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.

Who Pays?

The HDHP debate will probably continue for some time. Who really benefits from these plans?

Our contention at InsureBlog is that (almost) everyone can benefit in some way from the HDHP coupled with the HSA. A recent Kaiser Foundation survey would seem to bear that out.

For example, compared to people with traditional health insurance, those in consumer-directed plans are more likely to say that they always or sometimes ask about the cost of a doctor’s visit before making an appointment (39% vs. 23%) or that they always or sometimes ask about less costly alternatives (57% vs. 38%). And, over half of consumer-directed plan enrollees who have used any services under their plans say that being in such a plan has changed their approach to using health care. Of those, 57% say they changed due to cost considerations.

The observation here supports our contention that those who pay the bills are more concerned about cost containment than those who are simply beneficiaries.

If you pay, chances are you are going to ask how much it costs before making a decision on treatment. If you pay, you may also ask for alternatives that may be lower in cost but just as effective.

If someone else is paying, then price is rarely a consideration.

And there is this.

However, based on these early experiences, it appears to be that consumer-directed plan enrollees are not yet becoming the kind of savvy shoppers that advocates for these plans envision. Relatively few say they have used their plan’s Web site to compare prices across providers (5%) or to compare quality across providers (7%) – essentially the same low rates of comparison shopping reported by those in traditional plans. A small exception may be shopping for prescription drugs, with people in consumer-directed plans somewhat more likely to say they used the Internet to shop for drugs (19% vs. 10%).

Disconnected consumers.

Only 5% use the resources available to compare provider prices. Only 19% compare prices for Rx.

If consumers are this apathetic when spending their own money, how much more so are they when spending the carriers money?

Justice is Blind

OK. This site is about insurance, mostly health insurance. But sometimes a bit of news comes along that is related . . . kind of . . . and I just have to vent. After all, this is a health related issue.

The government discriminates against blind people by printing money that all looks and feels the same, a federal judge said Tuesday in a ruling that could change the face of American currency.

U.S. District Judge James Robertson ordered the Treasury Department to come up with ways for the blind to tell bills apart. He said he wouldn't tell officials how to fix the problem, but he ordered them to begin working on it.

While I have no disagreement with the comment by the judge. Certainly paper money is for the sighted, but blind people have been around since the beginning and money (or some form of exchange currency) for centuries. So why have our courts been clogged with this suit now?

One could also argue that our money discriminates against those who cannot read English.

If this suit continues, what is next? Banks? I mean, why do drive up ATM's have braille instructions?

And you have to wonder about the charge from the bench. Basically, he doesn't care what they have to do to correct this problem, and he has no clue how it should be fixed, but he still wants it corrected.

This guy is no Solomon.

Don't get me wrong. I have nothing against blind people (or any other individual with a disability). But I gotta ask. Who thinks up this stuff?

We Have WAYS to Make You Comply

Massachusetts has implemented the first stages of the Health Care Reform Act, a widely-watched, first-of-its-kind health-care measure designed to provide every Bay State resident with health insurance, in some form. If they don’t receive it from their employers, they themselves will be required to buy it. As of this past October 1, the law imposes fines for employers who don’t offer insurance and, as of next July 1, it will penalize individuals who do not elect to purchase it.

A good idea in principle but I still have my doubts this will work as planned. Something about this article reminded me of Col. Klink in the old Hogan's Hero's TV show.

Health Savings Accounts, which have been growing in acceptance across the country, are one such product (see related feature, page 22). But because Massachusetts is still an HMO-rich state, their acceptance has lagged here, says Tsotsis. He cites an instance in which his company worked for two years to put such a plan in place to cover 4,000 eligible people, but only 100 signed up for it.

Actually, 3% penetration is not that much different from data I have seen nationwide. For the most part, the HSA seems to be more widely accepted in the individual market than it is the employer market.

We will keep our eye on this situation.

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.

Buy It When You Feel Threatened

Derek Dailey, a 28-year-old restaurant waiter and musician in Florence, said insurance is not something you think about "until you're faced with a situation where you need it - when you feel threatened.

