Cavalcade of Risk #18 is up!

Our friend Joe Paduda, host of Managed Care Matters, hosts a fiesta-filled Cavalcade. He's got some interesting categories, and plenty of context.

What's even more remarkable is that he's sombrero-blogging (confused by that? Then click on over!).

Gracias, Jose!

And if you'd like to host a future edition, even from the good ole U S of A, just drop us a line.

Hide and Seek

As we’ve pointed out many times here at IB, one of the major challenges we face in the debate about health care and how we pay for it is defining the problem. That is, so many folks conflate health care with health insurance. As we’ve discussed, they are not the same.

But there’s another problem, wrapped up inside the first one: our present system actually hides the true costs of both health care and health insurance. The former is beginning to be addressed by the transparency movement, but what of the latter? About two thirds of us get our health insurance courtesy of our employers’ plans, and there are tax advantages to this for both the employer and the employee. Those of us who buy insurance in the individual market generally don’t have that kind of tax advantage, nor is it readily available.

One proposed solution to this conundrum is to do away with the employer tax break. I’ve always maintained that it would make more sense to enlarge it, making premiums deductible for folks in who buy their own.

But President Bush has proposed a third way (and you thought that was just a Clinton thing):

Robert Samuelson, writing in Newsweek (on-line edition), points out that “by modifying [the current code] with specific deductions for insurance ($15,000 for families, $7,500 for singles), [Bush’s plan] would force most workers to see the costs.”

Intriguing, yes, but pretty darn clever, as well. Other plans, notably Senator Wyden’s, rely on complex and failure-prone mechanisms like Community Rating. The Governator’s plan would increase the tax load, but not address the underlying cost factors. And the list goes on.

As a bonus, Mr Samuelson snopefies [ed: you just made that up!] a favorite myth about the uninsured: Turns out they “don't really use emergency rooms heavily. A study in the journal Health Affairs finds that their use is similar to that of people with private insurance — and half that of people with Medicaid.”

Who knew?

Terrific Two's, Thoughtful Three's...

Today marks InsureBlog's 2nd blogiversary, and I couldn't be more proud or delighted. For one thing, we've grown to four (count 'em, four!) contributors, from all over these United States. For another, our traffic has grown substantially, as has our reputation for interesting, insightful (and often humorous) posts.

Last year, for example, saw our first major investigative series, and the creation of the bi-weekly Cavalcade of Risk.

This year, we'll continue to bring you the inside scoop on the various health care reform efforts around the country, and the steady evolution of Consumer Driven Health Care.

Please stay with us, and Thank You for another great year!

Consumer Driven Grand Rounds...

Host Fard Johnmar presents a truly grand 'Rounds: it's all about Consumer Driven Health Care, from many different perspectives. Although I'm generally not a fan of "themed" carnivals, this one really hit me between the eyes. At InsureBlog, we've been major proponents of the principle from day one.

Fard's collected well over 2 dozen relevant posts (wow!), and organized them in a way that makes sense, and easy navigation. Even better, each entry has a brief explanation, which is indeed helpful.

Bravo, Fard, Bravo!!

Coffee in Donuts

No, that's not a typo; our famous New Food Pyramid may need updating:

"Buzz Donuts(TM) and Buzzed Bagels(TM) are the brainchild of Dr. Robert Bohannon, a molecular scientist living in Durham, NC. Dr. Bohannon has developed a way to mask the normal bitterness of caffeine so that it can be used in food and pastry products such as bagels and donuts."

Yum!

Carnival of the Capitalists is up...

Johny Debacle, blogging at Long or Short Capital, hosts an intriguing Carnival of the Capitalists. He's posted "the best 15" of the 56 (non-spam) submissions he received.

I'm of mixed feeling on this: on the one hand, Bob's item on the SOTU and health care made the cut. On the other, since we're not privy to the host's criteria, how do we know that other good posts weren't left out?

I can see why this one made the cut: Sox First blog reports on an unintended (though foreseeable) consequence of Sarbanes-Oxley and other privacy initiatives (hint: it's not good news).

