Sold Out Seniors

AARP's underhanded tactics are not news to regular readers of IB, but this takes the cake:

"Friday ... the AARP sent a memo to Senate officials threatening to yank support for the chamber's health committee's version of reform if it didn't get what it wanted on another provision in the bill related to biogeneric drugs ...

I cannot recommend a letter of support or a major grass-roots effort in support [of the health care reform bill]. Indeed, people will probably have to be critical, particularly about that provision. I hope you won't force us to do that on such an important bill that I know you all have worked so hard on."

"Gee, that's a nice store ya got there, pal, be a shame if anything happened to it."

Of course, this is merely politics as usual in DC, but it's fascinating (albeit disappointing) to see what's supposed to be the advocacy group for seniors making such (un)veiled threats. At stake, of course, is AARP's reputation as king-maker, able to wield its powerful sword (tens of millions of seniors' votes) to get its way, even at the cost of the very lives of those they ostensibly represent.

Think that's a tad dramatic?

No, it isn't:

"[O]lder people will be left vulnerable to discrimination and could miss out on life-saving treatment in favour of younger patients."

That's the view of the British health care system (known here as the MVNHS©). And it's definitely the view of The One:

"President Obama suggested at a town hall event Wednesday night that one way to shave medical costs is to stop expensive and ultimately futile procedures performed on people who are about to die and don't stand to gain from the extra care."

And in case it's not obvious to the casual observer, his very next statement concerned his grandmother. This ain't rocket surgery: he's explicitly proposing to limit care to the elderly.

One would think that might have caught AARP's attention, but it's apparently a lot more interested in scoring political points than saving the lives of its constituency.

Of course, one would be wrong.

The Medicare Tomato Market (and lessons for today)

[Promoted from the comments section - Thanks to Andrew Garland]

Regular commenter Andrew Garland tips us to this fantastic post from fellow med-blogger The Happy Hospitalist. It's a bit lengthy, so I'll only excerpt some key points, but please do yourself a favor and Read the WholeThing©:

"Imagine for the moment that you have been taken out of reality and into the alternate bizarro world of the Medicare Tomato. In this analogy, the Medicare Tomato represents a day in the life of a practicing physician...

Enter the massive government take over. A massive coup on the tomato market. By a midnight Congressional mandate, the destruction of the free market exchange of money for tomatoes was replaced and regulated by the Medicare National Tomato Bank (MNTB) ...

Immediately after removing free market principles from the tomato market, the MNTB instituted the principles of most resistance. If something can be regulated, it will be. The word quickly spread through out this great nation of ours that the government would now make tomatoes a right for everyone ...

[ed: that sounds familiar]

In their brilliant strike of genius, they decided to try something that had never been tried before in the world of capitalism. They would reign in the cost to the MNTB, not by cutting the demand (political suicide), but by instead instituting a policy of 80% payment of market prices ...

The first response exacerbated the problem. Since the super duper technology tomatoes were paid at a higher rate, more and more grocers stopped offering cheap tomatoes. They simply removed the variety of product. They removed their rings of service. One product fits all ...

The cheap primary tomato market was killed off."

Now, dear reader, try substituting the term "tomato" with "health care" and the picture becomes crystal clear.

And quite frightening.

Cavalcade of Risk #81: Call for Submissions

Jaan Sidorov hosts next week's Cavalcade of Risk. Submissions are due by Monday (June 29), 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.

HSA Update: Early Summer Edition

Regular readers know that we're big HSA (Health Savings Account) fans here, so it's nice to see that they continue to gain traction. According to the latest from the Association of Health Insurance Plans (AHIP), this is indeed the case:

"An annual census by ... AHIP ... shows that the number of people covered by health savings accounts/high-deductible health plans (HSA/HDHPs) totaled 8.0 million in January 2009."

That's an increase of over 200% in two years. Interestingly, the fastest growing segment seems to be the large group market, up about 35%. I don't do much in that arena; my doctor says I don't get enough stress, and recommended that I concentrate on the small group and individual markets to fix that.

Speaking of the individual market, AHIP's survey found that over half of those folks covered by an HSA plan were over age 40. Once again, we put the lie to the "only the young and healthy buy into HSA's" canard.

There's a lot more in the study, but it's clear that these plans have become "mainstreamed" in the market, and have become much more acceptable in all segments. Although I'm not holding my breath, I think that these kinds of plans, which require more individual commitment and responsibility to health care, could make a valuable contribution to health care reform efforts.

And speaking of HSA's, the new contribution limits for 2010 are in:

The max contribution limit for individual HSAs goes to $3,050 (up $50 from this year); for families, the new max is set at $6,150 (an increase of $200 from '09 levels).

Next year's minimum deductible will be $1,200 for individuals, and $2,400 for families, an increase of $50 for the former and $100 for the latter.

And, finally, the 2010 max OOP (out of pocket) for individuals increases by $150, to $5,950; for families, the max will be $11,900 (up $300).

Something about those numbers seemed "off" to me, so I broke out the ol' Excel and plugged them in. The maximum contribution amounts for 2010 increased 1.6% for individuals, and 3.25% for families. But the annual potential exposure (out of pocket maximum) increased about 2.5% for both individuals and families. This seems unfair to folks with single coverage, since they're going to be playing an impossible game of "catch up."

Just my $.02 (up 3.76% from last year!)

RIP, Angel Jill Munroe

[Welcome Industry Radar readers!]

For those of us of a certain age, Farrah's hair and swimsuit set a certain tone (maybe even expectation). To us, she'll always be Charlie's First Angel.

Fly, Jill.

Health Wonk Review, Late June Edition

Master EconBlogger Jason Shafrin hosts this week's collection of wonky health care posts. If you like soccer (aka "metric football"), you'll love this HWR.

Let's Make a (Health Care) Deal

As Bob has pointed out, a major problem for funding all these wonderful new initiatives is that the price tag keeps getting bigger and bigger, but no one in DC really has any idea of how to pay for it. One way, of course, is to begin taxing employees' health insurance benefits. While that would appear to be a non-starter (a lot of "employees" are also "voters"), there's one large, implacable and irresistible force that could make it happen:

"(U)nion workers who helped Democrats win Congress and the White House and whose support will be key in getting a health bill signed into law would not pay the tax."

