La Plus Ca Change...

Please excuse my French. It's the start of a famous quote: The more things change, the more they stay the same.

Or, as Yogi Berra once observed: It's deja vu all over again.

Our readers may recall that not so long ago, Anthem and a local group of providers had a falling out, with predictably (at least by us) problematic results. Claims went unpaid, or reimbursed at drastically reduced levels, checks were cut to insureds instead of providers, there were daily diatribes in the local press (some pro-Anthem, others pro-Premier).

In short, it was ugly (if you don't believe me, just do a search here on "Premier").

Maybe there's something in the southwest Ohio air (or water), but it appears that an eerily similar brouhaha is shaping up in the Cincinnati market. There, the big player is the Cincinnati Health Alliance, comprising some 8 hospital networks and who knows how many physicians. Reading the press is weird: it sounds like a rerun of the Anthem-Premier grudge-match. The carrier claims that the Alliance's demands are out of reason, while the providers aver that Anthem is playing hard ball with their patients' care.

Sound familiar?

Fortunately, I have access to top secret materials (not really: these are flyers sent out by the providers, pleading their case) that may shed some light on the matter.

For Anthem's part, they claim that the Alliance is already overpaid, and that meeting their new demands would be unfair to premium payors and other providers.

Of course, we all know who really ends up with the short end, right?

Carnival Monday

The Carnival of The Capitalists is up at Political Calculations. Host Ironman is apparently a serious geek: he's got it laid out in an easy-to-navigate spreadsheet format, sortable and categorized. Very cool.

With April 15 peeking around the corner, Joe Kristan has a timely post on the AMT, and how congress is exploring ways to make a bad situation even worse.

Insurance Dispatch...

Graduations and job changes can make insurance a challenge. In this week's 'Dispatch, we take a look at how Short Term Medical plans can help out.

Check it out at Tusted.MD

Cavalcade #22: Submissions Due

Submissions for next week's CoR, hosted by Sentinal Effect, are due this coming Monday (the 26th).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 Summer '07, so don't wait too long to sign up!

ER in Crisis

The chances of surviving a serious car wreck in Metro Atlanta are about to decrease, according to DeKalb County’s Chief of Fire and Rescue.

Chief David Foster told 11Alive News on Thursday he is “stunned” that DeKalb Medical Center is about to drop out of Georgia’s trauma-care hospital network -- hospitals that are tasked with treating some of the most life-threatening emergencies such as car wreck injuries and gunshot wounds.

ER's make up a small percentage of the patient load in every hospital. Since a large number of the cases that land in ER are uninsured, that translates into a gaping wound where dollars flow out in care and very little returns in paid receipts.

Add to that the number of docs who are not on staff but bill separately for their services. Some report collecting as little as 50 cents on the dollar.


Foster said that his crews have been transporting about 800 trauma patients a year to DeKalb Medical Center, but after DMC drops out, “We can have additional ambulances on the street, but I can’t make the trauma center closer than it is today. So it’s going to affect our patient outcome.”

How many lives will be lost? How many outcomes will be compromised due to this closing?

A hospital spokesman emailed an unsigned statement to 11Alive News that said that the number of victims coming to DeKalb Medical Center for trauma care amounts to less than one percent of the hospital’s 110,000 ER patients every year. So the hospital decided to stop offering expensive trauma care and focus, instead, on where the greater patient demand is – treatment for illnesses and diseases such as cancer and heart disease. The ER will remain open.

Trauma patients represent less than 1% of the patient load, but the dollars spent on care is money that is mostly lost.

800 trauma patients out of 110,000 is a small number, unless you are one of the 800. Since some are not paying their share of the cost of the trauma care, that level of care will no longer be available.

The Georgia Legislature is trying to come up with millions of more dollars to expand the state trauma network to 25 or 30 hospitals, by making trauma care more affordable, creating financial incentives for hospitals such as DeKalb Medical Center and Piedmont, Northside, Wellstar and St. Joseph’s to be part of the trauma-care network.

Funding proposals have included additional fines for traffic offenses, especially those that cause traffic wrecks and injuries, since wrecks account for most trauma injuries, more than gunshots and stabbings.

That's a novel approach.

Increase the fines for speeding, reckless driving & DUI to cover the cost of trauma care.

Health Wonk Review

This week's HWR is hosted by medblog biggie Matthew Holt. Lots to choose from this time around, with some twenty posts, all with helpful context.

Educators are grappling with the idea of school vouchers, but until I saw this post from Jason Shafrin, I didn't know that there's a similar concept being bandied about for health insurance.

Hat Trick

In the March 5 Register, state Sen. Jack Hatch began an important conversation about fixing our broken health-care system. However, he failed to identify the true reform that is needed in this state.


How so?

Health insurance provides support to individuals and families to cover health care. As we talk health-care reform, we must assure coverage is seamless, accessible and portable, that costs are equitably distributed and that risk pools do not discriminate against the sick or poor.

Health insurance, health care. At least someone got it right.

But what about the last comment? How does one assure that "risk pools do not discriminate against the sick or the poor"?

Risk pools are all about the sick. The only ones who use it are the sick. Can't say I have ever heard of a risk pool for the poor . . . other than taxpayer funded plans like Medicaid.

Health care is a basic human right, not a choice. It is important that we provide access to quality health care that is affordable and reliable for all Iowans.

A basic right. Is personal responsibility part of the equation?

