Thursday, July 31, 2008

Continuing Education: An Ethical Conundrum

In addition to selling and writing about insurance, I'm also a licensed Continuing Education instructor for Ohio, Kentucky and Indiana. These states require (as do, to the best of my knowledge, all states) licensed insurance agents to have a certain amount of updated knowledge of our industry and the laws and agencies which regulate it. The number of hours vary, but they are not insubstantial.
Other industries have similar requirements: lawyers have CLE, accountants must take CPE courses, and physicians have CME classes.
Costs for these courses vary, depending on industry and subject matter. But it can get expensive: I recently complained about the $100 charge for an 8 hour long term care course I was required to take. That is, until I asked my better half (a certified Project Management Professional) how much her courses cost, and was told that $30 an hour was a "good deal." And my surgeon brother-in-law told me that CME can run $100 (or more) an hour.
But that's only if you pay for it.
Many industries allow (encourage?) vendors to sponsor CE classes, at no charge to the actual licensee (doctor, lawyer, agent, whatever). So one might have BMW pay for lawyers' CLE classes, or Anthem pay for insurance agents' (this is more ubiquitous than you might have thought).
Or Pfizer paying for doctors' CME courses.
Apparently, that last is too much for the nanny-statists at the American Medical Association. I received an email (not sure why) that "actions are in motion by the American Medical Association’s Council on Ethical and Judicial Affairs (CEJA) and proponents to eliminate commercial support of certified CME."
The Council's concern is that there's an inherent conflict of interest when a vendor pays for CME for a physician. I'm not sure I buy that, unless the vendor is also the instructor. The email went on to inform me that "the Accreditation Council for Continuing Medical Education (which accredits providers of CME) found ‘no evidence to support or refute the assertion that support biases CME’." Granted, that's lukewarm, at best. Far more telling were the results of a recent poll claiming that "92% of physicians disagreed with the Committee’s call to end commercial support of CME." Of course, these doc's have a vested interest: free CME beats $100 an hour CME every time.
So what's this got to do with insurance?
Well, as I mentioned above, I teach CE myself, and we're paid (directly and indirectly) by carriers to do so. That is to say, the agents who take our classes don't pay anything, our fees are picked up by carriers. And as regular readers know, I don't carry any insurance company's water. So how does that work?
Well, it's pretty simple: a carrier wants to present itself in a positive light to its customers (agents), and so it offers "free CE." It's not really "free," of course: the company pays us so that the agent doesn't have to. And the company chooses the topic (from a rather extensive "catalog" of courses). We're the licensed providers, and we write and develop and file - and teach - the courses. The carrier's involvement stops at the classroom door, and then picks back up when we present our bill.
So where's the conflict of interest?
And why would that be any different for doctors, or lawyers, or accountants?

Wednesday, July 30, 2008

The Grift of the Magi?

The (unfortunate) headline reads like a convoluted novel:
The good news, such as it is, is that this is not a hit piece on organized religion. Rather, it's a report on the (alleged) shenanigans of some local health care providers. It's an insight, as well, on how "the system" works:
"The suit seeks damages from Christ Hospital, the Health Alliance of Greater Cincinnati, Ohio Heart and Vascular Center and the now defunct Medical Diagnostic Associates for an alleged kickback scheme in which Ohio Heart and Christ Hospital traded referrals for patients whose services were billed to Medicare and other federal programs."
What's interesting (frightening?) about this is that there's no indication of actual monetary damage. No allegation that Medicare was billed for fictitious services, or that patients were treated for non-existent maladies. It seems that the appearance of impropriety is enough to warrant legal action.
In some ways, this is not unexpected.
About a year ago, we reported that Christ Hospital had actually parted ways with the Cincinnati-based Health Alliance. The news account mentions that the (alleged) violations occurred over a seven year period, ending in 2004; this would certainly jive with the date of the "break up." During that time, the feds say, physicians were "rewarded" for throwing business to the alliance and its hospitals.
We've talked before about the inherent conflict of interest when physicians have ownership in various other medical-related industries. Doctors are human, after all, and subject to the same temptations as the rest of us mortals. It appears that the Health Alliance took advantage of this fact (and I didn't see anything in the story indicating that they had to force the doc's to participate), and ended up profiting from it (as did the doc's, apparently). The good news is that at least one physician, a Dr Harry Fry [ed: how ironic is it that a cardiologist is named Fry?], warned the Alliance that the practice was illegal, but was apparently ignored.
I suspect that, ultimately, the real issue will turn out to be "who was harmed?" There's a lot of finger-pointing going on right now; we'll let you know how it ends up.
[Hat Tip: Holly Robinson]

UHC and OhioHealth: Update

About a month ago, we learned that United HealthCare had pulled a little faux pas (literally, fox's paw) by (erroneously) notifying some 176,000 insureds that their provider of choice, OhioHealth, would no longer be in-network. To say the least, they chose poorly.
Now, though, it's time to pay the piper, to the tune of a quarter of a million dollars (or, as insurers call it, petty cash). That's a heck of a fine for some letters, especially since the two parties eventually inked a deal.
The fine itself amounts to $150,000; the balance is for unspecified "administrative costs". I bet.

Car 54, Where Are You (and how's your insurance)?

A few months ago, we reported on efforts by some insurers to link data from folks' GPS systems to their insurance rates. The idea is that by monitoring where insureds traveled (and how long it took them to get there), and other data, the carrier could more accurately assess (and rate for) the risk. On its face, this seemed innocuous enough.
But there are also privacy concerns, and worry over just how this data will be used. And, over course, there's a "slippery slope" from insureds voluntarily submitting this data to legislation mandating that it be supplied.
Progressive Insurance (headquartered here in the Buckeye State), has introduced a new program that sort of straddles that line:
To some extent, this makes sense. For one thing, auto insurance employs many of the same principles as health insurance: stop-and-go driving, peeling rubber, and such might be likened to smoking or high fat diets. All of those indicate a higher risk, and should generate a higher premium to offset it. And the program is voluntary: Progressive "has begun offering its drivers the chance to cut their costs based on how they actually drive."
So far, they're not requiring it.
But that could change: I recall some years ago that at least one insurer sent out an innocent-looking survey to its customer base, asking (among other things) whether that person owned a radar detector. Those who answered in the affirmative saw a spike in their auto premiums, even though they'd had no accidents or tickets.
And Progressive's not alone in looking for "creative" ways to re-underwrite risks: GMAC Insurance has linked data from the auto manufacturer's OnStar program to ostensibly offer discounts to safer drivers. That program also is voluntary. For now.
As we noted back in February, though, those who "watch the watchers" are somewhat skittish about the whole concept. There's a real fear that once companies start collecting this data, it may be difficult to control:
"Charles Samuelson, executive director of the American Civil Liberties Union of Minnesota...has worries about privacy.
We see this as kind of a creeping abduction of people's data," he said. "Basically, once they collect that data, it belongs to the insurance company. That's a big problem."
Maybe. Risk management is always at odds with behavior: what people should be doing is very often not reflected in what they actually are doing. And it does seem fair to reward those who practice good risk-management techniques (e.g. careful driving) while penalizing those who don't.
Personally, I'd also like to see this data used to target folks who are almost as dangerous as speeders: slow-pokes. Fair's fair, and if we're going to penalize those who break the speed limit, we ought to be having a talk about folks who drive dangerously slow, as well.

