Not qualified to be governor of California

This article discusses one of the dirty little secrets of health plans. They have future liabilities.

“[California] already owes another $48.2 billion in unpaid costs for retiree health and dental benefits.”

In the public sector, prime example California, these future liabilities tend not to be funded.

Suggestion from InsureBlog: if in this world of increasing pandemonium, you yearn for a brief respite of total silence - ask your town manager or mayor how much is the unfunded liability in your town employees' health plan.

Years ago, FASB decreed that all private companies disclose this unfunded health plan future liability and, in fact, reflect it as a cost on their financial statements. Not so for public entities like cities, counties, and states.

Or Medicare.

You don't think California is the only government entity with unfunded future liabilities, do you?

The unfunded future liability in Medicare is something like $60 trillion – give or take a trillion.

Just who do you think is going to pay these bills? Bernie Madoff? The tooth fairy? Your children and their children and their children?

Oh, and I can’t resist noting this additional gem:

“$11 billion in new borrowing”

See, that’s how states get out of debt these days. Ain’t it swell?

‘sfunny. It never occurred to me to borrow money to avoid indebtedness. Oh well.

All these things explain why I’m not qualified to be governor of California.

Another twist in the new COBRA rules

[Welcome Industry Radar readers!]

Here's another interesting twist in the new COBRA rules...the 65% subsidy starts phasing out if an individual's income is above $125,000 ($250,000 for couples) and is completely gone at the $145K ($290K) income point.

Admittedly this won't affect too many people, but let's think about how this works in practice. You get laid off. You take COBRA and pay the 35% that the plan administrator bills you. Your government pays the other 65% via the payroll tax subsidy to your ex-employer. You think that this is a great deal and add Obama to your holiday gift list.

Then you get another highly paid position and end up, at year end, with taxable income above the threshold. Guess how the subsidy gets paid back to the government...

You got it. On your tax return. Not only will you face a surprise tax bill, can you say "Underpayment penalties ??"

COBRA/Spendulus Update, Part 2

[ed: For background, click here and/or here]

FoIB and regular commenter Chad made this observation:

"As far as I can tell the subsidy applies to all group health plans subject to COBRA including dental, vision, HRAs, and [wait for it] health FSAs. Who wouldn't elect COBRA for their HFSA if the taxpayer is going to pick up 65% of the cost of the annual election. What a sweet deal!"

There was some discussion as to whether or not this was accurate, so I checked in with my Guru of All Things FSA/HSA/HRA, Pete Deist. He responded this morning that:

"It is but they still have to pay 35% AND have qualifying expenses to use up the money. I doubt many people will ... figure this one out."

So there you have it. For now.

And from co-blogger Bob Vineyard, this site has a plethora of up-to-date and helpful information on this complex and volatile issue.

Bad News, Good News

■ Item the 1st, Bad News Dept: On the one hand, it's remotely possible that, over the years, I may have had occasion to, um, disappoint my wife and/or daughters. Thankfully, however, it's never gotten quite this far [ed: that you know of]:

"(A)uthorities told [Kenneth Hughes] his wife of 34 years, Shirley Hughes, and his oldest daughter, Tammy Lewis, had plotted a murder-for-hire scheme to collect on his $200,000 life insurance policy."

Ouch!

But wait, there's a twist:

"(H)e was shocked at the allegations made against his wife but not his daughter." [emphasis added]

Memo to self: No more chores for Junior.

Of course, even had the plan succeeded, it's likely that neither wife/mom nor daughter would have collected a cent on the policy: since it's illegal for someone to profit from their crimes, the benefits would have been paid to either a contingent beneficiary or Mr Hughes' estate.

■ Item the 2nd, Bad News Dept: I've never been a big fan of dental insurance (at best, it's swapping dollars with the insurer), but this seems like a good reason to stay in-network:

"The attorney for a Woodland dentist told jurors that his client massaged women's chests as part of a medical treatment."

The, um, unorthodox "procedure" was ostensibly to treat his patients' temporomandibular disorder; TMJ generally affects the jaw and some facial muscles, so this defense seems unlikely to prevail.

Memo to self: Always accompany the wife to her dentist appointment.

■ Item the 3rd, Good News Dept: It seems safe to say that we've all heard of CAT scans, but would you believe that the MVNHS© is now using DOG scans?

Okay, it's not really the British health care system's newest medical tech, but a 64 year old woman's collie who made the potentially life-saving discovery:

"After Max began sniffing Mrs Burns's breath and then gently nudging her right breast, the 64-year-old examined herself and discovered a small lump in the same breast."

One wonders if this new technique will gain wider acceptance, but there's no doubt that, in this case, "Max" really was her best friend. Oh, in case you're wondering, Mrs Burns has "since had the lump removed and her prognosis is excellent."

Obama Doesn't Read InsureBlog

[Welcome FoxNews and Kaiser Network readers!]

Else he would know the difference between health insurance and health care. He would also understand that health care costs drive health insurance costs, and that simply extending insurance coverage to more people does nothing to cut the cost of health care.

So why is this important?

Because he's recommending that Congress spend an additional two-thirds of a trillion dollars to expand health insurance coverage.

Well, that's not quite right either: as we've pointed out many times here at IB, the gummint doesn't actually have any money: it simply takes funds from one group of people and redistributes them to another. This is called "taxes," and it's the primary means by which Congress can "pay for" such schemes.

The problem is that this is a well that can quickly dry up, especially as those folks targeted for additional taxation -- "the rich" -- stand by helplessly as their actual worth goes plummeting down the memory hole as the stock market continues its downward plunge. Then, too, there's the indisputable historical fact that higher taxes result in lower revenue for the gummint, thereby short-circuiting the process.

Historically, too, such programs inevitably outgrow their initially estimated size (cf: Medicare), and become cures which are worse than the underlying disease. Thus, a big problem becomes an even bigger one, with little hope of slowing down. Our political class has always been loathe to cut out programs which exhibit these traits (again, cf: Medicare), why would we believe that this one would somehow break that cycle?

