ask the normal questions (height and weight, tobacco use, some health questions). She seems fine, if a bit plump (not that I should talk, of course). Nothing that should cause a problem though, so I start asking her questions about her plan, what she likes and what she doesn’t like about it. I then suggested a certain carrier, and she quickly (and firmly) told me not to bother with them: they declined her several years ago.

Um, I thought you told me that there were no health issues?

There aren’t, Melody reassured me, just a rare genetic blood condition.

Oh, is that all? Golly, that shouldn’t be too much of a problem; after all, your current carrier took you.

You what?

You don’t think they asked if you’d ever been turned down for insurance, and why?

I see. And you didn’t bother to tell them?

Uh hunh.

Well, I happen to represent that carrier as well, and I can assure you that they did, in fact, ask if you’ve been declined. So you submitted a fraudulent application. Well, let’s see if we can get you back on the right side of the track now, with a carrier that knows your complete history. As it is, you don’t really have insurance now, so it seems a shame to pay even more for it.

I beg your pardon? You do have insurance now; if you break your leg the blood part doesn’t matter? Okay, well, it’s really not my job to argue with you, so I’ll check around, see if there’s any carriers that will offer you coverage, and get back with you as soon as possible.

Happy Holidays to you, too, ma’am, and PLEASE stay well.

LinkFest Tuesday

This week's Carnival of the Capitalists is hosted by Elisa Camahort at Worker Bees. She actually posted it a day early, but I missed it (for shame!!). It's a good one, too, with almost 3 dozen posts, each one with helpful context.

Grand Rounds instigator Nicholas Genes presents this week's edition. Over 30 bloggers submitted their favorite posts, and explained what made them so special.

UPDATE: The Carnival of Personal Finance is now up over at My Personal Finance Blog. The host has pulled together more than 60 entries, in a half dozen categories. Nice job!

Insurance Dispatch

While we're all celebrating the joyous Holiday Season, it's important to remember that not everyone is "naturally" so joyous.

In this week's column, we learn that cough medicine isn’t just for coughs anymore. Are your kids safe?

Available now at The Medical Blog Network.

Thursday News Briefs…

As we’ve written about more than once, so-called “health discount programs” can create more problems than they solve. And because they are NOT insurance products, the Department of Insurance (well, the Ohio DOI) has been powerless to stop them.

Until now, that is:

Ohio has joined a growing number of states which have empowered Insurance Departments to impose – and enforce – new rules on these plans. The Ohio House has passed, unanimously, their version of Senate Bill 5, which sets requirements for discount medical plans, including minimum marketing standards.

Unfortunately, SB 5 also includes enabling language for so-called “Healthcare Purchasing Alliances,” which have their own problems. We’ll have more on this soon.

While we’re on the subject of “ways to make insurance more expensive:” the Ohio House has also passed a mental health parity bill, which would require insurance companies to cover mental illnesses as they cover physical ones. Another word for this is “premium increasing mandate;” lame duck Governor Taft hasn’t announced yet whether or not he’ll sign it into law.

And finally, as long as we’re here in the Buckeye State (home of Heisman Trophy winner Troy Smith), there’s some interesting life insurance news, as well: Western-Southern Life has introduced an unemployment rider, available on many of its term plans.

The rider, which adds about 3% to the premium, is a waiver of premium benefit which is expected to help those who’ve lost their jobs keep their insurance.

UPDATE FROM BOB: Scam alert - Phony health coverage.

Cavalcade of Risk #15...

When we started the CoR a little over 6 months ago, it seemed a calculated risk that we'd last this long. We've got hosts scheduled up through mid-February now (hey, that reminds me, how would you like to host an upcoming edition?), which seems to mean that that risk paid off.

So, take a break from that last minute shopping, sit back, and enjoy the show. And a great big Thank You to everyone who submitted, and a few who didn't (but got included anyway):

■ You’ve heard of soft water, but how about Hard Money? Joshua Dorkin, blogging at Real Estate Investing For Real, explains how some lenders use an imaginative technique to help folks secure loans.

■ Joe Kristan, of Roth & Company, explains some of the “useful changes to the HSA rules." Using them can help reduce your risk of spending too much on health care.

■ The PC-Doctor prescribes a dose of common sense: reusing passwords can be dangerous to your (computer's) health!

■ Think you’re paying too much to insure your car? Chuck Russell has 15 ways to help you lower your car insurance.

■ The folks at VitaBeat warn that young men face a greater risk of high blood pressure than their female counterparts. As a former teen-age boy myself (a LOOONG time ago!), I'm tempted to say "dunh!"

■ Klik Money reports that something as simple as a health risk assessment can help lower your medical bills. Good advice!

■ The unfortunate plight of CNET editor James Kim has some lessons for the rest of us. Pro Bargain Hunter’s Yan has some helpful tips on preparing for the worst.

■ Think your identity is safe? Do you get credit card offers in the mail? Wenchypoo warns that if the answer to both of those are “yes,” you may have a problem.

■ Last week, she hosted the Health Wonk Review; this week, Rita Schwab has some pointed questions about the redundancy of the current physician credentialing system in the US. Don’t miss the comments.

■ Great news! If visions of (chocolate covered) sugarplums are dancing in your head, Mombian reports that chocolate may reduce the risk of miscarriage.

■ What’s a modern day Jack the Ripper got to do with risk (other than the obvious, if you’re in a certain line of work)? Renthusiast wonders why the ubiquitous London surveillance cameras weren't a show-stopper.

■ Hedge Funds are mysterious, and potentially risky, vehicles. Find out why Mister Juggles loves ‘em.

■ Since it's such a hot topic these days, here's one more on identity theft. The Identity Theft Fixes blog has a cautionary tale about a simple printing error that could have dire consequences.

■ No need to grab a shovel: Paul’s Tips has some advice about cutting your losses.

■ Jon Coppelman at Workers Comp Insider has a great post on navigating the hazards of the ADA (no, not that ADA!)

■ And finally, Yours Truly responds to a commenter’s puzzlement over the difference between luck and risk.