Yup, that should do it. After all, if the unions can't count on their own employees (aka the Legislative and Executive branches), then what was the point of all that campaign moola? And since they now basically own (in conjunction with those employees) major swaths of industry, it seems pretty likely that they'd get their way.

Of course, if they're exempt, what about all those poor non-union employees?

"Tough luck, bud."

On the other hand, we know that the cost of at least part of the proposals now on the table is a major reduction in the cost of medication, maybe this won't be so bad. After all, reducing the cost of drugs is sure to lower the overall cost of health care, and hence health insurance.

Right?

Well, not so much:

"The Obama White House cannot explain more than half of today's announced $80 billion in prescription drug savings."

Oh.

So the $80 billion in savings (which would do so much to alleviate the expected multi-trillion dollar government expansion into health care and insurance) just got halved? That can't be good.

The underlying problem is that no one in Washington really understands the relationship between health care costs and health insurance costs, so no plan realistically addresses either one. The overarching motto is "throw more money at it." Of course, there's no evidence that this approach has ever worked in the long run, but hey, pols aren't known for letting reality get in the way.

Take Me Out to Grand Rounds

Nurse-blogger Barbara Olson manages this week's line-up of health posts, complete with CrackerJack and beer (okay, no beer). She's sure hit a home-run fielding this outstanding team of interesting med-posts.

That Paradox

The New York Times reported on June 21 (3rd paragraph) “While 85 percent of respondents said the health care system needed to be fundamentally changed or completely rebuilt, 77 percent said they were very or somewhat satisfied with the quality of their own care.”

The Times refers to the survey result as “that paradox” (4th paragraph) but strangely, in the remainder of the 21-paragraph article, the reporters and editors at the New York Times do not probe for an explanation of the paradox, as though they have no interest in understanding it. Well, perhaps they think the paradox is unimportant? Apparently not. The Times blames the failure of the Clinton plan on “that paradox” - - 16 years ago (4th paragraph). That makes the paradox pretty important, it seems to me. And the Times' opinion on the failure of the Clinton plan is surprising because that plan failed 16 years before the present survey was conducted.

Well, perhaps the Times is merely conceding “that paradox” has existed for at least 16 years (I have evidence in my files that “that paradox” has existed for more than 30 years, but never mind). OK, but then if it is such a powerful and apparently paradoxical fact in public opinion that has existed for 16+ years, why does the Times not even attempt to explain it?

It’s my belief “that paradox” exists precisely because (1) most people are in fact generally satisfied with their medical care and (2) slanted media reporting across all those years has created the impression that most people are NOT satisfied with their medical care. So it's understandable that surveys report most people are satisfied, but believe most others are not.

In other words, “that paradox” which the Times does not explain and pointedly ignores, is the difference between what people experience for themselves, and what media such as the Times tell them is experienced by others. So I ask: who ya gonna believe? The New York Times or your own lyin eyes?

PS – Is this paradox newsworthy? I think so. Well then, why would the Times not print all the news; isn’t it fit to print? My answer: with depressing regularity, the Times deems news not fit to print when it does not fit the Times’ agenda. What is the Times’ agenda? In this area, the Times supports universal, government-controlled medical care. But if the Times were to concede that most people are generally satisfied with the quality of their own medical care, what then? Well, that would admit a powerful argument that takeover of the present system by the federales is just unnecessary. Therefore – Times won’t print that. Times won’t acknowledge that line of argument has merit – or, even, that it exists.

Carnival of Personal Finance: Iron Mike edition

Check out this week's bout of the Carnival of Personal Finance at the Suburban Dollar blog. It won't box you in, but it might knock you out (in a good way).

Transparency, Canadian-Style

For all the hoopla over transparency (and we've been advocating greater transparency in health care for a long, long time), the private sector seems to be ahead of the public. We see that in carrier tools like Aetna's Navigator, for example, and with a growing number of physicians' offices which share their pricing information with patients. True, Medicare has been working on this issue, and kudos to that agency for acknowleding transparency's value.

Unfortunately, our Neighbors to the North© aren't necessarily "true believers," and since the gummint-run system is the only game in town, that's a problem. For example, the Providence of Alberta seems reluctant to share data that some might consider critical to their own care and well-being:

"One Alberta hospital has an injury rate for newborns more than four times the provincial average. Patients in another Alberta hospital are five times as likely to pick up an infection following medical care, while patients at yet another hospital are more than twice as likely to experience bed sores ... But the report is unable to provide the names of specific hospitals because Alberta Health Services refused to release hospital names."

If one needs inpatient care, it might be nice to know which facility to skip to avoid bed sores. If one expects a lengthy recovery, it might be helpful to know which one to pass on to avoid an increased risk of infection. There may, in fact, be good reasons why a particular facility has more cases of a given condition, based on its focus (heart care, oncology, etc). But absent that information, no one really knows for sure.

As we rush headlong toward a similar system, it may be worth asking whether that's something we really want.

[Hat Tip: Leah Costello]

HRA's in Hot Water?

We've written extensively on the subject of healthy choices, and how these can positively affect insurance premiums. This can be especially helpful in the group arena, where employers often use a tool called a Health Risk Assessment (HRA) to help guage employees' health. This, in turn, is used by the insurer as one factor in the rate-setting process.

Some employers have gone so far as to require their employees to complete these forms as a pre-condition to participating in the group insurance program. In fact, the Department of Labor (which oversees ERISA, or self-funded, plans) actively endorses these tools as a way to help contain insurance and health care costs.

Alert Reader© Jeff M informs us that another gummint agency, the EEOC (Equal Employment Opportunity Commission) may be putting the kibosh on this little excercise:

"Seemingly oblivious to the ever-increasing concern shared by the rest of the country over rising health care costs, the U.S. Equal Employment Opportunity Commission recently cast doubt on the use of health risk assessments, a proven effective tool in the fight against rising group health insurance costs ... the [EEOC] issued a letter to an unidentified municipality, stating that the county’s conditioning of eligibility for its health plan on the completion of an HRA violates the Americans with Disabilities Act."

Ooops.

At present, this kerfluffle is just that, "an informal discussion on HRAs and health insurance coverage;" it's not an official "cease and desist" matter.

Yet.

We'll keep you posted.

