Flu Shot FYI

With winter (and flu season) quickly approaching, here's an important resource for you and those you care about:

A new website, FluCentral, has a nationwide flu-shot locator where one can search for dates, times and locations of vaccinations.

There's also an interactive map that sends out e-mail alerts about the spread of influenza in one's area, and medical articles about the flu.

Recommended.

Goin' to the Carnival!

This week's edition of the Carnival of Personal Finance is up at WealthyWeb.

And TriplePundit hosts the Carnival of the Capitalists.

Battling the Cylons...(BUMPED)

Believe it or not, I’m actually a pretty reasonable guy. Sure, I like to spend quality time yelling at insurance companies, and I don’t mind tilting at the occasional windmill of carrier “customer service” now and then.

But this is ridiculous:

Oriental Hut is a local restaurant that has been a client for many, many years. And they’ve had the same group carrier, VID, for almost three (which is quite remarkable in this market). Last Spring, one of their employees added her husband to the plan. Within two weeks, she learned that his premium would be almost $1000, and she called me to take him off because they couldn't afford that (yes, she should probably have called first to see what his rate would be, but she didn't; water under the bridge). In any case, I asked her to fax me the request, and we would have him taken off.

I faxed the request to the carrier, and presumed that all was taken care of; I never heard back from Oriental Hut that there was a problem until early September. Apparently, VID never took the husband off the policy, and had been charging the group for him all along. The employer told me this in early September, and I contacted our service rep to have it fixed. It should be noted that the employer handled it as he saw fit, which is to say, in a logical manner. Logic and insurance rarely coexist peacefully.

The employer simply deducted the amount that the (uninsured) husband was being charged, assuming that eventually VID would figure it out.

He was only partially correct.

In early September, the employer told me that the husband still hadn’t been taken off the group. I contacted our service rep, and within a week or so had confirmation that everything was now fine: he was cancelled as if he’d never been on it in the first place.

Early this month (October), the employer received a letter from VID confirming that they (VID) had, in fact, made a mistake; it basically reiterated what I had been told by email.

Case closed, right?

Don’t be silly: this is insurance we’re talking about.

Two days ago, the client received a cancellation letter from VID, informing him that the group was terminated for non-payment. Ooops.

Now, I had understood -- incorrectly, as it turns out -- that VID was charging for the husband’s May/June premium (one month), and that it was this $1000 that was in dispute. This was not correct: they were charging all the way through for him, a total of about $6,000. Their position is that, even though the husband was ultimately cancelled back to the original effective date, Oriental Hut should have been deducting the premium from his wife’s paycheck and forwarding said sum to them. They won’t reinstate the plan unless and until they receive that $6,000, which, of course, the employer has never collected. They will then reimburse that amount as a credit on the November invoice.

So, their position is: "we made a mistake, you're cancelled anyway, pay us $6,000 now to reinstate coverage, and we'll give it back to you in a few weeks."

Riiiiight.

As one can imagine, I’ve spent a great deal of the past 24 hours trying – in vain – to get VID to at least negotiate a more reasonable amount. They remain intransigent. I enlisted the help of my service rep, and eventually got as far up the corporate “food chain” as I could, all to no avail.

So, I played the only card I had left, which is the power of the gummint: I called the Department of Insurance, and was able to talk my way into skipping the on-line electronic form and directly to a specialist. The employer had to call her to grant me permission to act on his behalf, and I have submitted all the relevant details to her.

We now play wait and see…

Updates as warranted.

UPDATE 1 (Thursday 10/20): The plot thickens. The Claims Specialist at the DOI has received my email, and has started working on the case. OTOH, not a peep from the VID "supervisor," despite 3 voice mails. What to do?

As I pondered this dilemna, a fax comes in from the owner of Oriental Hut: another letter from VID, dated the 13th, indicating a balance due of only $1,700. As we recall from early math classes, $1,700 is less than $6,000, so this is a good thing.