"I haven't had health insurance in about five years," he said. "When you have to pick between auto insurance and health insurance... you pick auto - if you have to pick between the two."

Buy it when you feel threatened. Great advice.

Right before the oncoming car hits you, call 1-800-GetHealthInsuranceNow for your coverage.

Makes sense to me.

Price Fixing

A leading state lawmaker says it’s time to consider re-regulating health insurance premiums.

In Syracuse this afternoon, the chairman of the Assembly Insurance Committee told a hearing that insurance companies appear to be in a “get it while we can” mentality, hiking rates now, before the state returns to a system of approving future increases.

Assemblyman Pete Grannis said insurance companies are paying less in claims, and charging more in premiums.

He labeled those trends “unsustainable” and blasted what he called “extraordinarily one-sided contracts” between health insurance companies and health care providers.

Government controlled pricing is great election year rhetoric but has a 100% failure rate, no matter what the industry.

When government opts to regulate prices there is less competition. If carriers are not allowed to receive a reasonable rate on their investment they cease to write new business and eventually withdraw completely from the market place.

As this happens it becomes more difficult, and eventually more pricey, for individuals to secure the coverage they desire. Carriers who remain in the business turn to other methods to sustain profitability such as only offering a limited number of plans, making underwriting more challenging, tightening claims approval and restricting benefits.

Glad I don't live in NY.

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.

This is Where Your $11 Went

Healthcare for illegal immigrants between the ages of 18 and 64 cost American taxpayers $1.1 billion in 2000 — or about $11 per household — according to a study released Tuesday by the Rand Corp

Don't get me wrong. A billion is a lot of money, but most folks will lose $11 in the sofa during the course of a year.

Apparently the Rand Corporation miscounted . . .

The Federation for American Immigration Reform questioned the study's conclusions, saying it estimates the total cost of healthcare for illegal immigrants in California alone at $1.4 billion

Oh yeah, I forgot about those folks. The Federation. Aren't those the Star Trek folks?

Has anyone counted up how much it costs to cover legal residents who can afford but choose to go without cover?

This Won't Help You

but it will help me pay my mortgage.

Wonder what would happen if medicine really did have transparency? Suppose you had access to data that supports less treatment rather than more. What would you do with that data?

The St. Paul Pioneer Press on Sunday examined how a recent study indicates that "hospitals that provide more intense care do not prolong life for patients with chronic or terminal illnesses." According to a study conducted by Dartmouth Atlas, Medicare could spend $19 billion less on end-of-life care for beneficiaries and obtain the same outcomes (Olson, St. Paul Pioneer Press, 11/12).

So, spending more on health care does not produce better results.

Study participants, who were ages 67 and older, had at least one of 12 chronic illnesses and died between 2000 and 2003 (Kaiser Daily Health Policy Report, 5/16). The study found 5% higher mortality rates among heart attack and colon cancer patients who received the most care

In fact, less care has a lower mortality rate.

Some health policy experts also have recommended that health insurers begin to cover palliative care, which focuses on pain management and helps patients consider their options for end-of-life care. Lyn Ceronsky, director of a palliative care program at the University of Minnesota Medical Center, Fairview, said, "It's never 'We don't think you need this,'" adding, "It's 'What are your goals and how can we make sure our care plan really matches them?'"

We don't think you need this, but the government (read taxpayer) is paying your bills, so don't worry.

Beep Beep

The scooter industry may be in trouble.

Medicare officials have agreed to lessen the proposed cuts in reimbursement rates for power wheelchairs and scooters, particularly for equipment used by the most severely disabled.

The new rates announced today will take effect Nov. 15. The changes are part of an effort to combat fraud and ensure Medicare beneficiaries have access to the appropriate wheelchair or scooter, said Jeff Nelligan, a spokesman at the Centers for Medicare and Medicaid Services.

If valid, I have a real problem with this line particularly for equipment used by the most severely disabled. At this point I cannot say if this is editorializing or based in fact.

