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?

The Grift of the Magi?

The (unfortunate) headline reads like a convoluted novel:

Feds go after Christ, 3 others, charging kickback scheme

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.

[H/T: Industry Radar]

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:

"A high-tech monitoring device makes it possible to reduce insurance premiums for drivers who avoid jackrabbit starts and slam-on-the-brakes stops...The catch? Bad drivers who take a chance on the program may wind up paying a surcharge instead."

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.

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:

"Tagg's local health board rejected his request for NHS funding, saying they wouldn't pay the high price of Lucentis unless the disease hit his second eye."

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.

Thanks!

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:"

"State officials have offered a lung cancer patient the option of having the Oregon Health Plan, set up in 1994 to ration health care, pay for an assisted suicide but not for the chemotherapy prescribed by her physician."

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:

"Since the spread of his prostate cancer, 53-year-old Randy Stroup of Dexter, Ore., has been in a fight for his life. Uninsured and unable to pay for expensive chemotherapy, he applied to Oregon's state-run health plan for help.

Lane Individual Practice Association (LIPA), which administers the Oregon Health Plan in Lane County, responded to Stroup's request with a letter saying the state would not cover Stroup's pricey treatment, but would pay for the cost of physician-assisted suicide."

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?

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?

Well, turns out that "(a) major cause for E.R. crowding is the hospital practice of boarding inpatients in emergency departments... If there are no inpatient beds in the hospital (or no extra inpatient nurses on duty that day) then the patient stays in the E.R. long past the completion of the initial emergency work."

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?"

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:

"Researchers from Oxford have discovered that a common gene variation is a major cause of a rare side-effect of the cholesterol-lowering drugs, statins."

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.

HIPAA, HIPAA, Hooray!

Two years ago, I wrote that I was "puzzled, bordering on angry, that, (i)n the three years since Americans gained federal protection for their private medical information, the Bush administration has received thousands of complaints alleging violations but has not imposed a single civil fine and has prosecuted just two criminal cases."

Be careful what you wish for:

"WASHINGTON - The Department of Health and Human Services has levied a $100,000 fine on Seattle-based Providence Health and Services for alleged violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules."

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]

Massachusetts in the (Mail) Bag

Regular reader and frequent commenter Scuzz alerts us to the latest from the Bay State:

"Gov. Deval Patrick is calling on insurers, employers and hospitals to help cover costs. Many people have seen their co-pays and premiums rise, and a new cigarette tax is in the works.

"Our goal here is to spread the pain, as people are saying, and to continue the concept of shared responsibility which we think is part of the reason why Massachusetts has been successful...Everybody is contributing to the cost."

"(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."

Indeed.

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.

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.

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.

[H/T: Holly Robinson]

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.

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.

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?

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:

"After an extensive investigation this week by Tampa Bay’s 10 News, Aetna is now changing its tune and partnering with Tampa General Hospital to cover one hundred percent of the costs."

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.

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:

"Sheila Jackson says she would gladly trade places with her daughter, Caitlin, who was recently diagnosed with a rare brain disorder called Quiari Malformation."

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.

Tuesday (Healthy) Food Pyramid Update

It's been a while since we've visited our own special IB Food Pyramid , and today brings us two interesting items:

■ First up, erstwhile political pundit (and baseball afficianado) George Will is of the opinion that not only is beer a desirable commodity, it is an essential one. He opines that "No beer, no civilization." I'm not sure I'd go that far (on the other hand, I'm not sure I wouldn't go that far, either), but Will makes a strong case:

It is Will's contention that, once we grew from the hunter/gatherer stage into an agrarian society, our living arranegments changed dramatically. Where once we had roamed the plains (or veldt, or wherever), we now had the ancient equivalent of "gated communities." This led, unsurprisingly, to urbanization, and a host of new challenges, water-borne diseases among them. And how better to guarantee the safety of that which we drink than by purifying it? And what better process than by fermentation, which leads to the anti-bacterial qualities of our favorite brew.

And I hear it tastes pretty good, too!

■ Quick: which is healthier for you, bacon or fish? Not so fast, pardner:

"Farm-raised tilapia, one of the most highly consumed fish in America, has very low levels of the beneficial omega-3 fatty acids and very high levels of omega-6 fatty acids, a potentially dangerous fatty acid combination...Tilapia has higher levels of potentially detrimental, long-chain, omega-6 fatty acids than...and even pork bacon."