Trouble is, I no longer trust the carrier, and neither does my client. So, I call VID to see what they say today. Ooops, still showing the $6,000.

So, a follow-up letter to the DOI Claims Specialist, including the new $1,700 balance letter, and the conclusion that we have now entered the realm of "bad faith." Back to wait and see...

UPDATE 2 (FRIDAY 10/21 AM): Promising developments. Late yesterday afternoon, the business owner indicated that he would be willing, for the sake of his employees, to capitulate on the $6,000. However, neither of us trusts the insurance company to reimburse those funds as promised. Hence, a quandary. The owner suggested that a letter from VID (confirming that once the funds were received the plan would be reinstated, and that the relevant funds would then be reimbursed/ credited on the November bill) would be acceptable.

I called my service rep with this proposal, and this morning received a fax that was about 75% of what we requested; that is, they would reinstate, and would reimburse, but indicated that this could be on either the November or December bill. My feeling is that if they can put it off til December, they will put it off to December, but it’s not my call. I got the owner’s voice mail, and left a message bringing him up to date. Then, back to my service rep requesting that VID tighten up the letter to specifically say November.

And that seemed to work: they agreed to the November reimbursement, but suggested that we hold a conference call between the 4 parties (the owner, my sales rep, the carrier’s billing rep and me) to make sure that we are all on the same page. The Good Lord willin’ and the creek don’t rise, this should take place early this afternoon, and the matter resolved by late this afternoon.

Well, sorta:

Two issues remain hovering in the background. First, the owner is of the opinion (and perhaps rightly so) that he and his employees should be reimbursed for the 4-5 days that they were without coverage while all of this was going on. I’m inclined to agree with him, but this seems to me a secondary issue that should be addressed after we have the group reinstated.

The other issue is that, even though we continue to negotiate an amicable resolution with VID, the Department of Insurance is “hot on the case,” and has opened its own investigation. Even assuming that the parties reach a satisfactory resolution, I’m not sure that we can “call off the dogs;” and to be perfectly frank, I’m not so sure that we should. After all, even if (when!) we resolve the reinstatement issue, the fact remains that this whole situation should have never reached this point in the first place. And the fact that we now have so many different written claims regarding how much is owed indicates a real problem at VID. There is justice to be served here, as well.

UPDATE 3 (FRIDAY 10/21 PM): No closure, yet. After a 1½ hour conference call (see above), it was finally determined that we could all agree at how unfair and unreasonable the situation was, but reinstatement would still take $6,000 and no letter would be forthcoming.

After the call, I spoke privately with the owner, who is seriously considering just letting the cancellation go through, and finding other coverage. I did remind him that this would be easier said than done [the subject, perhaps, of another post], and he indicated that he would consult with his employees about whether or not he should accept VID’s terms.

To sum up, the owner is willing to part with the $6,000, in return for a letter which would simple say “We accept your $6,000 and your group is reinstated. On the November bill we will refund to you the credits to which you are entitled.” Notice, the only reference to actual dollars is the premium. This seems an innocuous enough statement, and indeed is simply a reduction to writing of that to which VID verbally agreed.

Of course, I was disappointed: I had really expected and hoped for closure before the weekend. I mentioned my disappointment to a colleague, who opined “Henry, you’re trying to get this done from the bottom up. Why don’t you start at the top, instead?”

Excellent advice!

So, I googled for the company headquarters and explained my purpose, eventually landing at the desk of a very professional-sounding young woman. She was understandably reluctant to write such a letter until she had investigated the circumstances, and asked me to fax her what we had so far. She is also familiar with the claims investigator from the DOI, which may or may not be important.

And so it goes.

UPDATE 4 (THURSDAY 10/27 PM): Know when to fold 'em. Neither the "executive level" woman at VID nor the Claims Specialist at the DOI have returned repeated calls over the past few days, and the meter's running out. Ostensibly, the owner has until midnight on the 31st to make the payment, but realistically he must do so in the next 24 hours.

