A Brief Commercial Break

Despite numerous offers and enticements, we don't do advertising here at IB. Yes, you do see a link to Hometown Quotes in the sidebar, but this is really a referral service; none of us actually get any leads from it. But I'd like to take the opportunity to plug two of my co-bloggers (Mike doesn't currently sell insurance):

If you live in the Golden State, and you're not availing yourself of the services of Bill Halper, you're missing a bet: Bill's an extremely knowledgeable and ethical insurance professional, and you should be seeking him out to help with your life and health insurance needs.

You may have noticed that I've updated the top post of our blogroll: instead of Insurance411, you see Bare Bones Health. This is Bob Vineyard's newest venture, and it evolved from his "Phantom Insurance" post here. Frankly, I think this is going to be big: in a sense, it's a quantum leap backward, but that's actually a good thing. The premise is that folks tend to buy too much insurance, and Bob's set out to correct that. Give it a whirl.

Mr DeMille, Your Policy's Ready!

Interesting article in the McPaper last week about insuring Hollywood blockbusters (and, of course, lacklusters):

"Most independent producers and even some big studios won't touch a film unless it's insured against potential problems including production delays from injured or incapacitated actors, bad weather, equipment breakdown or damage to essential elements of a film."

Special Risk policies are generally the province of our P&C brethren, and run the gamut from hole-in-one cover to NASCAR events. But the discipline really encompasses a lot more, and it's pretty interesting. For example:

"Independent films need to have these policies to land a different kind of protection, called a completion bond, that compensates backers if the movie doesn't come in on time and on budget. These bonds can account for an additional 2% of a film's costs" Who knew?

So now I can't wait for the new action-packed epic, Indiana Jones and the Underwriters of Doom.

PERSONAL UPDATE: Thank You to all our readers for your kind words and well wishes in the aftermath of my unfortunate accident. I had my surgery yesterday afternoon, and seem to be on the road to recovery (Percoset is good!).

Cavalcade of Risk #46 is up!

Wenchy the Wise hosts this edition of the Cavalcade of Risk. Please check it out!

We could use some hosts for April and May: please drop us a line to volunteer!

Grand Rounds is up...

Hungarian med student Bertalan Meskó, proprietor of Science Roll, presents a truly grand 'Rounds, with 4 dozen interesting entries, all with helpful context.

At Diabetes Mine, Amy Tenderich has some helpful, albeit little known, info on our immune system.

Norway: No Way!

Advocates of state-run health care take great pleasure in pointing to "success" stories in, for example, Japan and Great Britain. One of their favorites, though, has been Norway.

Until now, one supposes:

"State health officials are sounding the sirens themselves over a state of emergency in Norwegian hospitals' emergency rooms, where patients face lengthy delays, inexperienced doctors and often chaotic organization."

Ooopse!

The problems stem from inexperienced docs to long waits for staff and equipment. Perhaps more problemmatic is the dearth of monitoring of critically-ill patients and lack of clearcut procedures on how to deal with them.

"I'm from the government, und I'm here to help you!"

Indeed.

Great White North – Part XLIV

Significant goings-on up north. The Castonguay Report is released - see the Toronto Star.

Signficant because, at least in Quebec, the provincial health system is characterized as “overburdened,” “wheezing” and “near a crisis point” - because it can “no longer sustain the annual growth in health-care costs.”

Cheese, really? In Canada?

Significant also because the Castonguay Report recommends that Quebec adopt strategies that the evil American insurance companies use - - increase premiums (i.e., taxes) and reduce benefits (i.e., copays and deductibles). Predictably, unions fiercely oppose these strategies and meanwhile there is a shortage of doctors.

Sounds familiar. But in Canada??

The article notes that “The province currently spends about $24 billion annually on health care, or about 40 per cent of its budget.”

Well, now. The 2007 population of Quebec was about 7,720,000. Its $24 billion annual expenditure on health care is equivalent to $3,100 annually per capita. If U.S. federal health care spending were 40% of our budget, the U.S. would raise about $1.6 trillion anually to finance health care spending - - or around $5,400 per capita.

So the Canadian per capita number seems 43% less than the U.S. number. Is so large a difference the result of superior Canadian health care management? Maybe it is. But what if not?