And part II is here:

The way to fix our health-care system is to stop trying to make insurance the solution, and focus instead on getting people the health care they need.

Focus on health CARE. So far so good.

Absent a national approach, states have begun experimenting with initiatives that encourage more employer coverage, require individuals to purchase private policies, and expand public programs. These initiatives cannot succeed because they are based on a failed model: the same insurance system that got us into trouble in the first place.

Here is where she jumps the track.

How did insurance "get us in to trouble"? How is a nationalized system going to cure what is wrong?

First, insurance is temporary. Whether for a home, a car, fine art, or "health," insurance contracts are written for a brief, defined period - a year or less

Really?

Guess some of the clients I have with the same plan for up to 10 years didn't know this.

If you have a private policy, and you cost your company too much or otherwise look undesirable at the end of that period, you'll either pay a lot more or you'll lose coverage altogether.

Where does this garbage come from? Carriers are prohibited from discriminating against one who has high claims. They cannot cancel for any reason other than non-payment of premium. You cannot be singled out for a rate increase.

Second, insurance is based on minimizing risk and maximizing profit - concepts incompatible with protecting the health of individuals and the public at large

More fantasy. This has been addressed before in this forum.

We have a model for this in the United States, and though it might be imperfect, it's a great start. It's called Medicare

Someone needs to inform this lady how poorly Medicare works.

And now for the third segment on health care vs. health insurance . . .

Our existing health-care system is on life support. It's too complicated and too expensive even for those who have health insurance

Too expensive for those with health insurance. Read on . . .

Half of all the bankruptcies in the United States are caused by medical debt. What is surprising is that in the majority of those medical-related bankruptcies, the individuals actually had health insurance.

The rest of the story . . .

The average amount of unpaid debt is . . . about $13,000.

Who goes bankrupt over $13,000?

Apparently quite a few. At least that was the case prior to the change in bankruptcy laws.

Many folks with health insurance have high deductibles and policy exclusions. This discourages them from getting the preventative care they need.

My auto insurance has a high deductible. This discourages me from regular oil changes, tires & brakes.

There is a model for this. It's called Medicare. It's one of the most effective and efficient government programs

Here we go again.

Nuff said.

And that completes the hat trick on health care vs. health insurance.

At least for today . . .

Stupid Admin Tricks

Well, why not? We've had Stupid Carrier and Stupid Client tricks, and now we have a new category.

So what brings this on?

One of my groups, which has been a client for almost 20 years, recently agreed with me that they should change from their generic co-pay plan to a high deductible plan coupled with an HRA (Health Reimbursement Arrangement). The primary benefits of this move were two-fold: the employer saved a great deal on the premium (one of those unfortunately-rare cases where the price differential was substantial), and could afford to generously fund the reimbursement account.

Regular IB readers know that we almost always redact the names of carriers when we discuss them. This is not so much for purposes of liability as it is that most carriers do stupid things, so that it is not really useful to identify which one in any given scenario. But what happened in this instance was so egregious that I feel compelled to actually name the entity involved.

The carrier we're using in this case owns an HRA administrative company, called Definity. Their offer is simple and attractive: if you write your case with the parent company, Definity will set up and administer your HRA for free. This can be significant: set-up fees alone can run into the hundreds of dollars, and on-going administrative services into the thousands.

Still, it is said that free advice is worth what you pay for it, and so appears to be the case with free HRA administrative services.

Of a Monday, I called the number I had, to get the ball rolling (arrange for paperwork and instructions to be sent to the client). But when I called the number I had been given (by the carrier), the "gentleman" who answered refused to identify either himself or his company. That was odd, so I asked if I had gotten the right number, was this Definity? Instead of answering this reasonably straight-forward question, he asked if I was a "member." Hunh?

So I asked again, had I connected with Definity. He replied that he couldn't tell me that (would he have had to kill me?) unless I confirmed that I was a member. I pointed out that he was being moronic, that all I wanted to know was whether or not I had dialed the correct number, and if this was indeed Definity. He refused to budge, so I asked for his supervisor. I was told that "Dan" was not going to be available to me, and I observed that this was idiotic. The "gentleman" objected to this characterization, and warned me that if I persisted, he would hang up. I replied "Too late!" and disconnected. Redialing the number, I was connected with a different person, who was apparently empowered to divulge the fact that this was, in fact, Definity, but that the number I had been given was for claims, not "sales," and that she couldn't connect me to that one.

At this point, it occurred to me that I had learned something quite valuable: if these folks were this incompetent when I'm trying to get a relatively simple plan set up, I can only imagine how poorly they would have managed the arrangement itself. Thankfully, I was able to save my client from such a fate by referring him to a local admin who charges a reasonable fee for his services. It's true: Definity's plan was free but, at that, it would have been far too expensive for my tastes.

Sick Time Blues...

According to a new poll, conducted by the Wall Street Journal and Harris Interactive, some 80% of us think it's a good idea to require our employers to give us paid sick days. To add insult to injury, almost as many claim that employers who take a pass on this unofficial tax will end up paying for it anyway.

Perhaps mitigating this entitlement mentality is the finding that about half of the 2,700 respondents understand that such a requirement would have adverse effects on their employers' business. So, there's some hope, after all.

What sparked this whole debate? Well, it seems that (no surprise) San Francisco now requires employers to grant paid sick time to their employees. And, certain members of Congress (who shall remain nameless) are looking to expand this nationally.