And since he just asked me for the hot-line number to make payments by phone, it appears that that is the course he has chosen.

UPDATE 5 (FRIDAY 10/28 PM): Paid the Piper. Well, the owner called in the payment, thereby obtaining some measure of closure. On the whole, I agree that it was the right thing -- or perhaps just the least wrong thing -- for him to do.

Now, we await the resolution of several loose ends:

First, will he receive the credits due him on the November premium notice?

Second, will we hear from the VID contact person?

Third, what (if anything) will the Department of Insurance do now?

On the Case...

In a recent post, my correspondent asked “(w)hen will WalMart buy some hospitals and offer their own health care?” I flippantly replied “never.” Apparently, I jumped the gun:

“Former American Online chairman Steve Case wants to shake up the health care industry with a $500 million company he founded [in April]. The Washington, D.C.-based firm, called Revolution, plans to buy controlling interests in companies that provide health care and wellness services.”

Thus far, Revolution has purchased four entities to serve as a sort of launching pad: one is a health news aggregator, another is a sort of referral and appointment service, the third offers software that enables consumers to manage their health info, and the last is a sort of community-based WebMD.

Once the company is “off the ground,” it plans to enter the health insurance marketplace, offering what looks like consumer-driven products in both the individual and group markets.

It’s not really clear how they’ll differentiate themselves from “the pack,” nor how competitive they’ll be. But it’s nice to see someone from “corporate America” putting up their own money. And, even more importantly, it’s these kinds of innovations that represent the real answers to the arguments put forth in the book we reviewed earlier.

Broken Trust...

If you’ve been following my Battle with the Cylons, you know that one of my clients is in the midst of a major “issue” with one of my carriers. As an independent agent, I represent the carrier, but I work for my clients. This puts me in the unenviable position of balancing their sometimes competing interests. All things being equal, though, my first loyalty is to my client.

The insurance contract is unique: it is called a “unilateral” contract because almost all of the onus is on the company; in general, the insured’s responsibilities are to pay the premium and avoid filing fraudulent claims. It is also unique in that the client’s premium buys, not a new car or CD, but simply a “promise” to pay for some potential future event (a claim). That promise rests primarily on one thing: trust.

Trust is defined as “belief or confidence in the honesty, goodness, skill or safety of a person, organization or thing." What happens, then, to the equation when the party which has made that promise ceases to be trustworthy?

This is no simple question, by the way: my client has been insured with VID for almost three years, and almost $200,000 in premiums. That’s a lot of trust. VID, by refusing to yield on one simple procedural rule, has destroyed all that.

As I was explaining to the owner a short time ago, my own position is now put in question: When I present a proposal to a client (new or current), I have to believe that the carrier(s) I present are worthy of the trust which I would have my client put in them. Now, knowing that in the case of VID that trust is suspect, do I have an obligation to warn my other clients about the circumstances?

As you can probably tell, there has thus far been no resolution to the ongoing situation. And time is running out.

UPDATE: Time ran out (see Update #5).

An Excellent Grand Rounds...

may be found at Hospital Impact. This one is special!

The Carnivals Are In Town...

This week's Carnival of the Capitalists is up over at BlawgReview.

While you're there, check out the entry on the new Tax Panel's proposals from our good friends at Roth & Company. It's a great place to start if you're interested in what's likely to happen tax-wise in the next few years.

And Consumerism Commentary hosts this week's Carnival of Personal Finance.

A Twofer...

Apparently, the human brain comprises some 100 billion cells (neurons).

I believe that I lost at least 250 million of those recently: I had the privilege of sitting through a “webinar” to become certified to sell the new Medicare Part D drug plan. Only a gummint-approved panel could come up with such a complicated, poorly designed, inconvenient, and altogether bothersome “benefit.” Actually, the fact that one must become “certified” to sell what should be a simple drug plan should be a tip-off that it’s anything but.