What if, just maybe, this difference really measures how easily health care demand rises to meet the supply of money? What if, just maybe, it demonstrates that the American economy is able to supply substantially more health care per capita than Canada’s? And what if the difference mainly means Americans demand substantially more health care than Canadians? Might that explain, for example, the more immediate availability of hospital and specialty care in the U.S.? If the higher level of health care supply in the U.S. is bad, does that mean the higher level of health care demand is also bad? If so, who shall be punished for this?

EHR/EMR: Pro vs Con

Search engine behemoth Google plans to join other internet biggies in offering on-line storage of one's medical records:

"Thousands of patients at the Cleveland Clinic will be able to turn to Google to access their medical records online — everything from their prescriptions to diagnoses — in a pilot program announced Thursday..."

A few months ago, Mike wrote about similar efforts by the MVNHS©, whose providers overwhelmingly approved of (at least) the concept.

The idea is to make it easier for folks to both access their own info and make that info available to healthcare providers. The major benefit of such a service is to allow providers real-time access to pertinent (and perhaps life-saving) medical info on their patients. Another advantage is that it makes it less onerous when folks need to recall their own medical histories when faced with, for example, an ER visit.

There are some potential downsides, of course. Chief among these is the potential theft (or breach) of such data. We've all read the stories about stolen credit card info, and the risk is there for any electronically-stored records.

Another concern would be "unauthorized" access to this data; by, for example, employers (or potential employers), or even insurers. As to the latter, I really don't see a problem: we've written before about the MIB, and this seems to me an extension of that tool. As to the former, well, that is problemmatic: what does one say if/when a prospective employer requests access? That's not so cut-and-dry.

Still, rejecting new tech because of potential problems seems ill-advised. And the benefits seem genuinely, um, beneficial. And of course, one can't unring the bell: this stuff is already here (or on the way), so perhaps the discussion needs to be about the safeguards.

Cavalcade #46: Submissions Due

Wenchypoo hosts next week's edition of the Cavalcade, scheduled for Wednesday the 27th. Please make sure to get your submissions in by Monday (the 25th). She requests that you PLEASE include:

■ Your blog's url
■ Your post's url
■ The post's trackback URL (if available)
■ A (brief) summary of the post

You can submit them via Blog Carnival or email. We have slots available for April and May, so PLEASE drop us a line to reserve yours.

Accessing Healthcare, Part 1

[Welcome Industry Radar readers!]

We start today's lesson with a rebus:

Snowblower + icy driveway + gravity = broken (right) wrist

Ooops!

In my own defense, the polite and efficient ER doc informed me that there were four(!) other Y-chromosome types in the ER, at the same time, with comparable (and identically acquired) injuries.

Regular readers know that we recently switched to an Aetna HDHP/HSA; this post (and perhaps one or two others) will serve as a real-life, real-time assessment.

In the event, I was transported to the nearest hospital (a gorgeous, brand-spanking new, state-of-the-art facility). It was VERY cool:

First, I was assigned my own room (complete with sliding-glass doors, ala Dr House). The admitting person came to me: she wheeled in a cart (complete with PC, HD monitor, scanner and printer) and got my vitals: insurance card, co-pay, mother's maiden name, grandfather's trust number, you know.

She printed off the appropriate forms, stuck them in a clipboard, handed that to me, and said "sign here, please." I looked at her, then at my swollen and painfully mis-shaped wrist, and observed sagely: "you have to be kidding! "

But she wasn't; she nicely told me to use my left hand and "do my best." So I scribbled something illegible, and handed it back (but not before my youngest stood up, examined the signature and exclaimed: "really, Dad, it's no worse than your regular handwriting." She's her mother's daughter).

Then it was time for x-rays. But, they didn't wheel me to radiology, they wheeled the x-ray machine to my room! Wow.

To no one's surprise, the x-ray confirmed a broken wrist. Great.

And then came the question: do you want the on-call orthopaedic surgeon? Of course not. Dr Bob referred me to a pre-eminent hand specialist (at some point, I truly expect to be told "oh, I can't do that: you need a pinkie specialist!").

But that's another post [ed: well, we should hope so].

What I found so intriguing was the efficient (but not-impersonal) workflow: every person brought the supplies, equipment and expertise necessary for their task. I didn't feel rushed, but neither did I feel as if the wait was endless.