Our next host will be Jason Shafrin, the Healthcare Economist, on January 3rd. You can find the new Winter Schedule (and any changes) at the Cavalcade homepage.

Carnival Monday!

I'm ambivalent about this week's Carnival of Personal Finance: on the one hand, it's simply a list of posts, with no clue (other than titles) as to content. OTOH, I'm empathetic to the folks at A Penny Saved (after all, this week's Cavalcade of Risk is here at IB); still, I wonder if there isn't some happy compromise available.

In the event, you can't go wrong with Joe Kristan's tax-oriented guide to gift giving.

Happily, Jeff Cornwall has an outstanding, Christmas-themed Carnival of the Capitalists. With over 40 posts, including summaries and some (cute) comments, this makes a great gift.

Happily, Wenchypoo has a thought-provoking article on those ubiquitous year-end bonuses.

Insurance Dispatch

In this week's column, we examine how to enhance the holiday experience using your Flexible Spending Account.

Available now at The Medical Blog Network.

Happy Chanukah!

May the light of the season illuminate and warm the hearts and homes of all our readers.

UPDATE: And yes, they do taste as good as they look.

Wydening Gyre

In the pre-blog world, Senator Ron Wyden’s health care bill, the Healthy Americans Act, would be just another pie-in-the-sky version of HillaryCare, and would be consigned quickly to oblivion. It is, after all, based on flawed premises and suspect assumptions (which is not to say that it’s entirely without merit; more on that in a bit).

But a funny thing happened on the way to the backbench: Senator Wyden recognized the burgeoning influence of the blogosphere, and its ability to both shape and publicize the debate. As I remarked to the Senator, I have long envied my colleagues in the political blog world for their growing access to key political decision-makers and players.

But hold on a minute, Prof, what do you mean “as I remarked to the Senator?" Since when do members of congress discuss things with you?

Earlier this week, the Senator’s office sent out an email announcing his bold new health care initiative. Among the recipients were both myself and Bob, as well as (one supposes) several thousand of our colleagues. I responded by asking for an interview; turns out, he’d already anticipated such invitations, and had arranged for a conference call with a dozen bloggers from the “health policy wonk” side of the blogosphere. Bob was unavailable for the call, but I was able to participate. Also attending were such medblog luminaries as Joe Paduda, Matthew Holt and Ezra Klein, along with several other interesting bloggers, including econblogger Max Sawicky. Most everyone, myself excluded, were proponents of either single-payor or universal coverage systems, and were quite receptive to the Senator’s plan.

On the face of it, the bill offers a lot of bang for the buck. For one thing, it phases out employer-based health insurance. I’m all for that, with some caveats. For another, it appears to recognize the value of the “private” (i.e. non-government program) insurance channel.

There are, however, two fundamental flaws in the proposal:

First, it relies on a model called “Community Rating.” Basically, CR is the health insurance equivalent of “pay at the pump” auto insurance. It sure sounds nice: everyone pays the same rate, simple to administer, universal coverage (every car needs gas, right?). The problem is that not every car is the same, and not every driver has a flawless record. Same with health insurance: absent underwriting, folks who routinely run (and win) 26 mile marathons would pay the same as obese folks with diabetes. Thus, everyone ends up paying more.

The second problem is that it relies heavily on prevention to hold down rising health care costs. There are, for example, tax incentives for parents to have their kids vaccinated. While prevention issues are, of course, important and helpful, they are not going to significantly hold down the rising cost of health care. As one of our commenters has previously noted, “(I)f health care were not expensive, health insurance would not be expensive. If the cost of health care were not rising the cost of health insurance would not be rising.” There is precious little in this bill that addresses this basic problem.

And there’s this: the bill is touted as having bipartisan support, as well as support from various union leaders and titans (or at least captains) of industry. But, as usual, no one who actually works in the insurance field was involved. Rather like assessing how to get the car running better, but eschewing the advice of the mechanic. That is, we’re the folks who actually see how this stuff works, and doesn’t work, in the real world. We understand that study after study has shown that 85% of insureds are satisfied with their coverage. We also understand that mandatory coverage is no panacea (why don’t auto insurance rates go down every year?). The only insurance industry “representative” involved in putting this plan together was the president of Oregon’s Blue Cross/Blue Shield. Small wonder, that: who else is going to administer the plan (and reap the financial rewards)?

I would urge IB readers to check out the reports of the other attendees; each one of us had, of course, our own agenda and biases, as well as our own conclusions.

My own take is that this bill, while interesting in itself, is unlikely to get much traction. There are just too many problems with it, not the least of which is its unfavorable propensity to look like the Medicare D debacle writ large(r). That is, while it may look good on paper, the reality is that it will lead to a rapid increase in health insurance costs, while doing very little to rein in health care costs.

What did impress me, however, is that Senator Wyden was perceptive enough to understand that, by taking his case to the blogs, he gets a built-in publicity bump, with (mostly) favorable reviews. Thus, his bill will enjoy an immediate advantage over others that come down the pike. And he wasn’t afraid to engage in a bit of friendly debate with yours truly; he asserted that community rating would hold down insurance costs, and opined that cost-shifting from the private sector to the government was a major reason for high health care costs.

I pointed out that he had both of these phenomena bassackwards; that is, community rating increases premiums, and that the gummint’s cost-shifting habits (especially Medicare’s) unnecessarily increase costs. His answer was, unsurprisingly, to try to water down my point by saying that all sectors shift costs, which (for some unknown reason) somehow increases costs to the others. I found his arguments unpersuasive, but appreciated his candor and enthusiasm.

This was a tremendous opportunity, and I thank the Senator for sharing his time and insights with us. Hopefully, other congresscritters will follow suit, and we’ll have more such opportunities. If nothing else, it shows that medblogs are quickly coming into their own.

Calling all Wonks...

For the Health Wonk Review, available now at the MSSP Nexus blog. Hostess Rita Schwab presents an all-star round-up of over 20 thought-provoking posts.