I also read Prof Quadagno’s response to my review of her book. I do appreciate that she has taken the time to offer her rebuttal.

She raises some interesting points, most notably that there may be value in an increased role for the government in the arena of health care coverage. Professor Quadagno believes that the "only reason the situation doesn’t look worse is that the government is picking up the slack." She has it exactly backwards: government cost-shifting is one of the most egregious components of the increasing cost of healthcare. And instead of answering my challenge as to where the issue of “fairness” may be found in our constitution, she proposes that the insurance industry should be even more regulated (i.e. restricted), and that government intervention is necessary to solve the (fake) problem of “46 million uninsured.”

She couldn’t be more wrong, and the new Medicare “drug program” brilliantly and irrefutably demonstrates why:

Let us suppose that, for the sake of argument, the nation’s seniors were all consuming vast quantities of prescription medication and that, as a class, seniors represented the poorest of our society. Such an argument would go “Gosh, now Grandma has to choose between buying food or her med’s. Why can’t the government do something?” And so the government convenes a special panel (because that’s what government does) which is comprised of everyone affected by the “problem” except a representative sample of seniors, insurance agents who deal with the public every day, or doctors who actually see patients; in short, anyone and everyone who could bring meaningful information and experience. Such folks would not be invited to participate, while special interest groups and government bureaucrats (but I repeat myself) decide that Dr Goldberg’s model would be the ideal place to start.

And so emerges Medicare Part D (for Debacle), a multi- multi-billion dollar program to (allegedly) enable seniors to afford their med’s. It looks something like this:

Let’s start by making this a completely voluntary plan, so that Grandma and Grandpa can feel comfortable knowing that they are free to choose whether or not they wish to participate. Then we’ll slap a 1% per month penalty on ‘em if they decide not to play along, and want to join up later. Such a deal!

Then, for those that do “choose” to enroll, we’ll impose a new $250 deductible for medications, to supplement the current $912 Part A and $110 Medicare Part B deductibles. Hmmm, that’s a total of almost $1300 in deductibles right out of the chute.

Okay, so Grandma meets her $250 deductible, and all her med’s are covered now, right? Well, not so fast: actually, Medicare Part D will pay up to 75% of the next $3,000 of (covered) med’s, or a total of $2,250. Of course, that means another $750 out of (Grandma’s) pocket, but that’s not so hateful, right? So, what’s next?

How about: Grandma gets to pay 100% for her med’s until she’s out of pocket another $2,850. Ouch.

Oh, but surely she’s done now, right?

Nope, she then gets to pay 5% of all her med’s until the end of the year, at which point the whole process starts anew. That’s right: an extra premium over and above the “regular” ones for A and B, a new $250 deductible, plus $750, plus $2,850, plus 5% of the rest after that. Yikes!

Now, if you’re still following, then it’s not complicated enough for government-think, so let’s muddy the waters a bit more:

Each year, there are only certain times when Grandma (or Grandpa, for that matter) will be allowed to switch plans. “Switch plans?” you ask. Yup, because everything we’ve been talking about so far describes what the government has decided is the appropriate product for insurance carriers to sell. Kind of like Henry Ford and his famous (although probably apocryphal) comments regarding color choices for the Model T. These are plans that must be approved for sale by the same folks who designed the “product.” And you can only buy into a plan at certain proscribed times. Don’t like the plan you bought? Tough, because you can only opt out or switch plans at specific times, as well.

So there you have it: a perfect example of how government restriction of the insurance market place impacts how its citizens are allowed to purchase only “government designed and approved” products. No real free market here, folks, just move along. Of course, it’s left to the imagination as to whether or not this represents the solution to any identifiable problem. And it most certainly represents what happens when we put government in charge of even a small piece of the health care pie. Imagine what it would do with the 15% of the economy the whole pie represents.