Alzheimer's is NOT (Political) Fair Game

As we've noted more than once, although we are not apolitical, IB is not a "political blog" (poliblog). We don't, for example, endorse candidates or particular legislation. Sometimes, though, the political class oversteps its bounds and, in the popular lingo, "jumps the shark." The outrageous and utterly despicable smear against (now former) Inspector General Gerald Walpin is without honor or decency, and directly slights every Alzheimer's patient, their families, and those who care about them.

Regardless of one's political persuasion, there is simply no excuse for casually claiming that someone with whom one is in political disagreement is suffering from dementia or senility. Mr Walpin was fired from his post for reasons political, but President "57 States" Obama felt it appropriate to claim that the IG was dismissed because he was "confused, disoriented, unable to answer questions and exhibited other behavior that led the Board to question his capacity to serve;” all text-book definitions of Alzheimer's.

Having watched and cared for a real Alzheimer's victim, and having seen how Mr Walpin comports himself on television (indeed, passing a standard state-approved "mini-test" for dementia), it is obvious that this is a man in complete control and awareness of his faculties. It is an insult to my mother, and to the thousands of others who truly suffer from this horrid affliction.

It is simply inexcusable.

Healthcare "Debate:" Shut up, They Explained [UPDATED & BUMPED]

[Welcome Industry Radar readers!]

[Please scroll down for update]

The dictionary defines a debate as "a discussion in which reasons are advanced for and against some proposition or proposal;" implicit in that definition is the opportunity for each side to present its argument.

So why do we continue to call the juggernaut that is government-run health care a "debate?"

"Top aides to Senate Finance Chairman Max Baucus (D-Mont.) called a last-minute, pre-emptive strike on Wednesday with a group of prominent Democratic lobbyists, warning them to advise their clients not to attend a meeting with Senate Republicans set for Thursday."

It seems that Mr B doesn't like the idea that "the other side" may have some valid points to make; after all, "we won." Still, one can at least understand, if not condone, this kind of political grandstanding: after all, politics is very much a contact sport, and the Republicans have the opportunity to fight back in the court of public opinion.

Or do they?

"On the night of June 24, the media and government become one, when ABC turns its programming over to President Obama and White House officials to push government run health care ... exclude opposing voices on the debate."

This is unprecedented. A primetime news conference, sure, but even there, the press at least has the opportunity to question. But this is simply Pravda-in-English. Advocates of government-run health care should be embarassed - indeed, appalled - that their arguments are so weak that they can't stand to be questioned. And anyone who still believes that our media is an independent institution needs a reality check. Apparently, ABC now stands for "All Barack's Cheerleaders."

I certainly hope that folks will change the channel.

[Thanks to reader Tom T for the Drudge tip]

PILING ON DEPT [6-17-09]: It never occurred to me that the term "free press" meant that media folks would actually work for free:

"ABC is refusing paid ads for its health care program at the White House."

How much would a 30- or 60-second primetime spot normally bring in? Hundreds of thousands of dollars? More? And that's being purposely turned away in favor of scoring political points? Where are the ABC shareholders on this? Heck, where are the Disney shareholders on this?

The pro-government-healthcare folks are so afraid of the light of day, and an open, honest debate on the merits, that they're actually putting their investor's money where their own mouths are.

Words fail.

Agent/Broker Alert: Scamster Warning

Just got this from the PIA (this is a professional organization primarily for P&C agents; our agency is a member):

"Insurance agents and brokers in Nevada and California have found themselves the target of a scam recently ... individuals posing as Department of Insurance (DOI) employees are contacting agents and brokers by telephone and are informing them that their license may be canceled as the result of outstanding fees/penalties. They are then told that by providing their credit card and social security numbers, the matter can be resolved over the telephone."

Question: How many agents have actually fallen for this?

[ed: probably a lot more than you'd like to think]

As the release points out, Insurance Departments don't contact agents by phone on matters such as these; they're almost always by mail (ie, paper trail). So if you get such a call, keep your Visa number to yourself, and contact your own DOI as soon as possible.

Be careful out there...

Show Me the Money, Show me the Doc's

In a rare show of insight, physician's attending the recent AMA gathering in Obamaman's old stomping ground actually let loose a chorus of boo's. Admittedly, this was for a rather self-serving issue: "limits on jury damages in medical malpractice cases." Still, it shows a developing wedge between health care delivery folks and the gummint's efforts to nationalize their industry.

And it gets better (or worse, depending on whose ox is being gored): the Congressional Budget Office (itself not known for underestimating the cost of government-run programs) projects that the administration's health "reform" plans will cost a cool $1 trillion over the next ten years. Of course, it will ostensibly cut the ranks of the uninsured; the problem is that, as usual, that number is grossly inflated. Based on our own and other's research, we estimate the actual number of those eligible Americans who are chronically uninsured at about 25 million. That comes to some $40,000 per person (or $160,000 for a family of four). Of course, that also presumes that the $1 trillion is truly the ceiling, instead of the (more likely) floor.

But even if we take the Obamaman at his word [ed: quick, call Ripley's!], the $1+ trillion price tag does nothing to decrease the number of uninsureds.

How's that, you may ask?

Well, let's go back to the CBO, whose head honcho had this to say about "The Plan:"

"According to our preliminary assessment, enacting the proposal would result in a net increase in federal budget deficits ... When fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges. At the same time, the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million, so the net decrease in the number of people uninsured would be about 16 million or 17 million."

No matter how you spin this, it means that more people will lose employer coverage than gain gummint-sponsored health insurance. It's essentially rearranging deck chairs, shuffling folks from one type of plan to another, dropping many altogether, with the net result being a net loss. Somehow, I don't think this is the change folks were hoping for.

We've also heard how the adminsitration is going to cut Medicare and Medicaid expenses (i.e. reimbursements) to help offset the cost of this new initiative. Again, it'll be interesting to see how (or, perhaps, if ) that actually plays out.

Unfortunately, none of these proposals tackle the underlying problem: increasing health care costs. These are driven by a number of factors, the most critical of which is "skin in the game." As long as someone else is paying the lions' share of health care costs (be that the government or your insurance carrier), there's little incentive to not consume care. That, in turn, leaves us free to indulge our whims, often to our own detriment. As Bob has pointed out numerous times, many (most?) health care expenses could be reduced, or even eliminated, if we made healthy lifestyle choices.

