Wednesday, November 30, 2011

Beneficiary? Don't Fuggedaboutit!

Although we blogged on the subject some time ago, our favorite Tax Blogger, Joe Kristan, has a timely reminder on why it's so important to periodically check - and, if necessary, update - the beneficiaries of your life insurance policies.

You do own some life insurance, right?

Philly Cheese Exchange

Pat and Geno probably won't be fighting over this one:

"After months of study ... [Pennsylvania is] moving forward with a key - and widely supported - option offered by the federal health-care overhaul: a state-run insurance exchange."

Of course, the authors of this piece offer no evidence demonstrating anything like "wide support" for the Exchanges (possibly because none such exists), but no sense letting a few facts get in the way of a good story, right?

The silliness doesn't end there, of course:

"Besides being a one-stop shop for health insurance, the exchange will be the only place where many of the people who will be newly eligible for insurance under the law ... can apply for the tax credits that are intended to make coverage affordable."

Well, sort of: it's true that, as this is a state-run Exchange, Keystone State citizens would be eligible for whatever tax "credits" may be available, and for as long as they're available. But since we know that ObamneyCare© will quickly generate huge deficits, it's a sure bet that this won't be for long. Especially since tax payers in states with federally-run Exchanges won't be eligible for these same credits.

What could possibly go wrong?

In the event, the Pennsylvania-run Exchange is scheduled to go on-line (literally) in 2014, and is expected to draw some 2 million people. How many of those will be eligible for tax credits is not mentioned, but one presumes that it will be a majority of participants.

Which leads to even greater deficits, and thus higher premiums.

More cheese!

Cavalcade of Risk #145: Insurance Fest edition

David Williams hosts this week's excellent round-up of risk-related posts, with an emphasis on insurance as risk management tool. Do check it out.

Also, we really need a host for the February 22nd Cav...Drop us a line for details.

Tuesday, November 29, 2011

RomneyCare for Seniors

Willard Mitt Romney wants to save Medicare. Nothing wrong with that, at least in principle. But what would he do to bring down the cost of health CARE?

As it turns out, nothing.

But no big deal. Obamneycare won't do anything to lower the cost of health care either.

The Boston Globe has this take on the Dick Clark of the Republican party.

Mitt Romney’s ambitious plan to rein in federal Medicare spending would give America’s seniors a choice: choose government insurance or use a federal voucher to buy medical insurance from private companies. The idea, according to Romney, is to drive down costs by introducing market competition.

That's his big idea?

Allow private industry to compete against a plan funded with unlimited taxpayer (and Chinese) dollars?

Private industry needs to turn a profit, or at least break even.

The bean counters in Washington never have to balance a checkbook or even worry about funding. They can promise anything and everything to everyone without ever considering how they would pay for it.

“Romney wants to privatize a program seniors depend on and end Medicare as we know it.’’

We already have a privatized Medicare program. Medicare Advantage plans give seniors a choice at low or even $0 premiums.

But in a way it is only partially privatized.

The government dictates the minimum coverage rules, tells the carriers how many docs and hospitals they must have in their network, defines the marketing rules, and decides how much they will pay the carriers to administer the plans.

And if DC decides to change the rules after the fact the carriers are penalized.

Yeah, that works real well.

But does it lower the cost of care?

No it does not.

Douglas Holtz-Eakin, president of American Action Forum and former director of the Congressional Budget Office, thinks the plan will achieve Romney’s goal of reducing Medicare costs.

“It will control the federal budget because it caps the taxpayers’ exposure,

True, but only if the seniors on Medicare do not pay taxes.

All this proposal does is shift the cost of care from Medicare to the patient. Items not paid by Medicare and Georgia Medicare supplement plans are paid by the Medicare patient.

This is nothing more than rearranging the deck chairs.

Barney, Fannie, Freddie and Death Panels

In his role as Congressional "Rabbi" for Freddie Mac and Fannie Mae, Barney Frank has been credited/blamed for many of our current fiscal problems. His recent announcement that he wouldn't be seeking a 17th term may be surprising, but it's his take on ObamneyCare© Death Panels that really hits home:

"Massachusetts Democratic Rep. Barney Frank announced on Tuesday his support for the repeal of the Independent Payment Advisory Board [aka Death Panels] ... became the 12th Democrat, and the 212th member of the House, to co-sponsor ... Rep. Phil Roe’s bill aimed at repealing the [them]."