Ouch!

(Of course, the article fails to mention how it compares to the turkey bacon that is regularly consumed in our household)

And it gets worse for folks with heart disease, arthritis, even asthma, who may be thinking "hey, I'll have the fish sandwich instead of the BLT." Unfortunately, that would be a poor choice. So while eating fish per se may be a healthy choice, it's important to select a healthy fish (such as salmon or tuna) to begin with.

■ And in a completely unrelated update:

Regular IB readers may recall the ongoing saga of the Sleazy Seniors, whose scheme to collect the insurance on homeless men they murdered was eventually cracked. Last we heard, they had pled "not guilty" and were awaiting trial.

Well, here's some good news on that front:

"Two elderly women were sentenced to life in prison without parole Tuesday for murdering two indigent men to collect insurance policies taken out on their lives."

Of course, given their advanced ages (75 and 77), one wonders just how long that sentence will actually be. Still, it is justice of sorts.

Carnival of Personal Finance

Nicole the Budgeting Babe hosts this week's collection of finance-related posts from around the 'sphere. She's got a Top 6 list, and then the rest of the posts follow. Helpful categories and context help make it readable and easy to navigate.

Over at Financial Ramblings, blogger Sean has some interesting insights on auto insurance, including a helpful table to compare different kinds of discounts.

Comments Update (7/14/08)

Good news: We got edit back! So please feel free to comment (the more the merrier).

Oy Canada (Again)!

As has become fashionable, there's a lot of talk about the wonderful world of gummint-run health care. As I mentioned the other day, though, one should treat such wishes most carefully, because "free" things often end up costing a lot. Anyone who's ever adopted a "free" pet knows exactly what I'm talking about. As does Canadian citizen Shona Holmes, whose three year health care horror story began with a brain tumor:

"No one should be forced to travel thousands of miles to obtain quality care. Yet that exactly is what I was forced to do after being diagnosed with a brain tumor three years ago. After my government told me that I'd need to wait four to six months to see a neurologist and endocrinologist, and with my eyesight rapidly deteriorating, I decided to seek a diagnoses at the storied Mayo Clinic."

We've discussed Canadian med-shopping habits before, but these have typically been short jaunts "just south of the border." Ms Holmes had a bit further to travel (Scottsdale, Arizona, to be exact), where she was informed that immediate treatment was necessary. This meant an immediate return to her native land, where she anticipated her "free" national health care system to be waiting with open arms, eager to remove the offending and dangerous growth.

Regular IB readers already know what happened next: she was put on a waiting list and urged to "hope for the best." While that's a wonderful thought, it doesn't typically translate to an actual cure. So, she hopped another flight and flew back to Arizona, where she underwent surgery that successfully removed the tumor and restored her sight. But don't just take my word for it, here's Shona herself:

Shona Holmes (Toronto, Ontario, Canada) from BigGovHealth on Vimeo.

While policy wonks and candidates talk about the idea of government run, free health care, very few (I daresay none) actually address the reality of such systems. And while we see Canadian politicos eschewing the free health care to which they're entitled, and traveling thousands of miles inside the good ol' USA for actual care, I haven't read any stories lately (or, indeed, ever) about folks flying out of Washington National en route to Vancouver for that extra special medical attention.

[Hat Tip to BigGovHealth]

Cavalcade of Risk #56: Submissions Due

Health wonk extraordinaire Michael Cannon hosts next week's Cavalcade of Risk from the hallowed halls of the Cato Institute. Submissions are due this coming Monday (July 14).

Mike asks 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 may submit your posts at Blog Carnival or via email.

Believe it or not, we still have slots available for later this summer. Please drop us a line to reserve yours.

Resource Update

From time to time, we become aware of new sites that may be of value to our readers. Sometimes we stumble across them looking for something else; often we get emails touting this "great new site." Unfortunately, most of the latter variety are more advertising than advice, but there are sometimes pearls to be found, as well:

"I am 34 year old who was rendered T4 paraplegic 5 years ago. I have started a niche health directory called HealthDirectoryMoz because I am passionate about "QUALITY and USEFUL" health related websites.

