Tuesday, February 15, 2005

Knockin’ down the Straw Man…

In the study of logic, one learns of the “Straw Man Fallacy.” Briefly, this method consists of arguing that since a=b, then of course f=g. Allow me to illustrate:
In a recent Letter to the Editor of The Free Lance-Star (link), Dr Peter Kamilakis writes:
"Anthem made $295 million profit in the first quarter of 2004. This is $100 million more than the year before. Compare Anthem CEO Larry Glasscock's "performance bonus" of $42.5 million in 2002 (working no nights or weekends) to what your family doctor earns working 90 hours per week under Anthem's miserable payment schedule, and you can see why doctors arrive and then depart the Fredericksburg area constantly.”
He goes on to ask:
“In this age of concern about health care and health insurance costs, who on earth would side with a monster like Anthem, which demonstrates such colossal greed?”
He concludes that:
"Only when Anthem loses their monopoly on health insurance in Virginia will the playing field be leveled.”
Allow me to state at the outset that I am no shill for Anthem. I do represent them (as well as many other carriers), but I have my own issues with the way they do business, as well. For example, they are among the lowest paying (if not THE lowest) carriers in the group market. And I am also troubled by the seemingly egregious amount that the CEO takes home each year (I am by nature a fan of the free market and entrepreneurial spirit, but this is not Mr Glasscock’s capital at work, it is the shareholders’).
But fair is fair.
The straw man in this argument is that the CEO’s compensation is the cause of the current state of health care in Fredericksburg (and, I would suppose, elsewhere, since the Good Doctor is apparently writing from Wisconsin). But it has no bearing on this subject. I also find these kinds of profits and bonuses objectionable, but they just aren't relevant. It is not a finite pie, with only so many slices to go around. It is based on contracts and market share, the latter of which is fluid and dynamic.
In his letter, Dr Kamilakis bemoans the idea that “where Anthem's payment did not match what the physician charged, the doctors wanted the option of billing the patient for the difference.”
Well, absent a network contract, doc's are always free to balance bill. OTOH, if there's a contract in place, they can wail all they want, but no one forced them to sign that contract.
Individuals (almost) always have the option to switch carriers. And employers often (usually?) shop their coverage annually, in order to stay ahead of the rate increases. But the sad fact is, Anthem (well, any BX, really) is almost always the 800# gorilla in a given market. Until employers and unions (and, of course, brokers) push other carriers, it will ever be so. Unfortunately, that's not likely to happen, because the bottom line will generally dictate where the market goes.
It's true that price is not the only factor when deciding on a health insurance plan or carrier. And it may not even be the most important factor. But it sure as heck is a MAJOR factor, and that's unlikely to change any time soon. Yet, I've (occasionally) found a comparable quote with a lower price than Anthem, and still ended up writing the case with Anthem. Why? 'Cuz that's what the client wanted.
The bottom line [ed: I really hate that term!] is that Anthem is a business, and its shareholders demand a profit. And the providers want their customer base (patients), and to be paid fairly and promptly. And agents want to get the case written, and issued.
It’s called a free market.
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