The President is said to rely on "eight principles to guide his health reform effort," including freedom of choice as regards health care providers. But that flies in the face of experience: there are already two national health care schemes extant, Medicare and the VA. Both of these restrict that choice; why would any other program be any different? Indeed, how could another such system be any different?

The underlying problem is that the administration's “goal is still to bring down the cost of care and to get universal coverage." The problem is that it ignores the third leg: quality of care. As the saying goes, "you can have it fast, you can have it cheap, you can have it good. Pick any two."

Which ones would you choose?

Insurance Person of the Year Awards

No, not us (heck, none of us is even eligible!). Our friends at the Lexis-Nexis Insurance Law Center (which has deemed us as one of the Top 50 Insurance Law Blogs) is debuting its First Annual Person of the Year Awards for 2008. Categories include:

■ Policyholder Attorney of the Year

■ Insurer Attorney of the Year

■ Insurance Regulator of the Year

and

■ Insurance Jurist of the Year

According to FoIB Karen Yotis, nominations are being taken through March 6, "comments will be taken through March 13, and the ILC Board will make its selections at its monthly meeting on March 16. Recipients of the award will be featured in ILC’s April “Meet Me” campaign."

You can submit your nomination(s) directly to Karen via email.

Cavalcade of Risk #72 online now

From The Land Down Under, Russell Hutchinson hosts this week's roundup of all that's risky in the blogosphere.

Do stop by!

COBRA/Spendulus Update

[Updated - scroll down]

FoIB Bill Montgomery, CIC, points us to another "deal killer" in this bill. According to a memo from United Healthcare, "the subsidy provisions apply to state continuation coverage that is comparable to federal COBRA. That would include so-called "mini-COBRA" state laws that cover groups below the 20 employee threshold for COBRA."

Here in Ohio, groups with 2 (!) or more employees must indeed offer such an option; the key threshold is whether the (former) employee is eligible for unemployment compensation. If so, he or she may elect to continue the group coverage, at his/her own expense, for up to 6 months. Of course, this now means "at a substantial discount" for up to 6 months.

This does not bode well for small employers, who may have believed that they'd "dodged a bullet" when it appeared that these new reg's applied only to larger, COBRA compliant groups.

Of course, since "mini-COBRA" admin requirements are much less onerous than COBRA's, it's up to the (now former) employee to seek out this coverage. Still, if the extra costs are a problem for COBRA compliant groups, they could be disasterous for mom-and-pop shops.

Ooops.

Over on the Left Coast, co-blogger Bill Halper reports that California has CalCobra. He says that it "covers all group health plans (except those regulated by ERISA) with 2-19 eligible employees. The eligibility requirements are the same as Federal Cobra: as long as you are on the employer’s plan, pretty much anything short of walking in carrying an Uzi means you’re eligible. Voluntarily quitting your job, which would make you ineligible for unemployment, doesn’t affect your CalCobra eligibility. You can stay on CalCobra for 36 months; normally premiums are 110% of the employer’s premiums [ed: well, they were 110%. Now, not so much].

It’ll be amusing to see how this is implemented. Under CalCobra, the carriers are responsible for all of the administrative work. The employer notifies the carrier of a qualifying event, the carrier sends out the notice and then bills the participant and collects the premium. The employer is completely out of the loop. The Federal Law complicates things a bit.

OY! UPDATE: Just got this from one of our dental carriers: "Dental benefits are included in the health plan definitions of COBRA."

Exit question: If I didn't have dental before, will I be able to elect it at termination?

More (Bad) AIG News

From the Throwing Good Money After Bad Department:

"American Insurance Group, the insurance giant that is 80-percent owned by the US government, is in discussions with the government to secure additional funds so it can keep operating after next Monday, when it will report the largest loss in U.S. corporate history." [ed: emphasis added]

As we averred when the political class began schushing down this slippery slope, "When the gummint is your reinsurer, you're pretty much bullet-proof as to claims, reserves, you name it." And thus we see the results of unfettered access to someone else's (i.e. taxpayer) money. We're already some $150 billion into the struggling, ertswhile insurance giant, with no "happy ending" in sight. In fact, the rocket surgeons in Washington are now looking at swapping "some of the debt held by the government for equity in AIG."

What part of "enough is enough" don't these people understand?

There should come a point where the market is left to correct itself (I hesitate to say "must" because, with the gummint, all bets regarding common sense are off); sometimes this correction is painful. But it's the nature of risk; that is, sometimes you lose. Based on what we've seen so far, it doesn't seem likely that another infusion of hard-earned taxpayer dollars will net a long-term positive effect.

In other words, why won't they let us cut our losses?

Yummy! Grand Rounds is on the Table

The Blog That Ate Manhattan (burp!) hosts this week's roundup of medblog posts. From soup to nuts, you're sure to find some tasty food for thought.

Knowledge is Power. Except when it's not...

[Welcome Industry Radar readers!]

Here at IB, an overarching theme is "empowerment." Generally, this means consumer driven health insurance plans (e.g. HSA's), but it also means taking a more pro-active role in learning about treatment options. Of course, the two are interrelated: when one has more "skin in the game," as in high deductible health plans, one has a greater financial stake in finding out as much as possible about what one's physician is recommending.

Which brings us to our first bit of news:

"Cancer patients who research treatment options are three times more likely to get the newest drugs than patients who don't spend extra time learning about their condition."

This makes sense, since it implies that those folks who take the time and put forth the effort to research their options are bound to know more about their possible choices than those who don't. These are folks who've scoured the 'net, read newspaper and magazine articles, and (presumably) talked to other folks with similar conditions.

And it gets better, since "those who pursued second opinions from doctors as part of their research were the most likely actually to be prescribed" one (or more) of the newer cancer med's, such as Erbitux, and Avastin. These are drugs which seem to slow the growth of tumors (although the article is quick to point out that they don't necessarily cure cancer).