Marcus Newberry, writing at Fixin' Healthcare, has an interesting piece on risk, and the problem-oriented nature of our health care system.

Helpful HSA News...

From the fine folks at Colorado Health Insurance Insider, a helpful compendium of what's (presumably) in store for 2007 and beyond.

And FoIB Joe Kristan, who blogs at Roth & Co, has even more.

Grand Rounds

A very full 'Rounds today, with almost 30 entries, all professionally put together by the folks at TreatmentOnLine. Each post has thoughtful and incisive commentary, as well. Bravo!

FoIB David Williams, proprietor of the Health Business Blog, puts the lie to those who claim that the rich and powerful receive better health care. Thought-provoking piece.

Money Monday!

Kirk Walsh presents an excellent Carnival of Personal Finance. With almost 60 entries, all neatly categorized and most with helpful comments and context, it's a great pre-holiday treat.

Joe Kristan has an interesting post on the AMT (Alternative Minimum Tax) that helps explain that arcane little tax nugget.

This week's Carnival of the Capitalists is also pretty jam-packed, with some 40-plus entries, hosted by Sama Blog. I was a bit disappointed to see that it's basically just a list of posts, with no particular rhyme nor reason.

This one caught my eye, though, because it succinctly and accurately explains how liability insurance works and, more importantly, what it doesn't do. An excellent read from John Bambenek at the Part-Time Pundit.

Insurance Dispatch

Betting the Pharm...In this week's column, we take a look at a relatively new trend in pharmacy benefit management. PBM's are going transparent, which could mean lower health care and insurance costs.

Check it out at The Medical Blog Network.

Nipping One in the Bud...

There's been a great deal of blog-buzz recently about the new Johns Hopkins study. It purports to show that a sizeable chuck of "uninsureds' earn too much to qualify for public assistance, but nevertheless cannot afford insurance premiums.

Let me state the obvious at the outset: the study itself is fatally flawed, and its presentation so full of holes that I want a Reuben. About the only redeeming feature I could find was that it eschewed the common mistake of conflating health insurance with health care.

Okay, now to brass tacks:

According to the “study,” well over half of those folks who identify themselves as uninsured claim that they make too much money to qualify for the various public assistance programs, but not enough to afford insurance premiums. As my co-blogger, Bob Vineyard, reminded me, this seems to fly directly in the face of many previous such studies, which indicated that about 40% of the uninsured make in excess of $50,000 a year. Granted, this isn’t exactly Bill Gates territory, but it certainly enough to be able to afford some basic, catastrophic coverage.

Second, the type of plans for which these folks are supposedly shopping is never revealed. Are they looking for (expensive) first-dollars type plans, with office co-pays and drug cards? Or are they looking at, for example, high deductible plans which offer an affordable safety net? The study never says (although I’d hazard a guess). The point is, absent some critical illness, most folks will qualify for at least some basic level of coverage.

Third, it’s never made clear (if they bothered to ascertain this at all) how many of these fine folks have cable TV, internet access, or cell phones. It would be nice to know this: assuming that one has a finite income, the choices one makes as to how it’s to be spent is certainly relevant to this discussion. Absent this type of information, the study itself is meaningless.

But Professor, you may object, how can you say this when everyone knows how expensive health insurance is?

The “study” itself gives us the answer: “(W)e do not know what the benefit packages or cost sharing are for the policies for which we have premium data." That is, they have a set of values, and a set of variables, and there is absolutely no effort made to correlate the two. In other words, they just made the whole thing up.

Much ado about nothing, indeed.

Insuring the Uninsured...part n+1

Santa Clara County, (California) the valley's largest provider of health care for people without medical insurance, thinks it can get small businesses to do the right thing -- and make the county money in the bargain.

Under the "Three Share Model'' plan, the county would make its health and hospital network -- and its 300 attending physicians -- available to low-wage workers of small businesses that currently do not offer health coverage. Participating employers and employees, in return, would pay monthly premiums....

It remains at the conceptual stage until next spring, when the county will learn if it will be awarded state money, estimated at $10 million to $15 million, to launch the project. SJ Mercury News

To be eligible, a business must have less than 50 employees, 30% of whom earn $30,000 or less per year, and who live and work within Santa Clara County. The current proposal calls for businesses to pay $125 per employee per month and the employee pay $50 per month...nothing has been said about rates for dependent coverage. If the plan gets approved by the state, it is estimated that 5000 to 10,000 people will enroll.

What this will do to the bottom line is unclear. The county provides medical services for these people anyway...with this plan they'll collect $175/month per employee. That's a lot higher than the $0 that's collected today. However, nothing has hit the press about the plan benefits versus what's currently provided. And if the enrollees now think of themselves as having real insurance, utilization may markedly increase.

It will be interesting to see how this plays out.

HSA Discrepancy in the News (finally!)

Regular IB readers may recall our investigative pieces, inspired by Joe Paduda, in which Bob and I described how unsuspecting folks get burned receiving uncovered care from network providers. As far as we know, ours are the only blogs which have extensively covered this potentially catstrophic situation, and we wondered when (if?) it would appear on the radar outside the blogosphere.

Well, wonder no more; Peter Rousmanierre, himself a blogger as well as a regular feature writer, has an article on this growing problem in the November issue of Human Resource Executive magazine. In it, he cites our work as a primary source, and has some additional information, as well.

Click away! (NB: If the link isn't working, here's a pdf of the article)

Cavalcade of Risk (#14!) is up...

The Cato Institute's Michael Cannon hosts a terrific CoR, with a dozen interesting (and often provocative) posts. And he adds not just context, but a unique sense of humor to each entry, making them even more intriguing.

Hats off to Michael!

The next edition is back here at IB. In fact, we're actually scheduling hosts for next February (can you believe it?!), so don't be shy about volunteering.

Grand Rounds

Dr Emily DeVoto, hostess of The Antidote, has an outstanding collection of posts from around the medblogosphere. Her 'Rounds includes over 3 dozen entries, categorized and summarized. Nice!