Tuesday, July 29, 2008

Fast Food Police

[Welcome Time readers!]

(Sirens, lights, To Catch a Predator film crew . . .)

"Excuse me officer, but was I driving too fast?"

"No son, but you are about to enter a fast-food-free zone."

It seems the folks in la-la land have determined that low income families are no longer entitled to two-all-beef-patties-with-special-sauce-on-a-sesame-seed-bun and triple Whoppers.

The Los Angeles City Council has approved a one-year moratorium on new fast-food restaurants in a low-income area of the city.

The moratorium unanimously approved Tuesday is a bid to attract restaurants that offer healthier food choices to residents in a 32-square-mile area of South Los Angeles.

And the reason is?

Councilwoman Jan Perry says residents at five public meetings expressed concern with the proliferation of fast-food outlets in the community plagued by above-average rates of obesity.

Well there you go.

I guess they will have to start "brown bagging" their Happy Meals.

Let's just hope there aren't any strip searches.

The MVNHS© Strikes Again!

War hero, and NHS victim, Jack Tagg wanted nothing more than the sight restored to his right eye. Mr Tagg, a sprightly 89, was in danger of losing that sight due to macular degeneration (MD), a function of his advancing years.
Fortunately, a med called Lucentis held promise: it's an injectable drug that blocks abnormal blood vessel growth and leakage (which cause macular degeneration). Although it's not cheap (it can run $15,000 or more), it's apparently quite effective. And it's also one of the few effective treatments available.
In the event, Mr Tagg dutifully contacted the MVNHS©, believing that the service would quickly approve the treatment, and he could go on about his daily life. Obviously, poor Mr Tagg hasn't been reading IB, else he'd know that this was but a pipedream:
Well, that makes sense, doesn't it? Can't really help him until he's truly blind, don't you see?
The misinformed former pilot even thought he could just pay for the treatment himself:
"Tagg was astonished. "I would have gone blind, unless we could have sold the house and got some money," he says."
Sadly, no; as we've seen, this course of action could prove even more costly.
Fortune was smiling on Mr Tagg, though, in the form of his neighbor, Dr. Martin Rankin. The good doctor went online, soliciting contributions to help defray the cost of the medication. He collected hundreds of checks, which he and Mr Tagg hand delivered to 10 Downing Street, press in tow. The Prime Minister wasn't having any of this, however, and returned all the checks.
Then our hero's own Member of Parliament stepped up to the plate, and demanded answers from the MVNHS©, which intervened on Mr Tagg's behalf, pressuring the local representatives to make an exception (and/or stop the bad press). But fighter that he is, Mr Tagg demurred unless and until the service offered the same treatment to everyone with MD.
And that's apparently exactly what's happened:
"In fact, NICE now says local health boards shouldn't wait for the first eye to go blind, they should pay for Lucentis right away in situations where it's warranted. Officials at NICE say it wasn't a result of Tagg's activism, but a scheduled reconsideration of the data."
Not "a result of Tagg's activism." But of course.
One might be tempted to say that this demonstrates how flexible the NHS can be when its back is to the (metaphorical) wall. But that's most assuredly not the lesson here; rather, it's that when something's "free," you can bet that there will be strings attached.

Cavalcade of Risk #57: Up and Running!

Richard Eskow got a head start on this week's Cav, and it's a good thing he did: it's chock full of interesting and spot-on posts. Take a chance and head on over.
And don't be afraid to risk hosting a Cav yourself. It's fun and easy, and we have slots available for early fall. Just drop us a line to claim yours.

Gamer Awards: Ennie Voting: UPDATE

UPDATE: Tom just sent me this:
Looks like they had a voting snafu yesterday. If you voted for Fat Dragon Games in the ENnie Awards before 7am TUESDAY morning, you need to go back and recast your vote. Sorry and thanks again!
Last year, in its first year of eligibility, Fat Dragon Games was nominated for two industry awards, winning one (against stiff competition).
This year, they're in the hunt again: Fat Dragon's been nominated in the "Best Miniature Product" category. Please cast your vote* for this outstanding young entrepreneur - whether you're a "gamer" or not.
Voting starts today (July 28th) and runs through August 6th. To vote, please click here*.
*To vote, scroll down to "Best Miniature Product" Click on "Choice #1" and then click on "Dragon Tiles: Forest Adventures, Fat Dragon Games" (You can also scroll down a bit further, to "Fan Choice Best Publisher" and click on "Fat Dragon Games")
The remarkable thing about FDG is that, in an industry dominated by "the big boys," it's a one-man show, the brainchild (and dream) of its founder, Tom Tullis. A true entrepreneur, Tom's carved out a great niche, and provides gamers (young and old) with affordable gaming items.

Grand Rounds (and it really is!)

Edwin Leap jumps into this week's 'Rounds, offering an amazing variety of interesting posts. It's built around the question of "why do we do it?" and he explains in a sort of prologue his own drives and concerns. It's an impressive debut.
As a coffee drinker, I certainly appreciated this item from Highlight Health: apparently, coffee can help lower the risk of liver disease. Yay!

Oh, Oh, Oregon!

[Welcome Industry Radar readers!]