While much of the focus has been on the (Evil) Mandate, the IPAB/Death Panel has managed to fly somewhat under the radar. Without it, though, there are few (if any) provisions in ObamneyCare© that directly address the cost of health care, not just the availability of health insurance.

Good times, good times.

Food Pyramid Update: Fat's Back!

According to a new study by universities in the Netherlands, the "dietary intake of saturated fatty acids (SAFA) is associated with a modest increase in serum total cholesterol, but not with cardiovascular disease."

Translated, that seems to be a green light for more saturated fats in our diet. The bad news is that we'll most likely need to hold off on carbs, especially those with "a high glycaemic index."

In other words, look for foods that haven't been processed so much (whole grain or sourdough breads are good choices), cut back on the taters, stock up on quinoa (which, by the way, is generally considered Kosher for Passover).


[Hat Tip: Hunter-Gatherer]

Turning up the Heat on Allianz

Last week, we updated our readers on the efforts of Florida Congresswoman Ileana Ros-Lehtinen to resolve a decades-old dispute over life insurance proceeds due the families of those killed in the Holocaust.

Turns out, she's turning up the heat. To broil:

"[Congresswoman Ros-Lehtinen] is pressuring National Public Radio stations ... CNBC and others to stop airing sponsorships and advertising by a giant German insurer that collaborated with the Nazis ... has launched a letter-writing campaign aimed at blocking [Allianz] from advertising with any U.S. media until it pays off all Holocaust survivors' life insurance claims."

That's gonna leave a mark.

And in the "Adding Insult to Injury" Department, it turns out that in addition to insuring the lives of Holocaust victims, Allianz insured the means of their deaths, as well: "Allianz insured concentration camp facilities."

Full disclosure: I do not represent Allianz.

Monday, November 28, 2011

On Phones, Cars and Health Care

The Law of Unintended Consequences is cruel, and unforgiving: “every undertaking, however well-intentioned, is generally accompanied by unforeseen repercussions that can overshadow
the principal endeavor.”

We saw this with Cash4Clunkers. and are still reaping those consequences (don't believe me? Try finding a good deal on a used car). But there is, perhaps, an even better model: cell phones.

Ok Henry, now you've just gone off the deep end. What the heck do cell phones have to do with health care, or health insurance?

Just everything:

"Over 26,000 Ohioans abusing free cell phone plan ... Companies are flooding low-income households with free cell phones and minutes under a plan overseen by the federal government."

Let's tweak that a bit:

"Over 26,000 Ohioans abusing free or low-cost health insurance ... Carriers are flooding low-income households with free cell or almost-free health insurance phones, with immediate coverage for pre-exisitng conditions, under a plan overseen by the federal government."

And herein lies the problem: radio waves are essentially free, and limitless. Not so doctors, hospitals and medications. If the government can't keep a handle on handsets, how will it rein in the cost of hand surgeries?

But the cell phones are free, so what's the big deal?

Nothing is free:

"The program is paid for with fees mandated by the government and tacked onto most cellphone and home phone bills."

Again, a little plastic surgery (so to speak):

"The program is paid for with fees mandated by the government and tacked onto most insurance premiums and hospital bills."

'Nuff said?

Cash Baby

One of my clients is about to have their second baby without the benefit of health insurance. Parents and older siblings have health insurance but they opted out of maternity coverage some time ago due to the exorbitant cost and restrictions on coverage.

With some guidance from their agent, that would be me, they had baby number two at an out of pocket cost that was comparable to the discounted fee's charged by par providers if they had maternity coverage.

They took what they learned the last time and found ways to save even more on baby #3 (which is due any day now).

Hopefully you will find this site, and the information they are willing to share, helpful.

Dumping on MassCare

In the world of investing, the term pump-and-dump refers to a "scheme that attempts to boost the price of a stock through recommendations based on false ... statements. The perpetrators of this scheme ... sell their positions after the hype has led to a higher share price."

Put more simply, they get in, "use" the system, and get out, generally at a profit. This costs the company, and it costs the other shareholders.

But what, you may ask, does this have to do with health insurance?

Well, before there was ObamneyCare©, there was MassCare. And an integral part of MassCare has been Guaranteed Issue, coupled with immediate coverage for pre-existing conditions. Or, as the Boston Herald's Frank Quaratiello reports:

"A gaping loophole in state insurance rules that lets freeloaders pick up coverage to pay for expensive surgeries — and then dump it once they’re treated — has cost taxpayers as much as $37 million a year"

There's even a term for this: "jumpers and dumpers.” Jump and dump, pump and dump; tomato, tomahto.