Through this niche directory, I intend to create lasting value to patients, students & medical professionals and sincerely believe that we can have a mutually beneficial association by being in a link relationship."

Patient-blogging is a valid and valued subset of the medblog community, and this site ramps that up even further, offering relevant, up-to-date information, and accredited by the Geneva (Switzerland)-based HonCode organization.

Do check it out.

UPDATE TO THE UPDATE: Amy at DiabetesMine reports that there's a new prescription drug program for folks without prescription coverage (and who aren't eligible for MediCare). TogetherRxAccess is actually a service of nasty ol' Big Pharma, which continues to confound its most ardent critics.

Dr Rob Hits the Big Time

Fellow medblogger Dr Rob Lambert is interviewed today in the New York Times. Dr Rob maintains that it's actually unhelpful to patients to lecture them about their wait. As counter-intuitive as that may sound, the good doctor makes a strong case.

Mazel Tov!

Flex Plan Dilemna

Bob recently had an interesting email "discussion" with a colleague, and since I was tangentially involved, he's asked me to tell our readers about it (Bob's "out of pocket" today).

The other day, I received this email from him:

"Having a disagreement with another agent over health insurance under a flex plan. Figured your buddy Pete would know. Can an employee who is covering dependents opt out of a plan off anniversary by claiming hardship? Premiums are too much, and wants to change to an individual plan. My understanding is they cannot. Even if they did, I am under the impression they cannot change their contribution (assuming they are pre-taxing premiums or benefits) until the anniversary. Do you know the answer?"

[ed: "Pete" is our colleague Pete Deist, about whom we've written before]

I replied that "on the one hand, it doesn't seem "right" to force someone to buy insurance (hello Massachusetts?!); OTOH, rules is rules, and I've never heard of "hardship" as a qualifying event (or would that be non-qualifying event?).

Probably some arcane Section 125 rule about this.

Really two questions though: plan rules and IRS rules.

I'm going to feel REALLY silly when Pete says "oh, that's an easy one, it's..."

In the event, I forwarded Bob's request on to Pete, and here's his reply:

"Your buddy [Bob] is correct.

The legal: Hardship is not a qualifying event permitting a change in a premium election mid-year. He can drop the insurance but cannot stop the withholding until the end of the year. The practical: I don't know of many groups that enforce this rule as it relates to premium"

One wonders, though, how often this comes up. Perhaps more often than we think.

Second Opinions

So I'm sitting at my desk, working on some quotes, when the phone buzzes: Mary Thomas [ed: not her real name] is on line 2, has some questions about life insurance. If only it had been that simple...

Mary is a soon-to-be retired schoolteacher, as is her husband, Marv. She's 58, he's 67 but still teaching. As part of her retirement package, she's been offered a choice of annuity payouts, and her financial advisor has suggested that she choose the one with the highest payout (monthly benefit), but which will also stop at her demise. He's recommending a life insurance policy that would (essentially) continue the income stream if she predeceases Marv.

This is a fairly common strategy. We even have a term for it: pension maximization ("pension max").The idea is that one can calculate the present value of that income stream, and then insure it with a life insurance policy. The advisor had recommended, and then sold her, a 15 year level term plan. Mary had called me because she had some reservations, and wanted a second opinion from an independent insurance agent.

I was happy to oblige.

My first concern was her advisor's ethics problem. I have nothing against fee-based planners per se, but when that same planner not only recommends, but also sells the policy, that is an insurmountable conflict of interest. Fee or commission, not both. My other concern was the inappropriate policy choice.

Let's talk about that.

Term insurance, which is "pure" protection, has many uses, and I sell a lot of it. It's often heralded (inaccurately) as the "least expensive" form of life insurance. The challenge is that it's a temporary solution: it's good for mortgage protection (20 years is 20 years) or if one's raising a family (in theory, at least, Little Johnny will be out of the house in 20 years or so). But it is not a good choice for more long-term needs (final expenses, estate issues, etc). In this case, the advisor was recommending a short term (or temporary) solution for what is, in reality, a long term (or permanent problem): when is Mary going to die?

We went round and round on that, until I asked her a question: why didn't she look for an annuity choice that only paid for 15 years? Surely that would be a larger monthly benefit, and who knows if she'd even live that long? She hesitated, then replied, "but what if I live longer?"