About a month ago, we reported that Oregon's state-run "health" plan made Barbara Wagner "an offer she couldn't refuse:"
Turns out, it was considered more cost effective for her to, um, "go away" than to pay for life-extending meds.
And now the compassionate bureaucrats in the Beaver State have apparently decided to make that wonderful option more readily, and easily, available to even more desperately ill citizens:
Sound familiar?
The "health" plan won't pay for treatment, but has no trouble coming up with the funds for doctor-assisited "suicide." Of course, this makes perfect sense, when one considers that "state officials reported a new emphasis on preventive care and cost effectiveness." What could possibly be more effective than euthanasia? It's guaranteed to provide a complete and permanent resolution to the problem, without all that expensive medicine and stuff.
Who knew Dr Jack would be in-network?

Double Cross

Certainly you can trust your insurance carrier to keep your medical history secret, right? I mean, we have all these privacy laws that come with heavy penalties for breaching a confidence.

So what can happen when your medical records fall into the wrong hands?

It could affect your ability to get a job, a promotion or even a loan. There is also the possibility you could be a victim of medical identity theft.

So what happens when your carrier sends information on your medical health, complete with your Social Security number, to 202,000 people who are not you and have no right to your information?

The error occurred statewide and affected both employer and individual health benefit plans. The company has many state employees and schoolteachers as members, as well as large and small corporate customers. Blue Cross declined to identify large employers that it serves.

This may not be the only breach.

A thick stack of paperwork from Blue Cross of Georgia arrived at the Portland home of a KOIN News 6 employee. Many national and international corporations are based in Georgia, some of which have branches in Oregon, but provide insurance from Georgia-based insurance companies.

It is possible the two are related, but we cannot tell at this point.

Oxendine said he ordered the company to provide free credit monitoring for affected patients for one year. Blue Cross also must give written notice to policyholders whose names were on the EOBs and compile a list of names of those who erroneously received the forms.

While a noble gesture, I am not sure the credit bureau's track medical identity theft.

Monday, July 28, 2008

Randy Pausch

ABC News tribute.

Randy's last lecture. . .

Amigo? No Gracias!

And yes, that is how one says "no, thanks" in Spanish. And what's the reason behind our bilingual foray? I'll answer that question with another question.
What's wrong with this picture:
Dear Henry,
Recently I emailed you information on our LOW cost “Amigo” Short-Term Life...You may recall this is the short-term [plan] that
· Has only a $50.00 deductible at any Urgent Care Facility
· Has NO Proof of Citizenship
· GREAT Rates
[From email]
Catch that? "Has NO Proof of Citizenship."
Anyone else have a problem with that?
Okay, as an insurance guy, my first thought is supposed to be: "Great, a vast new untapped market. And now illegal aliens will have access to insurance products to help pay for health care, thereby reducing my costs."
And there's obviously merit in that position.
But I take a different view: Why are we promoting and enabling folks who are here illegally to become "part of the system?" Isn't there a greater issue here? Shouldn't we be focusing on folks who are here legally, by rewarding them for playing by the rules (i.e. following the law), rather than those who flaunt them? And if someone is willing to break one set of laws, then why would we suppose that any answers on an application would be truthful? And just so we have no doubts about the point of this excercise, or the target market, the website immediately offers "Click Here for a quote in Spanish."
I am appalled.
[H/T to Hannah S for the Spanish lesson]

ER Tragedy: Update

Earlier this month, we saw horrific video of a woman literally dying on the floor of a Brooklyn hospital, as uncaring hospital staff stood idly by. Esmin Green died at the relatively young age of 49, killed as much by an apathetic health care provider as her pulmonary embolism.
And while the circumstances of her actual death are horrible to contemplate, there's an even scarier sub-text: why she had the embolism in the first place. Ms Green had been waiting -- sitting -- for so long that blood had begun to pool in her legs, perhaps because of a shortage of inpatient beds.
Whoa, Henry, what's the one got to do with the other?
It could be worse, of course: the MVNHS© routinely parks its ER patients in the (actual) parking lot, waiting aboard the ambulances which brought them.
The problem here is that, if there's no place for admitted patients to go, then they're going to begin stacking up somewhere, and that somewhere is often the ER. This is especially becoming the case for those hospitals serving poorer communities [ed: Hello! Grady, anyone?]. It's called "boarding," and it's a growing problem.
Simply put, boarding is when a hospital, knowing that it has finite bedspace, looks toward filling that space with insured or other private pay patients, as opposed to the indigent. It's sort of a balancing act between EMTALA and the bottom line. The problem is, the folks who end up on the wrong end of that balancing act may be the ones who need care the most.
The challenge is that there's really no ideal solution. As noted above, it's just as much a problem for gummint-run health care systems as our own. More beds means less waiting, but it also means higher costs. And of course higher health care costs leads to higher health insurance costs [ed: just had to get that in there, didn't you?].
None of which excuses the unconscionable treatment afforded the late Esmin Green. Unfortunately, it's too late for her.

The Carnival of Personal Finance is up

Hosted this week at You Need A Budget, this week's compilation of finance-related posts is punctuated by some interestong and pithy quotes from the world of finance, both high and low.
With all the recent news of problems in the banking world, My Wealth Builder asks (and answers) a pretty important question: "Are my bank deposits insured?"

About Those 47M Uninsured . . .

We have posted on this before. Eye opening stats on the uninsured.

The 47,000,000 who are uninsured.

The upcoming election has once again focused a light on the uninsured, and the prospective candidate's plans for fixing what is wrong with America.

So how will "universal coverage" affect the uninsured?

Well according to the Phoenix Business Journal it won't include illegals.

Obama's plan to save us will not include 8.3 million illegals.

Thirteen percent of American citizens do not have health insurance compared to 69 percent of illegal immigrants in Arizona

There goes the Hispanic vote . . .

Sunday, July 27, 2008

Rethinking Genetic Testing

Over the years, I've come down pretty hard on the use of genetic testing, especially as it regards insurance underwriting. Until now, I've felt that the dangers outweighed the benefits, and that there were other, more unobtrusive, means to accomplish the stated goals.
But I'm beginnging to rethink that position:
Turns out, some folks are genetically predisposed toward a potentially fatal complication that can arise through the use of statins (kind of a "the operation was a success, but the patient died" kind of thing). Since statins continue to be a front-line weapon in the war on cholesterol, it seems to me that this new development merits some new thinking on my part, as well.
In addition to genetic factors that could lead some folks to higher "bad" cholesterol levels, despite diets and excercise, it may be that its treatment could also elicit some dangerous problems as well, and if a genetic screening could help lower that risk, then it seems to me to be worthwhile awaiting further developments.
This impacts insurance in two areas. First, from an underwriting standpoint, where I'm still ambivalent. But from a claims standpoint, as well: what if the med that the doctor prescribes (and that the insurer subsidizes or outright pays for) causes major problems for the insured?
Definitely something to consider.

