I Call BS!

There's a populist-driven whirlwind racing across the land, based on sketchy data, fear of the unknown, and a firm belief that the gummint is (or should be) empowered to make sure that nothing bad ever happens to us or our fellow Americans.

And no, I'm not talking about (so-called) Global Warming.

Recently, the Governor of Texas decreed that young women must be immunized against the dreaded HPV virus. Here in the Buckeye State, a similar effort is afoot. Other states are even now taking up the banner of this "righteous cause," whose proponents consider those with reservations dangerous, misinformed, misogynistic, you name it.

After all, who could be against the health of our children (see, men are susceptible to HPV, as well)?

Well, I am, for one.

"But Prof," you may cry, "you have two (lovely) daughters of your own, surely you want to protect them?"

And indeed I do.

I do.

It's my responsibility, and part of that responsibility is to make an informed decision. Here on IB we talk a lot about personal responsibility when it comes to health care, and I would be a hypocrite if I didn't walk that walk. So let's take a look at the whole brouhaha through the lens of risk:

HPV is the Human PapillomaVirus (no relation to Papillon, of course), which is a virus that causes abnormal tissue growth (warts) and is often associated with some types of cancer. The Centers for Disease Control suggest that up to one fourth of American women (ages 14 to 59) are infected with the disease. And how do they know this? Oh, very simple: by testing vaginal swab specimens from less than 2,000 women. Yup, that's right: less than 2,000 out of an estimated 100 million women in this age cohort.

Gee, what a great statistical model!

And then there's the question of just how dangerous this "menace" really is: less than 3,700 American women are expected to die from HPV related cancer this year. While that's a terrible tragedy, let's keep a bit of perspective, shall we: about 4,000 people die in fires every year; almost 5,000 drown; 5,500 are hit by cars and die; heck, food poisoning kills some 6,500 folks every year (if we assume, reasonably, that half of those are women, then why aren't we outlawing food?).

And by the way, why just daughters? Dr. Eileen Dunne, the CDC's lead, um, person on this issue, says that "HPV prevalence is thought to be high in men as well, but none were studied." Gee, thanks!

There doesn't seem to be a percentage-based definition of an "epidemic," but according to at least one, it's characterized as "(t)he occurrence of more cases of a disease than would be expected in a community or region during a given time period." If some 25% of women (and who knows how many men) have now been infected by the HPV, then why hasn't the CDC called it an epidemic? Gosh, how many people have to become infected?

Now, I won't pretend to advocate that people avoid this vaccine like, well, the plague. But I darn sure can't agree that it's the role of our government to force our daughters (and again, why not our sons? Are they disposable?) to be vaccinated against a sexually transmitted disease. And no, I don't have my head buried in the sand: remember we talked about risk? Well, look again at those stat's about other causes of death. We could easily outlaw swimming pools and cars, require homes to be built of concrete and furnished 100% with non-flammable items, and eat only specially processed (nuked?) foods.

Why aren't the nannies pushing for that?

Cavalcade of Risk #20 is up!

Renthusiast hosts this end of February issue, with some new faces, interesting categories, and helpful commentary.

Be sure to check it out!

The Renthusiast can tell you, hosting a Cav is fun, easy, and a great traffic booster. For your chance, just drop us a line.

Outsourcing HR

International HR (Human Resource) firm Hewitt Associates recently surveyed some 100 larage companies here in the US. These companies represented about 2 million employees between them, so we're not talking a lot of Mom & Pop Shops.

What they found is that HR executives are increasingly concerned about attracting, retaining, and growing new talent. Toward that end, it's becoming readily apparent that we're in for a period of sustained outsourcing of HR functions:

Carnival Monday...

This week's Carnival of Personal Finance has a celebrity theme (in honor of the Oscars, one presumes). It's a literally star-studded gala of interesting posts, hosted by Henry and Matt at Binary Dollar.

I'm not sure what to make of the fact that our own Mike Feehan is represented by the Guvernator (has the host been reading some of Mike's previous posts?).

And it appears that Joe Kristan, at Roth and Co, must be smiling enigmatically. I'm not sure why, but his post on the importance of accurate record-keeping is a classic.

An Override By Any Other Name...