On the other hand, those "first adopters" also face increased risk of developing negative side effects from these meds: "Avastin increases the risk of strokes, heart attacks and serious blood clots. Erbitux can cause a disfiguring rash."

Still, they show promise, especially for folks who face a death sentence.

On the other hand, just relying on the doc's, without doing one's own "due diligence," may backfire. The University of Michigan recently surveyed over 3,000 folks, all over 40, who had recently had office visits:

■ In "93% of talks about taking cholesterol or blood pressure drugs and in a majority of talks about cancer screening and elective surgery," the doc's initiated the conversation.

■ Doctors were much more likely to recommend taking action rather than adopt a "wait and see" posture.

That second may not seem like a big deal, but sometimes not taking action is the right course; at the very least, there's concern that, as researcher Brian Zikmund-Fisher oberves, "You need to have an opportunity to say yes or no."

Which is not to say that the doc's themselves are completely to blame here; after all, how many of us do make the time and effort to ask questions? Yet that's exactly what we should be doing, regardless of what kind of insurance we have. Or whether we're insured at all.

It really comes down to this: personal reponsibility and empowerment.

Carnival of Personal Finance is up

The Broke Grad Student hosts this week's extravaganza, replete with (questionable) YouTube clips. It's a great way to see a lot of interesting finance-related posts.

Shut Up, and Call Me in the Morning

It's as American as apple pie: the right to complain about poor service. But beware, you may have to give up that right if you want your doctor to continue treating you.

"Doctors across the country are forcing their patients to sign waivers giving up their right to post comments and reviews about them online."

Of course, just because you sign something doesn't automatically mean that you're bound by it. But there are usually consequences for ignoring the rules, especially ones to which you've explicitly agreed. In this case, the consequence is a boot out the door - of the doc's office, that is.

According to Laurence McCullough, a professor of medical ethics at Baylor College of Medicine, "(t)his is just the guild trying to protect itself from accountability to those it serves. That's not professional behavior — this is self-interested behavior." Of course, the medical profession has been under fire of late for other potential lapses in ethics, so this isn't necessarily breaking new ground.

But it is troubling:

Dr. Wendy Mariner, a law professor and director of the Patients' Rights Program at Boston University, opines that "the waivers create an adversarial relationship between doctors and patients, and could possibly limit options for patients seeking care. If this kind of thing gains any traction, medical licensing boards will, and I think should, prohibit it."

On the other hand, the reviews in question are often, well, questionable themselves. After all, how is one to know if the person posting an online complaint against Dr Smith was actually a patient of his, or simply a disgruntled employee, for example? Absent some kind of monitoring, who's to know. But that, of course, begs the question: who does the vetting? There doesn't seem to be any reasonable answer to that one.

And there's this:

"Under the terms of the agreements, patients promise they "will not denigrate, defame, disparage or cast aspersions upon" their doctors or post comments to any Web pages by name or anonymously."

Of course, if it's anonymous, how would the doc know whom to "fire?"

For now, both sides seem to be finding their way around these questions. It may be a while before we see any substantive answers.

Cavalcade of Risk #72: Submissions Due

Next week's edition is hosted by Russell Hutchinson. Submissions are due by Monday, the 23rd, and should include:

■ Your blog's url

■ Your post's url

■ The post's trackback URL (if available)

■ A (brief) summary of the post

And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

You can submit your post via Blog Carnival or email.

Health Wonk Review: The Anti-Spam Edition

In honor of all the "spamblog" submissions I received for this outing, I thought it appropriate to include some useful spam tidbits. And so, each post this week is accompanied by a relevant, and yet tasty, Spam© concoction.

Enjoy!

(Oh, and if that doesn't work, try this)

■ We start off with a Singapore Salad, in honor of Pizaazz blogger Glenn Laffel's post reminding us that not all talk of health care reform is taking place here in the US: China's system is undergoing some changes, as well.

Careful though, about an hour after you read this post, you'll want to re-read it.

■ Moving on to the appetizer course, Sarah Axeen of the New Health Dialogue blog argues that we can both save the economy and reform our health care system, all in one fell swoop.

■ For those interested in lighter fare, we present Fiona Gathright's post at the Employee Wellness blog. She contends that folks are more likely to lose weight if they are paid for it, and that this weight loss would then translate to lower health care costs.

■ Sometimes, Puffs are a great idea. But David Williams, proprietor of the Health Business Blog, warns that looking for bargains in healthcare can lead to puffed up claims, particularly for uninsured and underinsured patients.

■ In a nod to our new president's heritage, we have a Hawaiian Spamburger, courtesy of Musings of a Distractible Mind's Dr Rob Lamberts.

The good doctor is thoroughly unimpressed with the state of Medicare, and in an Open Letter to the President, he explains why.

■ For a south of the border taste, we look to Nursing Degree blog. Looking to mix travel with surgery? Erika Collins has an indispensible guide to what she considers the Top 50 (and then some!) resources for Medical Tourism.

■ Interested in something that may sound good on paper, but might just be overreaching? Our own Bill Halper gives us his take on the "Stimulus" package (known around these parts as "The Spendulus"). Bill takes a look at all the health care provisions, and worries about their impact.

■ Like this recipe for incomparable corn chowder pot pies, Health Care Renewal guru Roy Poses has his own take on the comparative effectiveness research imperative in the recently passed "Stimulus" bill: if done right, he's all for it.

■ Sometimes, it's important to remember the basics, like a classic baked Spam loaf. Jason Shafrin, the Healthcare Economist, reviews some important healthcare statistics. These are classic, too, like health care spending that is expected to grow to almost 20% of GDP in 2017.

■ Remember when Egg McMuffins were first introduced, and folks wondered what they were? Well, just what is the Certification Commission for Healthcare Information Technology, and why should we care? Healthcare journalist Neil Versel explains both, including what they have in common with Bernie Madoff.