Perhaps we could take a page from our P&C colleagues: auto insurance, for example, is based almost exclusively on behavior: get a lot of tickets, or wreck a lot of cars, or drink and drive, and you'll pay more. I've never heard of anyone seriously protesting this (well, except those who get dinged for their own misbehavior), and it seems to work out just fine. So why can't health insurance be more like that?

Well, it can:

Safeway, the grocery behemoth, put in place a health insurance plan that's priced directly relative to risk. That is, it's based on the actual behaviors of its participants. They observed several facts:

"The first is that 70% of all health-care costs are the direct result of behavior. The second insight, which is well understood by the providers of health care, is that 74% of all costs are confined to four chronic conditions (cardiovascular disease, cancer, diabetes and obesity). Furthermore, 80% of cardiovascular disease and diabetes is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable."

Participating employees agree to be screened for such things as tobacco, weight, blood pressure and cholesterol levels, and their premiums are then adjusted to reflect the increase or decrease in risk. Seems simple enough, and fair, too. After all, shouldn't folks be rewarded for keeping health costs (and hence, insurance premiums) down? Why couldn't these principles be applied in the broader marketplace? If the goal is to reduce costs, and thus premiums, wouldn't that ultimately lead to a reduction in the number of folks who find health insurance unaffordable? And of course, there's the added bonus of quality of life, as well.

Now that seems like a win-win to me.

Cavalcade of Risk #80 is up!

Rita Schwab hosts this week's risky collection of posts. Do stop by.

About that "Public Plan" Option: Notes from the Warpath

One of the problems with the idea that our government should be running health care is that, to some extent, it already does, and does so poorly (cf: VA, Medicare/Medicaid). But there's one gummint-run health care system that's not getting any press, and that should leave its proponents red-faced:

"Ta'Shon Rain Little Light, a happy little girl who loved to dance and dress up in traditional American Indian clothes, had stopped eating and walking ... she was diagnosed with terminal cancer, confirming the suspicions of family members ... A few weeks later, a charity sent the whole family to Disney World ... She never got to see the castle, though. She died in her hotel bed soon after the family arrived in Florida."

That's because the US Government-run Indian Health Service has become a (funny like David Letterman) joke:

"On some reservations, the oft-quoted refrain is "don't get sick after June," when the federal dollars run out."

It's essentially gallows humor, because the funds do run out about half-way through the year, leaving sickly American Indians with few options, and little hope. In fact, the Fed's are required, based on a treaty dating abck to 1787 (over two hundred years) to provide adequate and appropriate health care to American Indians. We can't (or won't) honor that commitment to a veritable handful of people, yet we're expected to believe that the gummint can handle the health care needs of hundreds of millions of other citizens?

Where's that bridge you were going to sell me?

[Hat Tip: Reader Brad F]

Grand Rounds Online

Another Early Bird, Ryan DuBosar presents this week's Grand Rounds a day ahead of schedule. As usual, there's a lot to digest here, and it helps that Ryan's 'Rounds are thoughtfully laid out and easy to navigate.

COBRA/ARRA Update: Gay Pride Edition

As previously noted, we have no problem discussing alternative lifestyle issues and insurance. This latest comes from Alert Reader© Jeff M, who asks (and then answers) "did the new COBRA rules change taxation of domestic partners?"

This is especially relevant as we see more and more carriers offering "family plan" type coverage to unmarried couples (and those same-sex marriages in relevant locales). In general, domestic partners (DP's) aren't eligible for dependent status on 1040's, so the question of how (and/or if) they should be taxed on employer provided health insurance is a poser.

Add in all the confusion about COBRA/ARRA, and you've got the makings of a real mess.

Fortunately, Benefits Attorney Frank Palmieri has the answer: a resounding "No!"

The issue is one of imputed value; that is, the monetary benefit of insurance, um, benefits. To the extent that these are (currently) not taxable for "regular" dependent coverage, the question of how they're treated for "non-traditional" arrangements becomes problematic. There was some concern that the new COBRA/ARRA rules in some way affected the taxation of these benefits with regard to DP's, but this appears to be a non-starter.

Well, so far, anyway.

[Thanks to reader Jeff M!]

There's an Annuity in my IRA!

[Welcome Wall Street Journal readers!]

One of our commenters raised an issue about which we've never written: the use of annuities in IRA's. As I replied to said commenter, there are some very good reasons to own an annuity inside an IRA wrapper (and, of course, some very good reasons not to).

First, let's review some basics. An IRA (Individual Retirement Account) is a financial tool which allows one to accrue retirement funds on a tax-advantaged basis. There are two forms of IRA: "Traditional" and "Roth." The first allows one to deduct contributions from one's income tax, but the interest earned will eventually become taxable at retirement. Contributions to the Roth version aren't deductible, but the interest isn't taxable come retirement time.

Annuities are risk management tools, used to minimize market risk. Because they're insurance products, they also offer some unique benefits (such as annuitization, which can provide a guaranteed lifetime income stream) and guaranteed interest (growth).

Annuities also have their own tax advantages which closely mirror those found in IRA's, which begs the question: isn't an annuity inside an IRA something direct from the Department of Redundancy Department?

Well, yes and no:

IRA's can comprise mutual funds, stocks, bonds, and the like. They can even include annuities. If the only investment vehicles are those with built-in market risk (e.g. mutual finds, stocks, bonds, etc), it's possible to actually lose money inside the IRA (just ask pretty much anyone who's had one over the past year or so). Annuities have built-in guarantees, which can mitigate some of the market risk of the investments.

Some might argue that putting an annuity inside an IRA is simply a way to line a lucky insurance agent's pockets. Of course, that presupposes (wrongly) that no one makes money selling the investments (which also often have "trails"). I'm not a big fan of "one size fits all," so I never recommend that folks use only annuities for retirement savings, but as we've seen, they're terrific risk mitigation tools, and certainly have a place at the IRA table.

Carnival of Personal Finance now online

This week's collection of personal finance posts is now up at Living Almost Large. As usual, it's chock full of useful financial tidbits.

A Blogging Nightmare?

Although I really have no idea why, we've had occasional hits from a blog called April's Mom . No big deal: we get hits from a lot of different, perhaps unexpected places. The April's Mom blog is (was) written by a young woman who was pregnant with a terminally-ill baby girl; the heart-wrenching, yet inspiring posts chronicled the journey.

