Swedish Meatball Surgery, Part XVI

When Swedish health care "professionals" aren't out trying to score hot nurses, they're apparently turning away fellow citizens who've suffered broken necks:

"A man from northern Sweden was sent home from his local clinic with a handful of painkillers ... Every time he moved or sat up his vertebral column moved three centimetres, which is enough to risk causing paralysis"

What is it about nationalized health care systems that's so darned attractive to Ms Shecantbeserious?

Gee, Mme Secretary, I wonder why...

From the lips of Ms Shecantbeserious:

"The private [health insurance] market is in a death spiral"

D'unh!

For someone like Mme Secretary this is, of course, a feature, not a bug.

But it's what happens when you impose rate controls, mandate coverage for non-medically necessary items, give away health insurance to irresponsible folks, and gin up phony "Exchanges."

Quelle surprise.

Gardisil Update: Told Ya So

Chock up another one for our prescience. Some 3 1/2 years ago, we discussed the possibility that young boys would also be given this tried-but-untrue panacea. Now comes word that "the American Academy of Pediatrics is fully recommending that boys get the shots as well."

And why is that?

Well, follow the money:

"The new policy should end any resistance among health insurers to covering HPV vaccines for boys"

At $130 a pop, no less.

Exit question: How long 'til HHS Secretary Shecantbeserious mandates that this be covered at 100%, as well? Sauce for the gander, and all that.

Breaking a Self-Imposed Embargo

I had decided some time ago to take a break from posting on the upcoming SCOTUS ObamneyCare© case, but Hot Air's Ed Morrissey has a post on a fascinating and refreshingly unique theory espoused by the Institute for Justice.

According to its website, the IfJ is "our nation's only libertarian public interest law firm ... We seek a rule of law under which individuals can control their destinies as free and responsible members of society."

And they've filed an amicus brief in the aforementioned case, based on the age-old caveat that a contract entered into under duress is non-enforceable. Their stance is that, because insurance is, in fact, a contract, forcing one under penalty of law to sign on the dotted line renders it moot.

Florida International University Constitutional Law Professor Elizabeth Price Foley, who helped draft the brief, explains:

Compact Fizzling?

Carrying on Bob's fizzling metaphor from this morning, we have a follow-up to our post on the efforts of the Ohio Health Care Compact (OHCC) folks to get some traction. Briefly, the HCC initiative would supercede ObamneyCare©, and put Buckeyes' health care decisions back in our control. I reached out to OHHC for additional information, and have finally received their reply.

Dianna Greenwood, the group's Outreach Coordinator, tells me that "unfortunately due to some issues, our committee will not be working on the Health Care Compact in Ohio. However, we all believe that this is still important legislation pending in the Ohio Senate and wanted to make sure that you received our answers."

So she in turn passed us along to Tea Party Patriots' State Coordinator Marianne Gasecki, who answered most of our questions:

InsureBlog: Let's start with a little background. How did this effort begin, who came up with the idea of using state compacts?

Marianne Gasecki: The Health Care Compact Alliance presented this idea at a Tea Party Patriots Conference of local coordinators in February of 2011. After a period of discussion, it was voted on by the coordinators and considered to be an exciting opportunity with great promise for not just healthcare, but other issues.

IB: Who funds this effort?

MG: To date, any efforts in Ohio have been minimal in cost due to the fact that it is mostly presentations at local tea party groups or other organizations, or meetings with legislators. Any costs have been covered by the individuals on the Ohio Health Care Compact Committee. Any efforts performed nationally, are most likely funded by the Health Care Compact Alliance.

[ed: I'll be contacting the Alliance folks ASAP]

IB: In the video, it's never clear which states we'd be joining in a compact. Texas is implied, and you mention "teams on the ground in 37 states," yet they've been passed into law in only 4. It's already 2012, with less than two years to go until full implementation. Aren't you concerned about timing?

MG: No. We know and understand that this is a long term project and are willing to go the distance. States such as Indiana will be added to the list shortly, as it has already cleared the house and is advancing quickly through their Senate. This is also an excellent tool to be used when questioning candidates regarding their sincerity in the belief of state sovereignty vs. a one size fits all centralized government.

IB: I also have some questions from my co-bloggers. Bob would like to know if there's enough money to meet federal requirements and address other financial obligations.

MG: Once the compact is ratified it supersedes federal law, and therefore federal requirements and obligations. Funds collected from the states by the federal government would be returned to the states with no strings attached. What needs to be reiterated is that these compacts are not policy making contracts. The compacts are just giving the states the authority to create policy that best suits the needs of their state. They can change nothing, or can change everything.

IB: Bob also points out that your FAQ states "The member states get funding according to the formula in the HCC." How does that work?

MG: The best explanation is that the amount for each state represents the total amount of money the federal government returned to that state in 2010. It includes ALL health care spending, minus the spending for veterans or for Native American Indians. That figure includes all grants, all appropriations, all Medicare spending, all Medicaid spending that the federal government sends to a state. 2010 is the base funding for each state moving forward with the HCC which, for Ohio, was about $35 billion.