From the Fellow Blogger Makes Good file: Diabetes Mine blogress Amy Tenderich has published a guide for diabetics, aimed at helping them manage their care. Mazel Tov, Amy!

NoKo Insurance (Big Time Fraud?)

Everyone's favorite whacky dictator has a problem (well, several, but this one is relevant to IB): he's strapped for cash, and running out of options (and money). Sure, he could sell weapons to terrorists, or continue to pump out counterfeit US currency.

But that's just small potatoes; the real bucks, as everyone knows, are in the insurance.

No, Kim hasn't (yet) gotten his Life & Health license (so far as we know, anyway); but he has (apparently) set up a pretty interesting reinsurance scheme:

Apparently, he's insuring much of his country's infrastructure, and then submitting major claims against those policies. If true, this is insurance fraud writ large, to the tune of potentially hundreds of millions of dollars.

Why should you care? After all, it's the reinsurers who take the hit, not us, right? Well, no: our own carriers offload much of their risk to these same reinsurers, who will now have to charge more to make up for the NK losses. A double whammy.

Ouch!

Money Monday

Marshall Lebovits hosts a jam-packed edition of Carnival of The Capitalists, available now at Show Me The Money blog. This edition boasts 30 entries, with helpful categories (including Poetry & Humor) and each entry includes a description.

As one opposed to any "minimum wage" laws, I really appreciated Brian Gongol's thoughtful explanation of why they don't really do what they purport to.

Insurance Dispatch

A new guide to disease prevention that can help employers, and employees, promote good health and save money at the same time. That's the subject of this week's column at The Medical Blog Network.

Read all about it!

Almost missed this...

David Williams, host of the Health Business Blog, has an insightful post about Walmart's new(ish) $4 rx offerings. He takes on its critics with some powerful, well-reasoned arguments, and offers his thoughts on the positive implications of such programs.

Good weekend reading.

Risk vs Luck

One of our commenters has raised an interesting question: "Isn't risk just a fancier word for bad luck?"

Well, no:

Risk is about "the potential harm that may arise from some present process or from some future event," whereas luck is "an unknown and unpredictable phenomenon." The former has to do with probability, the latter with randomness.

By way of example:

Suppose I bet that you won't make a hole in one, blindfolded, at our local course. My risk is that you may, in fact, ace the hole. But the laws of probability dictate that there is a finite chance of this happening, and I can buy insurance to cover the eventuality. You, on the other hand, must depend on luck that you'll make the shot.

In the same way, health insurers know that there is a chance (a risk) that you will become seriously ill in the next year. But they also know, based on your application and their own statistics, the likelihood of this happening, and can arrive at a price that will cover that risk (premium). You may or may not become ill, but that's your luck, not the carrier's risk (which they've already managed).

Insurance is about spreading the risk; that is, assessing the likelihood that, out of a large group of people, one particular person will have a large claim. So if a person has the bad luck (we'll leave out behavioral choices for this example) to have, say, a heart attack, the company has already planned for that contingency.

Insurance is not about "spreading the luck:" there are other industries for that.

Submissions Due...

For next week's Cavalcade of Risk (#14!), hosted by Mike Cannon of the Cato Institute. Please submit your entries (or one you like from someone else's blog) by Monday (the 4th):

■ via email
or
■ at Blog Carnival

PLEASE include:

► Your blog's url

► Your post's url

► The trackback url (if applicable)

► A (brief) summary

PS: We're still looking for hosts. If you'd like to host a future edition, just drop us an email.

In Which I'm the Interviewee (again)

Dr Alex Kavokin, host of the most recent Cavalcade of Risk, is well-known in the medblogosphere for his interesting and informative interviews (Nursing Professor Kim McAllister, for example). Recently, he asked me to participate, and I agreed.

I was impressed (and a bit surprised) by the number and scope of his questions; they really made me stop and think.

In the event, here ya go.

A Northern Front...

We've blogged before (here and here, for example) about importing med's from our neighbors to the north.

Turns out, most Americans favor such practices, and by a wide margin:

Now, will the politicos listen, and what's the potential downside if they do?

Health Wonk Review is up

Absolutely terrific HWR this week, courtesy of Mike Cannon at the Cato Institute's blog. He presents some 16 interesting entries, all with helpful (and often humorous) context.

Bryan Caplan, who hosts the EconLog, has a quick and effective takedown of Ezra Klein's assertion that HSA's won't do much to bring down the cost of health care. Who knew economics could be fun?

One Doc "Gets It"

My TMBN colleague, Dr Rob Lamberts, has an interesting post on his practice’s answer to “doc in the box” clinics. Instead of decrying the drain it might represent on traditional practices, he welcomes such services as a call for physicians to “think outside the box.”

In fact, Dr Rob writes, “patients are sick of how doctors run their offices.” And so his office has found ways to streamline the delivery of health care. Left unsaid, but certainly implicit in this model, is whether this results in cost savings to either (or both) the doc’s or their patients.

Worth reading in full.

Big Brother, or Good Risk Management?

Although we tend to focus on the life and health side of the insurance business, we are InsureBlog, so we sometimes stray into P & C (that's Property and Casualty) territory, as well.

Did you know that more teens are killed in auto accidents than by any other cause? Neither did I, but as the father of two teenage daughters, this story got me thinking about it:

"Susan Schauer never gave her teenage son the car keys without also handing him something he wasn't nearly as thrilled about - a small computer chip that kept an eye on his driving.

Plugged into his family's Mazda 626, the chip recorded his speed, miles traveled and any fast starts or stops. If Ben removed the chip, it recorded that too."

There are a number of such devices on the market now, and as more become available, and as their use spreads, prices should come down somewhat. I spoke with some of my P&C colleagues about these widgets, to see if any carriers were offering discounts to folks who had them installed. Apparently, though, this tech is still under the radar.

I'm ambivalent about the idea: on the one hand, I do worry about my kids. On the other, I trust them, as well.

Any thoughts from IB readers?

Grand Rounds...