At some point in the next few weeks, I'll receive my EOB (Explanation of Benefits) which will list all of the medicine that was committed upon me, how much the hospital charged for said services, how much the insurance will allow them to charge, and (finally) how much I owe. When it comes, I'll share it with you, along with the strategy we'll use to pay for it.

(And yes, I typed this with my left-hand, and two vicodin's)

This Sceptered Isle Part X

Imagine this.

It's easy if you try.

You may hope someday to join them.

And the world will be as one.

Transparency Update

It's been a while since we addressed transparency in health care. Very briefly, this is the idea that folks aren't aware, up front, of the costs of various procedures or medications. Although information regarding the latter is becoming more and more available, "regular" health care costs still remain somewhat murky. To an extent, this is to be expected: after all, there are many carriers and many plans, and providers themselves often have little (if any) idea how much a given procedure or exam will cost.

Still, it's an admirable -- and attainable -- goal. We've generally seen initiatives in this area from insurers and, to an extent, Medicare. As a fan of private enterprise, I've been hoping for more entrepreneurs to jump in. FoIB Chris Parks' efforts at MedBill Advisor come to mind, and Bob recently tipped me to this start-up:

"A new Twin Cities company called Carol is trying to change that with a Web site that gives consumers a "care marketplace" to search for medical services, compare quality and price and make appointments."

The company, founded in 2006, enables patients to access a variety of information about cost and availability, as well as quality of care. The site looks a lot like a shopping portal (complete with a graphic of a woman with a shopping basket). The metaphor is clear, if unsubtle: shop for health care as you would for milk and eggs, pants and shirts, a new car or DVD player.

This idea of health care as a commodity has, of course, upset a number of apple carts [ed: ugh!]:

"But Dr. Sidney Wolfe, director of Public Citizen's Health Research Group, said the site is nothing more than advertising, and he hoped it wouldn't catch on.

"Among physicians, there's a belief that health care is too critical ... to be left to the usual marketplace," he said."

Methinks thou dost protest too much, Doc.

Like it or not, you (and your colleagues) are in the business of delivering health care. While that may not seem particularly glamorous, and perhaps shows less deference than that to which you're accustomed, it is the truth. There are all kinds of health information resources available (from WebMD on out); don't you think your patients have already figured that out?

The article Bob sent also mentions something that regular readers of IB already know:

"If the site becomes more comprehensive, Carol.com would be most useful to people with high-deductible plans, health savings accounts or those without health insurance, said Elizabeth Boehm, an analyst with Forrester Research who studies the health care customer's experience."

As proponents of such plans, we've made this case many times over the years: it's your money, after all, shouldn't you spend it wisely?

Still, it's nice to be validated.

I think psychiatrist Ronald Groat summed it up best: "Carol is important because it makes health care "more visible and transparent to someone who's looking for help."

Interesting Post at Joe's Place

One of our very favorite bloggers is Joe Kristan. Despite the obvious handicap of being an accountant, Joe has insightful and often cutting-edge posts on tax-related issues.

And sometimes about gummint meddling.

In brief, Hawkeye State governor Chet Culver is taking aim at the health insurance market with a variety of problemmatic ideas. One of them seeks to address the challenge of folks coming off group plans and finding little or no joy in the individual marketplace. The Gov's idea is to require carriers to offer cover to folks with pre-existing conditions. Joe correctly adduces that this will serve to increase costs to everyone, especially if carriers are forbidden to rate up such applicants.

I tend to agree, but I'm intrigued by the concept. After all, one of the goals is to get (and keep) more folks "in the system." It's always bothered me that HIPAA does a reasonable job of this when moving from group to group, or even individual to group. But it's silent as to folks going from group to individual cover, and I think that's a problem.

As I mentioned at Joe's, as long as the carrier is able to "rate for the risk," I think this idea has some legs. Some of the Governor's other "solutions" are less attractive, but make for interesting reading.

Grand Rounds is up...

You'll find the best of the medblogs over at Daily Interview. There are over 2 dozen posts presented in 10 categories, all with helpful context.

We haven't talked much about alternative medicine here, but How to Cope with Pain has an interesting post on the efficacy of herbal pain meds.

Jumble o'Numbers

[Welcome Industry Radar readers!]