But that's just a Bay State problem, right?

Not so much, "according to a study that warns the same wrinkle in Obamacare could add a staggering $2 billion a year to the deficit-wracked federal budget ... similar provisions in the nation’s new health care plan could cost the government at least $1.9 billion a year starting in 2014 when Obamacare kicks in."


Glad we passed the bill to learn what's in it.

Friday, November 25, 2011

I been workin' on the railroad (I mean for SEIU)

"If you're a parent who accepts Medicaid payments from the State of Michigan to help support your mentally-disabled adult children, you qualify as a state employee for the purposes of the Service Employees International Union (SEIU). They can now claim and receive a portion of your Medicaid in the form of union dues."

These deadbeat scab parents gotta be stopped. And our government is just the one to stop them.

Cavalcade of Risk #145: Call for submissions

David Williams hosts next week's CavRisk, and wants your risk-related post. Entries are due by Monday (the 28th).

NB: We're now using this submission tool: The BC WorkAround

Once there, you'll be asked to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post ("Remarks")

At the bottom of the form, you'll see a drop-down menu; simply select "Cavalcade of Risk" then press "Submit" and you're good to go.

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

BTW: We REALLY need a host for January 25...


What ICD-10?

I love it when the government supports my theory. The theory in this case is that we will go metric before we go ICD -10. Towards that end the government announced on Thursday, November 17, 2011 that that first piece of moving towards ICD-10 has been delayed.

All physicians were to begin electronically billing using the new updated form, version 5010. That was to begin in Jan. 2012. It has been moved to March 2012.

As easy as running a four minute mile (no I do not know the metric equivalent, America never went metric).

Government Health Care

The VA (Veterans Administration) provides free and almost free health care to those who have served in the armed forces. These brave men and women have done something most of us have not in order to gain access to health care.

Most of us have health insurance paid for by employers or we do the responsible thing and buy it with our own money.

But our veterans voluntarily put themselves in harms way to preserve our liberty.

They deserve better than this.

“The very first time I went to the Nashville VA hospital, I had made my appointment and waited my two months. I showed up and I waited in the lobby for about an hour and 45 minutes — almost two hours — before I just left,” Betts said.
Is this what most of us have to look forward to when Obamacare adds 18 million to Medicaid rolls and the rest are subject to government designed plans?

Thursday, November 24, 2011

Captain Kirk vs Tom Turkey

If you've never had the pleasure of tasting deep-fried turkey, you're missing a real treat. But unlike conventionally-cooked birds, preparing one of these can be both daunting, and dangerous:

Be careful, and have a GREAT Thanksgiving!

[Courtesy of our friends at State Farm]

Wednesday, November 23, 2011

CMS Head Berwick Resigns

CMS Director Donald Berwick, lover of rationed health care for all, has resigned rather than go through a Senate confirmation hearing.

Readers may recall Berwick was appointed to the position while Congress was in recess, thus allowing him to assume the position on a temporary basis.

Obama circumvented the Senate confirmation process, appointing Berwick while Congress was in recess in July 2010.

The move, which hardened GOP opposition, meant Berwick had to step down by the end of this year.

Looks like the American public got an early Christmas present and something more to be thankful for tomorrow.

Wal-Marting of Health Care in America Continued

In 2009 I wrote a paper titled “The Wal-Mart”ing of Health Care in America”. The premise of the paper was that consumer driven healthcare was paving the way for clinics in places like Wal-Mart. Over the past several years mini-clinics have been popping up in grocery stores and strip malls across the country. In March of that year, an article announced that “Wal-Mart will partner with its Sams Club division with Dell and eClinicalWorks to begin offering low-cost electronic health record systems to physicians”. Well Wal-Mart did not go forward with the EMR, but instead is going straight to the mini med clinic with the headline: “Wal-Mart wants to be your MD: Retailer seeks to use medical services to lure shoppers, boost traffic."

In that 2009 paper I observed that “America has been facing a crisis in a shortage of primary care physicians. For the past few decades the number of graduating medical students going into family and general practice has been steadily declining. According to a study published by the American Osteopathic Association, in 1984 56.4% of all graduating D.O.’s chose family practice. That number has dropped to 42.6% while general internal medicine has significantly jumped from 4.7% to 9.5%. It seems that Wal-Mart “now wants to dominate a growing part of the health care market, offering a range of medical services from basic prevention to management of chronic conditions like diabetes and heart disease, according to a document obtained by NPR and Kaiser Health News.” First, general practice is not a growing part of health care, thus there is no domination. Wal-Mart “intends to build a national, integrated, low-cost primary care healthcare platform.” Isn’t this what Obamacare is all about? So what's wrong with Wal-Mart doing it sooner and cheaper?