This would be in addition to exiting FMLA legislation, and could have some deleterious effects on our competitiveness in the global marketplace. And, of course, it could mean that a lot of Mom-and-Pop shops will find themselves shuttered, forced out of business by even more required benefits.

And this is, indeed, a "benefit:" many of us already have employer-subsidized health insurance, as well as short or long term disability cover. In effect, this kind of law would force employers to self-insure short- (or potentially long-) term disability claims. Since we know from previous excercises that employers don't pay premiums or taxes, such a mandate will lead to higher prices, fewer jobs, or both.

Kinda sickening, isn't it?

Ho Hum

What’s happening with the Massachusetts universal health plan these days? Oh, nothing. Or maybe everything. Perhaps your reaction will depend on - or even change - your mood.

"Mar. 20--Leaders of the business community and major health insurers called yesterday for the state to delay for two years, until July 2009, the requirement that all residents have health insurance that meets state standards."

"To spare thousands of insured residents from having to buy expensive upgrades, the letter also urges the Connector Authority to allow plans with no prescription drug coverage to meet minimum standards. It also asks that plans with dollar caps on lifetime coverage be included."

Dollar caps on lifetime coverage? Don’t I get junk mail offering that kind of plan every month or so??

Keep in mind the Massachusetts plan already includes a $2,000 deductible ($4,000 family).

As they say, read the whole thing.

March Political Madness

For the first time in more than a decade, the debate over how to provide health care for the uninsured is moving back to center stage in Washington and many state capitals. After languishing as a major issue since President Clinton's health care plan failed in 1994, health reform is back on the agenda — from President Bush's State of the Union speech to stump speeches from presidential candidates.

And you can expect a laundry list of folks who want their story to be told.

Let's look at a few.

When Trenton was born, the family did not have medical insurance. "We took out a loan from the bank," Lela says, "because the hospital wanted a down payment. We paid the rest off a few years after that."

She says the Medicaid program needs to be more flexible to accept families with higher incomes.

Most programs accept applicants up to 200% of the FPL (federal poverty level . . . about $19k for a family of 4). How high do these plans need to go? 300%? 400%?

Where does personal responsibility begin and taxpayer subsidy end?

Kendra Pitts, 28, gets coverage though her job for herself at a cost of $60 a month. But to add her 5-year-old daughter, A'Nya, would cost an additional $300 a month, money Pitts says she doesn't have

I have several clients who insure their children separately, outside of the employer plan. Usually the premium is less than $100 per month. In some cases it is as little as $60.

There is no reason for paying $300/month to insure a child that is usually healthy. Alternatives do exist.

She looked into a private plan for A'Nya, but it was about $150 a month, with a $200 sign-up fee

$200 sign up fee?!!!

How much you want to bet this was not insurance, but a discount plan? I have never seen an INSURED plan with a $200 sign up fee.

For a while I had a policy and was paying $400 a month," says Stewart, who is relatively healthy but takes a thyroid medication and drugs for blood pressure and cholesterol. "I paid them more than they paid back in benefits."

So . . . you should only take out a policy if you believe you will get back more than you pay in? Someone has no clue what insurance is all about.

Cesa says his businesses netted him less than $4,000 in 2005, after he paid his expenses, including the $3,000 in medical bills from his finger injury. He's hoping the numbers for 2006 come in better, but he's certain it will be less than $15,000. There's just no wiggle room to buy insurance, he says.

"What am I supposed to do? Sell my house to pay for insurance for my employees and me?

Seems like there are more issues here than just a lack of health insurance. A net profit of $4,000 for 12 months of work? Perhaps a reality check is in order here.

And of course his answer is . . .

There should be a basic (health insurance) system where coverage is provided for everyone."

How "basic" does one get? Maybe 2 doctor visits per year + immunizations? Is that basic enough?

She pays $200 a month for a "discount card," one of many sold around the country by a variety of companies, which promises discounts on doctors and prescriptions.

Why would anyone pay $200/month for a discount card that can be had for less than $25?

On top of that, she pays about $300 a month for the seven medications she takes and the test strips she needs to monitor her blood sugar levels.

Doesn't sound like there is much of a discount to that card. Wonder how much her meds would cost if she stopped paying the $200 for the overpriced discount card?

"I was trying to set up payment plans, but they (hospitals and doctors) weren't willing to work with the amount of money I was able to send them," she says.

Hospitals are like that. Folks seem to think they can run up a $100k bill and offer to pay the hospital $10 per month and everything will be all right.

Not so.

Some of the uninsured simply choose not to buy coverage.

Quite a few actually. On average, about 40% can afford health insurance and can qualify. They choose to spend their money on other things.

Particularly those who are young and healthy — the very group that insurance companies want to attract — tend to see health insurance as an expense with little payback, rather than a hedge against financial disaster. So they don't buy it.

And guess which group has more accidents than anyone else?

The young & healthy.

About 33% of those ages 19 to 24 are uninsured, and about 27% of those ages 25 to 34 are uninsured, according to a Kaiser analysis of Census Bureau data.

So how much does insurance cost for these folks?

Generally less than $100 per month . . . about the cost of a latte' per day.

One of his co-workers, a man in his 20s, buys insurance on the private market, a move Wurtzbacher says doesn't make much sense.

"There's nothing wrong with him, and he's paying for health insurance," Wurtzbacher says.