There are plenty of abuses by "big business", particularly where a mostly unaccountable third party is the payor. I know some carriers in the Med Supp business that limit their payment on scooters. Otherwise everyone on Medicare would have a scooter (and some days it seems like everyone does).

The changes sought by federal officials come after a 2004 study showed that Medicare reimbursements for certain power wheelchairs were far higher than the prices paid by consumers and suppliers. Also, agency expenditures for the equipment jumped from $43 million to $1.2 billion in the eight years prior to the study.

A 28 fold jump over 8 years.

So much for government oversight if taxpayer dollars . . .

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.

Your Tax Commissioner Beckons

The state that gave us witch trials & Teddy Kennedy never ceases to amaze us. The new law requiring citizens to have health insurance goes in to effect next year has some more surprises.

The state's new health-care law contains a costly surprise for municipalities -- a requirement that young adults be allowed to stay on a city or town's group health-insurance plan for up to two years longer than they were allowed previously.

The new law, which legislators passed last spring, aims to help every Massachusetts resident purchase health insurance by July 2007. Young 20-something adults make up a portion of the state's 500,000 uninsured residents.

Currently, young adults cease to be covered as dependents on their parents' health-insurance plans when they graduate from college or turn 23.

But as of Jan. 1, when this particular component of the new law takes effect, that age limit will be raised to 25. And for cities and towns, that will mean coming up with more money so the dependents of municipal employees remain covered.

Wonder how much this free coverage is going to cost once the final bill comes in?

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!

Man Bites Dog

Officials of Massachusetts Gov. Mitt Romney's (R) administration are "now telling Wall Street that they expect" the state's new law requiring all residents to obtain health insurance by July 1, 2007, "to be quite expensive," even though "supporters promised that health insurance could be provided with only a slight increase in expenditures," Sally Pipes, president and CEO of the Pacific Research Institute, writes in a Washington Times opinion piece.

This is news?

According to Pipes, officials now say "the new plan will increase Massachusetts government health spending by $276.4 million in 2007" -- a $151 million increase "over what the public was told the plan would cost as recently as April." She continues that an Aug. 17 bond filing "reveals why Mr. Romney and friends had no problem getting consensus from the health community" and Democratic leaders, noting that according to the filing, the plan calls for $386 million in rate increases for hospitals, physicians and managed care organizations.

In any other industry, this would be known as a bribe.

In addition, current government programs will receive $85.2 million to restore state Medicaid dental and eye care benefits and expand eligibility of the MassHealth program, according to the filing. In addition, the filing also discloses that the "plans being discussed by the panel for low-income people will cost $25 million more than originally projected," which "would put total first-year costs north of $300 million,"

Higher projected costs. I am shocked!

Pipes writes, adding, "Although federal taxpayers are expected to pick up some of this tab, the majority of it will fall on Bay State taxpayers."

And higher taxes for MA residents. When will it all stop?

In addition, the $295 per employee contribution "ceiling" being imposed on employers to help fund the plan will likely "prove to be a floor" because "the extra money must come from somewhere," and "[s]tate activists, legislat[ors] and the Democratic gubernatorial hopeful are already grumbling that businesses need to pay more," according to Pipes (Pipes, Washington Times, 11/5).


I could say I told you so . . . but I won't.

Unnecessary Surgery

A study by US researchers has turned up surprising results – medical care delayed by three or more days gives no benefit to heart attack survivors with mild or no symptoms. The results are specifically aimed at procedures to open clogged arteries, the most widely used treatments today.

Almost all heart attack patients with completely blocked arteries are recommended angioplasty or the procedure to clear arteries if they seek treatment within the first 12 hours following a heart attack. This early treatment helps restore blood flow to the heart. It also preserves the heart muscle and reduces the risks of death due to heart failure.

However the treatment is effective only if given during the 12-hour window. Currently around 30% of acute heart attack patients arrive at the hospital after this period. Writing in the New England Journal of Medicines, the researchers said there is no additional benefit gained from restoring blood flow after three days as compared to standard drug therapy. There is no reduction in the risk of death, a second heart attack or heart failure.