[From time to time, we’re privileged here at IB to publish posts by esteemed “guest bloggers.” This post, by a gentleman who prefers to remain anonymous, details a disturbing trend in the insurance industry. While we usually prefer not to rely on “anonymous sources,” I can personally vouch for the integrity and inside knowledge that this gentleman brings to the table. Where relevant, I’ve also included links to previous IB items in which he’s had a hand. HGS]

Everyone in the health insurance business has had the subject of overrides come up during their career. Either they have taken part in them, wish they could have, or declined to be part of this monetary form of bribery. Agents and brokers who did “partake” enjoyed extensive additional compensation based on how much business they placed with a certain carrier. They built huge agencies, enjoyed huge lifestyles and grew huge egos. And they steered business to companies that paid the most, keeping out of competition those companies that paid them the least. Some of that compensation is believed to be 2, 3 or even 4 times the regular commission being paid. No one knew what was being paid and it was never disclosed to the customers. This was the equivalent of the Wild Wild West!

In the last two years the Ohio Department of Insurance has investigated this practice in Columbus and other areas (yet to be announced), solicited agreements from Anthem and United HealthCare on the subject, and has recommended the suspensions of agents who have misled their clients regarding compensation. Now Anthem has publicly said they pay “no overrides” of any kind to any agent, just “regular commissions” and any bonus due. While this remains true for the most part, how would a certain local agency pay a starting account manager $70,000 a year, expand and open 2 new offices in Columbus and Cincinnati, continue to hire non-sales personnel and remodel their palatial headquarters every few months with lots of bling? And pay their producers 50% of the standard commissions to boot?

By way of comparison, most large agencies pay their “producers” (that is, the agents who actually write the business) 30 to 40 percent of the commission, and little (if any) of any overrides or bonuses. If a “mega-agency” can afford to pay its producers 20 to 25% more commissions on a given piece of business, it seems likely that it’s making more than “the normal” compensation.

Welcome to the world of “Expense Reimbursement.” This flies under the radar of the dreaded 5500 (industry standard disclosure form). What keeps XYZ Mutual from paying a portion of an agency’s monthly payroll and other expenses? A well-known insurance agents advocacy organization, The “Big I,” recently published an article on this issue as it pertained to our Property & Casualty brethren. In an email exchange with the article’s author, I asked if he’d heard of such a thing on the group side of the business. He replied:

“With regard to the national HMOs my understanding is that volume "bonus" schedules are fairly commonplace for larger producers. I also believe this applies to the traditional group dental/disability/life carriers. However, some of the national carriers are pressing for disclosure of incentive compensation. There has been a feeling that since the Schedule A attachment to the Form 5500 discloses commissions, disclosure is less of an issue. But, some carriers are reviewing incentives such as Expense Reimbursement Allowances because these are undisclosed payments and won't show up on the 5500.”

Pretty amazing if this is going on! Is this another Marsh situation? Is this a level playing field for all? Will competition be eliminated even further? And will the smaller agent be gobbled up by the big agent?

Inquiring minds want to know.

Insurance Dispatch...

In this week's Dispatch, we revisit a previous IB post on how new legislation can help turn health care expenses into tax savings.

Check it out at Trusted.MD

News From the "D'uh! Dept"

I think the headline pretty much says it all:

Meetings make us dumber, study shows

No kidding?

I see this all the time (at carrier “get togethers,” especially). The article sums it up quite nicely:

“The researchers speculate that when a group of people receives information, the inclination is to discuss it. The more times one option is said aloud, the harder it is for individuals to recall other options…”

It’s often called the “echo chamber” effect, and it’s easy to get sucked into it.

I have a few more thoughts on this, but I have to get to, well, you know.

Cavalcade #20: Submissions Due

SPECIAL NOTE: We've been selected by Blog Carnival as their Featured Carnival for February 23rd. We'll be "splashed" all across their homepage all day!

Submissions for next week's CoR, hosted by Renthusiast, are due this coming Monday (the 26th).

You can submit your (or someone else's!) risk-related post via:

Blog Carnival

or

Email

Please include:

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

PS We're scheduling hosts for early Spring '07, so don't wait too long to sign up!

HSA: More Good News

I have a healthy skepticism when it comes to “breaking news” from insurance companies, even when that news tends to confirm that which I already know to be true. So, I was initially a bit dubious when I saw the title of this email which came across my monitor: “New HSA Data Reveals Positive Consumer Engagement.”

Among other entities, UHC (United HealthCare) owns a third party administrator (TPA) called Definity, and a financial institution (BANK) by the name of Exante [OT: how come there was so much gnashing of teeth when Barnett was handed down, allowing banks into the insurance biz, but when carriers seek inroads into banking, not so much?]. UHC uses the former to administer its Consumer Driven products (HRA, HSA, etc) and the latter to handle the actual funds.