IB: Finally, Mike observes that "the FAQ references "sale of insurance across state lines." He agrees with me that this is a deflection, not an answer. So: "why would the Compact make any difference?" In short, while it's a very nice video, neither it nor the FAQ explicitly lay out the end-game, other than "we opt out of ObamaCare." Yet you claim that "health care [is] in need of urgent reform." How do you square that circle?

MG: I think most people agree that layers of bureaucracy make everything more expensive and less efficient, whether it be in the private sector or government. But the compact is really about self governance. If you believe the states should have the opportunity to provide a more cost effective health care system rather than a one-size-fits-all federal program, then the compact idea for health care, as well as other issues, will look very promising to you. Again, it's not a policy document, as much as it is a document to give authority back to the states, bringing it closer to the people it directly affects.

Thanks, Marianne, for your time and candor.

And we'll be following up with the national Health Care Compact organization, as well.

Hedging Bets

Not sure what to make of this:

"The cost of providing health care insurance to the hedge fund community is rising at a slower rate for the first time in years ... insurance carriers raised their rates between 2% and 8%, on average, for hedge fund managers and their employees in 2011. This represents a marked improvement from the 6% to 18% rate hikes ... last year’s survey of 2010 rates."

What is there about the "hedge fund community" that would (apparently) shield them from some of the worst aspects of ObamneyCare©? My first thought was that many (most?) of these plans are probably self-funded, but the article says it's more likely demographics (primarily age). Another factor cited is that a lot of these plans "have less generous benefits than those in previous years."

So a Kia costs less than a Mercedes?

Who'da thunk it?

[Hat Tip: Mitch Ackles]

Rosemary's Health News

Time to break out that new standard, Days of Wine and Rosemary. Last week, we reported on the newest study touting the benefits of an occasional libation. Today, we learn that one of my favorite herbs has similarly beneficial effects on one's intelligence:

"Now researchers have used essential plant oils to see how much rosemary can improve brain power and mood ... Results indicated the 1,8-cineole taken into the blood through sniffing the plant improved brain performance. Those with higher levels had better speed and accuracy."

Rosemary-infused vodka, anyone?

HSA Update

Courtesy of our friends at FlexBank, some interesting late-model HSA factoids:

■ This year's (2012) max contribution ceiling is $3100 for singles and $6250 for families. If your employer is kicking in a few bucks (lucky you!), it'll count towards that total.

■ Thanks to ObamneyCare©, you'll need a doc's scrip for any Over-The-Counter (OTC) meds you want to run through your account.

■ You can't pay your regular health insurance premiums from your HSA, but COBRA, Long Term Care insurance and Medicare premiums are generally eligible.

■ This is VERY cool, and something I hadn't known: Mileage to obtain medical care is an eligible expense under a Health Savings Account. You can reimburse yourself at 23 cents/mile, but you'll need to keep very careful records.

[Hat Tip: Lou G]

A Good Start

Heh:

"As many as 75,000 workers throughout Greater Cincinnati and Northern Kentucky – about 12 percent of those who have insurance through their job – don’t have coverage for contraceptives."

[Hat Tip: FoIB Holly R]

Cuts, Cuts Everywhere

While we've often discussed the (so-called) Doc Fix, Medicaid is also facing severe budgetary problems. To address these, legislators in the Evergreen State recently passed a bill that would cut off coverage for non-emergency ER visits:

"Starting April 1, Medicaid will no longer pay for [unneeded ER] visits, even when patients or parents have reason to believe they're having an emergency."

On the one hand, this seems fairly drastic, but on the other, the ER should be for, well, emergencies. The tension here is, of course, how is a lay-person supposed to know the difference between, say, a panic attack and a heart attack?

The WSJ has more:



UPDATE/ADDENDUM: In the comments, FoIB NotWithStanding makes a VERY good point:

"Emergency departments are barred from federal law from turning people away without stabilizing them ... The Washington Medicaid plan would simply not pay the emergency providers for care rendered during "unneeded" ED visits, doing nothing to penalize people for coming in unnecessarily"

The reason they're forbidden from turning folks away is a little something the Feds call EMTALA, or the Emergency Medical Treatment and Active Labor Act. As NWS points out, this becomes a damned-if-you-do/damned-if-you-don't scenario for the provider.

But hey, health care's free, right?

Thursday Link-Fest

■ First up, our friend Bob Graboyes of the NFIB explains how the ObamneyCare© tax-credit is nutty:

"A bowl of cashews is a tempting snack, but it’s relatively unimportant to someone riding five million cubic feet of hydrogen toward an electrical source."

Food for thought.

■ And speaking of food, our next item concerns the MVNHS©'s self-destructive dietary guidelines:

"My diet was an extreme version of the NHS Eat Well regime, which recommends lots of starchy foods and smaller quantities of saturated fats, cholesterol, sugar and red meat ... and yet my health had never been worse."

Read on to learn what the "experts" conveniently forgot to tell us about their "healthful" recommendations.

■ Is there a shortage of vital cancer-fighting med's here in the States? It would seem so:

"Shortages of a lifesaving chemotherapy drug for children and a cancer drug for adults have federal regulators on edge and Arizona hospitals and doctors scrambling to secure supplies and alter treatment plans ... Patients and their families are puzzled over why drugs that have been available for decades are suddenly scarce when they need them most."

Hmmm, one wonders why.