Saturday, July 26, 2008

Better Than Any Commission Check

When they ask, I tell people I am driven, not by money, but by a strong desire to help people.

So, would I do it for free?

If I could, I would, but the folks I owe money to might not feel the same way.

I got a renewal letter on a small employer that has been a group health insurance client for almost 2 years. This employer was a bit of a pain at first, and I almost walked away from it.

Their prior agent had lied, or was simply mistaken, and had promised that certain medical conditions would be paid by the carrier.

As it turned out, that simply was not the case.

The result was, it cost the owner of the company over $10,000 to pay a claim he felt should have been the carrier responsibility. The agent who made these promises was a long time friend and I was a total stranger to the owner.

Still, I made my presentation which received (to put it mildly) a cool reception. The owner put me through the ringer, asking for financial information on the carrier, a copy of the policy and other things that are out of the ordinary.

After reviewing the information he asked what Blue Cross would charge for a similar plan. He was comfortable with the "brand" and felt he would be better served by a big company vs. the one I suggested.

I gave him a copy of the Blue proposal and pointed out their rates were about 40% higher for essentially the same benefit, but if he insisted, I had no problem using Blue.

He finally agreed to apply for coverage with the carrier I recommended.

Last years renewal went well but there was some resistance.

This year is a different story.

They are facing a 34% rate increase.

I received an advance copy of the renewal letter. A summary of the financial's follows.

Total premiums paid to date, $25,114.

Total claims paid to date, $83,546 (including $22,818 in Rx claims).

Total claims denied, $0.

This is what insurance is all about.

This is what drives me.

Finding ways to make coverage more affordable and delivering on a promise to pay.

SSDI Logjam

Is the Social Security Disability Income program, which is the only Social Security trust fund that is currently solvent, looking for a scapegoat?

It would seem that way, as the Senate "is investigating whether insurance companies are forcing able-bodied people to apply for Social Security disability benefits, worsening a severe backlog in the government program while increasing their own profits."

Forcing able-bodied folks to apply.

I suppose that is one way to say it.

Of course if they are able-bodied, why are they currently collecting disability? Carriers are not benevolent organizations that freely dole out monies to folks who are able to work.

Sick and injured people must often wait more than a year before their claims can be decided by one of Social Security’s administrative law judges, a delay Mr. Grassley called “abominable.”

“The last thing those who rely on Social Security need is for insurance companies to be clogging up the system by forcing ineligible applicants to apply,” he said.

Waiting a year before being awarded the benefit. Many times SSDI applicants must hire an attorney to appeal earlier denials.

If carriers acted in the same manner they would be strung up by their Gucci heels.

The Social Security Administration defines “disabled” much more narrowly than insurance policies typically do, so many people who qualify for insurance benefits do not qualify for Social Security.

It is true that the SSDI definition of disability is much more stringent than carrier language. It is also true that if carriers tried using the same language in their contracts would be tarred and feathered for denying claims to folks who were not "disabled enough" to qualify.

Senator's calling carriers on the carpet for trying to legally manage their business while ignoring their own shortcoming.

This must be an election year.

Friday, July 25, 2008


Be careful what you wish for:
According to its web site, Providence isn't an insurer, per se, but a "not-for-profit health system" which includes hospitals, clinics, physicians, even a university. They both provide and finance health care, so make of that what you will.
In the event, Providence was cited for a number of violations, including "unprotected backup tapes, optical disks and laptops, [which] compromised the protected health information of more than 386,000 patients." That's a lot of PHI.
If you'd like to see a copy of the agreement itself, just click here.
What I found to be even more interesting was this little factoid:
"The OCR [Office for Civil Rights] and the Centers for Medicare & Medicaid Services report they have successfully resolved more than 6,700 HIPAA Privacy and Security Rule cases." I recently had my own experience with a carrier and PHI, and ended up filing such a claim (which was later resolved to my satisfaction), and it surprised me that the process itself is generated from the OCR website. And, as noted above, it looks like the gummint's been a bit more proactive in cracking down on these violators.
And that's a good thing.
[H/T: Regular Reader Fred W]

Treating a Captive Audience

Remember Charles Manson? The Helter Skelter killer and his gang made infamous for the slaying of Sharon Tate and others in 1969.

Most of his "family" are still in jail, including Susan Atkins.

Her story has taken a different twist of late. Seems she has brain cancer which has paralyzed her right side and led to the amputation of a limb.

So how much has her treatment cost so far?

About $1.4 million.

That's $1.4 million in taxpayer dollars.

"I dare say that apart from the president and the members of Congress, the people with the best health care in this country are inmates," said Dr. Joshua Atiba, the medical director and CEO of Newport Oncology and Healthcare, which delivers cancer treatment to inmates in prisons in California.

I can't say if that is a subjective comment or not. Regardless, this situation is eye opening.

Atiba said that much of the cost can be attributed to the $10,000 daily cost of a bed in the intensive care unit, along with the money needed for guards. According to Thornton, two guards are with Atkins at all time to prevent family members from helping her escape and to keep her from being harmed by members of the public.

The woman is paralyzed and missing a leg. She is 60 years old. How much of a threat is she if she does escape?

No, I am not minimizing her crime. But rather I am simply stating a fact based on the economics of the situation.

Now here is an oddity.

While all of Atkins' health-care costs are paid for by the state, she cannot receive any experimental treatments while in custody, says Atiba. As a prisoner, she cannot give consent.

"They have no autonomy," he said.

Brain cancer patients in the general public, on the other hand, may have the option to receive such experimental treatments.

Probably some kind of prisoner's rights thing.

But there is a positive.

According to the UCLA Hospital System, the total medical bill for a person in the general population who had a diagnosis of brain cancer would be $2.2 million over the same time period.

I'm sure the California taxpayers are relieved to hear that.

Caplan also noted that while many speculate that some people will commit crimes to get better health care, he hasn't seen any evidence that this is the case.

"People are interested in health care, but they're not interested in getting it as a prisoner," he said.

They are not interested in becoming a prisoner to receive health care, but they are willing to become a prisoner of a government run, universal health care system.