Dr R W presents an outstanding edition of 'Rounds, boasting 31 entries. Each one has a helpful summary. Bravo, Doc!

The Grunt Doc has a (short) story that illustrates what we don't mean by Consumer Driven Health Care.

Medical Tourism: A New Twist

I must confess to being a bit apprehensive about this post. We've touched on IVF in the past, as it relates (or not) to risk. And we've discussed medical tourism, as well.

Remember the old Reese's Cup commercials? "You got chocolate in my peanut butter! "No, you got peanut butter in my chocolate!"

Well, this post is like that. According to the (English) Times on Line, "(t)he Vikings are coming. As sperm donations in Britain slow to a trickle, Denmark has become the sperm powerhouse of Europe."

That's right, English lasses are trading in their scones for "a Danish." (Or maybe, a Dane). Turns out, the Brits have all but outlawed anonymous sperm donations, which has caused their supply to, um, dry up. Stoking the flames is the fact that a sample of less than half a milliliter (less than a teaspoon) can fetch as much as $32.

Different strokes, I guess.

Carnival Time!

Overachiever My Financial Journey hosts this week's Carnival of Personal Finance. With almost 50 entries, he still managed to get it out a day early (nothing wrong with that!), and with helpful context, to boot. Kudos!

Kristine at Beacon Financial Tips has some, well, tips about how to stay in-budget this holiday season.

This week's Carnival of the Capitalists can be found at Bargaineering. Over 30 posts, many with context (but alas, not all).

One Man Band blog's cehwiedel (not a typo) sounds an early warning bell about a new California universal health-insurance initiative.

Insurance Dispatch

Would you spend 2% of your income to protect 70% of it? In this week's column, we look at a recent survey that holds some surprising answers.

Check it out at The Medical Blog Network.

Is Fair, Fair?

According to a recent study in the Health Affairs Journal, almost two thirds of those surveyed believe that smokers should have to pay more for health insurance; about a third felt that obese folks should, as well.

We talk a lot about personal responsibility here at IB, but have so far shied away from this particular controversy (mostly because it’s been somewhat under the radar). But we have discussed the importance of “risk” many times, and this would seem to fall squarely in that milieu.

Longtime readers may recall the IVF kerfluffle some time back: we sometimes forget that behavior choices have consequences. Certainly smoking falls under that heading: I’m aware of no medically-approved treatment plan that mandates one to “light up” (medical marijuana use notwithstanding). Smoking has been linked to any number of health risks, and of course smokers are subject to an increasing number of restrictions on their behavior.

Weight is another such issue: obesity can increase one’s chances for heart attacks, diabetes, and other dread diseases. Overweight folks might argue that they are subject to metabolic challenges that affect their condition, and there is probably some justification for that. Nevertheless, their condition does affect their health; underwriters are less interested in the why than in the fact.

In the life insurance and individual medical markets, smoking status and weight have long been used in assessing one’s rates. In the group market, though, these issues receive considerably less play. Generally, group plan underwriters look at the results of the behavior (cancer, diabetes, stroke, etc) when determining final rates for a group. I haven’t (yet) seen a group screening questionnaire that asks about smoking status of employees; likewise, there’s been no evidence that the behavior itself plays any part in the underwriters’ decisions.

But, if there’s enough of a demand, the industry will most likely respond. At some point, some carrier will announce a special discount for smoke-free groups, or some other program along those lines. It will be interesting to see when (not if) that happens.

How to Insure a Great Thanksgiving

According to the South Carolina Insurance Department, there are over 4,000 fires every year on Thanksgiving. They cause 15 deaths and dozens of injuries, not to mention over $25 million in property damage. And that's not just the folks who fry their birds.

Speaking of fryers (the cooking technique, not the variety), the U.S. Consumer Product Safety Commission reports that over a seven year period (ending last year), there were over 100 "incidents" related to turkey frying, mostly by folks who lit up their birds (metaphorically, we hope) and then just wandered away for a bit.

Never having been bitten by the frying bug, I think our family's (relatively) safe. One tip: if you've never brined your bird, this year's a great time to start. There's no better way to insure a moist and tender tom.

And speaking of turkeys, our friends in Massachusettes may well cry "fowl!" According to a Bay State bond filing, it appears that the state's new MassHealth plan will end up costing its taxpayers twice what had been anticipated. Talk about 3rd degree burns!

Have a great, and safe, Thanksgiving.

BONUS: A blast from the past. Enjoy!

The Cavalcade of Risk #13...

Just in time for Thanksgiving, Dr Alex Kavokin has a terrific roundup of posts from around the blogosphere. Each entry has a summary, and most have interesting commentary, as well.

I was intrigued by Car Geeks' report on the dangers of electric cars. While they may get terrific mileage, they've got some major safety problems, too.

Younger and Younger…

When we talk about Long Term Care insurance (LTCi), we most often think about “seasoned citizens:” retired folks who’ve put in their time, parents and grandparents, Bob Dole and Andy Rooney. And certainly that’s the most obvious demographic when considering the type of condition that would necessitate a nursing home (or home home) stay.

Remember Superman?

Well, Christopher Reeves, really; a young man, in his prime, thrown by a horse and confined to a wheelchair. He was the “poster child” for a number of causes, but it seems to me that the most appropriate of these might have been LTCi.

And your point, Professor?

Well, in reviewing their claims data from 1989 through this year, UnumProvident (one of the bigger LTCi carriers) found that almost 60% of their long term claims were from folks under age 65. And some of the causes surprised me (although they really shouldn’t have): obesity and diabetes (related, to be sure, but not the same), cancer and strokes, of course, car accidents and even dementia. In fact, the average age of these “preemies” is 53, hardly an old fogey. One in seven is 45. Who knew?

Something else to consider when you’re working on your financial plans.

Grand Rounds...

Dr Anonymous hosts this week's compendium of the best of the "medblogosphere." He's compiled some 45 entries, including 27 of his "best of the best."

And speaking of Thanksgiving [ed: hunh?!], Dr Paul Auerbach has some handy tips for avoiding shark attacks.