In the event, UHC commissioned a study for the 2005 plan year, the purpose of which was to determine what effects, if any, Consumer Driven plans would have on insureds and their behaviors. The results, based on 25,000 covered lives, are striking:

As I had long suspected (based on the experiences of my own clients over the past 15 or so years), consumers are using their accounts as savings tools, including investment options as a means toward even greater accumulation. Some 86% of those in CDH plans (HSA-compliant) had opened an account, with an average balance of over $800 at year’s end.

Unlike their MSA forebears, HSA plans allow both employers and employees to make contributions (with MSA, it was either one or the other in any given year). And folks are taking advantage of that flexibility: over 2/3 of employers contributed at least some cash to their employees’ plans. What’s more, the average employer contribution was almost $900. And a similar percentage of employees contributed to their own accounts, to the tune of $1,200 (on average). Not too shabby.

Perhaps more interesting was the unexpected: nationally, some 60% of those who opt for High Deductible plans actually set up an account. But well over 80% of the folks in the Definity group set them up. UHC hypothesizes that this is due to employers using “an integrated health plan and bank account model.” I’m not sure that’s true: the key phrases here are “employer” and “employee.” That implies that most (if not all) of the 25,000 folks in the survey were covered under group plans. Most employers would want to keep things simple, and thus look towards setting up as seamless an arrangement as possible. Hence, the high percentage of health plans integrated with savings accounts.

Not surprisingly, the greatest single influence on the account opening rate seemed to be employer funding; that is, 91% percent of eligible employees opened an account if their employer made a contribution. Anyone that’s installed a qualified retirement plan (401k, SIMPLE, etc) knows that employee participation is heavily dependent on employer participation.

The other good news in this report is a decent fisking of one of the more pernicious criticisms of Consumer Driven Care: that such plans favor higher income individuals.

Not. True.

Some 80% of eligible low-income employees (those earning less than $25,000 annually) opened an HSA. And over 50% of these made their own contributions to the account, as well.

About the only thing that surprised me was that the size of the group mattered. That is, almost 90% of employees in large groups (5,000+) open an account; that drops to about 80% in small groups (1-99).

Go figure.

Wonky Thursday

Julie Ferguson, of Workers Comp Insider fame, hosts a terrific Health Wonk Review. In fact, it's the First Anniversary of HWR, and Julie presents a fitting tribute, with 14 excellent posts, and excellent context support.

Remember Y2K? Well, we're leading up to DST2k7 (not to be confused with MST3K). Confused? Don't be: read Shahid's post on the potential impact of the new Daylight Savings Time rules.

On Letters...

Regular IB readers may notice that the suffix following my name has changed. I recently earned my CBC designation, after a relatively short but very intensive course of study.

The initials stand for Chartered Benefits Consultant, and is awarded by the National Association of Alternative Benefits Consultants. Very briefly, the designation reflects a more indepth knowledge of so-called "alternative benefits" (such as FSA, HRA, etc) with special emphasis on the burgeoning field of Consumer Directed Health Care.

Since I've been intimately involved in that last for some 15 years, it seemed logical to make it a bit more "official;" hence, the designation.

I'd like to thank the academy...er, uh, my co-blogger Bob Vineyard for manning the fort late last week, as I was in class for two full days finishing up (BTW, his post on Stupid Doctor Tricks garnered the most ever hits for IB -- Congratulations, Bob!). I took the test on Saturday; some multiple choice, the bulk essays on specific case studies.

Anyone interested in my final grade is free to ask.

HOPE and Alphabet Soup

Bet you never heard of the Health Opportunity Patient Empowerment Act of 2006 (HOPE). No? Don’t feel too bad, most folks haven’t. Briefly, the Act, aka H.R. 6134, set out to clarify some confusions in how Health Savings Accounts (HSA’s) are managed.

Let’s pause a moment to review some favorite acronyms:

FSA: Flexible Spending Accounts. These ubiquitous jobbers were all the rage for a while, because they let eligible employees sock away tax-free dollars for unreimbursed health care expenses (and premiums, and day care). The downside: the notorious “use it or lose it” provision, which requires you to spend any moneys in the account.