What is wrong with this picture?

Caplan predicts the problems we now confront about prisoners may eventually become discussed more widely as health care costs rise.

"We have a hard time saying no, even with prisoners," he said, noting that the questions applied to them will become more widespread with time.

"Why are we doing things that are basically hopeless when they cost a lot of money? We don't spend much on prevention, but boy, do we spend money to rescue people."

And so it goes . . .

But is it Worth it?

Good news.

There is a new drug in the fight against liver cancer. Most drugs do not work on liver cancer so this is a breakthrough.

The bad news.

Nexavar runs $5,400 per month.

So who pays?

All of us.

So what does the patient gain by using this new drug?

Average life expectancy without the drug . . . 7.9 months.

Average life expectancy for those using the drug . . . 10.7 months.

Is trading $15,000 for 3 months worth it?

This is a question all of us will have to ask.

Massachusetts in the (Mail) Bag

Regular reader and frequent commenter Scuzz alerts us to the latest from the Bay State:
"(S)pread the pain?" And here I always thought that insurance was about spreading the risk. Silly me.
A fundamental precept here at IB is that health insurance costs increase primarily because health care costs do. Looks like Governor Patrick isn't a regular reader.
I'll give Scuzz the last word:
"Hmmm. Co-pays and premiums still rising due to health care costs. Just like in the private sector. Except the private sector can't just raise taxes whenever they want to make up for the gap. "Everybody is contributing to the cost". Stunning new concept, isn't it? Seems I've heard that somewhere before. That's the concept of the private sector now."

Cavalcade of Risk #57: Submissions Due

Sentinel Effect's Richard Eskow hosts next week's Cavalcade of Risk. Submissions are due by next Monday (the 28th). Richard encourages you to include:
■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post
You can submit your post via Blog Carnival or email.
We're scheduling late summer, so please drop us a line to reserve your Cav.

Thursday, July 24, 2008

Caitlin's Story Jumps the Shark

[Welcome Industry Radar readers!]

Thank goodness for the Tampa Tribune, which brought Aetna to its (proverbial) knees.
Oops, I mean: Thank goodness for Fox News, which brought Aetna to its (proverbial) knees.
Oops again! I mean: Thank goodness for Florida Governor Charlie Crist, who brought Aetna, well, you know.
Of course, not all of them (or indeed any of them) can claim credit. For one thing, as we reported earlier, the procedure was never authorized, or not authorized, because there was no pre-authorization necessary in this case.
But hey, let's not let any facts get in the way of a good story, shall we?
I spoke late yesterday with our aforementioned Aetna rep, who was able to confirm several key facts, deferred on a couple others, and will try to help me with a few more. Here's what we know for sure:
■ There was no issue of scheduling or pre-authorization regarding the surgery. So reports that the surgery was cancelled at the last minute because of pre-certification issues was simply untrue, and the Tampa reporter knew this.
Here's what Aetna cannot confirm or refute because of HIPAA restrictions:
■ While I don't understand how this is covered by HIPAA, Aetna isn't allowed to confirm or deny that the coverage was cancelled, or that benefits had "run out."
And here's what we hope to find out:
■ Whether this was an ERISA (self-funded) or fully insured plan, and whether it was group or individual medical. My contact was unsure whether or not she could divulge this and, as a favor, agreed to ask her HIPAA compliance guru for guidance.
All of these questions, by the way, should have been asked by the various news folks, but there's no indication that such was the case. As we noted before, it is frustrating that the media just won't do its job, settling instead for the sensational over the informative.
Now, there are some who would claim that the Aetna rep would lie (or at least mislead) about the nature of the problem. And it would be fair to at least regard such information with a dose of (ahem) healthy skepticism. The problem with the "he said, she said" scenario in this case is that, because of stringent HIPAA privacy regs, Aetna is proscribed from offering policy details that might confirm (or refute) their position. There's an easy solution to that, of course: Caitlin's family has only to waive those privacy rights, and allow the carrier to answer completely, including documentation to support its claim. We're waiting...
And while we're waiting, let's discuss why this is such a crucial case. If, and it's a big if, Aetna "caved" in the face of media and political pressure, then we can effectively kiss health insurance as a risk management tool goodbye.
That's a bit overwrought, isn't it?
Sadly, no: if a carrier folds based solely on PR, then the next step is buying insurance in the ambulance. After all, if the carrier balks at the claim, one has only to threaten with Fox and Friends to have the claim paid. It would set a dangerous precedent, and literally change the face and nature of health insurance. This is not tinfoil hat time; it is simply the logical end result of such an action.
Interesting times, indeed.

Health Wonk Review now up

David Williams, proprietor of the Health Business Blog, hosts this week's edition of the Health Wonk Review. He's got almost 2 dozen(!) interesting posts, all in helpful categories. The HWR is always worth checking out.
Beware the dreaded Law of Unintended Consequences: Jon Coppelman, of Workers Comp Insider, reports that the American with Disabilities Act seems to have actually hurt employment opportunities for those it was designed to protect.