Perhaps the most fascinating thing to me is, a former colleague observed this phenomena some time ago. That was approximately 20 years ago.

So what took the NEJM 20 years to figure that out?

Other Than The Stroke . . .

People still amaze me. Perhaps I have spent way too much time in this business and just take things for granted. There are some things in life that you just ASSUME are common knowledge.

Things like, don't drink and drive. Sure some people do it, but they will admit (at least in their sober moments) that is something they should not do. At least they KNOW drinking & driving do not mix.

Or, just because you have checks in the checkbook does not mean you have enough money to cash them. Yes, some people still try to play the float game, and others just never bother to reconcile their checkbook and have no idea how much money they have. When the check bounces it is a total surprise, but at least they knew the bank would not honor the check if there was not enough cash in the account.

For some reason, these common knowledge things go out the window when it comes to health insurance. Otherwise, why would I have the following come up from time to time?

A woman calls looking for health insurance with an immediate maternity benefit.

How immediate? Most policies have a 9 - 12 month wait but I do have one policy with no waiting period.

That's the one she wants. The one with no waiting period.

Fine. You can get this as long as you are not pregnant now. If we apply now you can have coverage in place by the first of next month.

Oh, well. That won't work.

Why not?

I am due next month.

Click!

Today I had a man call who was looking for health insurance. He is on COBRA but can't afford the $500/month premiums and is looking for something less expensive.

What kind of plan I ask?

Probably something temporary, until I can find a new job. Or maybe on of those HSA's.

Great. Are you taking any meds?

No, I am in good health. No meds. Other than the stroke I had 2 years ago I am in great shape.

I have some bad news for you. Keep the COBRA, it is your only option.

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.

How Much Is . . .?

As much as many consumers hate shopping for cars, that’s nothing compared with trying to get an estimate on the cost of a medical procedure or a routine visit to the doctor.

One consumer health-care survey found that the typical consumer could predict the price of a Honda Accord to within $1,000, but was off by about $12,000 in estimating the average cost of a four-day hospital stay. People guessed an average of $7,762 when the cost was $20,000.

When you don't directly pay for services, but rather allow a third party to be billed, most people have no clue what the actual cost will be.

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...

Forest Gump Insurance

In the movie "Forest Gump" the lead character played by Tom Hanks was noted for saying "Stupid is as stupid does". Insurance buyers are not necessarily stupid, but they are ignorant when it comes to matters of risk management and insurance.

Stupid is defined as "lacking or marked by lack of intellectual acuity", while ignorant is "uneducated or lacking specific knowledge".

I had a Forest Gump client in the last few weeks. Like most of my clients, they were ignorant of the risks involved. The wife had a medical history that was going to be difficult to overcome while the husband was in relatively good shape. As it turned out the wife was declined (not surprising) but the husband was offered coverage.

We chose a particular carrier to submit the application because this carrier is more liberal on cancer history than others. Both the husband & wife are 62 so the rate was not inexpensive. They wanted a high deductible plan. More specifically, they wanted hospital only coverage.

I explained that half of all claims paid by carriers were for hospital charges and what they really needed was a comprehensive major medical plan. I assumed, incorrectly as it turns out, that they would understand my comments about hospital only coverage since the wife had gone through surgery, chemo & radiation for her cancer. She also takes medication in hopes of warding off a return of the cancer.

She was declined; his policy was approved with a $500 monthly premium. They were out of town while all this was transpiring so I sent them an email & left a voice message about the outcome.

She was not pleased at being declined (even though I had warned it was a possibility). She told me they were not interested in the policy for her husband. Seems he had found "just what we need" with a deductible that was half the one I quoted and also half the premium.

Turns out they bought the hospital only plan I had warned them against.

These people are not stupid, but they are ignorant of the risk involved. Ignorant is as ignorant does.

At least that is what Forest Gump would say.

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.

Grand Rounds...