■ Is the Kaiser Family Foundation's recent report a bit cheesy? Disease Management blogger Jaan Sidorov thinks so, and gives the KFF a thorough fisking for its disingenuous criticism of insurance coverage for cancer patients. The good news, Jaan assures us, is that his own "pic is Obama-esque."

■ When grilling kabobs, managing heat is critical. So, too, is managing patient care, as Dr Rich reminds us in this "meditation" on why patients who receive stents are so poorly informed, and how policy decisions (i.e, how doctors are "managed") may play a role.

■ Talk about heartburn in a bowl: Blogger Merrill Goozner takes aim at the Atlantic Magazine's apparent misrepresentation of comparative effectiveness. Ouch!

■ This Mexican Extravaganza is sure to cause some gastric pain. And while we're thinking of it, does the level of pain you experience while recovering from surgery have any relationship to the type of coverage you have? Jon Coppelman of Workers' Comp Insider makes the case that it sometimes does.

■ If you're on a budget, these BLT Bites might be just the ticket. But, as Medicaid Front Page's Brady Augustine reports, the new SCHIP legislation may leave states scrambling to stay within their own budgets.

■ Bet you never expected to see the words 'Spam' and 'cupcake' together, did you? Canadian Medicine blog's Sam Solomon reports on a similar surprise: the Canadian Medical Association is lobbying to reform the country's healthcare system to make it look more like one of the mixed public-private European systems.

■ These Tuscan Spam Bites aren't the only things with (metaphorical) fangs; Anthony Wright opines that the benefits of COBRA shows the complete disaster that is the individual insurance market.

■ Just as this Seven Layer Dip has many levels, Louise at Colorado Health Insurance Insider reports that the Stimulus Package [ed: referred to as "The Spendulus" here at IB] includes some not so obvious ingredients, including some that she hopes will help to ameliorate the problem of so many uninsured.

■ And for dessert, something both sweet and tart. THCB's Brian Klepper reports on a recent appeals court decision that held against the advocacy organization Consumers' Checkbook, and with the AMA and HHS. The latter two are looking to keep Medicare physician data secret, but this may conflict with increased efforts at transparency in health care.

Be sure to check out the comments for some great fireworks, um, debate.

Thanks for stopping by; be sure to catch the next edition when Brady Augustine hosts at MedicaidFrontPage.

Taxes and Top 10 Lists

Our good friend Joe Kristan has been named one of the Top 10 Tax Bloggers.

Congratulations, Joe!!

Medical Transparency Update

Boy, do we get results!

Regular readers may recall that we recently reported on regulations regarding physician rewards for recommending certain regimens [ed: okay, enough already with the alliteration!]. Specifically, "the pharmaceutical industry has agreed to a voluntary moratorium on the kind of branded goodies...that were meant to foster good will and, some would say, encourage doctors to prescribe more of the drugs."

First out of the box, it would appear, is Big Pharma Behemoth Pfizer, which has just announced that "will begin disclosing all sizable payments it makes to doctors, including those who test experimental drugs in people, a first for the industry." Now, that's not quite the same as, you know, actually ending said payments, but it certainly adds an element of transparency to a hitherto murky underworld of quid-pro-quo.

As Pfizer's Chief Executive Jeffrey Kindler noted, "It's very important that we earn the trust of patients and the public."

No kidding.

And it looks like Pfizer's move has sparked an interest in others, as well: "A handful of drugmakers, including Merck & Co. and Eli Lilly & Co., have recently announced plans to disclose payments for consulting, giving speeches and the like."

Another "freebie" sore point has gone unremarked; the underwriting of CME (Continuing Medical Education) credits by Big Pharma isn't mentioned. It would appear that this potentially valuable "gimme" will remain untouched by these new efforts. Actually, that doesn't really bother me: presuming that CME courses undergo at least as much scrutiny as insurance ones do, I don't think there's much danger of "contamination."

Word Problems

No, not that kind of word problems. More like this kind:

When is a rate reduction not a rate reduction?

When it's tied to buying another product. As in this lovely little offer that I recently received from our UHC service rep: "My UW [ed: underwriter] has provided 3% rate relief, off your groups medical rates, if you add any of our ancillary lines...dental...vision...or life."

A few simple words, and I blew my stack.

Why is that, you ask? Let's rephrase this, and perhaps it will become more apparent:

"We're offering a one-time, multi-policy discount on your group health rates if you also purchase dental, vision or life coverage. In fact, this discount could pay for itself."

(NB: I had to add the "one-time" bit because they already offer an on-going "package" discount)

So why would one phrase give me the warm fuzzies, and a simple re-wording send me through the roof?

Call me old-school, but when a carrier rep says "underwriter" and "rate relief" in the same sentence, it implies a whole series of specific processes and decisions, the results of which should be completely independent of whether or not we buy an additional line of coverage.

In fact, wording it in such a way strikes me as just shy of extortion ("(t)aking money by force, threats or deception or by excessive overcharging"). After all, if we're healthy, why not just offer the lower rates? In fact, if the underwriter has determined that we qualify for lower rates, isn't the carrier obligated to just put them in place?

Why not?

But recasting this as a completely separate business decision (which, after speaking with the rep, I came to understand it to be) makes it an attractive offer, not a thinly veiled attempt at squeezing even more premium.

As they say, "words mean things." And sometimes, they mean things we don't intend.

Grand Rounds is up!

Nurse Kim hosts this week's 'Rounds, and it's Dynamite! (Napolean Dynamite, that is). Kim does a great job of weaving together snippets from the film with great medblog posts.

BREAKING: ShenLife on the Rocks [Updated]

Just "over the wire:" Shenandoah Life has been placed in receivership. This means that the state of Virgina has taken (at least temporary) custody of the troubled carrier.

The good news is that the system works: already, other carriers have stepped up to the plate, offering safe harbors for ShenLife insureds.