Wednesday, July 23, 2008

Moving Goalposts

We've talked in the past about various caps and limitations on health insurance policies. Some limit outpatient meds, others maternity expenses, still others limit how much the carrier will pay out annually, or in one's lifetime.
We've also talked about "the uninsured," including folks who choose to "go bare."
Recently, Ezra Klein posted a thoughtful (albeit misinformed) piece on a relatively new phenomenon, "the underinsured." We've actually discussed this before, but there are some new studies out purporting to tell us just how bad the situation has become. And, of course, to tout various (and ill-fated) gummint-based solutions to a non-problem.
A "non-problem?" What's that supposed to mean?
Ezra reports on a Commonwealth Fund study released in June. Interestingly, the CF doesn't even try to hide its partisan nature; a quick search through OpenSecrets shows that their directors donate a lot of dollars to Democrats, and none to Republicans. Nothing wrong with that, of course, but understand that they have a very specific agenda here.
The study, in defining folks who are "underinsured" arbitrarily chose "10% of income spent on health care" as its cutoff. That is, if folks "spent 10 percent of more of their income...on out-of-pocket medical expenses, or if they had deductibles that equaled 5 percent or more of their income," then they were "underinsured."
Why those numbers?
The report really doesn't tell us. One might presume that spending 10% of one's income would be a significant drain. But are these catastrophic claims? That is, one-shot deals from which the patient either recovers or dies? Or are they chronic claims, such as MS or cancer treatments? And wouldn't there be both quantitative and qualitative differences between these two types of claims? It would also be helpful to know how it was that the insured had such an ostensibly high OOP. Did they choose a plan with internal maximums to save a few bucks in premium? Isn't that called risk management? We're just left in the dark.
Ezra then goes on to discuss those who are affected by this problem: "some folks being half insured and half uninsured." What does that even mean? How is one "half insured?" Seems to me, that's like being "sorta pregnant:" you either are or you're not. If one has insurance that isn't getting the job done, why is that? Certainly there are poorly designed plans out there, and some are purposely designed to look good on paper, if not in practice. But how many folks choose their coverage based on price alone [ed: I'd bet it's more than we think]? If price is the sole criterion, and we really don't know from the CF study that it was, then whose fault is it that someone ends up disappointed?
On the other hand, many folks are ignorant of their own plight, or have little choice about it. I recently blogged on a situation where the underlying plan looked fine, but had a $100,000 annual cap on all benefits paid. In today's environment, a hundred grand doesn't go as far as it used to, leaving a potentially catastrophic financial risk. Still, there are solutions to that problem; one has only to do a little research.
And what about people who choose high deductible (perhaps HSA compliant) plans? Are they "underinsured?" First, basing the criterion on income, as opposed to worth, is (ahem) "risky." If one has sufficient assets to cover the deductible (not terribly difficult to do, particularly with the help of an HSA), then what does income ratio have to do with it? And now that folks can jump-start those plans with a boost from their IRA, there's even less "there, there."
Which is not to say that there aren't problems. For example, I know that some folks choose to replace their major medical plans with less expensive (but also less useful) "mini-med" plans. I think that this is playing with fire: for the dollars saved, it's an awfully big risk to take. And there are folks who choose cheaper "hospital only" plans, incorrectly assuming that in-patient care is much more expensive than out. Sometimes that's true, but it's often not the case, again leaving a big financial hole.
So what's my point [ed: um, yeah, we were kinda wondering that ourselves]? There are no "magic bullets," no truly effective "one size fits all" solutions. As long as folks are free to make choices, they're free to make mistakes (or be mislead). But "underinsured" seems to me so ill-defined as to be essentially meaningless. And that just adds more confusion to an already complex problem, instead of actually offering substantive answers.

Tuesday, July 22, 2008

Grand Rounds now available!

The infamous GruntDoc (aka Dr Allen Roberts) hosts this week's compendium of the best of the medblogs. There are a LOT of interesting posts; start at the top and work your way down.

Driving Home a Point

Seems only yesterday (but it was actually the 13th) we were posting on how a million dollars didn't go very far these days.

Now we are back.

Consider Gladys Lester who battled cancer for 19 years only to discover she had exhausted her $1,000,000 plan limit.

Or Australia Montoya who hit her plans' $150,000 per illness limit in less than 2 years.

Patients with advanced breast cancer can ring up $160,000 annually just for chemotherapy. One of Montoya's hospital stays was billed at more than $200,000.

The time to find out about plan limits is BEFORE you need the benefits, not after.

Caps come in many forms: lifetime caps, annual caps, prescription caps, caps per illness. Most people don't realize their policies are limited until they find out the hard way.

Many plans are starting to limit how much they will cover for Rx benefits. The people who buy these plans never believe they will require expensive medication.

In tight spots like this, patients figure out ingenious ways to work the system. Lester has used Local 1262's unlimited prescription plan to order chemotherapy drugs through her drugstore. By purchasing a drug like Herceptin — a $6,499 anti-cancer medicine that costs her a $30 copay under her prescription benefit — she keeps the charge off her hospital bill.

Gaming the system in your favor is a common occurrence.

Rather that resorting to playing games, why not just buy a plan without limits from the start?

A Mild Slap on the Wrist

HealthMarket, parent of Mega Life, Midwest National Life and Chesapeake is in hot water again.

HealthMarket sells mostly to the self employed via the NASE (National Association for the Self Employed). Their marketing arm includes UGA and Cornerstone.

Following a 36 state investigation, HealthMarket has been fined $20,000,000.

The investigation, prompted by numerous complaints, found that insurer HealthMarkets failed to properly train its sales agents, who didn't always fully disclose the limits of its health policies to consumers and sometimes did not pay for medical services promptly.

HealthMarket carriers offer limited benefit plans that often fail to pay the majority of bills for a major claim.

If HealthMarkets does not resolve its problems, it could face up to $10 million in additional fines. Last year, it took in $1.6 billion and posted net income of $70.2 million, according to Securities and Exchange Commission documents.

The fines are a mere slap on the wrist compared to the financial loss incurred by those who have purchased their plans.

Monday, July 21, 2008

Carnival of Personal Finance is up!

This week's edition is hosted by Taking Charge blog. Emily has put together a terrific collection of finance-related posts, and there's a lot to see.

Check it out.

Sunday, July 20, 2008

Insuring German Shepherds

This just in . . .

According to Bloomberg, Allianz SE is going to join Axa in offering health insurance to animals.

Health insurance for dogs costs between 27 euros ($43) and 42 euros a month depending on the extent of the coverage, race and age, while cats cost between 18 euros and 28 euros, the newspaper said.

Guess their government run health care plan doesn't cover pets.

At least, not yet . . .

With This Ring, I Thee Insure

[Welcome Delphi Forum and Industry Radar readers!]

"Will you love her, comfort and keep her, and forsaking all other remain true to her and continue to provide health insurance as long as you both shall live?"

a poll conducted by the Kaiser Family Foundation, a leading health policy research group, found that in the past year 7 percent of U.S. adults married so one or the other could get on a partner's health insurance plan.

That is an astounding percentage.

Jeff Heisler didn't have $6,000 to cover much needed dental work. His solution?

Get married for dental insurance.

Says a lot about the basis of that marriage, huh?

"I married to obtain health insurance in retirement," said a 63-year-old Massachusetts woman who asked to remain anonymous.

Though the former hospital worker's relationship with her "best friend," a retired state corrections officer, is strictly platonic, the two tied the knot three years ago so she could get on his generous employer-funded health policy.

Insurance for retirement. Something wrong with Medicare?

But it goes both ways.