Silence can be golden.

Mary then asked me what I would recommend. I explained (again) that this was a permanent problem, so I would recommend a permanent solution. Whole life would do the trick, but can be terribly expensive at her age. "Regular" Universal Life might work, but lacks the guaranteed death benefit of Whole Life, and I wasn't too keen on going that route. I offered two suggestions:

First, a newer form of Universal Life, which (as long as the premium is paid) offers a guaranteed death benefit payable to age 120 (although premiums would stop at age 100). This plan had no cash value buildup to speak of, but since that wasn't really a goal here, it didn't matter. What did matter was that it would last as long as she needed it to, guaranteed.

My second choice was also a newer type of plan, a kind of hybrid called Return of Premium term. This plan was built on a term chassis but, at the end of the level term premium (e.g. 15 years) gave her a guaranteed, paid-up policy. Simply put, if she dies in the first 15 years, the full face amount would be paid. After 15 years, a lesser amount would be paid, but no premiums would have to be paid after that 15th year.

I explained that option one was a full, permanent solution to a permanent problem, while option two was a permanent "partial" solution. Either one was clearly (to me, at least) superior to the poor advice given by her financial advisor.

Which one, if either, will she choose? I really don't know. Mary really didn't like to think of this as a permanent problem, and who can blame her? But she called me, so something must have been bothering her about the status quo.

We'll have to wait and see.

Comments Update: Important Notice

HaloScan, the service which currently hosts our commenting system, has disabled the "edit" function, which means that we cannot moderate comments as we'd like.

I'm looking at alternatives (Disqus, Intense Debate, etc), and will have a decision soon. Unfortunately, this means that, for the time being, some comments will not be approved. These will include comments with links to commercial sites (as opposed to other blogs).

I am truly sorry for this, but it can't be helped.

If you'd like to comment on a post, and aren't sure whether it meets the guidelines, please send it to me via email with "Comment" in the subject line, and tell me which post you're commenting on.

Thank you for your patience!

Is Health Care a Right?

How about health insurance? A "Right" is not absolute, but it does provide a starting point, a minimum level of protection. The 1st Amendment, for example, guarantees us freedom of speech, but there are limits (shouting "movie!" in a crowded firehouse, for example); the 2nd guarantees us the right to own firearms, but again there are limits [ed: what, no bazookas?!].

But where is it enumerated that we have a right to either health care, or the means to pay for it (insurance)? We've come to expect access to both, and complain bitterly when either are not available or affordable. And various mechanisms have been developed to guarantee some access to both (EMTALA and HIPAA, for example). But just how far are we willing to go?

Here's why I ask:

"Patients will be able to escape NHS queues by demanding treatment anywhere in the European Union without the prior approval of a doctor, under proposals to guarantee health rights unveiled today in Brussels."

"Guaranteed health rights." Sounds good, right?

Not so fast:

"However, if unpredictable cross-border healthcare becomes a problem, the system could put into place a system of prior authorisation to safeguard the system."

Cross-border health care? Like this?

The Law of Unintended Consequences© (thus far not repealed by our congress) governs these transactions. "Rights" carry with them "responsibility," and we should be very careful what we wish for. When we give up certain rights in favor of others (say, freedom of choice in health care?) there are indeed consequences. We saw this in Massachusetts, and we've seen it in Canada and Britain, and we'll likely see it as it envelops the entire EU.

And what is "it," you ask?

Simply this: when a third party provides a service, you're pretty much stuck with that service, good or bad, until you switch. Take our current system, for example (and yes, I know that we have plenty of readers that would love to give it away). If I don't like XYZ Mutual's service, or network or rates, I can shop around to find one that fits me better. Or if I find that Dr Smith no longer suits me, I'm free to go to Dr Jones. But under a gummint-run system, which guarantees me access to both health care and the means to finance it, certain rules will apply, and I'm no longer free to make those kinds of choices.

So let's go back to the original question: is health care a "Right?"

My people have a (well-deserved) reputation of answering a question with another question, and I won't disappoint: Do we really want to make health care (and/or its financing) a "Right?" Rights, as we've seen, are regulated and rationed, and often lack for alternatives when we don't like the result. And then where do we go?

[Hat Tip: RWN]