In my opinion, Wal-Mart will succeed because Medicine is a business. Back in 2009, I wrote that “physicians, like all technicians, understand the art of medicine, that is their training, and they are effective in their art. However, medical schools do not teach physicians how to relate to the enterprise of medicine or to the business of medicine.” Wal-Mart will succeed because they appreciate the patient and they can offer low prices; prices lower, in fact, than the standard family practice physician. Physicians become their own worst enemies by constantly micro managing their practices and their staff; as a result, they will be unable to compete with Wal-Mart.

"Maybe Walmart can deliver a lot of this stuff more cheaply because it is an expert at doing this with other types of widgets, but health care is not a widget and managing individual human beings is not nearly as simple as selling commercial products to consumers," says Ann O'Malley, a physician and senior health researcher at the Center for Studying Health System Change, a nonpartisan Washington think tank.” Unfortunately, this is incorrect: in a recent post, I noted that medicine has already moved to a standardized format and consumers want simple medicine.

Health care leaders will need to deal with many issues if they want to maintain supremacy (or at least market share) in Health Care in America over Wal-Mart. There are many barriers standing in their way to achieve the change necessary to stay viable. One is the culture of the current state of how medicine is managed here. If physicians are making the decisions without input from the administrative people and medical ancillary personnel working in the health care field, then there is a 50-80 percent chance of failure. Norma Hagenow, President of CEO Genesys Health System Source stated that “Culture eats strategy every day of the week. Culture is people. You can set up the best strategies in the world, but if you do not have the hearts and souls of the people behind that enterprise, it’s nothing.”

Back in 2009, these were my concluding thoughts: “The Health Care perfect storm has been brewing for several decades, since the failures of HMO’s in the 1970’s, Phil Donahue lambasting against health care in the 1980’s, the Clinton initiative in the 1990’s and now Wal-Mart has entered the picture. At each time of conflict the physicians clung to their culture and refused to work towards change. As a result, change will come to them in the form of Wal-Mart clinics, consumer driven healthcare and electronic records. Based on all evidence, physicians will not address the changes and as all failed organizational structures, the current physician driven medical system will fade into oblivion.”

It seems the future is now.

The MVNHS© Gets Down

Down Syndrome, that is.

So what is Down Syndrome?

It's a "set of mental and physical symptoms that result from having an extra copy of Chromosome 21 ... Usually, mental development and physical development are slower in people with Down syndrome than in those without the condition."

Although DS isn't curable (yet), those afflicted with it can, with training and time, "live productive lives well into adulthood."

Well, maybe just folks who aren't subject to the Much Vaunted National Health System©:

"A man with Down’s syndrome was locked in a one-bedroom flat and deprived of his basic human rights for ten months until his death ... Detained against his will by health and council officials ... David Parsons was denied regular contact with his wife and family and ‘abandoned’ by those caring for him."

At age 53, he had plenty of life left, time he could have spent with his wife and other family members. A few years ago, MVNHS© physicians declared that he "had developed dementia and epilepsy," but Mr Parsons' family disputes this. Regardless, he and Mrs Parsons (who apparently has similar developmental issues) were locked away in a "residential care home for the elderly."

Well, there ya go: "Out of sight, out of mind, we're the MVNHS©"

Tuesday, November 22, 2011

No, they're not

Of all the stupid things I've read recently about SCOTUS and ObamneyCare©, this takes the cake:

"The insurance industry is terrified that the Supreme Court will strike down the individual mandate to buy insurance next year while leaving the rest of the healthcare reform law intact."

The truth is, carriers know that ObamneyCare© is simply the next step towards a nationalized system, and every one of the major players wants to be the one (or among the ones) who actually administers that system.

Afraid of it?

Heck no, they're rooting for it.

Great News, LexisNexis edition: Tax Update blog named to Top 20!

FoIB and All-Around Good Guy Joe Kristan has been named one of the Top 20 Tax Bloggers of 2011.