Earlier this year, a 50-something Indiana couple who'd been married 11 years got divorced so that the recently laid off, uninsured husband would be eligible for Medicaid, which he needed to help pay for $80,000 worth of cancer treatments (because of his wife's $38,000 annual salary, he didn't qualify for a government-subsidized health plan).

Seems there is always a way to game the system.

"I have not gotten married because of health care," said a 39-year-old Web designer from Vancouver, Wash., who didn't want to give her name. "I have had my daughter on Washington state health care since she was born. If I were to get married to the guy that I have been with for the past 10 years, then our combined income would disqualify my daughter for her coverage."

Sure. Why pay for it when you can get it for free?

Marriage, and divorce, is a wonderful thing.

Line Forms to the Rear

Need primary care?

Good luck.

Especially if you are in Massachusetts where you are required to have health insurance.

Since the law was passed, requiring residents to have health insurance, a little over half of the previously uninsured have gained coverage.

But at what price?

As the Cato institute reported, the state tax budget for health insurance subsidies overshot the mark by 33%.

But the cost of mandated care extends beyond dollars and "sense".

Want to see a doc?

Get in line.

Dr. Kate Atkinson is taking on new patients . . . who can wait until May 2009 before they are seen.

There are many reasons for this overcrowded access to primary care. One is there are fewer med school grads opting for the relatively low pay of primary care vs. a specialty.

Mr. Steinwald urged the overhaul of a fee-for-service reimbursement system that he said undervalued primary care while rewarding expensive procedure-based medicine. His report noted that the Medicare reimbursement for a half-hour primary care visit in Boston is $103.42; for a colonoscopy requiring roughly the same time, a gastroenterologist would receive $449.44.

The Medicare reimbursement rate.

As in, taxpayer funded plan.

And keep in mind that Medicare reimbursement rates are typically much lower, sometimes by as much as 30 - 40%, than reimbursement by private insurance carriers.

“It is a fundamental truth — which we are learning the hard way in Massachusetts — that comprehensive health care reform cannot work without appropriate access to primary care physicians and providers,” Dr. Bruce Auerbach, the president-elect of the Massachusetts Medical Society, told Congress in February.

Is this the same congress that wants to provide free health care for all as part of their election campaign promise?

Apparently they have selective listening skills.

The share who accept new patients has dropped, to barely half in the case of internists, and the average wait by a new patient for an appointment with an internist rose to 52 days in 2007 from 33 days in 2006.

52 days.

You could be well by then.

Or much sicker.

The need to pay off medical school debt, which averages $120,000 at public schools and $160,000 at private schools, is cited as a major reason that graduates gravitate to higher-paying specialties and hospitalist jobs.

Primary care doctors typically fall at the bottom of the medical income scale, with average salaries in the range of $160,000 to $175,000 (compared with $410,000 for orthopedic surgeons and $380,000 for radiologists). In rural Massachusetts, where reimbursement rates are relatively low, some physicians are earning as little as $70,000 after 20 years of practice.

If your goal as a new doc is to pay off med school loans quicker, opt for the higher paying job.

You know, like rocket surgery.

But let's get back to those folks on taxpayer funded plans. How do the docs react when a Medicaid patient shows up?

Dr. Atkinson, 45, said she paid herself a salary of $110,000 last year. Her insurance reimbursements often do not cover her costs, she said.

“I calculated that every time I have a Medicaid patient, it’s like handing them a $20 bill when they leave,”

Gosh, she says that like it's a bad thing.

Saturday, July 19, 2008

Update on Other Disturbing News?

[Welcome Industry Radar readers!]

Hank’s recent article about the Caitlin Jackson case mentioned Nataline Sarkisyan. Which raises a question: whatever happened to the lawsuit that celebrity attorney Mark Geragos vowed to file against CIGNA in the Nataline Sarkisyan case? I have been unable to find any current news of it on the internet, either under “Nataline Sarkisyan” or at Geragos’ own website. The news articles seem to have stopped in January 2008. Why? Anyone know?

Geragos’ website is here

The only reference to Nataline Sarkisyan (scroll down) is a copy of a newspaper article dated December 21, 2007. No updates on the Sarkisyan case have been posted to Geragos’ website since that time.

And here is a link to an editorial published January 11 in the Wall Street Journal that contains a summary of the case as it was only then beginning to be understood.

But even this editorial is now almost 7 months old. Does anyone know whether the threatened lawsuit against CIGNA is, or will be, proceeding?

Thursday, July 17, 2008

Disturbing News: Update

[Welcome Industry Radar and Insurance Forums readers!]
Regular readers know that we're nobody's shill; we regularly skewer carriers, providers, even fellow agents. But we also know that the "regular" media often fail to report (or even try to determine) "the other side." We saw it last year, with the sad story of Nataline Sarkisyan and CIGNA. And we're seeing it again now, with the equally sorry tale of Caitlin Jackson.
As it turns out, there's quite a bit of misleading information in the original news account. How do I know this? Because I spent a great deal of time on the phone late yesterday afternoon, working my way through Aetna corporate communications in order to give our readers a more precise understanding of the issues.
As it happens, I connected with a very helpful young lady, who remembered our earlier posts on Aetna's transparency program, and our interview with Dr Campinha-Bacote. This helped to establish our bona fides (literally: Fido's bones), and we learned a bit more about this unfolding drama.
Full disclosure: due to HIPAA privacy regulations, there were quite a few questions I asked for which the spokeperson could provide no answers. This may change as the case develops, and we'll keep you posted.
In the original story, it was reported that the surgery was initally approved by Aetna "15 minutes too late." While this makes compelling reading, and certainly casts the carrier in an unfavorable light, it was simply untrue, and the reporter knew it.
Let me repeat that: The reporter knew for a fact that there was no such process, and yet reported it as true anyway. According to Aetna, "under the plan, Aetna does not require pre-authorization for surgery so we neither would have pre-authorized or denied the surgery as portrayed in the Tampa TV news story." [ed: from email] Not only that, but Aetna "explained to the Tampa reporter that the scenario she was portraying of us "approving" surgery is not accurate because we don't pre-auth [pre-authorize], but she ran it anyway."
I also learned that "(m)edical necessity is not relevant to this conversation;" that is, there was no issue regarding the appropriateness of the treatment. As an aside, I think that's a mistake: as we've discussed before, "medical necessity" is a key component of health insurance, and would be relevant in ascertaining whether the surgery was even called for. Nevertheless, it wasn't in this case, and one supposes that Aetna is entitled to its own procedures.
There are apparently "other inaccuracies in the story as well," but my contact declined to identity them. Hopefully, that will change.
One final point: if we're going to have a meaningful discussion about the merits and shortfalls of our current health care financing system (and I think we should), then it's in everyone's best interest to do so in an honest, fact-based manner.
Well, maybe not everyone's.
UPDATE (7/18/08): Just received this email from my contact at Aetna:
"While I cannot share details, I thought you would want to know we have resolved this matter together with the hospital. We advised the member yesterday."
Good news!
CowPatty Alert: This is just self-serving; there is zero indication (or likelihood) that Ms Brooks' "efforts" resulted in anything other than sensationalism:
I need to take a shower after that.