At a meeting I recently attended, one of the speakers threw out a couple of "buzz alphanumerics" (these are like "buzz words," but different): 412i and 409a.

Neither one of these are brand new, and both of them relate to the use of life insurance in defined benefit deferred compensation plans.

Whether qualified or not, deferred compensation plans are a valid, and valuable, way to accumulate additional dollars towards retirement. By "putting off" (deferring) taxable income today, one hopes to enjoy greater purchasing power with those dollars in future years.

Qualified Defined Contribution plans, such as IRA's and 401(k)'s, offer immediate tax relief, but come at a price: limited access, special rules, an uncertain tax future, to name some baggage. One is also limited in how much one can stuff away in such plans: the gummint determines how much can getted socked away, and has special rules for highly compensated folks. Such plans are essentially defined by the amount one may contribute, thus the term "defined contribution."

Non-qualified plans, on the other hand, don't have such handcuffs. About the only real limit is the amount one is willing to sock away into them. There are variations on these plans, of course, but they remain relatively burden-free (for the most part). The biggest obstacle has usually been the pocketbook. Since one is limited by practicality, these plans are essentially defined by the amount one can contribute, and so it becomes a "de facto" defined contribution-type plan (although I'll quickly point out that's a characterization, and not a definition). These typically use life insurance policies as the accumulation vehicle, for a variety of reasons.

But what happens when you "marry" the two ideas: a qualified plan with immediate tax benefits, and the guaranteed growth (and leveraged death benefit) of permanent life insurance? And what if one could set up such a plan defined not by how much one may contribute, but rather by how much one expects to receive come retirement time? Well, we'd call that a "defined benefit" plan, and that's where these two "buzz alphanumerics" come in:

412i plans fall under the rubric of "Defined Benefit Pension Plans," which lay out how much a given person will receive down the road. Based on that person's age (and other demographics), he may be able to put in much more cash, much more quickly. The downside, of course, is that it works best in small companies, and requires some big cash commitments. And because it's based solely on permanent life insuance plans, there's not much flexibility.

409a isn't a plan, per se: it's a (relatively new) section of the code relating to how defined benefit plans (and their funding vehicles) are taxed. You didn't think Uncle Sam was going to ignore the potential bajillions [ed: a highly technical accounting and actuarial term] of dollars that could conceivably be tucked away in such plans, did you?

The new law was officially signed in October of 2004 as part of the American Jobs Creation Act. "The new law imposes restrictions on funding, distributions, and elections to participate in the plan. While recent IRS guidance (IRS Notice 2005-1, as revised on 6 January 2005) provides some transitional relief, immediate changes to many compensation arrangements are necessary."

Still, these plans remain an attractive and effective means towards growing retirement income. If you're interested, you'll need at least two resources that you know and trust: an accoutant, an independent insurance agent, and someone to handle the administrative end (I know, that's three).

Now you know.

Carnival of Personal Finance

The Financial Blogger presents this week's Carnival of Personal Finance, with over 80 entries. On the one hand, there's plenty to choose from, and posts are broken into a handful of categories. On the other, it's really just a big list of posts; relying on the titles is helpful, but somewhat hit-or-miss.

I did find one thought-provoker, though: Tina, at Money Smart Life, recently discovered (to her chagrin) that one's credit rating can affect one's insurance premiums. Thus far, this phenom has affected primarily the P&C side (although most life insurance applications also ask whether or not one has filed for bankruptcy). I've previously discussed this with a P&C pal, and I'll see if I can get him to do a guest-post on the topic.

Shameless Self-Promotion

We're usually pretty circumspect here at IB, but what the heck:

■ In the past few days, we've been linked by both Reuters and Fox News.

And:

■ We're ranked by Wikio as the Number 3 health-related blog (see new sidebar item).

Interestingly, we're also ranked by Wikio as #770 in the "General" blog category (out of almost 35,000 tracked), which puts us in the Top 2%.

Pretty cool.

Must Be an Election Year, II

[Welcome Insurance Forums readers!]

[UPDATE & BUMP: See below]

"New York Attorney General Andrew Cuomo plans on Wednesday to announce the launch of an industrywide investigation into health-care insurers, his office said."

Wow, an industrywide search. Pretty impressive (if a bit overwhelming). And what's Mr Cuomo's beef with insurers?