Right on, dude. He should save his money and only buy health insurance after he needs it.

What planet do these people come from?

Basic Economics

Let’s play a game. Roll time forward a bit…universal healthcare has arrived and you are now a Regional Head of the Healthcare System. You have an annual budget that you absolutely can’t exceed. The medical expenses for your region have been increasing and this year you’re going to exceed your budget. What do you cut? Medical staff? Drug expenditures? Or do you defer maintenance and maybe cut back on some housecleaning?

Want to see something interesting? Do a search on Google for “Canadian Hospitals filthy.” Then do the same thing for American hospitals filthy” and “NHS filthy.”

The Canadian search produces a stream of articles decrying deplorable conditions in their hospitals. The American search turns up articles on the VA system and, more interestingly, quite a few articles on the England’s National Health Service. At the time I ran the search, no civilian American hospital was mentioned on the first couple of pages of the search results. And the search on NHS produces an appalling number of hits.

According to the articles, both the NHS and the Canadian systems have one thing in common – both systems have cut back on cleaning as a way of saving money. In many cases, the cleaning staff has been replaced by subcontractors…I assume by the lowest bidder willing to agree to the contractual terms. Thing are so bad that, according to one of the articles, one dying patient left money in his will to clean the windows of his ward.

The result has been predictable… the incidence of secondary infections has increased to hundreds of thousands of cases per year. Antibiotic-resistant bacteria are flourishing (click on the findarticles.com link) and killing thousands of people annually. All in all, it sounds like many hospitals are equivalent to what you’d expect in a Dickensian novel.

Take a look at these articles:
Here
And here
And here
The environment that is described is truly disgusting.

Can this happen here?

Absolutely. It’s basic economics…a question of resource allocation. All it will take is the establishment of a centrally managed non-competitive health care system. When budgets are tight and somebody has to decide between purchasing medicine and having an “extra” janitor, guess which one will lose out. The lack of medicine will have an immediate measurable impact. The loss of a janitor? Well, I guess the other ones can just work a bit harder.

You disagree? Need another example? Look inside of one of California’s public school bathrooms. The same principle applies. With no extra money, sanitation isn’t high on the priority list…just ask my kids.

To be continued…

Carnival Monday!

The Lazy Man and Money blog hosts this week's Carnival of Personal Finance. It's an interesting and diverse compendium of over 4 dozen posts, neatly categorized and helpful annotated.

We've blogged on Identity Theft here at IB, most recently here, so I found Money Smart Life's post on the IDT risks hidden inside our copiers to be both timely, and chilling.

Insurance Dispatch...

In this week's 'Dispatch, I share my thoughts on the proposed HPV vaccine mandate.

For those IB readers who may be unfamiliar with the subject, check it out at Trusted.MD

BS Update

A couple of weeks ago, I expressed my doubts about mandated HPV vaccination. Among other things, I questioned the efficacy of such a program, as well as the wisdom of implementing it.

If anything, I may have underplayed the hand:

"A researcher who worked on a vaccine for the human papillomavirus is warning that it hasn't been tested on young girls, is "silly" for states to mandate the vaccination, and in a worst-case scenario could even increase cervical cancer rates."

Dartmouth professor Diane Harper actually worked on the study which formed the basis for the vaccine's approval, and notes that it was tested only on women aged 15 to 25. In fact, she believes that it's most helpful for those who are at least 18. It also appears that at least one member of the Centers for Disease Control's advisory committee on immunizations has reported that "while the vaccine may be helpful, it should not be mandatory."

What really brought it home for me, though is her assertion that "it's not been tested for effectiveness in younger girls, and administering the vaccine to girls as young as 9 may not even protect them at all. And, in the worst-case scenario, instead of serving to reduce the numbers of cervical cancers within 25 years, such a vaccination crusade actually could cause the numbers to go up." [NB: that link seems to work only sporadically]

She echoes my concern that we really don't know what the long-term effects of the vaccine will be. I generally try to err on the side of caution, which would initially seem to be "heck, go for the vaccine - after all, where's the harm?" But the risks here are great, and the downside is particularly troublesome.

It's nice to be validated.

The Technology Factor

Since 1970, health care spending has grown at an average annual rate of 9.8%, or about 2.5 percentage points faster than the economy as measured by the nominal gross domestic product (GDP). Annual spending on health care increased from $75 billion in 1970 to $2.0 trillion in 2005, and is estimated to reach $4 trillion in 2015.

And health care spending increases health insurance premiums, and taxpayer funded health plans, proportionately.

new medical technology may account for about one-half or more of real long-term spending growth.

Half is a substantial number.

“medical technology” can be used to refer to the procedures, equipment, and processes by which medical care is delivered. Examples of changes in technology would include new medical and surgical procedures (e.g., angioplasty, joint replacements), drugs (e.g., biologic agents), medical devices (e.g., CT scanners, implantable defibrillator's), and new support systems (e.g., electronic medical records and transmission of information, telemedicine).2 There is very little in the field of medicine that does not use some type of medical technology and that has not been affected by new technology.

Joint replacement, implantable defibrillator's. Bionic people.

From 1980-2000, the overall mortality rate from heart attack fell by almost half, from 345.2 to 186.0 per 100,000 persons

With heart disease the #1 killer, I doubt anyone would want to go back to the way it was 20 years ago.