Monday Money...

Very cool Carnival of the Capitalists this week. Host Brian Gongol has done an outstanding job, herding almost 60 posts into an easily sorted spreadsheet format, complete with comments and even ratings. Very cool!

Joe Kristan, at Roth & Co, has a unique tribute to the late Milton Friedman. Recommended.

Over at the Carnival of Personal Finance, you'll find a familiar (if unexpected) site: a used car salesman. Oops, sorry! A pre-owned automobile broker. Either way, an interesting metaphor for the topic. With over 60 entries, this is one huge lot!

Since we recently blogged on FSA's, you might also want to check out Jenna's advice on them over at Money Bucks Cafe.

Insurance Dispatch

In this week's column, we learn about using annual bonuses as a powerful new way to fund Health Savings Accounts.

Check it out at The Medical Blog Network.

Cavalcade #13 - Submissions Due

Just a reminder that submissions for next week's C of R are due Monday (the 20th). Alex at RDoctor would love to see your work.

You can submit entries:

■ via email or

■ at Blog Carnival

PLEASE include:

► Your blog's url

► Your post's url

► The trackback url (if applicable)

► A (brief) summary

PS: We're still looking for hosts. If you'd like to host a future edition, just drop us an email.

The Best Laid Plans of Mice and Men...

An electronic health records management system being rolled out by Kaiser Foundation Health Plan/Hospitals has been nothing short of an IT project gone awry, according to sources at the company and an internal report detailing problems with the HealthConnect system.

Questions about the project arose last week at about the same time Cliff Dodd, the company's CIO, resigned. Dodd stepped down last Monday after another Kaiser employee, Justen Deal, sent a memo to every company worker (n.b. all 180,000 of them!) warning of technological and financial repercussions related to the rollout of the nearly $4 billion system.

Kaiser is reportedly spending $76,920 per physician on the project. The full ComputerWorld article is here. There's another good article in eWeek.

For those not in the electronics industry, the 99.5% uptime mentioned in the eWeek article may sound good, but a system like this should have enough software scaling ability and redundant computer horsepower to be running at 99.99+%. The power failures that the CEO cites should never affect system availability.

CDHC: Smaller Increases?

Deloitte Consulting recently surveyed about 150 large employer groups, and found that Consumer Driven plans (CDHP) experienced lower rate increases than their "generic" cousins. Now, this was on "large" groups, which probably included quite a few self-funded plans; I'm not comfortable (yet) extrapolating from this survey to small groups. Still, it shows a definite trend, which is good news.

Among the other findings in this survey:

■ the rising cost of health care benefits was a primary factor driving respondents' health care strategy

■ extensive plan designs, increased utilization and cat claims were cited as having major impact on medical plan costs

■ most employers believe that CDHP offers the most effective approach for managing costs and maintaining quality care

One of the challenges cited by folks who are wary of CDHC is the perception that it's all about shifting cost onto employees. Obviously, there is some truth to this: higher deductibles (even with lower total out of pocket exposure) means that folks need to become more involved in their health care decision-making. On the other hand, encouraging employees to become better health care consumers, along with wellness programs and disease management programs, were cited by 38% of the respondents as important, which would seem to mitigate this. That's almost double the percentage of just 3 years ago, when only 21 percent of respondents gave that answer.

Now that's progress.

Health Wonk Review at HBB

David Williams hosts another great HWR, this time with 18 interesting entries. I know I sound like a broken record [ed: or a scratched CD], but I really like the informative context David has for each one.

I was unaware that of this Kaiser brouhaha, in which an employee blew the whistle on some EMR problems. HIStalk has an interview with the whistleblower (and if you're in the mood for some interesting geekspeak, check out the comments, too).

Life Insurance, for FREE?!

Stupid Carrier Tricks ™ are a virtual staple here at IB, so when a carrier actually does something right, it’s only fair to recognize that, as well:

“MassMutual…is introducing the program, which provides $50,000 in free life insurance for eligible parents and legal guardians, in the Sarasota, Fla., area.”

Apparently, MM introduced LifeBridge about 4 years ago, in an effort to help “the working poor” with life insurance protection. Eligible families can opt to insure either Mom or Dad (but not both), with $50,000 of term life insurance, at no cost.

I like the fact that, to qualify, both parents must be permanent, legal residents of the US. They must also be working, and bringing home between $10k to $40k a year.

Another unique aspect of the plan is that it doesn’t pay a benefit to the kids (or surviving spouse); rather it’s a scholarship (of sorts) that’s paid directly to the childrens’ school.

Oh, and it’s not just Florida, either:

“The company is bringing its LifeBridge Free Life Insurance Program to the Tucson, Arizona area. MassMutual's LifeBridge is a national philanthropic program in which the company issues 10-year term life insurance policies to eligible working parents to help pay for the cost of their children's education in the event they die.”

Kudos to MassMutual!

Grand Rounds is up...

It's a Python 'Rounds this week, hosted by Topher at the Rumors Were True blog. Although he received over 60 submissions (WoW!), he selected only 26 for publication. In an interesting twist, he plugged in my recent Insurance Dispatch column, instead of the one I'd submitted, but I can't get mad about that.

Achoo! Ever wondered about the "correct" etiquette for sneezing? Shinga, posting at Breath Spa for Kids, has the answer.

Not Quite Ready for Prime Time…

“Belay that line!” In rock-climbing, it means controlling one’s rope to prevent a nasty spill; in insurance, it apparently now means the latest gizmo from the minds of United Healthcare:

According to UHC, working stiffs make up a sizeable percentage of “the uninsured,” and are prime candidates for affordable health insurance. Their latest offering, called “Belay,” is built on a High Deductible Health Plan (HDHP) chassis, and comes in two models: with an HSA (Health Savings Account) and without. Sold directly to unsuspecting consumers through the Golden Rule distribution channel, these plans appear to directly challenge the notion that HDHP’s are primarily for “the wealthy.”