■ John Goodman wonders if the actual practice of medicine under ObamneyCare© will be worse than death panels:

"[D]octors would be given immunity from malpractice lawsuits, but only if they practice medicine according to government guidelines."

ObamaDeathWaivers©, anyone?

■ And finally, some (potentially) good news:

"Stanford researchers may have discovered a drug for a rare and often untreatable disease that leaves children with massive, and sometimes deadly, growths on their faces, necks and other parts of their bodies."

And what is that, you may ask?

Well, according to Dr Bob Dole,"[t]he drug is Viagra."

Early research shows that the ED med apparently causes these growths to shrink (counterintuitive, that).

Cheers to your Health: Physical and Otherwise

All things in moderation, of course, but more good news for the occasional imbiber. First:

"Alcohol is one of the only dietary practices that increases the 'good' high-density lipoprotein (HDL) cholesterol and lowers the 'bad' low-density lipoprotein (LDL) cholesterol, as well as lowers the risk of blood clots."

And no, we don't (necessarily) recommend dunking that bran muffin in a glass of Merlot.

And it's not just heart health, but that other important organ:

"Researchers in the U.S. found men who had taken enough alcohol to get mildly drunk solved more problems demanding verbal resourcefulness than sober men could, and did it more quickly."

Of course there's a fine line between "buzzed" and besotted, and this will not help with your driving skills.

Salut!

Cavalcade of Risk #151: Nary a cross word edition

Van Mayhall outdoes himself with a cleverly constructed and wide-ranging Cavalcade of Risk. So sharpen that #2 and have at it.

We're in bidness now !

Just what the administration has been telling us we need - a new insurance company.

Watch the new company cut the cost of medical care. Probably by 25% or more !

Covering ObamaStaches©

Full disclosure: I can't grow a beard to save my life. I don't really mind, because lately, what does come in is decidedly more salt than pepper. But still.

I bring this up because of a grave and serious injustice that's still under the radar: full coverage for men's facial grooming products.

The prestigious American Mustache Institute estimates that Y-chromosomed-Americans spend upwards of $1500 a year on these products, yet are denied basic tax and insurance fairness. To that end, the organization is pushing the "Stimulus to Allow Critical Hair Expense Act, or 'STACHE Act ... It appears clear that mustache maintenance costs qualify for and should be considered as a deductible expense related to the production of income under Internal Revenue Code Section 212"

The STACHE Act would help defray these expenses by making them tax deductible. And that's a good start.

But I say: Why stop there?

It seems to me that these types of expenses are just as much healthcare-related as, for example, birth control, and should be covered at 100% by one's health insurance. This is more than an issue of fairness, though: as the AMI's Aaron Perlut notes, "trimmers, wax and other accoutrements are ... protectors of the environment -- because not shaving saves water."

But Henry, you may argue, covering these products will increase health insurance costs and besides, only (about) half of the population would benefit.

Wrong.

As we now know, adding the cost of inexpensive and readily-available products does nothing to increase the cost of coverage. And the argument that it would benefit only (about) 50% of Americans is irrelevant.

See? Win-win.

MVNHS© Coming Off The Rails?

Perhaps so:

"Prime Minister David Cameron ... is working to partially privatize the NHS, beginning a massive outsourcing of medical services to private health care providers throughout the U.K."

The Much Vaunted National Health Service has a long and storied history of rationing care and and driving Brits to seek medical attention elsewhere. And of course, there's that worst-kept secret about private medical insurance "over there."

Of course, Mr C's idea has come under whithering attack from The Usual Suspects among the British press, but our own ObamneyCare© proponents are (not surprisingly) silent, thinking perhaps that if they ignore it, it will go away.

And perhaps they're right.

[Hat Tip: Hot Air]

Funny/Scary

Regular readers know that I'm the proverbial life/health guy in the P&C agency. That is, I insure people while my colleagues insure their things.

This afternoon, I noticed my colleague looked rather dejected about something, and I asked him what was up. He told me that he was not looking forward to meeting a particular client in the morning because he had to deliver a rather pricey renewal.

I told him, jokingly, "hey, just do what I do and blame ObamaCare."

He looked up and said "I don't think that'll work," to which I replied (still joking), "why not? It's not as if anyone really knows what's in there."

And then it hit me: if they can find coverage for birth control and abortions, why not a free roof, too?

After all, a roof's as much healthcare as birth control, isn't it?

Sweden ups the ante

Last we looked, the Swedish national health care system was busy cutting the legs out from under one of its citizens (literally, as it turns out).

Now, though, they're upping their game:

"A hospital in Stockholm has published a job advertisement trying to attract nurses who are both qualified and "TV-series hot" in what has been explained as an "attempt to catch people’s attention"

Of course, the hospital's spokescritter is quick to point out that they're also hoping to attract "competent nurses," as well.

Eye of the beholder, and all that.

A Fisking of a Rebuttal to a Fisking

Our post Friday on Maggie Mahar's recent Time article on the impact of the birth control/abortifacient mandate seems to have struck a nerve. Ms Mahar responded in the comments section (Thanks, Maggie!) and was none too pleased. I would absolutely recommend that our readers check it out to get the full measure of Nate's rebuttal [ed: And while you're at it, Mike's take is also highly recommended].