Another example of how advances in technology have changed health outcomes over time is in the treatment of pre-term babies, for which very little could be done in 1950. But by 1990, changes in technology, including special ventilators, artificial pulmonary surfactant to help infant lungs develop, neonatal intensive care, and steroids for mother and/or baby, helped decrease mortality to one-third its 1950 level, with an overall increase in life expectancy of about 12 years per low-birthweight baby.4

The cost of treating a premie can easily top $1M. In some cases, the long term effects of treating these children, some of which have serious health issues that they never outgrow, can hit $5M or more over a lifetime.

Many factors influence innovation in medical care. Consumer demand for better health is a prime factor. Research shows that the use of medical care rises with income: as people and the nation become wealthier, they provide a fertile market for new medical innovations. Consumers want medical care that will help them achieve and maintain good health, and advances in medical technology are perceived as ways to promote those goals. Consumer demand is affected by the increased public awareness of medical technology through the media, the Internet, and direct-to-consumer advertising.

These are points that have been addressed in this forum before. We have a demand driven system fueled by seemingly unlimited fund . . . usually from the carriers. A small card in your wallet is like a credit card with a $3M+ line of credit. Doc copays at $20 and the same for Rx, no one pays for their health care any more.

This leads to xs demand and over-utilization.

Stripping Down

Saying it will help control costs, the state House voted Tuesday to let insurance companies offer stripped-down health plans to individual policyholders.

Stripped down plans lower costs.

Actually, they lower premiums by shifting more of the cost of care away from the carrier and on to the individual.

Not saying this is a bad thing. Just depends on what is being stripped.

He said insurers could still offer full-blown policies which cover all situations. But Adams said some people don't need -- and don't want to pay for -- things like contraceptives, mental health care or chiropractic services.

I am sure this will be challenged by some.

And Rep. Steve Gallardo, D-Phoenix, speculated HB 2757 would make insurance more expensive.

He said premiums will remain the same for less coverage. But those who need what would become options would be forced to pay more for those extras.

Speculated. That's a good word.

Actually, he is probably right. With health care inflation running 12 - 15% it is quite possible that stripping out a few benefits will simply hold premiums at bay for about a year on the stripped down policies, while the rest of the plans continue at a 12%+ clip.

"This bill will provide people with the opportunity to choose between a Cadillac and a Yugo," he said. "And most people are going to want something in between.""

Wonder how the folks at Yugo feel about that?

But again, there is some truth. When given a choice, and an education on health insurance choices, most folks will opt for the plan in the middle.

Swiss Miss, Part II

Voters in Switzerland have rejected plans for a single means-tested health insurance system, aimed at reducing the high cost of premiums.

Final results showed 71% of voters in a referendum on Sunday opposed the reform.

The voters have spoken.

Under Swiss law, everyone must have a health insurance policy; there are 87 different companies to choose from, each offering a variety of policies.

Mandated health insurance. What a novel idea. Wonder why we don't have that here?

The proposal for a single health insurance scheme came originally from a family rights organisation, and had the backing of the centre-left Social Democrats, Swiss trades unions, and some doctors' associations.

It called for a merger of the existing 87 health insurance companies, and would replace their policies with one premium, calculated on a wealth and income basis.

Single payor proposals backed by Social Democrats & unions. Boy is that a surprise.

Blues News You can Use...

Sometimes, a carrier can actually contribute something helpful to the on-going debate about health care and health insurance. For example, the Blue Cross Blue Shield Association has published its 2007 Medical Cost Reference Guide.

In it, you'll find some interesting (and enlightening) numbers:

■ In 2006, health care spending in the U.S. reached $2.2 trillion

■ The gummint continues to account for almost half the total costs, mostly through public programs like Medicare and Medicaid

■ Private health insurance accounts for about one-third of the total

■ About 2/3 of us are covered through commercial (private sector) insurance plans, mostly through our employers

There's lots more, if you're willing to dig a little.

Cavalcade of Risk #21 is up...

Rita Schwab hosts this stellar edition, with 32 excellent posts, in 7 "risky" categories.

We at IB have long argued that the cost of health care drives the cost of health insurance, and blogger biggie Arnold Kling's post really drives this home.

Grand Rounds...

Bertalan Meskó, blogging at ScienceRoll, hosts this weeks 'Rounds. Built around a Monthy Python theme (NOBODY expects the Monty Python Grand Rounds!), and rife with Python video, this remarkable effort (over 50 posts!) by a 4th year medical student is a lot of fun.

I've been meaning to link this for some time: You may recall our post on Baby Ashley, and especially the blogging efforts of Dream Mom. well, she's collaborated with a neonatal doc to produce a compelling blog mini-series about the travails of a newborn. Recommended.

Swiss Miss

Voters in Switzerland have rejected plans for a single means-tested health insurance system, aimed at reducing the high cost of premiums.
Final results showed 71% of voters in Sunday's referendum opposed the reform.

Under Swiss law, everyone must have a health insurance policy, and there are 87 different companies to choose from, each offering a variety of policies.

Premiums, which take no account of an individual's income, have risen on average by 2.4% annually since 1990.

2.4%? That is amazing.

the Swiss government and centre-right parties opposed the reform plans, saying a single fund would be cumbersome and would not keep the cost of premiums down

So, a single payor system is NOT more efficient?

Do tell.

A recent OECD (Organisation for Economic Co-operation and Development) and World Health Organization report showed that the Swiss spend 11.5% of their gross domestic product on health, compared with an average 8.8% in other OECD countries.