It’s an intriguing idea, and one which, on its face, appears to be the answer to a lot of prayers: high deductible, low cost, and easy to understand. Initially available only in the Cleveland and Chicago markets, no one can accuse UHC of over-reaching. And certainly, any effort toward reducing the number of folks without insurance at a given time is to be commended.

But I remain underwhelmed.

Why is that, you may ask?

Well, for one thing, Golden Rule has a (well deserved) reputation of being quite stringent in their underwriting. While that’s not necessarily a bad thing, it’s not something the layperson would be expected to know. Professional agents do, though, and can offer suggestions about which carriers a given client should be considering. But Belay isn’t available from agents, only directly from the carrier, which could leave consumers worse off if they’re declined.

For another thing, the press release touts how easy it is to sign up: “just click here.” Problem is, that just takes you to the regular GR site; even feeding in a Cleveland address gets one zero info on Belay (is Belay delayed?).

Expect a lot of hoopla surrounding this newest venture (they’re bringing in a professional rock climber for the official “rollout"); what follows should tell us whether or not this is indeed an idea whose time has come, or whether it’ll end up “on the rocks”.

Carnival Monday!

With over 35 entries (all with context), in 11 categories, Casey Software has done a tremendous job with this week's Carnival of the Capitalists.

I was intrigued by this post on alternative fuel technologies, brought to us by the Long or Short Capital blog. Unfortunately, it doesn't appear that it will be available in Israel (or Saudi Arabia).

Geek's World brings us this week edition of the Carnival of Personal Finance. It has almost 70 entries, most with helpful summaries.

With that much content, it was challenging to find my "favorite:" since my family is also dealing with "ageing parent issues," I found Wenchypoo's post on finances and the elderly to be spot on.

Insurance Dispatch

In this week's column, we look at how failing to disclose your medical history can cause problems when buying insurance. You could wind up with a big loss on a large claim.

A lesson in truth-telling, available at The Medical Blog Network.

And Now For Something Completely Different...

Okay, this post has absolutely nothing to do with insurance, but hey, it’s the weekend, so what the heck:

“Is a burrito a sandwich?

The Panera Bread Co. bakery-and-cafe chain says yes. But a judge said no, ruling against Panera in its bid to prevent a Mexican restaurant from moving into the same shopping mall…

"A sandwich is not commonly understood to include burritos, tacos and quesadillas, which are typically made with a single tortilla and stuffed with a choice filling of meat, rice, and beans," Locke wrote in a decision released last week.”

Apparently, the Panera at this particular mall has a clause in its lease that prohibits another “sandwich shop.” Their contention is that a burrito is a sandwich, meaning that Qdoba (the Mexican eatery at issue here) is outta luck.

I don’t know: the folks at Slashfood say “A sandwich is any kind of food that you can combine with another kind of food and/or condiment and eat it while holding it in your hand…sometimes (especially in these carb-counting times), a sandwich can be made without bread.”

On the other hand, “The first recorded sandwich was by the famous rabbi, Hillel the Elder, who lived during the 1st century B.C. He started the Passover custom of sandwiching a mixture of chopped nuts, apples, spices, and wine between two matzohs to eat with bitter herbs.” (At our family’s seder, we call this a “Hillel Big Boy") Since matzah is unleavened bread, this would seem to settle the question in favor of the ubiquitous bakery/café.

On the gripping hand, Sandwich is a town in Barnstable County, Massachusetts, United States. The population was 20,136 at the 2000 census.

I guess that doesn’t really help much.

I tend to side with the judge here; if a burrito is a sandwich, then so is a crepe, a blintz, and moo shoo. Just because a food can be held and eaten with one hand doesn’t mean it’s a sandwich (ice cream or otherwise).

Bon appetit!

The lawyers have been at it again...

As has been covered in several previous posts, Blue Cross of California is in the middle of a class action lawsuit over rescission of coverage. When used appropriately and with discretion, the ability to rescind coverage is important to protect the carrier against fraud. It's also a disaster for the consumer if it's inappropriately applied.

We've just received the new version of the small group application forms and there have been dramatic changes that address this issue. I thought you would be interested to see the differences between the old and new forms.

Here is the wording in previous version of the employer app:

Coverage may be rescinded if there are misstatements in this application.

Simple. No? And now for the new version:

Rescission

We have provided a complete history of material information that is considered in the acceptance or denial of the enrollment application. Following approval of coverage, if Blue Cross discovers that we intentionally provided incomplete or false material information or withheld material information from Blue Cross prior to the Effective Date of the Agreement, Blue Cross may revoke coverage. This means Blue Cross may cancel coverage as if it never existed.
If Blue Cross revokes our Group coverage under the Combined Evidence of Coverage and Disclosure Form, Blue Cross will send a written notice explaining the basis for the decision and our appeal rights. We have the option to submit a new application in the future to be underwritten and considered for enrollment. We will be required to pay for any services that were covered for an employee, and Blue Cross will refund any amounts paid by our Group except amounts already paid by Blue Cross on behalf of our employees.
We have personally read and attest to the completeness and validity of the information provided on this application for coverage. If we are accepted, this application will become part of the contract between Blue Cross and our Group. We and any enrolled family members agree to abide by the terms of that contract. Initials: (emphasis added)

That's potentially a bankruptcy-level penalty for a small business.

And on the employee's side, the old app read:

Even if this application is approved, any misstatements or omissions may result in future claims being denied and the policy being rescinded.