I appreciate that Prof Quadagno probably truly believes that such onerous government control would make things “fair,” but she still hasn’t addressed how “fair” is even relevant. And programs such as Medicare Part D demonstrate that “fair” isn’t even a good idea.

For more information on the new Medicare Part D plan, or for any other Medicare issues, contact your state’s Department of Insurance or medicare.gov.

Actuaries Miss, Too...

No one likes rate increases (okay, no one who isn’t an insurance company employee likes rate increases). Sometimes, though, they’re inevitable and justified.

And sometimes they’re not:

According to The Segal Company, health care costs projected for 2004 were way off: actual costs were lower than expected, pretty much “across the board.” For example, PPO costs were projected to rise by almost 14%; they actually rose about 10% -- a difference of almost 30%.

HMO’s and POS (Point of Service) plans were presumed to rise by about 13% each, but only grew by 11.5%; not so great a disparity as with PPO’s, but significant nonetheless.

Interestingly, we seem to have hit a plateau of sorts. It’s important to remember that trending accounts for only part of the overall rate picture, there are other factors, as well. But it is notable that costs seem to be rising at a much lower rate than had been assumed. Some of this may be due to the increased presence of Consumer Driven Health Care (CDHC) plans, such as HRA and HSA.

Interestingly, in their 2006 Health Plan Cost Trend Survey, Segal notes that “2006 will mark the third consecutive year of lower projected trend rates for medical plans. Still, medical plan trend rates are three to four times the rate of general inflation.” And they also note that “trend rates for prescription drugs continue to moderate and are close to 1998 levels.”

We’ve discussed the impact that prescription medication has on overall health care costs. According to the same Segal report, “trend rates for prescription drugs continue to moderate and are close to 1998 levels." This is good news, especially since the gummint is about to roll out its new Medicare Part D drug program (about which I’ll be posting later this week; stay tuned).

What I take away from this is that the health care market is not in such dire straits as the punditry would have us believe. It’s also heartening to think that the drive toward more consumer driven care may be having a bigger impact than previously believed.

Some Blogservations...

Okay, so Noah Webster I’m not. But I couldn’t think of a more appropriate term to describe what I’ve noticed regarding a couple of my recent posts:

In the past week or so, I’ve published two fairly controversial posts; one on a new book touting nationalized health care coverage, and the other on the issue of medical necessity as it relates to In Vitro Fertilization (IVF).

Both of these tend to be “hot button” issues nowadays, and what became readily apparent is how much thought and care went into most arguments on both sides of these issues. I’ve noticed that on some blogs, the comments section in posts like these tend to be quite vitriolic, but InsureBlog readers have offered cogent and articulate arguments without being argumentative.

Another relatively new (at least to me) phenomenon is the cross-blog (or multi-blog) debate that arose as a result of the IVF post. No less than four blogs are involved in discussing the issue, from several points of view and with respect for others’ viewpoints. I’m not sure why I’m so surprised; perhaps it’s from reading posts and comments at some of the poliblogs, which tend to run to rather heated exchanges, with little actual knowledge either offered or accepted.

In any case, I’m really enjoying the back and forth here, and look forward to reading more of the same. Thanks!!

Medical Necessity vs IVF

In our backyard, we have a woodpile from which we feed our fireplace during those notoriously harsh Ohio winters. This summer, a clan of bees decided to make their home therein, a fact of which I became acutely aware when I went to retrieve some wood for our outdoor firepit. Apparently, bees do not like to have their natural habitat disturbed, and I was treated to a stinging demonstration of their displeasure.

I mention this anecdote because, while commenting on an excellent post over at the Health Business Blog, I have managed to set off a swarm of indignant women: another commenter, Susan opined that In Vitro Fertilization (IVF) should be a covered medical expense, and others soon joined the chorus.

I demurred, thus setting off the swarm.