Or not.

Turns out, April's Mom was not, in fact pregnant with a terminally ill child. Or any other kind:

"A blogger who wrote of deciding to give birth to a terminally ill baby, attracting a following of thousands of supporters online, admits now that the entire story was made up."

Oy.

The blogger behind the blog is a 20-something Chicagoland social worker, who became unable (or unwilling) to stop building on lie after lie. She even received gifts from loyal readers, and prayers from well-wishers (and pro-life advocates). It appears that she really did lose a son, shortly after his birth, in 2005. Why she waited this long to start the April's Mom blog is, at this point anyone's guess.

Actually, it's not all that clear why she started it at all (although it does appear that she hoped to use it as a pro-life advocacy effort).

So, why are we blogging on this?

At its peak, her blog was getting over 14,000 hits a day (hard to believe, but that's even more than we get!). That kind of traffic implies, and in fact generates, a certain amount of credibility. So when a blog that big implodes, it calls into question others, as well.

Regular readers here know that we don't blog anonymously, and there are a number of reasons for that. But the over-arching one is credibility: it's quite easy to post controversial items when one has the shield of anonymity. It's quite another when folks know who (and where) one really is.

Frankly, I wouldn't have it any other way.

Paint Me a Birmingham

Thanks, Tracy, but today we're talking about hip resurfacing, not oil painting. A while back, we had a guest post from Dr Robert Roman discussing a new hip surgery technique. Recently, I had the opportunity to speak with Bob about another hip procedure, this one aimed primarily at "young actives."

By the way, "young actives" are those folks aged 55 or so who enjoy an active lifestyle, and don't want to be sidelined because of a bum joint.

Typically, a hip replacement involves cutting a piece of bone, and then attaching a new piece (or three). There's usually a pretty significant waiting period before one's able to get back to one's accustomed lifestyle, whether that's mall-walking or a round of golf. Another downside is that the replacement parts have a finite (and known) lifespan. This is a problem, because no one really wants to have such an operation at age 57, and then again at 72.

And that's where this (relatively) new technique comes in. Called the Birmingham Hip Resurfacing System, this process, developed by Smith & Nephew, holds a lot of promise for those "young actives." As Dr Roman explains, it involves much less bone resection, and patients can expect to get back to their pre-surgical activity level much faster than with a traditional hip replacement. In fact, according to Dr Roman, some 87% of folks who undergo the resurfacing process are back to their pre-surgical levels of participation in sports activities, and in past series some 22% of these athletes participate in contact sports.

[ed: Actually, Dr Roman may be understating the benefits of the Birmingham approach; according to this study, almost half again as many folks who had the surgery were able to participate in sports post-op, and "a significant proportion of patients who did not do any sports before surgery are able to take part in sports after surgery." ]

This procedure also lends itself nicely to the anterior approach (where the patient is prone and the surgeon proceeds from the front, rather than the traditional posterior - or lateral - approach). It's less invasive than traditional replacement surgery, which means a faster recovery time, but Dr Roman also warned that's it's more labor intensive for the surgeon. Another benefit is that the "Birmingham method" is a self-lubricating, metal-on-metal bearing surface, so there is much slower wear and tear.

Hunh?

This simply means that there's greater longevity in comparison to a traditional metal-on-plastic bearing, and so less likelihood of additional replacement procedures down the road.

Let's step back and look at how "a Birmingham" works: the surgeon make an incision, and then trims the "knob" at the top of the leg bone where it joins with the "cup" of the hip, and adds a little ball (much like the ones we used to put on car antennas). He then adds a metal "liner" inside that cup; there's a very small channel where the new ball and the newly-lined cup meet. The body's own, natural lubricants fill in that space, creating a self-lubricating system.

Very cool.

[ed: Click here for a short video showing the difference]

Of course, we also need to consider both the cost and the insurance aspects of this procedure, especially in contrast with the traditional replacement method. As Dr Roman explained it, the Birmingham is a bit more expensive (at least initially), but that cost differential is minimal. The surgeon's fee is generally set by either Medicare (if applicable) or one's insurer, so it tends to be the same as a full replacement. So at least from the outset, there's no tangible cost-savings. Of course, if there are fewer complications, then longer-term costs are likely to be lower. It's really a lifestyle, rather than a financial, calculus.

From the insurer's perspective, this has become just another procedure, not considered experimental. Again, fees are dependent on procedure codes, but carriers seem to be okay with it. In fact, it's generally the same code as a full replacement, and reimbursed the same way. And providers like it because it gives them an additional marketing tool: "hey, we've got the latest tech and processes, and can get you back on the courts and courses faster."

So what are the downsides? Well, as Dr Roman points out, the anterior method we discussed previously, while continuing to gain steam, faces some obstacles. For one thing, many hospitals are a bit skittish about the $80,000 capital investment for the new, specialized equipment. For another, surgeon's who have had reasonable success with traditional replacement techniques often take the "if it ain't broke, don't fix it" route. Still, these are not insurmountable obstacles, and Dr Roman is confident that this technique will become relatively commonplace in the near future.

Thanks again to Dr Robert Roman for helping us to enlighten our readers. If you have any questions, please feel free to pose them in the comments, or drop us a line.

Cavalcade of Risk #80: Call for Submissions

Rita Schwab hosts next week's Cavalcade of Risk, and she's looking for some strong, risk-related posts. Deadline for submissions is Monday, June 15. Please remember to submit yours with:

■ 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.

American Health Choices Act, v. 1.01 [UPDATED & BUMPED]

[Welcome Insurance Forums readers!]

[Please scroll down for update]

And so it comes to pass that we learn Senator Kennedy's staff are busy bees, having ground out a 167-page interim draft of a Bill they are pleased to call the American Health Choices Act. A copy was leaked over the weekend. The text of the draft Bill and the article where I saw it are here - both are at Keith Hennessey.com, the economics blog. I recommend you read Hennessey's entire linked post on this draft Bill.

My reading of the draft Bill so far: Congressional staffers are far along in defining what will be theirs to choose, ours to obey.

If you decide also to scan thru the draft Bill, you will almost immediately come upon this:

6 SEC. 2. DECLARATION OF RIGHTS.

7 (a) RIGHTS OF PATIENTS TO CHOOSE THEIR DOC
8 TOR.-It is the right of patients to select the doctor of
9 their choice.