HRA: Health Reimbursement Arrangements. These relatively new creatures enable employers to reimburse you for medical expenses, but you usually have to spend at least some of your own money first. The upside is, it’s your employer’s money going into the account; the downside is that you can’t cash it out if you leave (although some HRA's let you spend them down post-employment).

HSA: Health Savings Accounts. These are descendents of MSA’s (Medical Savings Accounts). Again, you put your own money in, pre-tax, but there’s no “use it or lose it” problem; the money just keeps rollin’ over. And, your employer can make deposits to the account, too. The downside to these is, well, I’ll have to think about that. Really, the major drawback (if it is one) is that you have to couple it with a special High Deductible Health Plan, which neither the HRA or FSA require (although it’s generally a good idea to use one if you’re going for the HRA).

IRA: Individual Retirement Account. What the heck’s an IRA doing in this discussion? Well, in case you didn’t know it, you can use your IRA to “seed” a new HSA, if you’re so inclined. Cool, hunh?

So, what’s all that got to do with HOPE? Well, in addition to using your IRA to help kick-start your HSA, you can use funds from your FSA, as well. That is, if there’s anything left in it. Since a lot of folks do end up with balances at the end of the year, there’s usually a mad rush for various medical expenses in December and January (the law says that FSA’s may be used up to 75 days after the end of the year; your plan may or may not have that provision). So your local One Hour Lens Mart may see a big spike in prescription sunglasses, for example. But what if you really don’t need to use those funds, but don’t want to lose them, either?

Well, HOPE to the rescue. Turns out, the law permits some FSA account holders a one time transfer of unused FSA assets into their HSA (offer good until Jan. 1, 2012), and those with HRA’s get the same privilege. That’s a good deal, because it means that folks can really pump up their HSA’s, cushioning the potential blow of a large claim. For those with an FSA, the deal’s good because it means that they don’t have to use their funds or risk losing them; for those with an HRA, it’s a way to make those funds portable.

Of course, if you do move the funds from an FSA or HRA, you don’t get to deduct the transfer from your taxes. But that seems a small price to pay for greater flexibility, and ownership. And in case you’re confused by all of this, the new guidelines include 13 examples showing how IRS officials want employers and employees to apply the new procedures.

Now you know.

ADDENDUM: A small, overlooked provision in President Bush's health care proposal would render much of this post moot. One part of his plan deletes the tax deductibility of medical expense FSA contributions. Ooops.

Manny’s Mandate

The New York Post reported 18 February:

“Poor New Yorkers will be entitled to free or low-cost medical treatment, under new rules meant to prevent hospitals from denying care to the uninsured.”

The new rules are actually final regulations implementing “Manny’s Law” - a mandate passed in New York about a year ago. That mandate strengthened earlier mandates requiring that hospitals give financial aid to indigent, uninsured patients. Among other things, the final regulations add a requirement to tell uninsured indigent patients that they are entitled to charity care. Sounds reasonable to me. After all why would a hospital want to keep that a secret, especially for a life-threatening condition? Read on.

“Manny” is Manual Lanza, a young New Yorker who was turned away from St. Lukes-Roosevelt Hospital in late 2005 because he had no insurance. Doctors and administrators at the hospital insisted he obtain Medicaid before they would agree to treat him. They did not tell him about other financial assistance available thru the hospital under existing New York law or, in fact, offer to help him enroll in Medicaid for which (I’m assuming) he was eligible. Manny subsequently died.

For many years, New York has mandated that its hospitals provide care to the indigent. Prior to 1997, hospitals tacked the cost of uncompensated care onto their bills for insured patients. Starting in 1997, New York began to tax insurance plans based on NY hospital benefits paid. Proceeds of this tax are placed into a pool managed by NYDOH and distributed among hospitals in New York. Of course, it’s the insured people who bear the ultimate cost of uncompensated care, whether financed by additional hospital charges or by taxes.

The state considers the provision of hospital services to be an entitlement for the indigent, and I agree the entitlement is necessary under present conditions. Because the entitlement is not called “insurance,” indigent persons receive hospital care and are still counted as “uninsured”. This meets the social need while pleasing the New York majority party, too, by not reducing the count of uninsured.

So what does this mean?

1. The uninsured “problem” is less serious than advertised. Despite the headlines and hustlers shrieking otherwise, “no insurance” does not really mean “no health care”.

2. Fix Medicaid, fix that problem. The number of uninsured Americans rises from the failure of Medicaid to fulfill its mission to insure the poor and working poor - because the clear majority of the uninsured are the poor and working poor.