Take it away, Nate:

Thank you for responding Maggie. As a side note, much of the material in my post was in a response I left at your Time article which was (for some mysterious reason) never approved.

"First, Henry claims that the average out-of-pocket cost for childbirth and pregnancy is around $2,000."

I don't see where Henry or I ever claimed this. As the sentence clearly states, that number came directly off the Federal Government's sample SBC, Summary Benefit Communication.

In regards to the issue being insurer cost, that is not what your article said:

"But in terms of the costs to give birth to the child, she is not much better off, because if she does become pregnant, her insurer, like many, would pay the bills above and beyond the co-pay."

As I showed, members paying $9 per month themselves would take 13 years to equal the out-of-pocket cost of a delivery. If you want to argue insurers should pay for birth control because it is in their financial interest, you must also accept that it is in the member's interest as well. If $9 per month for birth control is unaffordable, then 20% for cancer treatment must surely be unaffordable; why aren't we helping them with “free” chemo?

In the US, there are roughly 61 million women of child bearing age, which means $6.5 to $30.5 billion per year (calculations available on request). Divide that by $7,600/pregnancy and we would need to see a reduction in unintended births of up to 4 million. Seeing as we only have about 4 million births per year now, those numbers aren't possible to achieve. And that’s assuming no increase in the cost of birth control.

"As I note in my piece, when pregnancies are unplanned, and contraception is not used, the rate of complicated pregnancies is much higher."

What about when contraception is used and they still have an unplanned pregnancy? I have seen studies that say 5% of women on the pill get pregnant; it only takes 1 missed pill, a not uncommon occurrence. With over 11 million women on the pill, that is a lot of abortions and unintended pregnancies. Further destroying your claim insurers will save money.

"This is why insurers would not need to hike premiums if they offered free contraception. If all if their customers used contraception, and fewer of them had babies, they would save more than they spent waiving the co-pays."

This is really the crux: you have no experience in this field, have never worked with the real data, and don't cite a study to back this up. I have worked 20 years in this business and see the data in real time and know it will increase cost. Who’s more credible?

"Also, Nate ignores the fact that what Federal Employee's insurers were required to cover contraception, they Did Not Raise Premiums. (Again for the source, see my piece.)"

Since there’s no link to support this, one supposes this is another issue of credibility. On the other hand, it is a great argument for more "skin in the game" on the part of those Federal employees.

"Nate also assumes that if there were no co-pay, women would switch from generic Pills to prescription pills. Why? Presumably he assumes that women are too stupid to realize that the generics are just as good. In fact, experience shows that once patients switch to generics, they don't go back. "

I assume that based on 20 years of actual experience in the field, and thus 20 years of data on how people use brand name and generic drugs. But don’t take just my word for it:

"Aren’t generic drugs just the same as their brand name counter-parts? As it turns out, not necessarily."

Based on my experience, the owner of the brand will often outsource manufacturing to the generic makers, or the brand will supply the generic with just a different implant. In these cases, why would anyone take the brand name? Yet millions of people do: I see the claims. And then we have movement from generic to new patent-protected drugs with little to no increase in effectiveness. Often, these changes come with new patent protection and huge advertising budgets.

Which leads to this unsettling news:

"The government is considering setting higher standards for birth control drugs used by millions, saying that newer pills appear to be less effective at preventing pregnancy than those approved decades ago."

So I wouldn't say that women are "stupid" for falling for the advertising, yet it is clear that millions of them do. Something someone with any actual experience in the field would know. Billions have been spent on these new forms of birth control, and it could be argued it was all a waste. Now insureds and other taxpayers must pay 100% of this cost.

From the same MSNBC article:

"The original birth control pills approved in the 1960s allowed less than one pregnancy when taken by 100 women for at least a year, the FDA said. But in the last decade, the government has approved pills allowing more than two pregnancies for every 100 woman-years of use."

Let’s use a little common sense: millions of women paid a co-pay 2-3 times higher then the generic for a drug that was less effective. If the whole purpose of this is to prevent unintended pregnancies, why are we covering pills that fail twice as often?

"He also assumes that insurers would be able to raise premiums as much as they want, whenever they want ("why not raise it to $1,000?")"

I clearly was talking about pharmaceutical manufacturers raising the price to $1000. Follow the paragraph: the maker of Mirena increased the cost, what is to prevent them from raising it to $1000?

"or long-lasting birth control that is much, much cheaper (Source in my piece)"

Okay, let's do that math: Mirena cost $742 for the IUD, plus perhaps another $58 to insert (erring on the low side). Now we're at $800, which is $160 per year or $13 per month. That’s almost 50% more than the $9 generic Pill. Wouldn't you agree that's a pretty big hole in your "it's cheaper" argument?

'A' Case for Annuities

Interesting article at Forbes making a case for the concept of "dying broke." Briefly, the idea is that one should shuffle off this mortal coil the way one came into it: by accident with no assets:

"You can cleverly arrange your financial affairs, so goes the theory, such that your spending stays level. You suffer neither a collapse in living standards when you retire nor an embarrassment of riches on your deathbed."

Essentially, it's looking at one's life as a zero-sum game. While no one relishes the idea of leaving one's heirs with crushing debt, neither is there a moral or legal obligation to leave them well endowed financially. But how does one walk this thin line?