Which is great in and of itself, but there's more: the Update's also in the running for Top Tax Law blog. And no one deserves it more than Joe - the Update is consistently interesting and entertaining, informative and snarky. That's no mean feat for a blog about taxes.

So, click here to vote for the Tax Update Blog for LexisNexis Top Tax Law blog, 2011 edition [NB: Make sure you vote for "Roth Tax Update Blog"].

Selfless vs Selfish

Last night I happened to catch the premiere of a new game show with a pretty cool premise: all the winnings would go to the contestant's best friend "Because She Deserved It." To introduce the deserving single mother of three, we were treated to a quick bio, which included the fact that her late husband was selfish and irresponsible.

Of course, they didn't couch it this way, but consider the facts: he (apparently) had no life insurance, and decided to go scuba diving alone - at night - leaving a young widow and three fatherless daughters. Mom struggles to pay the bills, and lives in constant fear that she or her daughters will become ill. Why is that? Because he also didn't arrange for them to have health insurance.

Having had enough of that, I hit the remote and was treated to this outstanding commercial from State farm:

Yes, it's funny, but it's also illustrative of a father who does care about his family. That's how responsible dads operate.

Frustrating Carrier Tricks: Medicare vs Group

Basic rule: your group is under 20 lives, Medicare is "primary."

But what does that mean?

In simple terms, it means that if you're on Medicare, but still actively at work and on the group insurance there, your group plan becomes a sort of supplement to Medicare. Not so difficult in theory, but in practice, well, sometimes carriers make it too hard.

Take, for example, Anthem (please!).

One of my small groups has a simple plan: $30 office visit co-pays, a $5,000 deductible and some co-insurance for big-ticket items, and a prescription drug benefit. Next March, their employee Mary will turn 65, and Medicare will become the primary health insurance on her claims.

Mary's employer asked me how that would work, and requested that information in writing from Anthem. Seems pretty simple to me. Anthem knows how Medicare works, they know that it's primary for this group, and they know this group's benefits structure.

Piece of cake, right?

Well, no.

After repeated phone calls and emails, further and further up the Anthem food chain, this is what I got in email today:

"... I did hear back from customer service who confirmed we do not have something like this. You are correct that there would be too many variances with how the claims will process. We will need to see the Medicare EOB & then determine which policy is the primary. The claims area will then key the claim into the system ... they will input the information from Medicare. All of this information is taken into account, while viewing the members benefits. I hope this helps."

No, Tracy, it does not help. This is very simple: Anthem insures the group, and knows exactly how and what it will pay. This should not be a deep, dark state secret.

Cough. It. Up.

Grand Rounds: In Gratitude edition

FoIB Amy T hosts a Thanksgiving-themed collection of medblog posts, and we're grateful to have been included.

Monday, November 21, 2011

And awaaaaay we go !

Secretary of Health and Human Services Kathleen Sebelius is urging Pennsylvania-based Everence Insurance to abandon its plan to raise rates by an average of 11.6 percent in the small-group market.

And will this be more entertaining than Jackie Gleason?

Well, probably not.

But still good.

Government Price Controls

A doctor, now retired from the health care rat race, decided to offer his opinion on top down, government rationed health care. His observations were published in the Dominion Post.

A brief excerpt follows.

In short, Dr. Iammarino (retired pathologist) had a rapid heart beat, went to the ER for diagnosis and treatment. The doc is covered by Medicare and opted to have ablation surgery to correct the issue.

His total bill was $53,252.75.
I am a longstanding health professional (an M.D.) and I knew this charge was way over the top. I asked for an itemized bill. There were many examples of excesses. To me, the most outstanding was $48 for one 100mg dose of Zoloft. At the local pharmacy, a generic form of the drug costs well under $1. The hospital does have legitimate extra charges, but nowhere near $47. It went on and on.

I wanted a second opinion. Another cardiologist came to WVU, relieving the shortage well after my procedure was done. He had been in private practice. I asked what the charge of my procedure would have been in the area of West Virginia where he had practiced. He said it would have been around $10,000. In my case, Medicare paid $8,318.33.
OK, and your point is?
Had I been a private-pay patient, I’m sure the $53,000 plus would have been what I had to pay.
Can you say out of touch?

No one pays "sticker price" and those without health insurance usually pay almost nothing for their care. Hospitals are lucky if they collect 15 cents on the dollar from the uninsured.

His rant continues.
Around 1980 and since, Managed care groups (Health Maintenance Organizations — HMOs) became very popular. We were told that they would save money.