11.5% of GDP? Egads!!

Many people find it difficult to get an insurance company to take them on at all, the BBC's Imogen Foulkes reports from Bern.

Cherry picking in Switzerland? Say it ain't so.

It called for a merger of the existing 87 health insurance companies, and would replace their policies with one premium, calculated on a wealth and income basis.

Redistribution according to wealth. Sound like Socialism.

In recent years proposals to change the way hospitals are run and to promote more generic drugs have also failed.

Resistance to generic meds. Sounds familiar.

High Deductible Sticker Shock

With a state board poised to approve health care plans for the working poor on Thursday, some are concerned that the high cost of deductibles could keep people away from the doctor's office.

Gov. Deval Patrick and private insurers proudly announced over the weekend that they had met their goal of developing low-cost insurance plans with premiums under $200 a month.

The goal came at a steep cost: deductibles for the proposed plans would run as high as $2,000, including prescription drugs, for an individual to $4,000 for families. That's the amount people would pay in out-of-pocket expenses before their insurance covers their bills for the rest of the year.

Low cost plans = less than $200/month = $2000 deductible.

High cost plans = $380 premium = low deductible & copays.

Today's lesson is in math. How many times can I see the doctor when I am saving $180 per month in premiums?

GrannyScam Update

Regular IB readers may recall our story from last summer, wherein two elderly women bought insurance policies on the lives of homeless (and helpless) men, and then (allegedly) ruthlessly murdered them for the death benefits.

At the time, I was skeptical of the tale, because it seemed so far fetched (even in this day and age). Turns out, though, that truth is stranger than fiction:

"Checks and life insurance forms show that two women made millions from the deaths of two transient men they are accused of killing, a prosecutor said in a preliminary hearing Monday.

Helen Golay, 76, and Olga Rutterschmidt, 74, are accused of befriending the men, convincing them to sign the women's names on to their life insurance policies before drugging and running them over in secluded alleys."

Both women have pleaded "not guilty," and may soon face trial.

In an ironic twist, at least one of the issued policies was for accidental death only, and the insured (apparently) died of natural causes. The best laid plans...

Hoosier Health Care Provider?

Here at IB, one of our pet topics (and interests) is transparency in health care, about which we've written numerous times. Now comes word from Indiana that a group of Hoosier business-folks have glommed onto a new Federal initiative which seeks to offer more information about the quality of care offered by health care providers.

Under the guidance of HHS honcho Mike Leavitt, the US Department of Health and Human Services has launched an on-line project called Value-Driven Health Care (okay, so they're not so creative at names). The project's motto ("Transparency: Better Care Lower Cost") seems to sum up its mission nicely. At the website, consumers can learn about what transparency is all about (well, at least the gummint's take on it), and even find pilot programs that may help them in their search for quality health care with understandable prices.

Indiana Governor Mitch Daniels is a big fan, and recently signed an executive order agreeing to collect information on the quality of care provided to the state's 30,000 employees. The Indiana Health Information Exchange is touted by the HHS as a pilot project to initiate methods of reporting on quality of care. Presumably, this information will become available to the private sector, as well.

I've mentioned before that Transparency has been in its infancy...one supposes that it's now reached toddlerhood.

Carnival Monday...

The Carnival of Personal Finance is now up, hosted this week at The Sun's Financial Diary. Our host has accumulated 64 links, most with helpful commentary.

Our friend Jeffrey Strain, who blogs at Personal Finance Advice, has some tips on where not to hide your goodies.

And this week's Carnival of the Capitalists is available at Small Business Trends blog, where hostess Anita Campbell presents 28 interesting choices.

Nina at Queercents has an interesting post on "creative" marketing ideas. Something about the right hand, I believe.

P1K

Wow.

InsureBlog began life just a little over two years ago, and this marks our 1,000th post. One supposes that it would be appropriate to mention the latest on champagne and insurance, but alas, there seems to be a drought on the subject.

So I'll raise my own flute (metaphorically speaking) to my co-bloggers: Bob Vineyard, Bill Halper and Mike Feehan, and toast them for a job well done.

Here's to the next 1,000.

Insurance Dispatch...

This week's 'Dispatch covers a recent survey showing employers don't know how much they spend on disability benefits, and employees don't seem to care.

Check it out at Trusted.MD

Heads I win, Tails You Lose...

On the one hand, I'm used to seeing unlikely information coming out of the insurance industry, but this is kind of strange:

"U.S. individual life insurance sales rose 7 percent in new annualized premium in 2006, a pace unmatched since 2000, according to the quarterly survey by LIMRA International."

So who's (or what's) LIMRA, and why is this strange?

First things first:

LIMRA is the Life Insurance Marketing and Reseach Association (on whose Producer Panel I serve, along with thousands of my closest friends). They're kind of an industry-sponsored think-tank and research bureau. In a March 7, 2007 press release, LIMRA announced that the industry was breaking all kinds of production records. Well, not the industry so much as insurance agents.

Great!

Maybe.

The Medical Information Bureau (about which we've written before) has a somewhat different story:

"North American Application Activity for individually underwritten life insurance declined 7.4% in January year-over-year, according to the MIB Life Index. Applications were off 3.3% when compared to December 2006."