Forbes' William Baldwin posits that a very effective way to do so is through the use of annuities. As we explained late last year, "[One takes] a lump sum of money (say, from an under-performing CD) and put it in one of these newfangled "longevity annuities." After a while, it begins to pay out a lifetime stream of income via annuitization.

Properly structured, one cannot outlive the income stream, but neither is there anything left at the end. It's a challenging game of "chicken," of course, but for some folks, it may be an appropriate strategy.

First things first, please

I think Maggie Mahar (her comment to a post on February 17) is correct that there are cost benefits from the use of contraceptives and abortifacients. There are certainly religious-based differences of opinion about their use but it seems to me the cost benefits are clear.

Accordingly a public policy to promote the voluntary use of contraceptives and abortifacients seems to me beneficial at least from a cost perspective. And cost is clearly important.

However, the first and primary issue in the present controversy appears to be whether the administration has chosen a correct, legal, and constitutional method to implement its policy. Credible critics object to the administration’s policy on technical, legal and constitutional grounds. I think these objections must be dealt with first.

So far, the administration has responded largely by deflection- that is, by attempting to turn the public discussion into one of access to contraceptives and abortifacients. This is not helpful and at best it’s a diversion from the basic issue.

This tactic of deflection may explain why, so far, the administration has not satisfactorily responded to the numerous sincere objections to its policy from many churches and related organizations. In fact after seeming to offer an "accommodation” that turned out not to alter anything meaningful in the originally-proposed regulation, the administration has now:

(1) proceeded to implement the originally-proposed regulation without any change,

(2) responded on February 16 to a federal lawsuit filed by the Becket Fund for Religious Liberty by essentially asking the court to defer any action on the suit. Why? The administration said it might "propose and finalize changes to the regulations" at some undefined point in the future.

This response is interesting for several reasons. First, the administration chose not to defend the legality or constitutionality of its regulation. Second, it appears the administration does not wish to defend the regulation as originally written - even though the administration has now finalized the regulation as originally written. Third, having finalized the regulation, there is no assurance that the administration intends to follow thru with its expressed willingness to work with religious groups to reach a satisfactory resolution of this problem - a problem created by the administration in the first place.

So despite the public good that may be available from promoting the voluntary use of contraceptives and abortifacients, and despite the theoretical value in having insurance plans facilitate such use, it seems to me this threshold question is reached first and is much more significant: is the government proceeding in a legal and constitutional manner?

Whether the administration’s regulation may promote the public good is not the constitutional or legal test. The National Recovery Act of 1933 contained measures designed to benefit the public, but the Supreme Court ruled it unconstitutional.

I think the controversy here, as with NRA, similarly involves a more fundamental conflict, in this case church and state. Given the administration's actions to date, I have doubts whether it will make a bona-fide effort to resolve the problem. So - I expect this will be settled in the courts.

Trends, Premiums and Disconnects

So yesterday I attended a CE (Continuing Education) class on Underwriting Principles; more specifically for large group (100+ lives) health insurance plans. I was not aware of that particular specification when I signed up (I studiously avoid that market), but am glad I went.

First, because if the carrier which presented the class could find a way to bottle the first hour and fifty minutes, they would have a superb homeopathic alternative for folks who need surgery but have issues with medical sedatives.

The last 10 minutes were actually fairly exciting: the presenter was discussing "trend," which is roughly analogous to medical inflation and which makes up a part of the overall rating process. In that context, he proceeded to "prove" that high deductible, consumer-centric plans are actually more expensive than lower deductible plans, and in fact a $0 deductible plan would have the lowest trend of all:

What that chart purports to show is that (all other things being equal) a lower deductible will result in a lower "trend."

This was too much for one person in the class, who raised his hand and said "I can see what you're doing, it's dishonest and I call bullcrap." Here's why:

When questioned, the presenter confirmed that a zero deductible plan would have the lowest trend of all. I then asked "well, then, why isn't healthcare free?" The presenter laughed that off, calling it absurd.

I smirked.

Because according to the logic of this home office critter, if a $500 deductible produced a lower trend than a $2500 one, and a $0 deductible was preferable to $500, then it only stands to reason that giving away care would then result in negative trend.

Now who's absurd?

Time for a Fisking

We have the best readers and commenters. Bar none. Earlier this week, Nate Ogden provided us much-needed perspective on the dramatic cost of the birth control/abortifacient mandate. Today, he offers a terrific take-down of Maggie Mahar's silly thesis that "Free Birth Control Will Not Hike the Cost of Your Insurance." Here's a sample of Maggie's "logic:

"If my married daughter lays out a $15 co-pay for birth control pills, she doesn’t save a dime ... in terms of the costs to give birth to the child, she is not much better off, because if she does become pregnant, her insurer, like many, would pay the bills above and beyond the co-pay."

Take it away, Nate:

This argument is wrong in both logic and fact. The cost of deductibles and co-pays for child birth is thousands of dollars, not the same as the monthly Rx copay. The new SBC (Summary Benefit) reporting requirement uses birth as one of the two examples of cost. I'm looking at the government issued sample SBC now and it says the patient would expect to pay $2,050. That is 136.6 months of birth control co-pays - 10 years worth of birth control. Major miscalculation by Maggie. Further this does not include lost earning potential and other costs related to being pregnant.