Because I am an insurance critter, I tend to see these things through the simple lens of “risk.” Risk is defined as “the chance or possibility of loss,”and insurance is all about managing risk. I am of the opinion that lifestyle choices such as IVF do not fall under the aegis of risk management. Now, in my own defense, being of the Y chromosome crowd, I am perhaps less sensitive to this issue than XX’ers [ed: is that even a word?]. Nevertheless, I stand by my analysis.

It may be helpful to define what constitutes “medical necessity,” at least insofar as IVF, or Viagra, or baldness cures are concerned. For example, I readily admit that I am close to actually mainlining Rogaine these days, but it does not seem to me reasonable that my insurance policy should reimburse me for that. After all, no one has ever died or became acutely ill by becoming bald. Likewise, search as I have, I can find no evidence that anyone ever became seriously ill, let alone died, because they were unable to easily conceive.

So, what then constitutes medical necessity? Well, according to the standard industry definition, “medical necessity refers to treatment which is required to treat or care for symptoms of an illness or injury or to diagnose an illness or condition that is harmful to life or health.” Thus, we see that IVF fails to meet the threshold of “medical necessity,” ergo it should not be covered by insurance.

But Prof, you may ask, what about all those other “lifestyle” treatments and medications that insurance covers, like Viagra, or “the pill,” or even hair transplants?

There are actually two answers here. The first is that some med’s and procedures are covered because of competitive pressure (Viagra), or collective bargaining (“the pill”). And some, such as hair transplants, are covered by brute force of the gummint. That is, coverage for such treatments has been mandated by various state and/or federal legislatures, and thus became part of the contract, as well as 17% (or more) of the cost of your medical insurance.

So, when an IVF advocate demands coverage for that regimen, she is saying that she believes that you and I should help pay for her to conceive a baby (or babies). There are only two ways that this is going to happen:

An insurance carrier (or some insurance carriers) will determine that this is an under served market, and offer it as an optional benefit. Of course, this presupposes that there is a huge groundswell of folks who want and/or need IVF treatments, and are willing to pay extra for that coverage, and that other insureds don’t mind the premium increase to cover them.

More likely, though, she means that she wants IVF to be a mandated benefit, and thus advocates that the government should force you and me to help pay for her to conceive a baby (or babies). I may well have had my own plans for that money, but will now have to re-budget because those dollars have been forcibly taken from me, and given to her. Somehow, that doesn’t seem quite fair.

Now, I suspect that none (or very few) of those who advocate coverage for IVF really want to take my money from me, nor would they explicitly agitate for that. But that is precisely what they are advocating, whether or not they realize it. Their argument seems to be that they somehow deserve to have children, and I am standing in their way because I am reluctant to help them pay for that wonderful privilege. By this logic, of course, the costs of adoption should then be a covered medical expense as well. Again, I must pull out my lens, squint carefully through it, and declare that neither of these rises to the level of medical necessity, and wishing that it were so isn’t going to change that diagnosis.

It will be interesting to see how those who favor IVF coverage will address this post.

One Nation, Uninsured: A Review (Conclusion)

In Part 1 we learned about Prof Jill Quadagno’s new book setting forth the case for a national health insurance plan. The introductory chapters tended to focus on anecdotal “evidence,” which I do not find compelling. But the rest of the book follows a more rigorous argument, and at least makes an attempt to justify its conclusion.

Dr Q begins the actual meat of the book by laying out the history of medical care and cost at the beginning of the last century. She traces the evolution from private pay to corporate benefit – how we ended up with employer-based health insurance. By the 60’s, as our population continued to age (as folks started living longer and longer), Medicare and Medicaid became dominant forces in the health care delivery system. The Professor then discusses the genesis of national health insurance that began in the early 70’s, and sets up a sort of conflict between providers and legislators, lamenting the forces of the medical industry’s lobbyists. Of course, this fails to take into account the incredible power of the lobby of “care by government:” the legislature itself.