"Attorney General Andrew M. Cuomo today announced that he is conducting an industry-wide investigation into a scheme by health insurers to defraud consumers by manipulating reimbursement rates. At the center of the scheme is Ingenix, Inc., the nation’s largest provider of healthcare billing information, which serves as a conduit for rigged data to the largest insurers in the country."

Oooh, "rigged data!" Nothing loaded about that phraseology, is there? The issue is how folks are covered for non-emergency out-of-network care. Traditionally, reimbursement rates for these services are paid as a percentage of "usual and customary" (UCR). And who decides what's UCR? Well, apparently Ingenix does.

Which raises an important, if impudent, question: so what?

Someone has to set these rates, else what's the benchmark? And imagine the hue and cry if the carriers themselves did so. Kind of a "darned if you do..." scenario. According to the company's website, over 1,500 insurance companies and health plans utilize these services (that number's important: it represents the vast majority of carriers). Interestingly, over 200,000 health care providers also use this service.

Wonder when Mr C's going to investigate them?

And since he apprently doesn't think that little effort's going to take some doing, the Empire State's AG plans to sue one of our favorite targets, United HealthCare, for allegedly engaging in "deceptive practices."

And what practices are these, you may wonder?

In order to rein in out-of-network costs, UHC chose to "keep their reimbursements artificially low and force patients to absorb a higher share of the costs."

A higher share of the costs for choosing to go out of network? Heaven forfend!

For its part, UHC (in an email I received this morning) says they use such tools "to set their own reimbursement schedules, establish fees for non-network care, negotiate provider service contracts and review claims for their members and consumers."

Seems inocuous enough to me. But then, I actually favor consumers being more proactive, and taking more personal responsibility for their health care and how it's financed.

(Hat tip: Industry Radar)

UPDATE: Bob sent me this link to an LA Times article which reports "City Atty. Rocky Delgadillo has assembled a team of investigators and prosecutors to probe industry practices such as canceling patients' coverage after they get sick." This is of a piece with what Bill has written about recent efforts in this area.

Food Pyramid Update: Bad News and Good News

[Welcome Reuters and FoxNews readers! Please feel free to look around the site]

Swedish scientists recently concluded a study on the effects of a "month-long diet of fast food and no exercise." [ed: sign me up!]

One of their conclusions, which should surprise exactly no one, was that such a diet leads to a higher risk of liver damage.

What was surprising, however, was that the subjects' "healthy HDL cholesterol actually increased" during the month-long experiment.

Decisions, decisions.

Not So Good Neighbors (A Hot Tip)

Lawblogger Eric Turkewitz has a major scoop:

"State Farm has been sued for racketeering in New York with a claim that it conspired with "Independent Medical Exam" companies and medical practitioners to produce fraudulent and sham medical reports."

Ooops!

The idea was to generate false medical reports in order to justify cutting off (legitimate) claims.

If true, I would judge this to be far worse than AG Cuomo's silly vendetta against UHC. As they say, read the whole thing.

California Dreamin'

Fresh on the heels of a recent legislative defeat, Golden State residents who live in the Los Angeles area face another blow:

"Los Angeles County healthcare officials unveiled a draft cost-cutting plan Wednesday that calls for closing all but one of the county's dozen clinics and reduces services at its six comprehensive outpatient health centers."

We've seen this kind of thing happen in other metro areas, as well. The problem seems to be high demand and little remuneration:

"On paper, it looks like they're trying to achieve savings without cuts in services, but the numbers leave more questions unanswered," opines community activist Yolanda Vera. Last year, you may recall, the dreadful Martin Luther King Jr.-Harbor Hospital was shuttered, after at least one person bled to death waiting on help that never arrived. Unfortunately, this left a void in the system, which other gummint-run providers haven't been able to fill.

So what happens now?

Sheer magic, that's what:

"Officials said they plan for private, nonprofit clinics to step into the gap and provide care to most of the displaced patients for a lower cost than the public system."

Watch out for that little phrase, "nonprofit:" contrary to popular belief, this doesn't mean "at a loss." Someone has to pay for these services (of course, physicians could just do it for free, though, right?), and guess who these "Officials" have in mind?

"Under the plan, the county would then spend..."

As we know, "counties" don't actually have any money to spend; they collect taxes from their citizens and redistribute those funds.

What a plan!