Stealing private health information is not just about identity theft

“The case involved the theft and transfer of medicare patient information from the Cleveland Clinic in Weston, Florida. Defendant Ferrer Jr. purchased the patient information from co-defendant Isis Machado, a former Cleveland Clinic employee, who pled guilty on January 12, 2007 and testified against Ferrer at trial. The theft resulted in the submission of more than $7 million in fraudulent medicare claims, with approximately $2.5 million paid to providers and suppliers. According to the Justice Department, this is the first Health Insurance Portability and Accountability Act (“HIPAA”) violation case that has gone to trial in the United States.”

Read the whole Justice Department report here.

This theft of data led to fraudulent Medicare costs – paid for by our tax dollars. There is no reason to believe that private health plans are immune to similar thieves who want to cash in on fraudulent insurance claims, thereby driving up the cost of your insurance and mine. How much of this happens? The scary but true answer is: many have estimates, but no one really knows.

Patients, their family members, doctors, insurance companies and even lowly benefit managers have expressed frustration at the privacy rules arising from HIPAA. It’s true, these rules sometimes seem calculated to stop all the wheels of commerce at one swell foop. However it's important to understand more of the total story.

This case reveals a bit more of the total story - what the government is trying to prevent. Note that this is the first HIPAA violation that has gone to trial. If this is the kind of culprit that the feds are going after using HIPAA, I say more power to them.

Carnival Monday...

Sanjay Kumar, host of Simplify This, hosts a terrific Carnival of the Capitalists. In keeping with carnival founder's Jay's push toward greater relevancy, Sanjay culled about half the submissions, leaving, hopefully, "the best of the best." Even so, that's still over 20 terrific posts (including our own Bob Vineyard's submission on the perils of "going bare").

Two posts stood out: Joe Kristan, of Roth & Co, points out that not all public policy problems are necessarily tax problems. And David Maister discusses a true-life ethical dilemna, representing some major bucks and future business, and shows that "honesty (literally) pays."

The Carnival of Personal Finance is also up at Stock Market Beat . There are over 40 posts, in 9 interesting categories, with plenty of context, and a beautiful illustration.

Surfer Sam has a terrific post on Living Trusts, which are great places for life insurance plans to reside.

Insurance Dispatch...

An elite group of hospitals gets an A+ in saving lives, and empowered consumers want to know which ones. In this week's dispatch, we learn about a company that can help you find out.

Available now at Trusted.MD

Consumer Driven Health Care in action...

For the last several years, my family has been covered by a small business plan from Blue Cross of California. We’ve had one of their better PPO plans, with a $250 deductible and a $20 doctor’s office copay. Each year, as our renewal came around, the price has jumped up…most recently from a monthly rate of $1183 to $1358.

$16K per year for health insurance is simply too much. We just switched to Blue Cross’ $2400 deductible HSA plan. The premiums dropped by $785 per month…$9420 per year…for a plan with a family out-of-pocket maximum of $5500. This year I’m saving more in premiums than the worst-case annual claims. On top of that, there’s the tax savings on expenses that are run through the HSA account. Altogether it’s not a bad deal.

But, now when I go to the pharmacy, instead of paying $15 or $25 per prescription, I’m paying full freight, at least until I meet my deductible. So I decided to call around and see what a few local pharmacies would charge for a month’s supply of my latest cholesterol med, Simvastatin (the generic form of Zocor). The results were illuminating: Walgreen’s: $146 Longs: $88 Target $55 Costco: $13.56. That’s almost an 11:1 range in prices.

When I was paying a flat price per prescription, convenience was the determinant factor in filling a prescription. Walgreen’s is around the corner. Costco is 6 miles away. Sorry, Walgreen’s. From now on, I’m driving to Costco.

Cavalcade of Risk #19 is up!

SuperSaver has a sweetheart of a Valentine's Day CoR, complete with mouthwatering illustration.

Be sure to indulge yourself!

And don't forget, you can host a Cavalcade, too. Just drop us a line.

A Sweet Grand Rounds...

The Chronic Babe hosts a 'Rounds that would satsify any sweet tooth. With almost two dozen cavity-inducing entries, you'll be amazed (and impressed) with these nougats of the medblogosphere.

(I know, I may have overdone that last)

Given the theme, it seems only fitting to highlight this Diabetes Mine post, a letter to her pancreas. Well done, Amy!