By the early 80’s, TEFRA ushered in HMO’s, based primarily on the tax breaks such entities would enjoy, thereby legitimizing what we lovingly call “managed care.” Dr Q argues (and I tend to agree) that this marked the beginning of a period of unimaginable premium growth. She seems to set up, however, a sort of tension between federal and state regulators; this particular argument left me unmoved.

The mid-80’s, Dr Q writes, brought us COBRA to “plug some of the holes.”

And then there came HIPAA. The goal was, of course, admirable. But it contains so many provisions, some of which are only now becoming obvious (and onerous), that one wonders why this would be a good argument on which to base the need for national health insurance. It’s as if one built a brand new, 8 lane superhighway, but put barbed wire on the guardrails, and abruptly ended the road in the middle of a pit of quicksand. This makes no sense to me.

Her argument seems to be that the current system is “unfair.” I’ll even stipulate that she’s correct, that the system (as it is today) is unfair.

So what?

Where is the Constitutional prohibition against “unfairness?” Better yet, where is the Constitutional mandate for “fairness?” Because some people are not treated fairly, must everyone else be brought down to the lowest denominator? Wouldn’t it be more “fair” to make an effort to bring those less fortunate up to a better level? Nationalizing almost 15% of the economy in order to help a minority of the population seems pretty silly to me.

If one wishes to see a very real world example of what happens when the gummint nationalizes an industry, try taking a train. The passenger rail system, nationalized in 1971, is hardly a model of efficiency: it is expensive, inconvenient, and not well-known for its timeliness of service. Would we want those traits in a national health service?

I think not.

Is the current system perfect? Of course not. But we enjoy a level of care, as a society, that is unequalled in world history. There are a myriad of cost-effective ways to fix and improve the current system, which well serves over 85% of the (legal) population. Seems a shame to toss it out.

I would like to thank the Oxford University Press blog for the incredible opportunity, and the vote of confidence. And I also appreciate Dr Quadagno’s patience with me as I put together this review, as well as for the initial link that started this whole ball rolling. I certainly hope that I didn’t disappoint.

This Week's Grand Rounds...

may be found over at doulicia, who's done a terrific job of culling and organizing a lot of interesting posts.

BTW, she describes herself as a "labor doula;" I'd never heard the term before. Turns out, "(t)he word Doula comes from the Greek meaning ''in service". A Doula is a Professional Labor Assistant who understands the emotional and physical needs of a woman in labor, and provides continuous support and care for a woman throughout labor and deliver." Interesting.

Wearing Genes to Work, Redux

We’ve looked before at the issue of genetic testing and employment, most recently here and here. Now, at least one company, IBM, has committed to protecting its employees’ privacy by explicitly avoiding the use of genetic information.

In a (very) recent New York Times article, IBM announced its decision to ignore such results in both its hiring practices and when dealing with its various workplace benefits.

On the one hand, genetic testing can be a valuable tool in assessing risk, diagnosing conditions, and finding cures. The concern is, of course, that the information can also be used to discriminate against folks who have markers for certain illnesses or proclivities, but of course have no control over their genetic makeup. By being the first out of the gate on this issue, IBM has set the bar. It’ll be interesting to watch how other companies in the tech sector, and then in the business arena in general, choose to address this now high-profile issue.

Kudo’s to IBM.

UPDATE: Jack from the HealtNex blog has additional information on this story.

Weekly Carnivals...

WooHoo! Carnival of the Capitalists turns two today. Rob over at BusinessPundit hosted the very first CotC, and shares some of its history, as well as some thoughts on where to go from here.

And Hello Dollar's Frank has done a great job with this week's Carnival of Personal Finance. Mosey on over.

A New Transparency...

We’ve talked before about transparency in regard to health care costs. Recently, though, Aetna has really taken this concept to a new level. A new pilot program currently underway in the Cincinnati, OH market aims to make real numbers available to Aetna insureds who choose the Consumer Driven Health Care (CDHC) model, such as HSA or HRA.