HMOs built on venture capital, saw health care as a low-risk, highprofit industry. We have seen medical care turn into a profit making business — mostly privatized with shareholders and highly paid CEOs.
Health care has NEVER been a low risk, high profit business. Apparently this doc spent way too much time in the lab and the fumes got to his brain.
Getting old has some advantages, but one disadvantage is recalling the government stepping in to establish price controls and fighting against price fixing when confronted with outlandish charges
Too bad his memory fails him when it comes to price controls. When the government regulation stopped and the free market returned prices and inflation when through the roof.

Thanks to Henry Stern for this tip.

Holocaust insurance settlement: Update

It's been over 4 years since we've had any news about efforts by survivors in their efforts to collect on Holocaust-era life insurance benefits. At the time, Florida Congresswoman Ileana Ros-Lehtinen had introduced legislation to help move those efforts along.

Skip ahead 4 years, and Ms Ileana Ros-Lehtinen is holding hearings in Congress aimed at enabling survivors and their families to "sue European companies such as Allianz AG, a German insurance giant, in state courts for unpaid life insurance policies sold before World War II."

The seemingly insurmountable problem, of course, is that life insurance companies require death certificates in order to adjudicate claims. Obviously, these are not going to be forthcoming in the cases of those massacred in the Holocaust. As Congresswoman Ros-Lehtinen asks, "[c]an you imagine anything more outrageous than asking for a death certificate for someone murdered in Auschwitz?"


Of course, there's a twist here:

"[T]he American Jewish Committee, the Anti-Defamation League, B'nai B'rith and the World Jewish Congress ... argued at a 2010 congressional hearing that the International Commission on Holocaust Era Insurance Claims was created to address worldwide claims, and that re-engaging in court could unrealistically raise the expectations of survivors."

I'm reminded of that classic punchline: "what could it hurt?"

Friday, November 18, 2011

Lamenting the Demise of Medicine in America

Two physicians from Beth Israel Deaconess Medical Center, Pamela Hartzband, MD and Jerome Groopman MD, write in the Oct. 13 edition of the New England Journal of Medicine that medicine has become industrialized. In their view, the medical exam given by a doctor to his patient has become an encounter between a provider and a consumer. Their lament is correct but a little late in coming. When I was working on my MBA, I researched the business of medicine and discovered that the process that these physicians lament has occurred over the past 6 decades. The insurance structure that exists today came about as a result of wage freezes during World War II.

As employer-sponsored health insurance become more popular, the revenue cycle of medical care changed. Instead of the patient paying for the entire service at the time of treatment, the patient would pay a small amount of the medical bill and the insurance would pay the rest.

And then:
…insured patients began to request that the [medical offices] bill their health insurance before making payments on their accounts. [The patient] agreed to pay the balance due after the carriers determined the insurance portion of the claim. Each insurance company had a unique set of billing requirements. The complexity of the new billing procedures greatly increased paperwork and practices had to, therefore, increase the size of their billing staff [or add a billing staff which had heretofore never existed in the medical practice]
These changes dramatically affected how Americans viewed health care. First, by not paying the premium, they no longer had the knowledge of the true cost of those premiums. Secondly, by not paying for the medical care at the time of service, they no longer had the knowledge of the true cost of health care. The organizational culture of healthcare changed and the organizational memory has been lost by the American populace.

The Deaconness folks weigh in:
“We are in the midst of an economic crisis and efforts to reform the health care system have centered on controlling spiraling costs. To that end, many economists and policy makers have proposed that patient care should be industrialized and standardized.”
Patient care became standardized when insurance companies began telling physicians how much their services are worth. No longer is a physician paid based on the financial needs of the physician’s business, but instead on a government produced fee schedule based on a formula called RVU’s. Physicians have not had a raise in their fee schedule from Medicare in over a decade, and the docs are so appreciative that each year the fee is not cut that they don't realize that they did not receive any increase.

The Deaconness Duo adds:
“The problem ... is that the special knowledge that doctors and nurses possess and use to help patients understand the reason for and remedies to their illness get lost in a system that values prepackaged, off-the-shelf solutions that substitute "evidence-based practice" for "clinical judgment."
What Hartzband and Groopman do not understand is that the patient does not want to pay for the physician to develop an evidence-based plan of care. Today’s exam averages 15 minutes. A physician cannot do the type of work that Hartzband and Groopman want in 15 minutes. That is the reason that more and more medicine is pre-packaged, and it works for the majority of the population. For the minority of patients that need the more protracted appointment and care, there is resentment that they should have to pay more for their care than someone else.