Mental Health Parity

The Wall Street Journal today (13 February) reports the introduction of a Mental Health Parity bill in the Senate. This Bill would build on the Mental Health Parity Act of 1996 and require that, if mental health expenses are covered in an employer group insurance plan, they must be reimbursed the same as other health expenses in the plan i.e., cost-sharing, inpatient care, and outpatient care. Despite its name, the 1996 Act did not require full parity with other health benefits. The current Bill would produce full parity and therefore represents an expansion to mental health benefits in group insurance plans. The Bill requires States to go along, perhaps simplifying the rules for plans whose participants are located in more than one State. Employers having fewer than 50 employees would be exempt.

As reported, this Bill claims not to “mandate” inclusion of mental health in group health plans. Plans that presently do not cover mental health expenses would not be required to add such coverage, and plans now offering mental health benefits could delete them; as both of these possibilites seem far-fetched for employers having more than 50 employees, in practice this Bill is effectively a mandate.

There is a cost test – if benefit parity would require an increase in cost of more than 2% in the first year and 1% per year thereafter, the plan sponsor may “opt out” from the parity requirement although the nature of future cost tests is not mentioned.

The reporting is not clear whether the requirement applies only to insurance companies or also to the group plan sponsors such as employers, labor unions, governments, etc. Understanding this would help clarify whether the requirement falls only on insured plans or might also affect self-funded plans.

Apart from cost, I wonder about the effectiveness of outpatient behavioral care. I believe it’s still true that generally-accepted “best practices” and treatment protocols are not so well-developed and uniformly applied for behavioral health as in other branches of health care (where, BTW, substantial variation exists), which I think means there is less assurance of effective care. That is one reason why benefit plans have historically limited the coverage for such care. One thing for sure, the cost of the added coverage will be measured in tangible dollars.

The National Institute of Mental Health estimates that 25% of all Americans have at least one “diagnosable mental health disorder”. The providers represented by that organization stand to gain financially from this Bill. I believe NIMH and the behavioral health providers owe plan sponsors and the public in general, tangible and specific explanations as to how patients will benefit from the additional care, were this Bill enacted into law.

Carnivale!

This week's Carnival of Personal Finance is hosted by 2 Million blog. It's got a Rio Carnivale theme, and it's chock full of interesting financial advice (with a mind-numbing 65+ entries!). Great job!

Believe it or not, I did find one that just really stood out: over at the Credit Cave, you'll find an excellent piece on ethical considerations you should explore when looking for a financial planner.

ADDENDUM: This week's Carnival of the Capitalists is finally up, but I won't be linking to it.

Why not, you ask?

While I'm no fan of "themed" carnivals, I can appreciate that a prospective host may choose that route, if for no other reason than to keep the number of entries manageable. However, it is incredibly stupid to do so without announcing -- in advance -- that one is doing so, and what that theme is.

'Nuff said.

Insurance Dispatch...

Genetic testing is back in the news, and this week's column has the latest as it relates to insurance and employment.

Check it out at Trusted.MD

Terror Insurance...

Some time back [ed: that would be July of ‘05] , we reported on a horrific sales contest that rewarded insurance agents who adopted a “Bin Laden strategy” in their sales efforts. Although it was beyond tasteless, it was an essentially harmless bit of corporate stupidity; the only ones hurt were the managers who came up with this idiotic scheme.

Unfortunately, life has imitated art, after a fashion: Jordan’s Arab Bank has set up a quasi-insurance plan for families of Palestinian homicide-bombers. The “deal” is fairly simple, if not disgusting:

“In February 2002, a similar ad was placed in another publication, Al Hayat Al Jadeeda, again asking families of "martyrs" to go to the Arab Bank in order "to receive the tenth payment, totaling $5,316 for each family, donated by the Saudi committee." The generous donors ended up giving $1,594,980 to some 300 families in the occupied territories via the Arab Bank.”

Basically, the terrorists’ families are instructed to open an account at their local branch, into which will be deposited some $5,000. It’s not really “life insurance,” since there’s no underwriting or an actual policy (among other issues). But since someone has to die in order for a “beneficiary” to collect, it certainly mimics such a plan.

Words fail me.

Pay No Attention...

Regular IB readers know that we (okay, I) have somewhat of a fixation regarding transparency in health care. I’ve often used the McDonald’s Model (e.g. flu shots: $5, appendectomies $450, etc) to illustrate the point.