We'll have more on this over the weekend, as details come in.

[Hat Tip: An anonymous FoIB]

MORE: Readers may be wondering just why ShenLife foundered. Apparently, the predicate cause was its substantial position in certain pillars of financial stability:

"Shenandoah Life lost approximately $50 million when the value of its equity position in Fannie Mae and Freddie Mac preferred stock was significantly diminished."

[ed: "Significantly diminished" is insure-speak for "flaming burn-out."]

I must admit to having been somewhat flummoxed when I first heard the news this afternoon; it had flown completely under my radar. However, our "Anonymous FoIB" told me that it had caught pretty much everyone by surprise: as late as yesterday, another carrier had been in negotiations to buy ShenLife's entire book of business; that fell through and the Virginia Insurance Department (aka the State Corporation Commission) stepped in to act as safety net.

Just goes to show you, though, how important it is to diversify, and to avoid putting so much money into investments backed by questionable actors.

Health Wonk Review Coming Up

We're pleased as punch to host next week's roundup of all that's wonky. If you'd like to participate, please submit your post no later than next Wednesday (the 18th). Please be sure include:

■ Your blog's url

■ Your post's url

■ The post's trackback URL (if available)

■ A (brief) summary of the post

And PLEASE note: Only posts which meet the HWR Guidelines will be included:

"Health policy, funding, insurance, managed care, infrastructure, IT, the uninsured, economics and trends re same are all fair game."

You can submit your post via Blog Carnival or by dropping us an email.

On the Radar

If you're in the health care or insurance biz, HR or Project Management; if your job has anything at all to do with risk or benefits, you need to be reading the Industry Radar.

Head Honcho John Nail has grown this aggregator into a powerful tool for anyone who wants (or needs) to know about what's going on in health care financing, risk management, and benefits in general.

Highly recommended.

Are WE Stupid, Too?

[Welcome Industry Radar readers!]

Recently, I noted that doctors demonstrate a remarkable lack of intelligence and sense. But I also wonder why the public at large believes that health care reform included in the Spendulus is going to have a happy ending.

As we've repeatedly noted here at IB, unless we're able to contain health care costs, our likelihood of controlling health insurance costs is a pipe-dream. And we can look at real world examples to ascertain the truth of this.

One such example, often cited as a model of health care efficacy by those in favor of such systems, is Medicare. Unfortunately, it fails miserably on all counts:

"An ambitious effort to cut costs and keep aging, sick Medicare patients out of the hospital mostly didn't work, a government-contracted study found."

Got that? A "government-contracted study." Not an insurance company or doctor's association. For many seniors, chronic illness is a way of life; the challenge is to manage it cost-effectively. Unfortunately, this gummint-run system has demonstrated no such ability:

"Most of the patients had serious, but common, age-related illnesses...Programs were set up at 15 centers...Only two cut the number of times these patients were hospitalized...None saved Medicare any money." [emphasis added]

One of the primary problems (and again, one we've mentioned many times) is that many folks have behaviors that can be changed, but too often remain unchecked: weight, excercise, smoking, etc. Without more personal responsibility, there's very little hope of change, the power of the gummint notwithstanding:

"The only way you can really do it is by changing patients' behavior and by changing physicians' behavior, and both things are really hard to do," according to the study's author, Randall Brown.

No kidding.

Stupid Mommy Tricks

Several years ago, we caused a kerfluffle with a series of posts explaining why IVF (In Vitro Fertilization) should not be covered by insurance. At the time, it never occured to us that we should have added "or by the taxpayer."

Ooops:

"A big share of the financial burden of raising Nadya Suleman’s 14 children could fall on the shoulders of California’s taxpayers."

Turns out, the young "lady" (who had already spawned 6 children) has been receiving gummint subsidies, at least in part because she is unemployed. For some reason, this rocket surgeon decided that having a slew of additional mouths to feed would be appropriate, and that it would also be appropriate for thee and me to pay for their care.

Perhaps the hardworking taxpayers of the Golden State (or should that be "Goldbrick" State?) had other plans for those dollars; alas, those tireless workers weren't consulted, only forced to pay up.

But wait, it gets better!

"(T)he hospital where the octuplets are expected to spend seven to 12 weeks has requested reimbursement from Medi-Cal, the state’s Medicaid program, for care of the premature babies, according to the Los Angeles Times. The cost has not been disclosed." [emphasis added]

Oh, great: a blank check!

The good news is that Ms Suleman "doesn’t consider the public assistance she receives to be welfare." Well good on her! After all, it's only important to consider what one calls it, not that one is expected to pay for it.

Surprisingly, "bloggers rained insults on Suleman." Gee, I wonder why?

Cavalcade of Risk #71 Now Up

Once again, Julie Ferguson presents an outstanding edition of the Cavalcade of Risk. From peanut butter to lightbulbs, medical errors to radiation risks, you're sure to find something to interest (or scare) you.

Do check it out.

And consider hosting your own Cav; we're scheduling for Spring '09. Just drop us a line to snag yours.

Doctors are Stupid (Updated)

[Welcome Industry Radar readers!]

[ed: File this under "great" (?) minds think alike - before I had the chance to push the "Go!" button on this post, my colleague Bill Halper had his take on the Spendulus Package. Please be sure to read it. And it appears that Bob will also be sharing his thoughts on it a bit later.]

Yup, that's what I said: as a group, doctors are stupid.

That bears repeating: as a group, physicians are stupid.

And on what do I base this?

Well, let's look at the headlines on the front page of the AMA website:

■ AMA Cheers New Law to Get Kids Health Coverage

■ AMA Wins Legal Victory for Physicians in Privacy Court Case

■ AMA Wins Victory with Record-Breaking Settlement in case against insurer

Not one word on the Spendulus package, which contains even more pieces of a nationalized health care system As Bloomberg News' Betsy McCaughey reports:

"The bill’s health rules will affect “every individual in the United States” (445, 454, 479). Your medical treatments will be tracked electronically by a federal system."