Insurance Dispatch...

This week, we look at Concierge Medical Plans, and how one carrier that specializes in Consumer Driven Health plans handles them.

Check it out at Trusted.MD

Why not universal health care?

WASHINGTON - Every American should have health care coverage within six years, Democratic Sen. Barack Obama said Thursday . . . "I am absolutely determined that by the end of the first term of the next president, we should have universal health care in this country," the Illinois senator said.

I wonder what Senator Obama is talking about. Is it universal insurance (”everyone should have coverage”)? Or is it “universal health care”? Who can tell from these confused statements? If Obama knows what he is talking about, why does he sound so mixed up?

Well, I say the time has come for members of Congress to understand that health care and health insurance are different, and then, unambiguously, face up to America’s true needs. And I say it’s time for Congress to take up universal health care.

Do you call an actuary when you are sick or injured? Do people call their insurance agents? Doesn’t everyone call their doctor or go to the emergency room? Yet our so-called leaders do not, or cannot, distinguish between health care and health insurance, and so haven't figured out that insurance is not what we need first - health care is what we need first.

As a result, we are being sold insurance when instead we need to be buying health care.

I say if anything is to be made universal, it should be health care. If our laws made health care universal (and much less expensive), problems of access and affordability would evaporate, as would insurance problems. And of course, once we have universal health care, our life expectancy will go UP and infant mortality will go DOWN.

Health care does not become less expensive when someone subsidizes it. That’s what insurance does. But I’m talking about health care, not insurance. I am suggesting that the nation take the steps necessary to reduce the cost of health care. Is it possible to provide modern health care for substantially less cost? Of course it’s possible. The experience in any number of advanced nations proves it’s possible.

Cavalcade # 18: Submissions Due

Submissions for next week's CoR, hosted by Joe Paduda at Managed Care Matters, are due this coming Monday (the 29th).

You can submit your (or someone else's!) risk-related post via:

Blog Carnival

or

Email

Please include:

► Your blog's url

► Your post's url

► The trackback url (if applicable)

► A (brief) summary

PS We're scheduling hosts for early Spring '07, so don't wait too long to sign up!

Unintended Consequences (III)

A few weeks ago, Mike reported on California’s bold new health insurance initiative. Part of the Governator’s plan requires employers with at least 10 employees to offer health cover, or face a potentially substantial fine.

One may argue about the “fairness” (or even efficacy) of such an arrangement, but some folks have decided that this is a great opportunity for some lemonade:

“The Schwarzenegger proposal requires individuals who can afford to buy their own health insurance to do so or face a state tax. Because the high-deductible health insurance plans are significantly cheaper than more comprehensive policies, Mr. McKechnie [of the Health Savings Account Council] thinks that they will become the plan of choice for many moderate-income people.”

The idea’s pretty simple (and hence, elegant): since the premium for a typical HDHP is likely to be (significantly) less than the payroll tax/fine, such plans may become very popular, very fast, at least in the Golden State. And if that’s the case, then the folks who handle the cash accounts are going to be taking a good look at this new market, as well:

“Since assets in HSAs are managed much in the manner of those in individual retirement accounts, advisers increasingly are taking an interest in HSAs.”

No kidding.

This assumes, of course, that folks fund their accounts. Whether or not they’ll do so is, of course, a mystery at this point; they’ve been gaining ground, albeit slowly, but will this potential groundswell really come about? We’ll have to wait and see.

At 4%, the payroll tax is about a third of what California employers currently spend on health care cover. So in theory, they could trade in higher priced PPO plans for HDHP’s, fund some (or most, or maybe even all) of the deductible, and still be ahead. Kind of intriguing, no?

As we’ve maintained here at IB, it’s preferable that these experiments take place at the state level. Why's that, you ask? Simple: federal experimentation could have devastating national effects on health care and its funding. By encouraging the states to “test-drive” different configurations, any potential damage is much more limited, which is desirable.

Interesting times.

Heath Wonk Review is up...