We all know that carriers negotiate prices with providers, and we have some vague notion that these prices are significantly less than the “street rate” that doctors (and others) charge patients who either don’t have insurance, or aren’t in-network. Until now, though, we had no idea what those costs really are.

The primary idea behind CDHC is that insureds will make better health care choices if they have the tools to decide what is and what isn’t covered, and how much their out of pocket’s going to be for a given service or procedure. And that’s great on paper; the problem is that we consumers have never really had the one tool that would be most helpful: “how much does that cost?” If one knows ahead of time exactly how much a given service is going to cost, instead of guessing and then waiting for the EOB (Explanation of Benefits), then one can make more informed decisions about that service. Or one could even shop around for the best price (although I’m not personally all that enamored of “shopping around” for healthcare services, I recognize that a lot of folks have no problem with it). After all, even gas stations advertise their prices out front, so we can decide where to go to fill up. Why shouldn’t the same information be available when we’re shopping for an item even more expensive than gas?

According to the WSJ, the negotiated rates for some 600 common services are available, on-line, to Aetna CDHC’ers [ed: is that even a word?]: “For instance, an internist in the University of Cincinnati area charges Aetna or its members $161.32 for a visit from a new patient with moderate to severe problems, while another physician a few blocks away charges $132.23 for the same office visit. The first doctor also charges $41.89 for a chest X-ray taken from two angles, while the latter's price is $34.34.”

Of course, there’s more to this than just raw numbers, and we’ll explore those other issues in Part 2. Stay tuned…

UPDATE: David Williams over at the Health Business Blog has an interesting post regarding a potential downside to consumers' health care decisions based on dollars alone.
UPDATE 2: An exclusive interview with Aetna's Medical Director sheds even more light on this exciting innovation.

Interesting White Paper on HSA's...

Thanx to Jeff over at Tusk & Talon, we learn that Dr David Hogberg (with whom this blogger has corresponded) has a new study out on a number of issues regarding HSA's. He discusses some of the problems of state mandated benefits, and how these interefere with the HSA market. Recommended.

Helpful InsureBlog HSA posts here and here.

Grand Rounds is up...

Dr Donnell over at The Haversian Canal has done a really nice job, breaking down a LOT of posts into interesting categories. Check it out.

L'Shannah Tovah!

Happy New Year 5766 to my (fellow) Jewish InsureBlog readers. May the New Year be one of health and happiness for you and your families.

Blogging will (of necessity) be light the next few days...but your patience will be rewarded.

This Week's Money Must-See's...

JD over at Drakeview has done an outstanding job with this week's Carnival of the Capitalists. He's even created a chart of posting history for the past two years of CotC's history (and you thought I was a geeek!).

Our friends up north host this week's Carnival of Personal Finance at the Canadian Capitalist. I for one really appreciate the easy to read, straight ahead style.

If you participate in a Deferred Compensation plan, then you'll definitely want to check out Joe Kristan's post on some new regulations that are in the mill.

UPDATE: Joe's been quoted in an article in Forbes Online today about these new regs. Congratulations!!

Not Pulling Their Weight...

Turns out there’s real dollars at stake for overweight employees. That may seem like a “dunh” moment, but it’s backed up by some hefty numbers: According to a new study, obese employees are costing their employers hundreds, and sometimes thousands, of dollars a year. These losses come in the form of increased health care costs and higher absenteeism.

The study defined obese based on one’s “body mass index.” BMI is a measure of body weight relative to height, and seems to correlate with body fat. According to the National Institute of Health, a BMI of 30 or higher puts you in the obese category.

What’s particularly interesting is that these costs grow directly in proportion to one’s BMI: for example, the study found that the heaviest 3% of employees accounted for over 21% of health are costs. Ouch!

As this blog has previously mentioned, making healthy lifestyle choices not only makes one, well, healthy, but it also helps to hold down healthcare costs.