And:

"One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective."

So let's review those AMA headlines in this new context, shall we:

■ AMA Wins Legal Victory for Physicians in Privacy Court Case. Nope, you can kiss that privacy goodbye. After all, the gummint's proven so adept at keeping private information private.

■AMA Wins Victory with Record-Breaking Settlement in case against insurer. And that goes the way of the dodo, as well: can't sue the gummint. So when the bureaucrats in Washington say "jump," the doc's only response will be "how high, boss?"

These are folks who willingly gave up major chunks of their lives to study, work, even brreathe medicine. many of whom make (very) nice wages for these efforts. Yet they willingly risk throwing all of that away to make, what, a political point?

Okay, that's certainly their right and prerogative.

But it's also proof of my original thesis.

And there's this: If you're a "seasoned citizen," be aware (and beware) that this bill dramatically reduces your choices (and chances), as well:
"In 2006, a U.K. health board decreed that elderly patients with macular degeneration had to wait until they went blind in one eye before they could get a costly new drug to save the other eye."

[ed: as we reported last summer]

According to Ms McCaughey, "seniors in the U.S. will face similar rationing." Talk about an uncertain future.

Carnival, anyone?

Oh, and for Economies With "Performance Issues," there's this:

[Hat Tip: Joe Kristan]

You Want Stimulus? I'll give you stimulus...and everything but the kitchen sink...

I hate to be negative about the Stimulus Bill and the myriad of provisions which will affect all of us, but please read:

Ruin Your Health With the Obama Stimulus Plan

If the Bill passes with the provisions relating to health care still in it, you need to think about how it will affect you. As the article says:

"The bill’s health rules will affect “every individual in the United States” (445, 454, 479). Your medical treatments will be tracked electronically by a federal system. Having electronic medical records at your fingertips, easily transferred to a hospital, is beneficial. It will help avoid duplicate tests and errors." (ed. And how often have you had duplicate tests???)

"But the bill goes further. One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and “guide” your doctor’s decisions (442, 446). These provisions in the stimulus bill are virtually identical to what Daschle prescribed in his 2008 book, “Critical: What We Can Do About the Health-Care Crisis.” According to Daschle, doctors have to give up autonomy and “learn to operate less like solo practitioners.”

Read the comments about his book. Daschle will not be a cabinet member, but no doubt a similar thinking individual will be.

Next time your doctor says he can't prescribe what he wants or treat you the way he wants because the government deems the treatment or medicine not cost effective (even if you want to pay for it) you can blame the Stimulus Bill. If you don't have blinders on, you might even blame Sen Reid, Speaker Pelosi, and oh, yes - President Obama.

You might ask what such provisions have to do with stimulating the economy, but don't. Those questions aren't allowed. If the law isn't passed, it will be a catastrophe. Just ask the President.

Gardisil in the Crosshairs (Again)

From the Told Ya So Department:

"There are new concerns about Gardasil, the vaccine that prevents a virus that caused cervical cancer. It's approved for girls as young as nine ... The FDA and its maker insist it's safe. But CBS News investigative correspondent Sharyl Attkisson has exclusive information on some very serious side effects."

Ooops.

Turns out, this questionable med - which costs $120 a pop - is not only unproven, but potentially quite unsafe:

"The National Vaccine Information Center [NVIC], a private vaccine-safety group, compared Gardasil adverse events to another vaccine, one also given to young people, but for meningitis. Gardasil had three times the number of Emergency Room visits ... Reports of side effects were up to 30 times higher with Gardasil."

Major oops.

In fact, the NVIC notes that "there are more reactions and deaths associated with Gardasil than with another vaccine given in the same age group."

And yet, proponents of the vaccine continue to promote its use; in fact, they're also pushing to have it administered to boys who, as I understand it, have a very low incidence of cervixes (cervixi?).

Oh frabjous day!

On The Other Hand: Turns out that the doc who connected the dots between the MMR vaccine and childhood autism may have significantly fudged his numbers:

"The doctor who sparked the scare over the safety of the MMR vaccine for children changed and misreported results in his research, creating the appearance of a possible link with autism, a Sunday Times investigation has found."

One of the hallmarks of good science is replicability; that is, that results can be replicated in subsequent studies. When one deliberately misreports the actual test results, and also refuses to divulge how they were obtained, it renders those results unuseable.

Or at least it should.

Shame on "Dr" Wakefield, and further shame on The Lancet for even accepting the report in the first place.

The Carnival of Personal Finance now up

Follow the yellow brick road to this week's edition of the Carnival of Personal Finance. Host Brooke of Dollar Frugal has a Wizard of Oz theme that works quite nicely.

Wasteful Government Tricks

No, not that wasteful government trick.

You just can not make this up:

"As he tells it, Randall Hinton is paid $93,803 a year to do nothing...His work agenda involves placing his feet up on his desk, staring out his office window and counting cars on the New York State Thruway. He arrives at 7:30 a.m., leaves at 3:30 p.m., sees no one and talks to no one."

And just what is his (ostensible) job?

Why, he's the "director of investigations for the Insurance Fund." To hear Mr H tell it, he's not allowed to actually investigate anything, though, because he had sued the state for discrimination. Although that suit has long-since been settled, this Investigator-without-Portfolio has been idled, forced to spend long, lonely days staring out the window, perhaps contemplating life "on the outside."

By my reckoning, that amounts to over $50 an hour to twiddle his thumbs, all on the taxpayer's dime. Nice work if you can get it.

And just what is the State Insurance Fund actually for? Glad you asked:

"It exists to provide workers' compensation and disability policies as an insurer of last resort to 190,000 employers statewide."

Hmm. I wonder if Julie knows about this.

The crux of the matter seems to be that Mr Hinton believes that he's being discriminated against for having had the gall to sue a GOP-led administration. This falls apart, of course, since Democratic Governor and Man-About-Town Eliot Spitzer elected to continue the charade.