Found this week at the Health Affairs Blog. Hostess Jane Hiebert-White presents some 20 entries, with interesting and helpful commentary on each and every one (I like that!).

Something I'd never even thought about is Worker's Comp issues for our countryment deployed to Iraq. FoIB Julie Ferguson has the inside scoop.

Saving the integrity of the Ontario health care system

Here is an interesting article from Canada:

A Canadian citizen was denied reimbursement by the Ontario Health Plan for a liver transplant in 1999 after “two well-respected transplant centres in Ontario said he was not a suitable candidate for a liver transplant”. Toronto General Hospital told him “his chances of survival were slim” and “he had just six months to live.” This is the kind of review and tough decision that systems with limited resources must face, whether public or private. So, is there a problem? Well, based on the information reported in this case, I think yes.

This patient sought advice from other physicians, and that’s where the story gets interesting. A team of doctors in London, England gave him an entirely different medical opinion. However, the Ontario Health Plan refused to change its original decision, repeating that he “wasn’t a candidate”. One of the Ontario hospitals added that the “procedure had never been performed” – anyway, not “in adults” – and anyway, not “at that hospital”.

After the patient had the operation in England and survived, thank you, he sued the Ontario health plan for reimbursement – and lost, the case is under appeal.

The Ontario Health Plan’s defense is that the operation “was considered in Ontario to be experimental” and that “the state did not deprive him of anything, specifically of seeking treatment overseas.” Strangely enough, Ontario also argued that “liver transplants in Ontario are available in a timely fashion”. For everyone except poor Adolfo, I guess. Water, water everywhere and not a drop to drink - eh?

This story raises many questions that are not explored. Was the original reason for Ontario’s denial truly based on clinical factors? Was it a competent review? How much might the decision have been influenced by the Ontario hospitals’ admitted ignorance of the life-saving procedure? How much might the review authorities in Ontario have been influenced by the expected cost, in ruling that the patient was “not a good candidate” for the operation? Is Ontario truly as inflexible as the article implies in regard to its own medical guidelines? Why didn’t the patient go to a different Canadian hospital - I thought in Canada one has free choice of hospitals? Was the Ontario Health Plan responsible for the “tainted” blood transfusion in the first place? If not, who was; is there no accounting for such liability in the Canadian health care system?

Finally, in the case that is being appealed, the judges wrote that limiting the funding of out-of-country medical treatments to those that are generally accepted in Ontario ensures public funds are not spent on treatments that are "inconsistent with the ethics and values of the Ontario medical profession and the Ontario public. This safeguards the integrity of the health care system." Maybe. And maybe more information is needed before the public knows for sure whether this episode is about integrity or about money.

The Price (Waterhouse) is Right…

With the presidential election cycle already heating up, health care is again on the front burner, simmering in a handful of states that have passed “universal” care plans, and half-baked proposals popping up in DC.

[ed: We apologize for the preceding metaphor overdose. We’ll get serious now]

Of course our system isn’t perfect, but before we ditch it we should pay close attention to what other countries are experiencing. Once again, it’s critical to draw the distinction between health care and health insurance.

According to a new study released by Price Waterhouse Coopers (an international data services firm), just because a government provides (and/or pays for) health care, doesn’t mean that health care costs are any better managed. For example, even countries like France and Ireland (about which one of our regular commenters keeps asking us) are searching for solutions to their own health care crises.

By all accounts, commercial insurance carriers pay about 40% of health care costs here in the US. That’s twice what France’s carriers fork over, and almost 8 times the burden of English carriers. Yet, those same countries are stuck with a similar problem: spiraling health care costs. Even countries like Switzerland, Ireland and even Australia (all of which have much lower levels of private health care spending) face increasing costs, and increasing liabilities.

And of course, with all the press on medical tourism, the PWC study found, perhaps surprisingly, that the rest of the world turns to us for insights, experience, and ideas. According to PWC’s Paul Veronneau, “(t)here are a number of countries that are continually coming to the U.S.to understand how we do it.”

One interesting note which I found particularly relevant: the importance of wellness programs in addressing increasing costs was found to be more amenable to private, rather than public, funding. You don’t say.