But we’ve also pointed out that prices are not the only (nor, often, the most important) factor: quality of care and outcome of process are key, as well. As more carriers bring their transparency programs online, and as consumers make more use of them, it seems reasonable that there may be a (for lack of a better word) backlash against the process.

And so there has been:

“Regence BlueShield and UnitedHealthcare informed [Dr] Kelly that he failed to qualify for their respective designations as a high quality doctor…a family physician in practice outside Tacoma, Wash., who is now suing Regence over its program.”

Dr Kelly believes that he was inappropriately singled out for exclusion in Regence’s now discontinued rating program. Which is an interesting, if not surprising, development: as such programs become ubiquitous, providers are going to be under increasing scrutiny for cost/benefit ratios. It’s a conundrum, of course; balancing the patient’s right to appropriate medical information and care with providers’ right to practice medicine as they deem fit.

"We're concerned that as insurers try to maximize profits they are saying that the doctor that charges the least amount of money is the highest quality," said Dr. Jim Rohack, a cardiologist who is an AMA board member.”

Of course insurer’s seek to maximize their profits, as would any other business. But it seems to me that the issue is more complex: the patient also wants to maximize his health and well-being, and any tool that can help him in this regard should be available. Of course, this presupposes that the patient wants to maximize his well-being, and that may not always be the case.

There are, of course, instances where using these tools is pretty much out of the question: an emergency heart surgery comes to mind, or a stroke. There are, undoubtedly, countless other such exceptions. But for routine, preventive or elective procedures, having such information available is a necessary stepping-stone to consumercentic care.

For their part, doc’s claim that such tools tell only a part of the story: “an insurer may look at an older female patient's claims data and see that she hasn't had a mammogram — information that would reflect badly on a doctor. But that record won't show that the patient simply refuses to get a mammogram.” A reasonable argument. But one wonders whether that is the exception, rather than the rule.

Another problem is availability of information. Minnesota BX’s program relies on consistently updated records, but that requires an investment in electronic infrastructure, both at the provider and carrier levels. As more providers move to EMR (electronic medical records), we may see some relief in this area.

Perhaps the most obvious answer is the simplest, provided by Aetna’s Dr. Charles M. Cutler: “The key is to work with physicians so they understand the product and the rating system.”

Ya think?!

Cavalcade # 19: Submissions Due

Submissions for next week's Valentine's Day CoR, hosted by SuperSaver, are due this coming Monday (the 12th).

You can submit your (or someone else's!) risk-related post via:

Blog Carnival

or

Email

Please include:

► Your blog's url

► Your post's url

► The trackback url (if applicable)

► A (brief) summary

PS We're scheduling hosts for early Spring '07, so don't wait too long to sign up!

Structure and Form...

According to the Integrated Benefits Institute (IBI), business executives are looking for ways to better manage their employees' health-related productivity. Managing absenteeism and "presenteeism" are also high priority items. One way to accomplish these goals is by reconfiguring benefits packages. Not surprisingly, managing (reducing) healthplan costs is the number 1 priority, but a close second is managing "all health related costs."

At least the IBI (and the executives it surveyed) understands the difference between health insurance and health care.

One way these folks intend to rein in costs is by promoting more personal responsibility among employees, including sharing more realistically in health insurance, and health care, costs. We're also seeing much more emphasis on preventive care and healthy lifestyle choices. Again, this shows that employers understand that health insurance costs can be positively impacted by health care costs.

Health Wonk Review - 25th Edition!

David Harlow, proprietor of the Health Blawg, hosts this week's compendium of policy and polity. David presents some 16 interesting (and diverse) posts, offering a lot of helpful context and useful summaries.

"Spring forward, Fall back" may not seem to be strictly "health" related, but Shahid Shah explains why we need to be aware of an important timing change regarding the, well, time change.

Truth or (Unintended) Consequences...

Back in October, Bob reported that New York's newest mandated benefit, the Mental Health Parity Act (aka "Timothy's Law") would take effect with the new year.

And so it has.

Beginning some 5 weeks ago, carriers who want to continue marketing in the Empire State must cover mental health claims much the same as they cover any "regular" medical condition. As Bob pointed out, New York's version of MHP is particularly draconian, because it lacks a safety valve that would help contain runaway costs.

The new law mandates that health plans include 30 or more days of active inpatient care, as well as at least 20 days of active outpatient treatment, per year. In addition, mid-sized group (50 or more covered lives) plans have to cover:

■ schizophrenia

■ major depression

■ obsessive compulsive disorders (Hello, Monk!)