Seems like quite a disconnect. I say "seems" because it appears that while the LIMRA piece touts sales growth for the whole of 2006, the MIB report indicates things slowed down in January 2007, which is apparently typical. What's still troublesome, though, is that "(y)ear-to-year activity comparisons have been falling since March 2006."

Something to watch.

Cavalcade #21: Submissions Due

Submissions for next week's CoR, hosted by Rita Schwab, are due this coming Monday (the 12th).

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 Spring '07, so don't wait too long to sign up!

Health Wonk Review...WooHoo!

Joe Paduda hosts this week's HWR, and boy, it's a doozy! Along with almost a dozen and a half interesting, insightful and thought-provoking posts, Joe includes spicy commentary and analysis.

I just discovered attorney-blogger Eric Turkewitz recently, while hunting for interesting Cavalcade of Risk posts. His HWR entry on why doc's may want to think twice about promoting malpractice suits is a must-read.

And while not part of HWR, please check out this article at SoloGig News (a resource for freelancers). Our own Bob Vineyard is interviewed, and shares some tips for entrepreneurs looking for health insurance. Mazel Tov, Bob!

Health Care Reform or Something - Massachusetts Style

Bob's already commented on this developing story; here are some more details as reported by The Boston Globe on March 5th:

"Governor Deval Patrick yesterday unveiled significantly lower prices." How much lower? Look in the 10th paragraph “average monthly premium for residents of Eastern Massachusetts of $305. That indicates a decrease of nearly 20 percent in premiums from the earlier bids” (why is the good news always buried in the 10th paragraph?)

But averages can cover up a lotta things. For example:

1. The plans are age-rated. The least-expensive plan is offered by Neighborhood Health Plan (a Boston-area Medicaid insurer) and costs $175 a month - provided you are age 35-39. If you are over 56, the premium is $347 a month. Who will actually pay the "average" premium? Anyone?

2. The plans are geographically-rated. "coverage will be less expensive in Central Massachusetts compared with the eastern and western parts of the state."

3. The benefits are bare-bones at the lowest price points, even for the Boston Medicaid insurer. The plan "covers preventive care, office visits, hospitalization, and prescription drugs". Mandates? what mandates? More: "The annual deductible for the basic plan would be steep: $2,000 for an individual and $4,000 for a family" and "Similar plans from the three major health plans". Stripping the benefits sure does lower the premium, but isn’t that a tactic that only the greedy private insurance companies use? Yikes.

The Massachusetts plan is widely called "health care reform" but it looks and sounds to me like plain-old insurance, subsidized by the State. In other words, true to a grand Boston tradition, Gov. Romney "stuck a feather in his cap and called it macaroni". And now Gov Patrick is doing the same.

Indemnification

Hello boys & girls. Today we are going to take a look at the grown up world and learn a new word.

Can you say "indemnify"?

So what does this word mean?

Let's look at what Mr. Dictionary has to say about indemnify.

"protection against future loss"

Note the word FUTURE in the definition.

"An agreement wherein one party financially protects another against an anticipated loss"

Note the word ANTICIPATED. This means something that may happen in the FUTURE.

So what does all this have to do with insurance?

Insurance is an INDEMNIFICATION policy. The contract agrees to INDEMNIFY the insured party should a loss occur in the FUTURE.

Let's see how this works in real life.

Readling, a 50-year-old real estate agent, is one of nearly 47 million Americans with no health insurance.

Let's back up just a moment and see how this happened.

As an independent contractor with a Century 21 real estate brokerage, Readling had bought insurance on her own — a temporary extension of coverage from a prior job.

A temporary extension. Was this COBRA, or was it STM (short term medical)?

The article does not state.

STM's are helpful to bridge a gap when you KNOW you have GUARANTEED coverage coming in a few months. It is not a long term solution.

But she was unable to renew it after she had surgery for breast cancer in 2005.

The cancer probably had nothing to do with the renewal, as many STM's will allow you to reapply but they will not cover any pre-existing conditions. There are a few that will not allow you to reapply if you have made a claim during the prior policy term.

Most insurers would not offer her coverage, she said, and one carrier quoted a price of $2,300 a month for coverage with a deductible of $5,000 a year.

Frankly, I am surprised anyone made an offer. If she had the opportunity to pick up full coverage she should have taken it.

To collect unpaid medical bills, health care providers often obtain judgments against a patient's spouse, as well as the patient, and file liens against their homes.

This is something many folks, even those with the funds & good health, seem to ignore. Without insurance you can still receive treatment but you will still have to pay. The way you pay is with your assets and forfeiting a portion of your wages should your medical creditors decide to pursue garnishment.

She said she had never voluntarily allowed her insurance to lapse and could not understand why she was being refused coverage.

She was refused coverage because she failed to QUALIFY for insurance. As a friend says, you pay for insurance with your dollars but you buy it (qualify for it) with your good health.

The only guaranteed continuity of coverage is from one employer plan to another. Beyond that, about three fourths of the states have a risk pool where someone who is otherwise uninsurable can obtain coverage on a guaranteed basis. All states have HIPAA compliance laws in place that allow someone coming off a group plan to purchase coverage once their COBRA expires.

Barbara Morales Burke, the chief deputy insurance commissioner of North Carolina, said state law did not guarantee the availability of health insurance for everyone. "Most insurers decline to issue policies to those individuals whom they deem to be too risky because of their medical history," Morales Burke said. Blue Cross and Blue Shield of North Carolina will sell to anyone, regardless of the person's medical condition, she added, but the premiums may be very high for people who have had serious illnesses.