10 (b) DOCTOR-PATIENT RELATIONSHIP.-A strong
11 doctor-patient relationship is essential to the practice of
12 medicine, and patients have a right to an effective doctor-
13 patient relationship.

14 (c) HEALTH PROFESSIONALS SHOULD JUDGE WHAT
15 Is BEST FOR THEIR PATIENTS.-Doctors, nurses, and
16 other health professionals have the right to judge what
17 is best for their patients.

18 (d) No INTERFERENCE WITH THESE RIGHTS.-
19 Nothing in the this Act or the amendments made by this
20 Act interferes with the rights described in this section.

Paragraphs (a) and (b) sound innocuous but are not. Still, it's paragraphs (c) and (d) that really creep me out.

Paragraph (c) grants no legal right to patients, to influence the judgement of what is best for them. Perhaps more importantly, paragraph (c) grants patients no legal right to refuse treatment that a doctor may prescribe. Only "health professionals" are given these rights. And then paragraph (d) says "we really mean it."

Does this strike you as a little creepy? It sure does me.

Ah well, as the man once said at his finest moment in the movie, So let it be written, so let it be done.

Maybe this is only a movie.

UPDATE [HGS]: Mike's done an outstanding job of delineating some of the problems with this legislation. From an agent's (and free market advocate) perspective, this is certainly frightening:

"Specifically, §2704(a) is the “Requirement to provide value for premium payments.” A health plan must report how much of their premium revenues are used for clinical services, how much for “activities that improve health care quality,” and how much for “all other non-claims costs.”

§2704(b)(1) then tells the Secretary to look at how much other health plans spent on “all other non-claims costs,” and based on that survey, set an allowable percentage for this category. Plans are then required to rebate premiums if they go above this amount. This is direct (but confusing) regulation of premiums and profit margins."

What this means is that an insurer which is able to operate more efficiently (that is, save money on claims) will actually be penalized for doing so.

Brilliant.

Will Doc's Prove They're Not Stupid? [UPDATED & BUMPED]

[Please scroll down for update]

Several months ago, we raised the question (and a lot of hackles) of whether doctors - as a group - are dim bulbs. Our justification for concluding that they were was fairly damning: the AMA website, which continued to tout a government takeover of the health care industry [ed: see UPDATE below for news].

But the AMA doesn't necessarily speak for all physicians, and a grassroots effort to stop the gummint juggernaut has been launched:

"We are an organization of concerned physicians committed to the establishment of a health care system that preserves the sanctity of the doctor-patient relationship, promotes quality of care, supports affordable access to all Americans, and protects patients’ freedom of choice."

Let's examine those principles one by one:

"sanctity of the doctor-patient relationship" Under a nationally-run system, the government decides who you see, when and how often you see them, and (under some proposals now under consideration) what courses of treatment the physician may undertake.

"promotes quality of care" This should be self-evident, but under current gummint-run systems (e.g. Medicare, VA), quality of care is not the primary metric (that would be cost).

"affordable access to all Americans" That one's somewhat of a puzzler: there are already a myriad of programs, both public and private, that give every American access to health care.

"protects patients’ freedom of choice" Freedom to choose which doctor (or doctors) one may see, what kinds of care one may receive, and the opportunity to make (informed) choices.

That last is especially relevant: while the politicians and pundits try to cast this battle in terms of economics and heart-strings, it's really about choices, and the freedom to make them. To choose whether or not one wishes to buy insurance, and what kind; the freedom to choose a provider, or not; the freedom to choose personal accountability and responsibility.

Or not.

Choice versus mandate.

Consider carefully.

UPDATE: Well looky here! The AMA has finally seen the light, and has now gone on record as opposing the so-called "Public Plan."

Of course, they continue to conflate health care and health insurance:

"While committed to the goal of affordable health insurance for all, the association had said in a general statement of principles that health services should be “provided through private markets, as they are currently.”

Still, if they can be made to see the light on one major issue, perhaps there's yet hope for the doc's.

Health Wonk Review: Major Reform Edition

HWR founder Joe Paduda hosts this week's edition of health care wonkitry, with a special focus on current health care and financing reform issues.

The HWR is always a great read; this week, it's a must read.

Long-Term Care . . . the other elephant in the room

[Welcome Wall Street Journal readers!]

The U.K is studying the problem of long term care (nursing homes) and one proposal is for mandatory, private long-term care insurance. I think this is a creative idea that is worthy of discussion and debate – not only in the U.K but here, too.

One very constructive concept in the linked article is that mandatory, private long term care insurance would be “primary” to NHS. This means that the cost of nursing home care for insured persons would first be paid by each person's insurance company, up to the policy limit, thus reducing the expenses of nursing home care to NHS, i.e., the public treasury.

Problems with the idea? oh yeah, sure, the same problems as with mandatory insurance of any kind. But it's my hope that won’t be used as an excuse to ignore the need for policy debate here, on LTC.

In the U.S., long-term care is not covered at all by Medicare or private medical insurance. Only a few fortunate people have the resources to pay for nursing home care themselves – which can easily cost $75,000 per year, or more depending on where you live. So in the U.S., most people who need nursing home care also need significant financial aid and the most common source of aid is Medicaid.

To qualify for nursing home benefits under Medicaid, one must “spend-down” one’s assets to essentially zero – in other words, one must be, or become, impoverished to qualify.

While private LTC policies have been available for many years, relatively few people buy them. Going without LTC insurance can mean assuming a very substantial risk because in the event one needs nursing home care, the only practical option may be to spend down your life’s savings, apply to Medicaid – and live in poverty.

Statistics suggest the odds of needing nursing home care at some point in one’s life are over 50%. This means that, for the average person over age 65, the question of confinement in a nursing home is more a matter of “when” not “if”. Note in the linked article a health minister states these chances are one in ten; that may be the case in the U.K., but in the U.S. the risk seems to be much higher. That's why you should care about LTC.

Medicaid now pays for more than 50% of all nursing home expenses with the result that almost 33% of Medicaid spending goes to nursing home care. The oldest baby-boomers are now beyond age 60 and many more are coming behind them like a wave. If a more effective means cannot be devised to cover long-term care expenses, I think we will witness:

(1) much higher Medicaid expenses which will devastate federal and state budgets, and result in higher taxes or reduced benefits or both.