"By contrast, if an insurer makes birth control totally free for all of its customers, it avoids having to reimburse them for countless unplanned pregnancies and births. Overall, then, it’s cheaper for the insurer to pay a little upfront to save a ton down the line."

Maggie makes the mistake of not understanding how insurance works in this argument. Insurers charge overhead over expected claims. Their profit is a percentage of revenue, so the higher the claims, the more money they make. In reality Maggie is 100% wrong: insurers make more money if their members become pregnant because premium would be higher and their 5% would be of a higher number.

"There’s some indication that co-pays serve as a barrier to using birth control."

More than an indication, its accepted fact that unaffordable premiums are a barrier to insurance. If you can't afford the insurance policy that covers birth control at 100% you're no better off than the person with affordable insurance that covers birth control with a $10 co-pay.

"employer-sponsored insurance plans have increased considerably over the past decade to $49 in 2010 for ‘non-preferred’ brand-name drugs and $28 for brand-name drugs.”

Why would Maggie fail to mention generics in a discussion on cost [ed: that's rhetorical, right?] ? Generic birth control can be purchased for less then $9 per month. If cost is an issue, why not look at the numerous generic options instead of brand name?

Where Maggie's argument really falls apart is the unintended consequences: she fails to acknowledge any. The bill as written says birth control must be paid at 100%, but we still don't know exactly what that means. Right now millions of women take generic birth control that cost less then $10 a month because cost matters. What if they can now get the brand name drug for free? We already know Pharma is very successful in pushing the latest and greatest drug regardless of effectiveness. If the $9 generic is "free" and the $300 brand is "free" why would women not fill more of the brand? This alone would cause costs to skyrocket.

But there is more. Right now Pharma is sensitive to price; members and plans will only pay so much. Take the IUD Mirena, which might now have to be paid at 100%. When it was just an IUD subject to stricter cost control, it cost $515.85. When it was approved for the treatment of heavy bleeding and prescribed as a treatment, they raised the cost to $742.42. Now that insurers might have to cover it at 100% why not raise it to an even $1000?

"This is why the notion that President Obama’s proposal will lead to higher insurance premiums is ... just plain silly.”

Who seems silly now?

Thanks again, Nate!

Oh, and one more nail in Miss Maggie's thesis. Even HHS Secretary Shecantbeserious disagrees:

"There would be no consideration of cost effectiveness. That was the explicit condition that the Department of Health and Human Services imposed on the ... mandate that will require virtually all health-insurance plans in the United States to cover sterilizations and contraceptives—including those that cause abortions." [emphasis added]

Ooopsies.

Cavalcade of Risk #151: Call for submissions

Van Mayhall hosts next week's CavRisk. Entries are due by Monday (the 20th).

Just click here to submit your post.

You'll need to provide:

* Your post's url and title
* Your blog's url and name
* Your name and email
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Lighting the way to ObamneyCare©

This is the future of health care under the bill we had to pass to learn what's in it:

"Lemnis Lighting introduces two no-frills LED bulbs--one priced under $5 and one under $7--that don't give off much light ... That means that the bulbs ... won't give off enough light for many uses, such as lighting a whole room.

A fitting metaphor.

Bad News Exchange

As Bob noted a few weeks back, "[c]ome 2014 "Exchanges" will be where many American's buy insurance. You will be encouraged to go online or call an 800 number and pick a plan. You will discuss your needs with salaried navigators that are unlicensed and unregulated."

Or will you?

Although the Exchanges are ostensibly a key component of ObamneyCare©, there's now some question as to their viability. In a pair of posts from FoIB (and Cato's Director of Health Care Policy) Michael Cannon, we learn that:

"[T]he federal government doesn’t have the money to create ObamaCare Exchanges, and the administration has no hope of getting that funding through the Republican-controlled House. So if states don’t create Exchanges, they might not exist."

Here's the rub: if your state demurs, then you're not eligible for the promised subsidies.

And speaking of states who've given HHS Secretary Shecantbeserious and her Exchanges the snub, legislators in the Beaver State have "blocked approval of Oregon’s health insurance exchange."

Are dominoes beginning to fall?

ICD-10…We Don’t Need No Stinking ICD-10

In my daily review of my medical practice list group a member posted an announcement that CMS was considering delaying the implementation of the ICD-10. Medical Practice Managers have been told for over 2 years that the date of Oct. 2013 is in concrete, will not be moved, be ready or else. Well, it seems that the implementation of moving to the ICD-10 is not really working as well as planned. As of Jan. of this year all medical offices needed to switch from billing under the ICD-9, which is called 4010 to billing under a new system, 5010, which will allow providers to bill using the ICD-10 identifications.

I personally oversaw the billing transition from the old system (4010) to the new system (5010) and it was an unmitigated disaster. Our software company was not ready for the transition and we suffered a two to three month loss of monies due to software issues (and the physicians were none too happy). I attended a seminar at the beginning of this year discussing the 5010 problems and was given a handout from CMS which outlines how to get ready for the 5010 transition. These are the recommendations:

How to Ensure a Smooth Transition to Version 5010 Below is an overview of steps providers can take to maintain continuity of operations for their practices as they prepare to complete Version 5010 testing and implementation by the January 1 deadline:

• Be sure to have a transition plan in place. The plan should document the steps that will be followed and the dates that milestones will be achieved to comply with Version 5010 requirements. Make your plan available to payers and other business partners so that testing can be scheduled.