■ bulimia AND anorexia

■ serious cases of attention deficit disorders in children

■ disruptive disorders

■ pervasive development disorders

As you can imagine, this won't come cheap. "But Prof," you might object, "the state general fund is supposed to help subsidize small employers’ purchases of the new mental health benefits!"

Um, who funds the general fund?

That is correct: the taxpayer.

So once again, we have the state foisting extraneous coverage onto an unsuspecting public, which will cause rates (and taxes) to increase.

But hey, it's for a good cause.

Insurance Lagniappe...

Lagniappe is "a little extra" left over when preparing a feast, a sort of unexpected gift. And since I'm more likely to cheer on Iron Chef Chen than Quarterback Rex (or whomever), I'll stick with the food metaphors, instead of Monday Morning Quarterbacking:

■ Officials in Washington (as in Starbucks, not Senators) have fined our old friends United HealthCare almost $60,000. What was it this time? UHC apparently used an unapproved contract for its chiropractic providers, even though they'd been warned previously about that very thing.

$60,000. UHC. Hmm...somebody's petty cash is gonna be hurtin' this week.

■ Italian insurance company Assicurazioni Generali has some financial issues, as well: they're on the cusp of a deal to resolve some claims arising from the Holocaust. This has been a particular bone of contention: among other things, how does one file a claim for whole families that were wiped out?

Adding insult to injury, some claimants will receive the equivalent of $1,000. Doesn't seem quite, um, kosher.

■ Texas-based management consultants Robert E. Nolan Co recently surveyed the life insurance industry. Among other things, they found that insurers are looking toward more widespread adoption of e-signatures and online applications, as well as better document management and workflow.

I think that means we'll be seeing more Carpal Tunnel claims.

Carnival Monday!

The Carnival of the Capitalists is up. Head on over to the Mighty Bargain Hunter for a generous helping of financial advice, insight and ideas. With some three dozen entries, there's bound to be something you can use.

Two items stood out for me this week: The aptly named Jon Swift suggests lowering the minimum wage (both here and in Lilliput, one presumes). And Joe Kristan reports on Iowa's move to bring a little Hollywood to the bread-basket.

Insurance Dispatch...

In this week's 'Dispatch, we recapitulate our explanation of Community Rating, and why it's a flawed methodology.

Check it out at Trusted.MD

Another reason for universal health care?

Here is, verbatim, perhaps the most bizarre lead paragraph in the history of health-care related newspaper articles:

"A doctor pleaded guilty yesterday to stealing a hand from a cadaver at the University of Medicine and Dentistry in Newark. The hand was later found by police at the home of a stripper."

Paris Hilton was apparently not involved.

Death and Taxes - Indeed!

FoIB Joe Kristan points us to a disturbing item at The Tax Foundation blog.

First, the good news: the much dreaded estate tax is due to phase out in 2010.

Now, the bad: It's set to come back, full force, the following year.

So what's so "disturbing?"

Read the Tax Foundation piece...but keep Gramps away from the monitor when you do.

Gimme a Break (a tax break, that is)

Actually, Missouri governor Matt Blunt plans to do just that: in order to encourage employers to offer group health plans, those that do will see their state franchise tax waived.

And that's just one of his six principles for reducing the number of uninsured folks. He's also proposing a health insurance purchasing pool for individuals without health coverage (more than 30 states have some form of risk pool). He also favors allowing employers and employees to pay health insurance premiums with tax-free dollars (although that one's a puzzler: most group plans are set up to do just that, and Section 125 "POP" plans are pretty inexpensive options for those that don't).

On the Medicaid front, the governor proposes expanding wellness and disease management services, and performance-based compensation for providers. Not bad.

Governor Blunt also favors making long term care insurance premiums 100% deductible.

By far the most ambitious aspect of this is his showcase plan, MO HealthNet, which would replace the current Medicaid program. The goal would be "improving health care for low income Missourians by giving participants meaningful choices...[and] empower participants by providing opportunities for prevention and wellness." A lofty goal, but perhaps attainable. After all, he's willing to put up $20 million of taxpayer funds to see these changes implemented.

I'm actually rather pleased to see this: as mentioned before, I'm a proponent of state-based health care and health insurance initiatives. This pilot program should add valuable data as we see what types of changes work, and which ones fall short.