More from Boston:
“Even more troubling ... is the impact of the new vocabulary on future doctors, nurses, therapists and social workers who care for patients. Recasting their roles as providers who merely implement prefabricated practices diminishes their professionalism.

Reconfiguring medicine in economic and industrial terms is unlikely to attract creative and independent thinkers with not only expertise in science and biology but also an authentic focus on humanism and caring.”
Here, Hartzband and Groopman are correct: individuals who desire to make a contribution to society, and to be rewarded for this contribution financially, will steer away from medicine. Since insurance companies pay the inadequate physician the exact same as the extraordinary physician, what is the incentive to become a physician?

While I applaud Doctors Hartzband and Groopman for their impassioned plea to return to medicine of old, that ship has sailed. Modern medicine is dictated by a labyrinth of regulations, economics, and government oversight that has forever changed medicine in America.

Thursday, November 17, 2011

Stretching Your Medicare Dollars

Much has been said about Medicare fraud and abuse, and cutting wasteful spending, but this story has me at a loss for words.

An Illinois man accused of shipping unwanted "penis enlargers" to diabetes patients as part of a Medicare fraud scheme has pleaded not guilty in an arraignment in federal court in Providence.

Under an agreement with prosecutors, Gary Winner plans to change his plea in a second hearing later Thursday. The deal calls for the 49-year-old Winner to admit he bought $26 penis enlargers from an adult website, repackaged them and shipped them to patients with information claiming the "erectile pumps" helped "bladder control, urinary flow and prostate comfort."

Prosecutors say Winner billed Medicare an average of $284 for each item, claiming they were used to treat erectile dysfunction.

The Northbrook, Ill.-resident has also agreed to forfeit $2 million.

Winner could face up to 33 years in prison.

At least give the guy points for creativity.

Puzzling Carrier/Government Tricks

Last week, I had the pleasure of once again hosting the Health Wonk Review, which included a post from our very good blog-friend Louise Norris that really piqued my interest:

"For the last several months, individual health insurance applications in Colorado have included a new set of questions to determine whether an applicant’s premiums are going to be paid or reimbursed by an employer."

For as long as I can remember, carriers here in Ohio have forbidden employers from directly subsidizing premiums for individually-owned plans. Although this applied across the board, it was specifically aimed at those small companies that offered to payroll deduct individuals' premiums and then send them in to the insurance company (often called "list billing").

Let's take an example:

Sam works for ABC Widgets, which does not offer group health insurance. But Sam, Joe and Sally each own individual plans from (for example) Anthem. Their boss offers to set up a list billing arrangement, whereby he deducts the appropriate amounts from their paychecks each week, and then sends that all in to Anthem at the end of the month. In this case, he's just acting as a conduit, providing nothing more than a convenience.

But if the boss were to go a step further, and offer to kick in, say, $25 a week towards each of their plans, this could create a major problem: it could very easily be argued that he now has a group health plan, and the Anthem could potentially be on the hook for expenses not contractually covered under the individual plans.

So carriers forbid this practice, and life goes on.

But that's Ohio, and as Louise points out in her post, Colorado had no such moratorium.

Until now.

I've asked Louise to explain in more detail for InsureBlog readers:

In Colorado, it has also been illegal for many years for employers to an employee's individual health insurance policy. It was illegal for brokers to even discuss individual plans with an employee at their place of work - everything about individual policies, from the application to the billing, had to be done outside of work. But then federally legal HRAs came on the scene and started to muddy the waters a bit. Some HRA companies were actively soliciting brokers to get them to encourage employers to switch from a group plan to an HRA and have the employees seek out individual health insurance policies that the employer could reimburse via the HRA. The big problem with that tactic is that some employees won't be able to qualify for medically underwritten coverage in the individual market and are left with no option other than CoverColorado, the state's high risk pool. A flood of employees into CoverColorado threatened to destabilize the risk pool.

Earlier this year, the Colorado legislature passed Senate Bill 19, which changed the rules considerably regarding the legality of employer funding of individual health insurance* Employers can now fund individual health insurance premiums for their employees via an HRA or wage adjustments - as long as the employer has not had a group health plan in place in the past 12 months. Senate Bill 19 has resulted in a new section on individual health insurance applications in Colorado wherein the applicant has to state whether or not an employer will be reimbursing any portion of the premium, and if so, whether or not the employer has had a group policy in place in the last 12 months. If yes to both, the application will be declined (unless the employee agrees to pay all of the premiums without any assistance from the employer).