• Communicate with vendors regularly; encourage them to take action now to avoid problems with reimbursements. Providers should identify areas within their practice that depend on vendor support and communicate with their vendors immediately to ensure their systems will be up-to-date. Hold vendors accountable by discussing business requirements to ensure products are Version 5010 compliant. Ask vendors about the new Version 5010 features and request trainings to make sure internal staff is comfortable using the updated system. Lastly, talk to vendors about any contract upgrades or costs involved with implementing the new software.

• Reach out to a clearinghouse for assistance. A clearinghouse ensures that claims smoothly transition between practices and payers. When providers submit noncompliant claims, the clearinghouse translates the claims into a compliant format and sends the compliant transactions to payers. The clearinghouse serves as a translator from the Version 4010/4010A to 5010 format. Even if you normally submit your claims to your business partners directly, a clearinghouse can bridge the gap if you are behind in implementing Version 5010, and maintain the submission and processing of your claims while you complete your transition.

• Establish a line of credit. Providers should work with their financial team to establish or increase a line of credit to cover potential cash flow disruptions. A line of credit will help a provider’s practice prepare for potential delays and denials in payer claims reimbursements due to noncompliant Version 5010 transactions being submitted. A practice should also evaluate its cash reserves.

• Take advantage of the free software available to Medicare Fee-for-Service (FFS) providers via Medicare Administrative Contractors (MACs). Providers should contact their MAC for more information.

Take note of recommendation number 4, establish a line of credit. Physicians cannot afford a two to three month break in their revenue due to the incompetency’s of the federal government. Our office did have a line of credit which got us through the drought; however, not all physicians have the collateral to establish a line of credit to cover three months of anticipated revenue. “The Medical Group Management Association recently sent a letter to Department of Health and Human Service Secretary Kathleen Sebelius, saying that if the government does not rectify the current problems with the transition to HIPAA Version 5010 electronic transaction standards, physician practices may face "significant cash flow disruptions, operational difficulties…or even the prospect of closing their practices."

So now the federal government is back peddling so fast they are going to get whiplash. “CMS Acting Administrator Marilyn Tavenner said the agency plans to “re-examine the pace” of implementing ICD-10, marking the first public indication that the 2013 implementation date is not as firm as CMS has repeatedly said it is.”

As I have stated before, the only reason for going to ICD-10 is because the rest of the world is on ICD-10 and we need to be like the rest of the world. So I state again, the rest of the world is also metric, but I don’t see America jumping on the metric bandwagon.

Health Wonk Review: Beyond Contraception edition

Our favorite healthcare economist, Jason Shafrin, has a very topical round-up of the fall-out from the recent Komen/PP/HHS kerfluffle. As usual, his 'Review is well-organized, compelling and eclectic.

Enjoy!

Inside Baseball and ObamneyCare©: Is it a tax?

We've been pretty silent on the Constitutional fate of ObamneyCare© as it wends its way to the SCOTUS. For one thing, we've already made it perfectly clear how we feel about the (Evil) Individual Mandate, and the other myriad of problems inherent in the bill we had to pass to learn what's in it.

But today, the folks behind ObamneyCare© let slip the mask, and perhaps tipped their hand:

"In a hearing of the House Budget Committee ... pressed [Acting Budget Director Jeffrey] Zients on whether the penalty that the health care law imposes on individuals who do not purchase health insurance constitutes a tax. Eventually, Zients said it did not." [emphasis added]

Of course, characterizing the fine as a tax is what gets them under the Commerce Clause umbrella, and hence (potential) legitimacy. One wonders if Mr Z was inspired by Tom Brady.

From the P&C Files: Get a CLUE!

As we've mentioned, Bob and I frequent an online consumer bulletin board, where we offer advice when appropriate. One of the frequently asked questions is how to find out if a recently deceased loved one had any life insurance. Unfortunately, there is no central repository of that information.

About the closest thing to that kind of data warehouse would be the Medical Information Bureau (MIB), about which we've written several times. The MIB doesn't have records of issued policies, but can be helpful in determining whether or not a person had applied for life or health insurance. It does not, however, collect actual claims information.

Which may or may not be a "good thing" depending on one's perspective.

But if you've had a claim on your homeowners policy, that information is available to other agents and carriers. And it's not just your claims, but your home's claims; that is, even if you sell your house and move away, that claim will (essentially) follow it.

This information is readily available to companies and agents via a CLUE report. And here to explain that is our P&C guru Bill M:

CLUE stands for Comprehensive Loss Underwriting Exchange, which is a database subscribed to by most Insurance Companies. A reported claim will show up as a claim for the individual insured and as a claim on that property location. When looking at a new property for someone, a CLUE report will show both claims that the individual has had as well as claims at the location being looked at.

For example:

Maybe you've never had a claim, but the previous owners' had several. Well, that's going to show up and may affect your rate.