(2) increasing numbers of people who impoverish themselves to obtain nursing home care.

There needs to be public policy debate about long term care and the debate should start right here and right now.

The U.K appears to be engaging this problem. The U.S. should, too.

ObamaCare: A Thousand Words' Worth... [UPDATED!]

'Nuff said.

[PhotoShop courtesy Michelle Malkin]

UPDATE: Leave it to Peach State physicians to "get it:" Check out Docs 4 Patient Care to see how front-line providers (not ivory tower AMA types) see this looming battle. [More here]

Carnival of Personal Finance is up!

David Weliver, blogging at Money Under 30, presents the 208th edition of this venerable roundup of finance posts from around the 'sphere. It's done well: there's an Editor's Picks section, and then the other submissions.

Early Grand Rounds...

Oh those Brits! This week's Grand Rounds, the weekly compendium of great medposts, is hosted by The Jobbing Doctor. TJD is a bit early out of the gate: GR generally "goes live" on Tuesdays. Still, better early than never...

Seriously, don't miss this intriguing take by a distinguished member of the MVNHS©.

Public Plan or Public Enemy? Our Conclusion

In Poe's The Purloined Letter, the thief hides the stolen item in plain sight. He knows that most folks tend to overlook the obvious, and takes advantage of that fact. In much the same way, members of our political class are using the innocuous sounding title "Public Plan" to (not so) surreptitiously implement a gummint-run health system.

How's that, you ask?

Well first, let's review the premise behind the so-called "Public Plan" (PP): the government will institute an "alternative system to private insurers, much like some states already use for their employees;" the PP would offer certain plan designs at set rates, presumably subsidized for those who can't (or won't) pay the higher premiums. Of course, the gummint has a poor track record in predicting how its policies will actually work in real-time. Case in point: current unemployment numbers. You may ask, "what's that got to do with gummint and health care?" The reality is that the Spendulus was supposed to create (and/or save) scads of jobs, and yet the latest unemployment figures show that we're worse off than if there'd been no Spendulus. Why would anyone think the Feds would be any more successful in anticipating the effects (and costs) of a nationalized health care system?

Meanwhile, we still have the unanswered question of how the PP will supplant the private sector.

First, the PP must recognize that health care costs drive health insurance costs, and that absent some downward pressure on the former, the latter's just going to continue to climb. There are only a few ways to control costs, and comparable systems we've explored (cf: the MVNHS© , Canada, et al) have done so through rationing, generally at the expense of those in their Golden Years.

Second, while the PP is advertised as being an alternative to insurers, it is in reality a substitute for them. How can we state this so unequivocally? Because we saw in the recent mortgage debacle that when the government meddles in private sector financial issues, we get mandated loans to folks who have no way of repaying them. And how does that apply to insurance? Well, when the government is buying and selling health care, it can use the power of the state to get its way, and thus the whole "level playing field" theory becomes a myth. How can private insurers hope to compete against the government, especially when the state can reduce fees at will, rather than through negotiation?

As mentioned in Part 1, I was particularly intrigued with Stuart Butler's term: "the down the road." First, the so-called "wall of separation" between the government and the market becomes blurred (Hello! GM, anyone?), and as costs continue to mount, there's every reason to believe that the government will continue its tradition of tinkering with systems about which it has no real experience or understanding. It becomes, in essence, the team manager and the umpire. What could possibly go wrong?

Mr Butler also observed that what people "heard" during the election is not at all what we're seeing proposed: that if one is currently insured, that wouldn't change. But of course, it must: as we've seen with Medicare [ed: did we mention that that's going bust in less than 10 years?], the gummint has, and uses, the power to shift costs to the private sector (insurance). Of course, when it's expanded to the population writ large, the problem is then magnified.

There are those who would argue that the PP is simply an extension of already-existing state employee programs. This would be disingenuous: no individual state has anything like the power of the Federal Government. Indeed, a national PP would control costs simply by controlling how much is paid, a sure-fire way to force health care rationing.

They say that a picture's worth a thousand words (and we're already up to 600+), so we'll conclude with this video, which neatly summarizes the inherent problems of a Public Plan. Or is that Public Enemy?

[Thanks to Lyndsi Thomas for the video link]

iTriage Update

Just got an email from Healthagen announcing that their iTriage app (reviewed here) is now free.

Exit question: Should I ask for my $1.05 back?

Cavalcade of Risk: 3rd Anniversary Edition

Hard as it is to believe, this edition of the Cavalcade marks our 3rd Anniversary. As has become our tradition, we're including posts only from those who submitted (hosts know that I spend the weekend before a Cav "hunting" for interesting risk-related posts). To see how far we've come, one has only to look at our premier issue.

The Traditional third anniversary gift is leather, but I'm kind of afraid to go there. The Modern gift is crystal or glass, but these pose substantial risk of breakage, so they're out. It turns out that the gemstone gift for third anniversaries is pearls, and I think that's just about right: each of these posts contain at least one pearl (of wisdom, natch):

■ If you're like a lot of folks, you've already broken the first rule of password protection: don't Post-It-Note it on your monitor (bet you never saw Post-It-Note conjugated before, have you?). An even better idea is to pick a password with some heft to it. Jim at Bargaineering has some tips on how to pick a strong, but easily recalled, password.

■ Five Cent Nickel's not afraid to ask the tough questions. With all the banking and finance problems in the news, have you ever considered the role of the SIPC (Securities Investor Protector Corporation)? FCN has, and offers some insights.

■ Ever heard of the ADA? No, not Jack McCoy, but the Americans with Disabilities Act. Nancy Germond asks you to consider if you're ready to help your injured workers return to productivity, because there's some new changes to the Act that could test your risk-assessment skills.

■ It never ceases to amaze me how EconBlogger Jason Shafrin effortlessly segues from economic principles to risk management, but he sure makes it look easy. Today, he takes a look at Medicare Part D (known around these parts as "D for Debacle") , and how it's affecting pharmacy insurance benefits. Jason reviews an article and makes some disturbing discoveries.

■ Talk about the horse's, um, mouth: Colorado Health Insurance Insider's Jay Norris offers up a guest-post from the President of Anthem Blue Cross Blue Shield of Colorado. John Martie has the insurer's perspective on some important, and potentially troublesome, aspects of guaranteed issue health insurance.