Meantime, New York taxpayers continue to fork over almost $8,000 a month for this gentleman to, well, you know.

Cavalcade of Risk #71: Submissions Due

Julie Ferguson, proprietor of Workers Comp Insider blog, hosts next week's Cavalcade of Risk. Submissions are due by Monday (the 9th). Please be sure to include:

■ Your blog's url

■ Your post's url

■ The post's trackback URL (if available)

■ A (brief) summary of the post

And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

You can submit your post via Blog Carnival or email.

It's really easy to host, and a nice bump in traffic. Just drop us a line to reserve yours.

Hiding in Plain Site

The nationalized health care folks have found renewed energy and legitimacy in the latest iteration of the Trojan Horse known as SCHIP:

"A new report, Maximizing Kids’ Enrollment in Medicaid and SCHIP: What Works in Reaching, Enrolling and Retaining Eligible Children, suggests strategies states can use to increase enrollment in Medicaid and the State Children’s Health Insurance Program (SCHIP) based on tested ideas for reaching, enrolling and retaining children who are eligible for public health insurance."

Of course, this is merely the logical result of an effort to push more folks out of the private sector and into the gummint trough. There are a myriad of commercial alternatives for children (very few of whom are uninsurable), but that just won't do. Rather, the NatHealth folks see an historic opportunity to expand gummint-sponsored and -run health care schemes, forcing our children into substandard care.

Of course, our friends at the Robert Wood Johnson Foundation are all for it; after all, it serves to legitimize their own view of health care finance and delivery. And of further course, the National Academy of State Health Policy (whose board consists primarily of beareaucrats and educators, with no evidence of input from the private sector, let alone the insurance industry) is all for this, since it represents more money for state governments.

What's so appalling to me is that we've come to a point where the NatHealth folks aren't even trying to hide or disguise their agenda.

Early February Health Wonk Review now online

David Williams, fresh off of hosting last week's Cavalcade of Risk, once again dons the mantle of Carnival Master, presenting a terrific Health Wonk Review. From primary care to Big Pharma, this one's got it all.

Do stop by.

And by the way, InsureBlog hosts the next edition, slated for the 19th.

Treat-worthy Carrier Tricks

Over the years, we've chronicled numerous examples of carriers' less-than-stellar performances. Sometimes, though, they do the right thing, and we try to document those times, as well.

This is one such time.

Recently, we reported on Anthem's apparently lackadaisical approach to changing policy effective dates. In this particular instance, my client learned that she could retroactively cancel her previous coverage back to January 1, and receive a full refund from the prior carrier. But we'd already nagged Anthem to move the effective date forward, to February 1.

Could we get them to rescind this change, and regain the original (January 1) effective date? I set out to try.

The bad news is that it took two days, several hours on the phone, and numerous blind alleys to get to the person empowered to make the change. I eventually got to the right department, but was told in no uncertain terms that the company will allow only one such change per policy. The lady with whom I was speaking made it clear that she was not empowered to make an exception.

So, of course, I asked to speak to the person who was so empowered.

The good news is that I did connect with that person, a supervisor (of course!), who listened politely to my plea and rationale, asked a few questions, and agreed to make the non-change. I'm sure it helped that I had also asked my client whether they'd had any claims since January 1 (which they hadn't), and if they understood that they'd still have to pay Anthem's January premium (which they did).

So, kudos to Anthem for making things right, and for being flexible enough to understand why they should.

Insurance and the Hive(mind)

According to the American Family Association, our esteemed political class has apparently invented a whole new kind of insurance: catastrophic Apis mellifera cover.

For those without a Latin-English dictionary, that would be bee insurance:

"Pg. 102 of Senate Appropriations Committee report: "The Secretary shall use up to $ 50,000,000 per year, and $150,000,000 in the case of 2009, from the Trust Fund to provide emergency relief to eligible producers of livestock, honey bees, and farm-raised fish to aid in the reduction of losses due to disease, adverse weather, or other conditions, such as blizzards and wildfires, as determined by the Secretary")"

That buzzing sound you hear may be a previously uninsured hive stopping by to bind coverage. Or it could just be the innocent taxpayer getting stung again.

Knockin' Wood

The Robert Wood Johnson Foundation, that is. As is typical of such endeavors, when the facts don't support one's preconceived conclusion, just change the subject.

In this case, the Urban Institute doesn't much like free market solutions to health care and/or health insurance issues, so they decided to pick on the one product that is generally perceived to be the most useful in both reining in costs and insuring more people: consumer driven health care plans.

Here's how they characterize consumer-centric health care:

"This RWJF-supported study by the Urban Institute indicates that HSA and HDHPs are likely to be attractive to people with high incomes and those with expected low use of health care services, but they are unlikely to decrease significantly the number of uninsured."

As we've already demonstrated here at IB, none of these conclusions are valid.

Let's take them one at a time:

Fallacy #1: "attractive to people with high incomes." While this may be true (certainly folks with money are likely to want to keep more of it), it implies that folks with lower incomes don't find these plans attractive. As we've previously noted, "75% of its HSA enrollees have an income of $50,000 or less, with 27% reporting a net worth of less than $25,000.” Those folks aren't exactly "high rollers."

Fallacy #2: "those with expected low use of health care services" Again, it's obvious that those who have few health care needs have little use for needlessly expensive health insurance, so of course they'd find HDHP's attractive. But as Bob has repeatedly pointed out, those who have moderate to even heavy use of health care also benefit from plans which eschew costly "extras."

Fallacy #3: "unlikely to decrease significantly the number of uninsured" Of course, this one's the silliest of all, since high deductible plans have lower premiums than their expensive co-pay counterparts, so are more affordable to those who are uninsured, and since the plans have higher deductibles, it seems more likely that those with more health problems (up to a point, of course) will be more likely to make it through underwriting.