Rita Schwab at the MSSPNexus blog has a terrific 'Rounds this week. In a nod to mod culture, she channels Peter Parker & Charles Emerson Winchester, and a few other "celebs" in between. And THEN, she presents over 45 posts, helpfully categorized and extensively annotated. Enjoy!

Movin' Meat blog (yucky name, neat post) has the inside story on med-mal (medical malpractice) claims. Interesting and provocative.

Red's Blue

Although we're primarily about insurance, our readers' health is also a concern. And so we're disappointed that what was touted as a "breakthrough" technology for the treatment of the dreaded papillomavirus has been found wanting:

"Duct tape does not work any better than doing nothing to cure warts in schoolchildren, Dutch researchers reported on Monday in a study that contradicts a popular theory about an easy way to get rid of the unattractive lumps."

Oh well, back to the ol' drawing board.

Carnival Monday!

This week's Carnival of Personal Finance is posted at City Girl's Financial blog. Our hostess presents us with weel over 50 posts, all categorized and some with helpful commentary.

My favorite will come as no real surprise: Jeffrey Strain gifts us with a "beer calculator." 'Nuff said.

Gill Blog hosts the Carnival of the Capitalists this week. Over 30 posts, all with helpful insights and commentary, fill this great edition.

Execupundit has a neat little quiz, challenging us to match classic movie dialog wioth current mananegment style. Funny, and maybe a bit uncomfortable.

HSA/MSA in the News...

Well, how 'bout that? Two seemingly disaparate demographics are about to be introduced to Consumer Driven Health Care:

Seasoned citizens will have an MSA (Medical Savings Account) option, courtesy of WellPoint. Rolling out in a week or so (November 15), these high deductible Medicare Advantage plans will be coupled with an MSA* administered by ACS/Mellon Bank.

At the same time, officials in the Empire State will introduce a HDHP (High Deductible Health Plan) for the "working uninsured," sole proprietors and small businesses.

Available in January (2007), Healthy NY's HDHP touts a lower premium, which makes sense since deductibles start at $1,150 for singles and $2,300 for families. Apparently, they're also exploring the idea of offering other (higher) deductible choices, as well.

This is definitely a trend we'll be watching.

*Yeah, I'm a bit confused, as well: MSA's morphed into HSA's some time ago, so it's not clear why these plans still use the old terminology. We'll keep you posted.

Safety at Work

According to its website, the Bureau of Labor Statistics “is the principal fact-finding agency for the Federal Government in the broad field of labor economics and statistics.” One of its functions is to track the number (and severity) of injuries we suffer while at work:

We don’t know, of course, what’s caused this decline; perhaps our friends at Worker’s Comp Insider will have some insights. Regardless, this seems to me to be good news.

Insurance Dispatch

Employee Assistance Programs, about which we've written here at IB, are the subject of this week's column now posted at The Medical Blog Network.

Reverse Economics

Supply and demand run hand in hand with price, at least according to economic theory.

As demand increases, so does price at least until supply catches up with demand, then prices fall.

This may be true for food, clothing & transportation but the economics of medical care respond to their own set of rules.

This axiom of economics does not hold in the health care market; at least not according to a 1998 HCFA White paper to Richard Foster. The paper found that when Medicare decides to reduce its fees, the quantity of medical services supplied by physicians actually increases. In fact, a Medicare price decrease led to increased medical service volume and intensity by 31% (significant at the 5% level). A Medicare price increase also increased volume and intensity but the results were not statistically significant.

Other papers have found similar results:

Yip (1994) found that after Medicare reduced the price for coronary artery bypass graftings (CABGs) in New York and Washington, there was a large and statistically significant increase in the volume and intensity of CABGs.

Christensen (1992) looked at the state of Colorado in the 1970s. He found that a one half of a Medicare price decrease was offset by increased volume of medical services and one third of the price decrease was offset by increased intensity of medical services.

Nguyen and Derrick (1997) estimated a behavioral response which was statistically significant only among physicians whose practices received a Medicare price reduction. The magnitude of the response was 40% for these firms.