The new employee application reads:

Rescission

I have provided a complete history of material information that is considered in the acceptance or denial of this enrollment application. I understand and agree that I alone am responsible for the accuracy and completeness of this application, and to the best of my knowledge and belief, I have done everything necessary to be able to assure you that all information about any children under the age of 18 listed on this application is true and complete. Also, all of my dependents listed on this application that are over the age of 18 years have read this application and have provided complete and accurate Information for this application. I understand and agree that following approval of the enrollment application, if Blue Cross discovers that I intentionally provided incomplete or false material information or withheld material information from Blue Cross prior to the Effective Date of the Agreement, Blue Cross may revoke coverage. This means Blue Cross may cancel coverage as if it never existed.
If Blue Cross revokes your coverage under the Combined Evidence of Coverage and Disclosure Form, Blue Cross will send you a written notice explaining the basis for the decision and your appeal rights. You have the option to submit a new application in the future to be underwritten and considered for enrollment. You will be required to pay for any services that were covered while you were a Member, and Blue Cross will refund any amounts paid by you except amounts already paid by Blue Cross.
I have personally read and attest to the completeness and validity of the information provided on this application for coverage. If I am accepted, this application will become part of the contract between Blue Cross and I. I and any enrolled family members agree to abide by the terms of the contract. Initials:

Notice that the old version of the employee application has ambiguity in the difference between "future claims" and the concept of rescission back to day one. The new version clears that up and basically says that you're toast if the coverage is rescinded. It also specifically adds in the words "intentionally" and "materially" so trivial and accidental omissions don't provide a basis for rescission...regardless of the size of the claim that triggered the review.

The new forms are a huge improvement in openness and clarity. Rescission is a very serious matter and it's important that it be fully explained.

Down Under...Lookin' Up!

Here's a bit of news...

Australian researchers found that Google identified the correct diagnosis in 58% of uncommon medical cases, after entering a few of the symptoms from the 26 cases into the search engine, according to an online study from the British Medical Journal, the London Daily Express reports (Fletcher, London Daily Express, 11/10).

Cool! A new cost savings feature...you can use Google to diagnose yourself! Now, if they can just get that 42% error rate down a bit...

More from Across the Pond…

As we’ve noted before, the British National Health System (NHS), while touted as far superior to our own flawed efforts, continues to prove its proponents wrong. For example, Britain's Royal College of Obstetricians and Gynaecology is now urging doc’s to do away with sickly infants, which “can disable healthy families.”

As it stands now, such activities are illegal in the ‘Isle, but the College is pushing for that to change. Kinda makes sense, from their standpoint: “sickly” infants are a real drag on finances, both the family’s and those of the NHS. Much better to nip those costs in the bud, so to speak, than to place an even greater financial and emotional burden on those affected.

Excepting, of course, the newborns themselves.

But they don’t vote.

In related news, a simple case of gallstones has left an Ipswich woman in severe pain for several months. Turns out, the treating hospital faces substantial penalties for providing needed care “too quickly.” Her doc has suggested that she maintain a steady diet of saltines and water to help manage the pain, which diet could last for several more months. She’s already lost over 40 pounds, and is concerned that she’ll have trouble conceiving a child.

On the other hand, that may be good news, since it might be “sickly” and thus be euthanized.

Great system, folks; where do I sign up?

FSA = Failing Support Abounds?

Flexible Spending Accounts (aka Section 125 Plans) seem to be struggling, even as their HSA (Health Savings Account) cousins are taking off. Although FSA’s have great market share (a LOT of medium- and large-size employers offer them), not so many folks actually avail themselves of the plans.

Briefly, an FSA allows one to sock money away, pre-tax, for unreimbursed medical and daycare expenses. This can save one a great deal of money (after all, it means that Uncle Sam is paying a third of your medical costs), but there’s a potential down-side, as well: FSA’s are “use it or lose it” propositions, which means that money left unspent is forfeited.

According to a recent study by the International Foundation of Employee Benefit Plans, more than 90% of their members offer FSA’s. But, less than 40% of eligible employees actually use them. Even worse, about 7% of the ones who do end up leaving “money on the table.”

Oh, and about a third of the respondents said that their company also offered some type of Consumer Driven Health care product, as well. Unfortunately, the study didn’t indicate how many folks chose that option, or how many actually contributed to an HSA.

Maybe next time.

Cavalcade #12 Is Up...

Kudos to Chris Parks at MedBill Manager who hosts this week's CoR while on the road. It's breezy, informative, and boasts 17 entries from around the riskier parts of the blogosphere.

Think that OTC med you're taking is "risk-free?" Think again: David Williams of the Health Business Blog reports on how even Big Pharma is looking anew at risk assessment.

And don't forget, if Chris can put one together "on the road," you can host one from the comfort of your armchair. Just drop us a line.

It’s a Wash, Right?

Met with one of our clients today; he’s 62, his spouse is 65. A retiree, he’s concerned about making the right choice for his health insurance. Having just gone through a similar election process myself, I was only too happy to help him noodle it through.

Mort (not his real name) was debating between staying with the generic PPO plan, or switching to the new HSA (Health Savings Account) option. On the one hand, this is pretty momentous: leaving the low deductible “generic” plan with its prescription drug card and (seemingly) low out of pocket, and moving to a high deductible plan can be scary.

On the other hand, he can switch back next year, so even the worst-case scenario really isn’t a big deal.

Still, it’s a paradigm shift, and there are some complications [ed: aren’t there always?]. For one thing, his wife is Medicare eligible, which means that (in this case), she really can’t take advantage of the plan. However, this is still considered “family” coverage, so we had to use the family (i.e. 2x) rate for the deductible and coinsurance calculations. Ouch!

Another “twist” is that, if Mort goes with the PPO plan, he’ll be required to contribute almost $1,000 in premium over the course of the year. If he chooses the HSA plan, no such contribution is required; in fact, he could dump the whole thing into the loss-fund account itself. Sweet.

So why was this a difficult decision? Well, the numbers kept canceling each other out. It was the weirdest thing: my typical experience with group HSA’s is that usually there’s a big difference in what comes out of the client’s pocket (a lot) and how much he saves (not so much). This, in fact, has been my primary complaint with HSA’s in the group market: there just isn’t enough play in the premium to make them attractive (yes, broad brush, but true nonetheless).

In this case, though, something interesting happened: turns out that, when we looked at the worst case scenario (maximum OOP for a catastrophic claim), the HSA plan saved Mort almost $1,000; and if he had a “normal” year (some meds and office visits), he essentially comes out even.

Which will he choose? Don’t know, but he’s supposed to call me when he decides. I’ve got own guess, of course, but I’ll have to wait.