Cavalcade of Risk #56 now online

Cato Institute's Michael Cannon hosts his 2nd Cav, and does a great job. Take a risk and check it out.
If you'd like to host a Cavalcade, and you really should, just drop us a line. It's fun and easy, and a nice traffic bump.

No Child Left Behind

Much is made about the disenfranchised who, try though they may, cannot obtain health insurance.

While some of the reports are true, most are exaggerated at best while some are totally misleading.

Take the case of 5 year old Logan Swaim.

According to the report, Logan was determined to be "short for his age". AFTER receiving this "diagnosis" (more like an observation than a diagnosis) his mom tried to buy health insurance.

(Comment. Insurance is something that is bought before the need, not after).

Two insurers accepted the Swaims and three of their children for new coverage, but they rejected Logan, fearing his height — 40½ inches — might indicate a glandular problem that could be expensive to treat.

Two insurers.

Out of how many?

Might have a glandular problem.

For two years, the Swaims paid all of Logan's medical bills themselves, about $4,300. Eventually they got test results showing there was nothing wrong with him.

Why did it take them 2 years to have the tests done?

Even so, the insurers wouldn't cover him, Theresa Swaim says, because the time to appeal the denial of coverage had expired.

So what's wrong with trying a new carrier? Or even a new application on the boy?

Something smells here.

Wednesday, July 16, 2008

Dr Shill, Part 2

Yesterday, Bob wrote a timely piece on Canadian docs with ulterior motives. Today, I've got some "enthusiatic" ones in our own system:
There's little argument that smoking is detrimental to one's health. And there are few folks who would advise against stop-smoking (aka "smoking cessation") programs. In fact, most (if not all) physicians would advise their smoking patients to quit, and perhaps even offer some suggestions on treatment protocols to help that along.
One such treatment, Chantix, is made by Big Pharma Biggie Pfizer. Recently, Chantix received critical praise in an article published in the "prestigious Annals of Internal Medicine" (gee, one can hardly wait for their swimsuit issue). The AoIM publishes peer-reviewed articles on current medical advances. This one, which urged a "new approach" to smoking, treating it as a chronic disease like diabetes. This new paradigm suggested that "cold turkey" was out, long term medication was in.
On the one hand, shaking things up and looking at common conditions in new ways would seem to have merit. After all, "if you always do what you've always done, you'll always get what you've always got." So the idea of trying something new wasn't completely off-base.
The problem was, the authors of the study "disclosed that they are paid by manufacturers of smoking-cessation products for speaking and consulting."
Conflict of interest?
A lot of their "peers" thought so, and it's called into question not just that particular study, but now others, as well. Again, just because the "messenger" may have a vested interest (and the authors vehemently deny that they do) doesn't mean that the message is wrong. But of course, it is certainly valid to question that message, and the research upon which it's predicated.
I would hate to see a promising new treatment cast aside because of the potentially questionable ethics of the study's authors. But I would also think that it's reasonable to put that protocol under the proverbial (and perhaps actual) microscope to ferret out any problems arising from the potential conflict of interest.

Disturbing Carrier News

[Welcome Industry Radar readers!]
On the one hand, this is news because it's the exception, not the rule. On the other, one wonders why "journalists" don't seem to ask a lot of relevant questions, particularly since they could help us understand what really happened here:
19 year old Caitlin was scheduled for surgery to, well, something; the "journalist" doesn't seem to think it's important enough to tell us exactly what (was it experimental, for example). And we're also not told how effective this procedure's been in the past, which could indicate its value.
It would be nice to know why the family scheduled this surgery, which doesn't seem to be an emergency, before Aetna approved it (or not). The story says only that "Caitlin needs immediate surgery," but doesn't explain why. It may well be that her condition had deteriorated quickly, adding urgency to the situation, but the story doesn't tell us. It is sensationalism at its worst.
We are told that the hospital pegs the surgery's cost "at a staggering $113,000," and requires a substantial "deposit" before it would be done. Why's that? Where's the hospital's compassion? The surgeon's? It's only the nasty old insurance company that's dragging its (metaphorical) feet here?
Uh hunh.
This is why stories like this are so counter-productive. We're asked to feel compassion, perhaps pity, for Caitlin, and we're left with the distinct impression that the insurance company is the only player in this game which lacks compassion. Maybe it's just me, but I also infer from it a sort of "hey, that could be me, or my child" feeling. And indeed it could be. But what we don't know is why Aetna apparently declined to authorize the treatment. All we're told is: "her benefits ran out." Again, why is that? Was this a group plan with a limited annual benefit? Was it an individual plan with a limited lifetime maximum? Who chose this plan in the first place?
All of these questions are relevant, but will most likely be lost in the maelstrom of publicity about the "evil insurance company." If Aetna made a mistake here, then they need to own up to it, and make it right. And certainly we all feel for Caitlin and her parents. But we also need to know that there's at least the possibility that the carrier isn't the bad guy here, only the fall guy.
UPDATE 1: Aetna's National Medical Excellence Program seems like it would have rendered much of this moot. According to them:
"If you have a complex illness or injury, your doctor can request authorization from Aetna to use our National Medical Excellence Program. If authorized, the program gives you access to our national network of respected doctors and facilities. This means your care (less any applicable copays or coinsurance) and your related travel costs (for you and a companion when traveling more than 100 miles) will be covered. And program nurses, who specialize in complex care, will work with you every step of the way to help you get the services you need."
So, was this available to Caitlin and her family and, if so, did they access it? And if they did, why would the surgery have been denied?
This took me all of 3 minutes to find, begging the question: where's the "journalist" on this?
UPDATE 2: Available here.