■ Rita Schwab (who hosts the next Cav) highlights the risk to patients, hospitals, and practitioners involved in a negligent credentialing case, and the potential risk to reporters and bloggers who may find themselves in the midst of controversy for writing about the case. And make sure you see the email received from the defendant's attorney at the bottom of the post. Scary stuff.

■ HWR founder (and all-around good guy) Joe Paduda cautions "Medicare for all? Not so fast..." Joe's been conversing with Jacob Hatcher and Jason Rosenbaum about the merits of using Medicare as the basis for a public health plan option. Joe's not convinced Medicare is the right answer, in fact he's pretty much convinced it isn't. But he thinks that another government offering may well be.

■ Self-proclaimed rookie blogger John Leppard thinks that when "Change" (vaguely defined) is the centerpiece of the national agenda, it is quite fitting to be a little apprehensive. Promises aren't the same as policies, but they can be just as dangerous. Such promises can be risky, at best.

■ An integral part of risk is "mitigation;" that is, trying to reduce the impact of something that may be unavoidable. Mikkal Travvis offers some timely tips on how to survive a possible flu pandemic.

■ One of our major bugaboos lately has been the influx of spam submissions from the personal finance folks. This post, submitted by BankMan, almost ended up in the JunkMail folder because of that, but luckily, I stopped to actually read it. It ties in quite nicely with Five Cent Nickel's SIPC piece (above): the FDIC was created to prevent people from making runs on their banks and causing banks to collapse when they were otherwise healthy. This was a HUGE problem in the Great Depression, and caused many banks to fail and people to lose their life's savings - all because people panicked. No one wants to risk that.

■ Longtime contributor Jaan Sidorov examines the hubbub around McAllen Texas' outlier status in the New Yorker magazine, which examined health care utilization rates. He's not impressed and thinks the commentary has failed to pay attention to a very simple concept from statistics 101 (and hence the risk factor).

■ The Norks' Nukes? The Iranians Uranium? The Chinese Chits? None of those infuriate me as much as the folks who insist on Dialing While Driving. WorkersComp Insider's Jon Coppleman looks at the liability risks posed to companies by workers who use cell phones while driving and offers examples of policies that various companies are implementing to mitigate that risk (unfortunately, none of these include the Death Penalty for offenders).

■ And, finally, our own submission examines whether reducing risky behavior really does result in better health (and lower insurance premiums). Apparently so, as we learn from this post based on recent studies.

Well, that does it for our 3rd Anniversary edition. Thanks again to all of our hosts this past year, and to everyone who's contributed to the Cav.

Next week's host is Rita Schwab. We have hosting slots available starting in September, and would encourage you to grab yours "while the gettin's good."

We're also looking for alternatives to Blog Carnival, so if you have any suggestions, please send 'em in.

Another Resource Pops Up...

Quest Diagnostics, a national medical testing service, recently initiated a new, free service for folks with limited finances and those who are uninsured. There are actually four independent Patient Assistance Programs:

■ Financial Assistance Program For folks of limited means, Quest will help work out a payment plan.

■ Uninsured Patient Program For a modest fee, offers dicounts on certain services.

■ Free or Reduced Fee Laboratory Services Working with various clinics, Quest is offering reduced (or waived) testing fees.

■ Take Care Clinic(sm) Take Care Recovery Plan Working with the Take Care Recovery Plan to provide free laboratory testing services to qualified patients.

Kudos!

[Hat Tip: Holly Robinson]

Grand Rounds, "June's Bustin' Out" Edition

Health law blogger David Harlow hosts this week's compendium of health care posts. But David has a whimsical side, as well, so be sure to check out the embedded video.

Sticks and Stones and HSA's

[Welcome Industry Radar readers!]

Regular IB reader and commenter Brad Ford (himself an agent, although primarily on the P&C side) alerts us to this rather disingenuous article at the Gray Lady:

"IS your medical insurance bad for your health? If you have a high-deductible plan, the answer may be yes."

Really?

And how might that be?

According to a study done of folks covered by high deductible plans by investment firm [ed: investment firm? Gee, those guys sure have a lot of cred ] Fidelity, about half of those surveyed "said they or a family member had chosen not to seek medical care for minor ailments as many as four times in the last year to avoid paying the out-of-pocket expenses."

What would have been helpful is to have determined how many folks covered under "regular" (i.e. co-pay) plans also eschewed care. After all, even co-pays can begin to add up. As we've repeatedly pointed out (and as Brad reminds us), insurance should be there to cover our catastrophic claims, not every ache and sneeze. In fact, over-utilization is a major contributing factor when comparing rates for co-pay and high deductible plans.

And it flies in the face of what we've previously seen: that folks who have a stake in their own health care tend to make more carefully considered decisions, and don't tend to skimp on care.

Brad also points out another major fallacy in the article: lifetime caps. These are the "outer limits" health plans - virtually ALL health plans, not just HDHP's - put on policies to mitigate exposure. These can range from $100,000 (dangerously low) to $5 or even $7 million (way more than adequate). The article's author, Walecia Konrad, also seems to have no clue as to how these plans actually work:

"Some severely restrictive plans will cover only a handful of doctor visits a year after the deductible is met."

Really? Name one HDHP with such a feature. On the other hand, many carriers are now offering reduced premium (and reduced benefit) co-pay plans with just such limitations. My professional opinion is that these provide a false sense of security and a minimally reduced cost, certainly not worth the trade-off. But Mr/Ms Konrad seems not to have understood the distinction.

I also found this little tidbit disturbing:

"If you use a Web site like ehealthinsurance.com, you can find out more about each price quoted by clicking on “plan details” and reading carefully, looking for the categories listed above. If you do not find the specifics you need, call the insurer’s customer service department and ask."

First, using an online service to buy health insurance is, at best, playing Russian Roulette with your own health: there are literally thousands of carriers and plans available, and choosing the right one presents a daunting challenge. Add to the the likelihood that one will buy too much insurance. And of course, contacting the insurer, while not a terrible idea, only tells you what that carrier will offer, not how their products, service and network stacks up in the marketplace.

This is why finding - and using - a professional, independent agent is so critical. Health insurance (any insurance, really) is a poor candidate indeed for DIY.

And relying on the advice, let alone "expertise" of a journalist for tips on shopping for health insurance is no less foolhardy.