That's the part I hadn't known, and that I suspect a lot of readers hadn't, either. Thanks, Bill!

ObamneyCare© vs Jobs (Redux)

Just a few months ago, we brought you the story of a mid-sized law firm which perfectly illustrated the jobs-killing effect of ObamneyCare©. Of course, proponents of nationalized healthcare would pooh-pooh this as a one-off, but would they be right?

Turns out, not so much:

"U.S. small-business owners who aren't hiring -- 85% of those surveyed -- are most likely to say the reasons they are not doing so include not needing additional employees ... nearly half of small-business owners point to potential healthcare costs (48%)"

That only makes sense, of course: if you're a small business owner struggling merely to survive this oppressive economy, you're already well aware of how much your existing workforce's health insurance costs. Adding to that? Get real. And this is after just a couple of years of ObamneyCare©; imagine how much uncertainty will increase as we draw ever closer to 2014.

United Healthcare Drinks the Kool Aid

“UnitedHealth Will Tie Doctors’ Payments to Quality of Care in U.S. Shift” was the headline I saw during my morning review of medical news. The article describes in glowing terms how United Healthcare will save money because people will be healthier.

“UnitedHealth expects to save twice as much as it would spend on incentive payments for doctors because patients will be healthier, according to company documents ... The nationwide expansion of the program follows similar efforts by the U.S. government and rival insurers to trim medical costs by shifting away from paying based on the amount of services provided.”

The age-old argument of quality over quantity. Currently, the payment system in place is quantity. Providers are paid per CPT code billed, which defines either an office visit or a procedure performed. Medical notes, referred to as SOAP(S=Subjective, O=Objective, A=Assessment, and P=Plan) notes do not mention quality of care, only that care was delivered and the plan (if any) for continued care. The current guidelines to writing a SOAP define the exam, the chief complaint, what was examined, diagnosis and treatment. In situations of a chronic condition the provider can note if the patient is getting better or worse in terms of recovery, but this does not relate to the quality of care.

The argument to move away from quantity in terms of payment is that physicians are over-worked (a physician needs to see a minimum of 28 patients a day to make enough revenue to simply maintain a business) and patients are not receiving good care. Concierge medicine attempts to deal with this issue by limiting the number of patients a physician has by charging each patient a retainer to be their personal physician. A limited number of physicians have moved to this model, but it cannot be implemented with Medicare Patients: Medicare prohibits charging a patient more than the Medicare Fee Schedule for medical treatment. So, two solutions have emerged, ACO’s and payment for quality. ACO’s are a capitation plan which failed under HMO’s and will fail again, but quality is a new concept. The theory is that if a physician knows that he/she will only be paid if their care is high quality, then the physician will take the time to truly treat the patient. As with all theories, only practical application will prove their viability, but I do have some thoughts on the theory itself based on common sense and my experience.

Thought 1: People do not always do what is in their best interests. The Darwin Awards are a testimony to this thought. In medicine the physician is only as successful as his patient. If his patient is 200 lbs overweight, smokes, and has a steak for dinner every night, there is a high probability of heart disease or stroke. The physician puts the patient on a diet, enrolls him in smoking cessation classes and gets him a life time subscription to Veggies International. The physician provided quality care. But the patient ignores the diet, blows off the classes and sic’s his dog on the nice lady from the Veggie group. He has a stroke and is admitted to the hospital. Who is to blame for this situation, the physician or the patient? Under the quality mandate it would be the physician because his treatment did not prevent the stroke.

Thought 2: Pre existing conditions or genetic time bombs. Science has demonstrated that each of us have genetic markers that can become a myriad of diseases. The federal government takes this so seriously that as an employer I cannot discriminate against someone who has had a genetic test and came back positive for some chronic and life threatening disease. Even though that disease will cause my health care insurance premiums to sky-rocket, I cannot take that into consideration when hiring an individual. What if a physician takes on a patient that is unlucky enough to get one of those chronic, expensive diseases that have death as the only outcome? Will he not be paid because his treatment could not keep his patient alive? After all isn’t that the true outcome of quality care, staying alive?

Thought 3: Who defines "quality care?" In the 1980’s the argument revolved around the best care for a child, home with a parent or in a daycare setting. It was the same argument: the stay at home parent offered quantity time, while the child in daycare received quality time from one’s parent. That argument was not resolved because we all have our own definition of quality. In terms of medical care, is the fact that you did not die during your appointment prove quality care or is it keeping the person from ever getting sick or injured or suffering any bad thing from ever happening, (remember, even bad things happen to good people)? It cannot be answered, and if it cannot be answered then a payment system cannot be linked to it.

Thought 4: If the insurance company and/or government define quality and their definition determines if the provider gets paid, will the provider ever get paid? In medicine right now providers and insurance companies are competitors; competitors for the patient’s dollars. The insurance companies are a business and it is in their best interest to keep the money. The providers did the work and thus the money is owed to them. It is getting harder for a provider to be paid for treatment rendered simply based on the objective parameter of delivering treatment. How much harder will it be to get paid with the parameter as subjective as quality?

Based on these thoughts, it is my hypothesis that payment for quality care will fail because of one simple fact: We are mortal and no amount of medical treatment will alter that reality.