The following observations are revealing.

Why is this occurring?

First, patients often do not know what type of care they require so they physicians can suggest treatments which may be unnecessary.

Since patients bear little cost of these procedures, their price sensitivity is low relative to the total cost of a procedure. (emphasis added) It is also possible that when Medicare prices decrease, the amount of the coinsurance paid by patients needed to cover a procedure goes down; this demand change may have some influence on the increase in quantity.

Uncertainties in the practice of medicine allow for a variety of practice styles, so even peer review or a physician’s behavior may not be appropriate.

Govt Run Healthcare

In other areas, public hospitals have boards of advisers or directors who devote enormous time and effort to planning for the institutions' future.

Not in Cook County.

Here, public hospitals are run by the government, and that means they are bound by county regulations, hobbled by outmoded business practices and captive to county politics. Practically, it also has meant the County Board president runs the county health system with little effective oversight

snip . . .

Many observers say the setup has left the $830 million county health system adrift, without a clear plan for dealing with existing or future challenges, as financial pressures mount and growing numbers of needy county residents seek expensive medical services.

The only other major city that runs its health system in a similar way is Los Angeles, and that system is teetering on the brink of collapse.

Your Health or Your Wealth?

We blogged recently on the kinds of benefits most American workers prefer. But a new survey, conducted by the American Payroll Association, went a bit further: they found that most of us apparently prefer increased benefits to increased wages:

In a way, that makes sense: wages are subject to taxes, which dilutes their value; benefits are not, and so retain full value. Over 30,000 folks participated in the survey.

Cavalcade #12 - Submissions Due

Just a reminder that submissions for next week's C of R are due Monday (the 6th). Chris at MedBill Manager 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.

Health Wonk Review

Terrific HWR this week, hosted by Jason Shafrin at the Health Care Economist. He includes 16 posts in 5 different categories.

Here at IB, we talk a lot about consumer empowerment, but Social Marketing and Change's Craig Lefebvre warns about the problems of consumer health illiteracy.

Better Late Than Never Department...

Apparently, this week's Carnival of the Capitalists scheduled host went AWOL, and the estimable Jay took up the cause. There are over 40 entries in this edition, each with at least some context. Bravo, Jay, Bravo!

Always a fan of "over the top" thinking, I really enjoyed Long or Short Capital's post on a, um, unique fundraising idea (all for a good cause, of course).

Don't Ask, Don't Tell

Remember from the Clinton years? The "new" policy on happy people in the military?

Now the same applies to health insurance applications.

Maybe.

One carrier now boasts a 17 question health application vs. the old one with 50 or so. The new app is online, shorter, and supposedly 70% are approved in 48 hours.

Supposedly.

I have yet to prove that theory.

Most apps take a 10 year look back on illness, some go back to the day you were spanked. All apps have the Final Jeapordy question . . . "is there anything else you haven't told us, even if we did not ask, that you want to say at this time?".

The apps also ask the agent do disclose anything they know that the client has not disclosed on the app.

The new app only does a 5 year look back on everything except cancer where they go back 10 years.

The Final Jeapordy question is not the new, shorter application. Neither is the agent accountability question.

So what is an agent supposed to do?

I guess it depends on what the definition of is, is . . .

Identity Theft

Why would a blog on insurance post on identity theft?

Good question. Read on.

When I logged in to create this post, I noticed my twin brother from a different mother had beat me to the punch on identity theft. His post certainly brings up a lot of valid points, and you do have to wonder why a carrier would require an FEIN or SS# just to obtain a quote, but this is even more sinister.

I picked up a copy of Readers Digest at the grocery store. Always a fun, and informative magazine, but I have not read it in a while. The cover story on medical identity theft caught my eye.

I believe it will yours as well:

medical identity theft is the last straw; after crooks steal their wallet and max out the credit cards, they turn to the health insurance card for even more freebies. "An insurance card is like a Visa card with a $1 million spending limit," says Byron Hollis, national anti-fraud director of the Blue Cross and Blue Shield Association.