Senate Bill 19 was a big change to the legal landscape of individual health insurance in Colorado. It's not a perfect system by any means, but it does allow employers - who wouldn't otherwise be able to afford group insurance - to kick in at least a small amount of money towards their employees' health insurance premiums. The provision requiring 12 months between coverage under a group plan and reimbursement for employees' individual policies will hopefully help to prevent employers from dropping group plans just to send their employees into the individual market and CoverColorado. This should help to prevent destabilization in both the small group market and CoverColorado. But it's also causing some employees to be declined for coverage when they may not have any other option at all (assuming their employer has already dropped the group plan and isn't going to reinstate it, and assuming that they were relying on the contribution from the employer to be able to afford a new individual policy.)

Starting in 2014, this shouldn't be an issue anymore, as all policies are slated to be guaranteed issue by then. But for the next couple of years, it's likely to cause some headaches.

Thanks, Louise, for helping to put this in perspective!

Wednesday, November 16, 2011

ObamneyCare© Glitch - IB Ahead of the Curve

Over two months ago, Bob noted that citizens in states that opted out of creating their own Exchanges would be ineligible for premium subsidies. Since so few states have thus far even begun exploring how to set up an Exchange, this has now hit the radar.

As Cato's Michael Cannon writes in today's Wall Street Journal:

"[Obamneycare©] offers "premium assistance"—tax credits and subsidies—to households purchasing coverage through new health-insurance exchanges ... [Obamneycare©] authorizes premium assistance in state-run exchanges (Section 1311) but not federal ones (Section 1321)."


So folks in states utilizing Exchanges run by the Federales will have a choice: buy (and pay for) unaffordable health insurance, or go to jail.

So not only didn't they read it before they passed it, they didn't even debug it.

Less Health Care - You Can Live Without It

Is it just me, or is Washington sending a message that they want to RATION our health care? The Obama administration seems to favor placing those people who want bigger government and less access to health care in charge of our senior population.

Consider this.

During a Congressional recess Obama appointed Donald Berwick, a socialist that adores nationalized health care such as exists in Great Britain, to head the Center for Medicare Services. The timing of the appointment to a position that had been vacant for over a year is suspicious.

By making the move while Congress was not in session the appointment avoided the normal scrutiny of a Senate committee.

In essence, Mr. Berwick was appointed to a powerful government position without the normal vetting process.Frankenstein's monster

Now the president wants to place Henry Aaron (no, not THAT Henry Aaron) as head of the Social Security Advisory Board.

Let's look at this in more detail.

Berwick, to whom Obama issued a dubious recess appointment to circumvent the usual Senate confirmation, has become notorious for statements like, “The decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open” — and, in progressive-speak, “The social budget is limited.”

Aaron, a recent Obama nominee, has expressed similar views. He wrote a piece earlier this year called, “The Independent Payment Advisory Board — Congress's ‘Good Deed.’” The grisly IPAB, one of the most underreported of Obamacare’s myriad of liberty-sapping features, would have the power to cut Medicare spending each year — if Obamacare isn’t repealed first. The dictates of its 15 unelected members would effectively become law. In fact, Congress couldn’t even overturn the IPAB’s decrees with a majority vote in each house and the President’s signature.


Even Congress cannot overturn their decisions.

How much power does Washington need over our lives?

Aaron praises the IPAB, although he does admit to having a few problems with it. He thinks that its largely unchecked power isn’t unchecked enough, as the board should be able to order payment reductions for other aspects of medical care that have so far escaped its statutory grant of power. He writes,

“I admit that the provisions governing the IPAB are less than optimal. For example, recommendations regarding payments to acute and long-term care hospitals, hospices and inpatient rehabilitation and psychiatric facilities are off-limits until 2020; and those to clinical laboratories are off-limits until 2016. These politically motivated restrictions should be repealed as early as possible so the IPAB’s recommendations can comprehend the delivery system as a whole.”

In other words, Mr. Aaron wants more power sooner rather than later.

“If Americans are serious about curbing medical costs, they’ll have to face up to a much tougher issue than merely cutting waste, says Brookings Institution economist Henry J. Aaron.

“They’ll have to do what the British have done: ration some types of costly medical care — which means turning away patients from proven treatments.

Yes, we all know how well the British health care system works . . .