Tech (Comments) Alert...

Once again, our comments are on the fritz. If you've tried to leave a comment recently, and can recall what you said, please feel free to email it to us; I'll save them, and put them up when we're back at 100%.

Thanks for your patience!

UPDATE: Comments appear to work in FireFox (just not IE).

UPDATE 2: Comments appear to be working again in IE, as well.

Toys 4 Tots 2...

Last month, Bob told us about Vimo's campaign to help kids have a brighter holiday season. Well, looks like they're still at it: they've extended their (already-in-progress) Toys For Tots Donation Program until the end of January 2007. Vimo will donate one dollar to the U.S. Marine Reserve Toys For Tots Program for every doctor rating posted by consumers at Vimo's website.

Some futures aren't much fun to contemplate - II

Medicare has an enormous financing problem that most people probably don’t think about, or even know about. The problem is Medicare's crushing future liabilities, 90% of which must be paid from future federal budgets (the other 10% will come from contributions, e.g., Part B premiums paid by Medicare beneficiaries). Taxes must be levied to cover these Medicare liabilities as they become payable.

Many people know that Social Security income benefits (the “OASDI” funds) face this kind of financing problem. However few people know that Medicare has the same kind of problem as Social Security – and it’s much bigger.

OK, so how big are the Medicare liabilities? As of 2005, “(p)roviding promised Medicare benefits is projected to require over $2.7 trillion (in nominal dollars) in new tax rev­enues over just the next 10 years . . . Medicare’s financing problems will arise sooner and ultimately surpass Social Secu­rity’s financing problems.”

$2.7 trillion is an incomprehensibly large number of dollars, but just consider that the TOTAL RECEIPTS of the U.S. government for fiscal year 2006 are expected to be less than $2.5 trillion. Given that future Medicare costs are no small problem, have you ever heard a member of Congress discuss them? Have you ever heard a member of Congress suggest a way to deal with them, on his way out of the room?

Frequently this or that politician or commentator suggests a solution to our present health care cost and access problems is “Medicare for all”. There are about 45 million Americans covered in Medicare. Before the public entrusts the government with health care for more than 200 million additional people - in any form, whether "Medicare for all" or not - shouldn't more people understand the problem the nation faces in paying for the Medicare liabilities that already exist?? Some futures aren't much fun to contemplate.

Carnival Monday!

This week's Carnival of Personal Finance is hosted by Jim at Blueprint for Financial Prosperity. With over 75 entries, in 3 categories, there's sure to be something you'll find useful (and/or fun).

Our kids are pretty much grown now (okay, one's still a teenager, but you get the idea). Still, we (they) might have benefitted from GreatFX's post on teaching kids about money.

David Maister hosts this week's Carnival of the Capitalists. There are more than 50 entries, broken down into 6 categories. Each one has helpful context, as well.

Nina, blogging at Queercents, poses an ethical question about investing in companies which engage in activities we find immoral.

Insurance Dispatch...

In this week's column, we learn about a federal agency's reports that a lot of us are scrimping on preventive care.

Check it out at Trusted.MD

The Thinker Nails It...

Bob found this insightful and important post over at The American Thinker. Steven M. Warshawsky does a terrific job of explicating something we here at InsureBlog have said for a long time: the reason health insurance is so expensive is that health care is so expensive, and he further underscores the difference between the two, writing that "not everyone who lacks health insurance is suffering from a lack of adequate medical care."

Read the whole thing.

Wal-Mart Wins...

We've blogged on the Maryland vs Wal-Mart situation before (the Old Line State had passed a law which would have requored specific employers -- namely, Wal-Mart -- to provide health coverage to its employees there). This would have placed an onerous financial burden on Wal-Mart's customers, and perhaps led to lay-offs or even stores closing.

Fortunately, the US Fourth Circuit Court of Appeals saw what a boondoggle this would have created (not to mention that it conflicted with ERISA, which supercedes state law), and told Maryland legislators to take a hike.

All's well that ends well...