As the highly-regarded Heritage Foundation puts it, "(m)ore than 6 million Americans are enrolled in HSA-eligible health plans. And the popularity of these plans is growing, in no small part because patients can determine how much of their money to spend today, or save for tomorrow, for health-care expenses. In short, HSAs allow patients to make prudent decisions for themselves."

Catch that? "HSA's allow patients to make prudent decisions for themselves." That's the whole crux of the matter: the liberal vision assumes that the gummint is best suited to make those decisions for us. The pragmatic, sensible vision is that we are the ones best suited to make them for ourselves.

We Get Results

First there was this: "Mr. Daschle, meet Dartmouth"

Then there was this: "(T)he gentleman in question isn't known for thinking things through"

And now we have this: "Tom Daschle has withdrawn his nomination for health and human services secretary"

Coincidence?

I think not.

Grand Rounds is up

The Samurai Radiologist marks his first blogiversary by hosting this week's Grand Rounds, and does a fine job of it.

Do check it out.

Outrageously Stupid Carrier Tricks: AA Edition

It's difficult, really, to decide which carrier is more incompetent. I'll lay out the facts, and encourage readers to draw their own conclusion.

First up, we have the curious case of Aetna, which doesn't seem to know how to actually underwrite individual medical insurance. I only recently began writing business with them; until a short time ago, their individual policies had a "poison pill" which made them unacceptable. They did away with the offending verbiage, and I was pleased to see what appeared to be well-designed plans with reasonable rates.

Unfortunately, the "2 out of 3 rule" came into play: alas, they have no clue how to underwrite plans. Case in point: a client who completed an online application in early January, requesting a mid-month effective date. This client had some very minor health issues, but that didn't stop Aetna from dragging its feet.

They conduct "phone interviews" with prospective clients; unfortunately, they kept calling mine at his home. During business hours. When I called them to point this out, I was told he could call it in himself. So I passed along the contact number, and he did, in fact, call in. They requested additional information, which he promptly got from his physician. We actually sent this twice, since Aetna couldn't be bothered to keep track of it.

I was told by Aetna that this was all that was needed, so I presumed that all would be fine. What they neglected to inform either myself or my client was that apparently this fax, from the physician, wasn't enough - they needed to talk with him again. Again unfortunately, they neglected to communicate this to either my client or myself, with the result being that they've now closed the case.

This will become a major component of at least one future Continuing Education class.

Anthem doesn't fare much better: on another recent case, they took so long to underwrite and issue that the effective date came and went. Ordinarily, this wouldn't be a major problem, but in this case, the client had paid a semi-annual premium to his current carrier, and we couldn't get a partial refund. So, we asked to move the effective date forward one month.

No big deal, right?

Not so fast: it took well over two weeks, numerous phone calls and emails, and I finally received word that the date had been changed to February 1.

I got that information today: February 2.

We may be able to resolve this with the current carrier, but why should it take so long to make a very simple change? It isn't as if we're asking them to retroactively issue a policy so as to cover a new condition. Actually, they're off the hook by one month, which would be a reason for them to honor the request quickly. There just isn't any acceptable reason to put my client through this aggrevation and stress.

So there you have it.

UPDATE: Poll's closed, here are the results:

Firing a Cannon at SCHIP

FoIB and Cato Institute wonk Michel Cannon has a fascinating and insightful article in the latest edition of the National Review Online. In it, he argues pursuasively that although the program has enjoyed modest success, it has done so at an unjustifiable price.

Here's a taste:

"It’s not even clear that SCHIP’s method for improving children's health—expanding insurance coverage—is the right one. The New England Journal of Medicine reports large gaps between the quality of care children receive and what they should receive, even if the children have insurance. That study’s authors conclude, “Expansion of access to care through insurance coverage, which is the focus of national health care policy related to children, will not, by itself, eliminate the deficits in the quality of care.”

Note well that last caveat about "quality of care." How come *that's* never addressed by those who favor socialized medicine?

As they say, read the whole thing.

Fixing Gender Discrimination in California

Great Scott! In California (of ALL places) there is a state law that would “force women to pay more than men” for individual health insurance. Who knew??

California already has a law forbidding gender-rating of group insurance. Somehow, the legislature forgot about individual policies, and the City Attorney of San Francisco has filed suit to remedy that error.

He will probably succeed. Remember, this is California.

The inconvenient truth remains that insurance premiums reflect the underlying cost of the insured liability. In this case, health insurance premiums for women are greater than for men, because the cost of health care for women is greater than the cost of health care for men.

But never mind that! Because this is another wonderful opportunity for California politicians and other self-serving “public” servants to grab publicity for some self-serving comments about some alleged discrimination against women.

And the consequence of their political showboating? Why, mainly that women will pay less than their cost, while men will be required to pay more than their cost to make up the difference. But will anyone pay attention? I expect not. Not in San Francisco or Sacramento, anyway.

Oh, and one more thing. The fact that insurance prices reflect the underlying cost of the insured liability also explains why life insurance rates for women are significantly LESS than for men.

But life insurance premiums never seem to result in any gender-discrimination lawsuits or grandstanding by these very same politicians and public servants.

Funny, that.

Deeper and Deeper: Too MUCH Transparency?

File this under things I probably didn't want to know [ed: take deep breaths, Henry]:

"Tom Daschle, tapped to be President Obama's health czar, was paid more than $200,000 by the health-care industry in the past two years."

As Bob previously noted, the gentleman in question isn't known for thinking things through, but is that really a good qualification for this job? After all, he's now going to be responsible (at least in part) for much of our nation's health care system. Does the term "conflict of interest" ring any bells?

We've noted before the inherent problem of folks who accept "gifts" from those whose products and services they're responsible for recommending; how bad is it when the gummint's health care czar-to-be accepted, in just two short years, almost a quarter of a million dollars from the folks he's charged with regulating?

Hope and change, indeed.