So there is an option. In many states Blue is the carrier of last resort, so she is not completely without options.

Working with her doctors, Readling raced to get as many tests as possible before her coverage expired. She recalled her anxiety in the final months: "It's like a freight train coming at you, and it's going to get you. And there was nothing I could do."

Actually, there was.

The permanent coverage needed could have been purchased in advance of the need. That is what an indemnification contract does.

It pays for losses that may occur in the future.

$1M Isn't What it Used To Be

The Assertive Cancer Patient writes:

Every three weeks, always on a Thursday afternoon, I amble on over to the cancer center for my IV treatment.

(I also take Cytoxan, a chemo drug that comes in pill form, every day, plus a handful of other pills to help deal with the side effects and fringe benefits of being in cancer treatment—anxiety, high blood pressure, occasional depression, insomnia.)

The total bill for each treatment session at the cancer center is something north of $20,000. The annual cost of my cancer care is more than $300,000. That’s three hundred thousand dollars a year.

Almost $30,000 a month to keep me alive.

I have no idea who this lady is. Her story clearly illustrates why health insurance should be a priority for people . . . before they get sick.

As a result of the high cost of Herceptin and Avastin, I am going to hit my lifetime max of $1 million on my health insurance before the end of 2007.

Then what? I can’t even afford a month’s worth of cancer treatment on my own.

Some of the individual plans in GA have $2M caps, while others stop at $3M. Sadly, many group plans, usually those covering public employees, have caps of $1M - $1.5M.

A $2M cap is low by today's standards. A $3M cap should be adequate for most situations, at least for the foreseeable future.

So how much does it cost to raise the lifetime max from $2M to $6M?

About $4 per month for a family of 4.

Get a Job

According to a study by David P. Lind & Associates LLC of more than 900 Iowa businesses, the average premium paid by employees of non-public businesses was $64 a month for single policies and $288 for family plans.

So it’s easy to see why a lot of North Iowans’ jaws probably dropped when they read in recent Globe Gazette stories that many Mason City public employees pay as little as $15 a month for single insurance coverage or $25 for family health insurance. That’s $300 a year for family coverage — almost what non-public employees pay every month!

Yeah.

It gets even better.

In addition, at a time when employees of private businesses are often looking at deductibles in the four-digit range in an effort to keep costs down, these Mason City AFSCME union members have annual deductibles of only $250 for single coverage and $500 for family coverage.

$250 deductibles. Any idea how much that kind of plan really costs?

Of course not. It isn't their money. It is the government's money.

Right.

In private business, money paid to employees in salary and benefits comes directly out the owners’ pockets, whether those owners are individuals or groups of stockholders. Businesses must find that sweet spot where pay and benefits are competitive enough to keep quality employees, while still allowing the business to earn a profit.

In the public sector, employee pay and benefits come out of taxes and fees charged by the city. If taxes have to increase to pay public employee salaries and benefits, the effect on the city managers individually is miniscule.

Amazing observation. Someone actually gets it!

Have I Got a Deal for You

The average uninsured Massachusetts residents could obtain health care coverage for as little as $175 a month under the state’s insurance law, Gov. Deval Patrick announced Saturday as he released the results of negotiations with the state’s health insurers.

The lowest monthly premium is far lower than an earlier estimate of $380 a month suggested by some insurers.

Wow! That's less than half the other quotes. How did they do that?

The minimum plan detailed by Patrick would cover the majority of today’s uninsured, who are typically 37-years-old. It includes prescription drug coverage and covers basic medical care, such as emergency room visits and outpatient medical care.

Strip the benefits!

Kind of like offering a house for half the price. No problem as long as you don't need things like electricity, gas, heat, air, running water, indoor plumbing . . .

In other words, a wooden tent.

Addendum . . .

Here's a bit more for inquiring minds.

You get a doctor. You get to go for regular physicals. Your family gets to go and your children get to go for regular physicals. You get a certain amount of hospital coverage.

"Certain amount" of hospital coverage. Very specific. Wonder if carriers could get away with that kind of language in their policies.

Kinda doubt it.

The agency charged with implementing the health care reform law will decide on Thursday whether to permit plans that don’t cover pharmaceuticals. That would drop premiums even lower. It should be up to consumers to decide whether to buy a product with prescription coverage, or to pay less for a plan without it.

No Rx coverage.

Right.

What happens when you need Rx coverage?

if a 45-year-old wants to forgo chiropractic care or infertility treatment in favor of a lower-cost product, why shouldn’t they have that choice

Infertility treatment? Who opened that door?

The insurers get credit (at Patrick’s strong urging) for coming up with creative ways to bring down premium costs within the existing guidelines. But they could do even better if they weren’t working with one hand tied behind their backs.

Uh-huh, uh-huh.

The Eye of the Storm

Time for another of our occasional forays into the dark and mysterious world of Property and Casualty insurance. Last week, Bob wrote about State Farm (et al) and the insurance market aftermath of Katrina.

NOLA wasn’t, of course, the only area affected by hurricanes in the past few years; Florida has certainly seen it’s fair share (or more) of the deadly storms. And, of course, the insurance market there isn’t exactly considered a rosy picture.

But one carrier is bucking the trend, and intends to begin writing business in the Sunshine State:

“As most big insurers are cutting back coverage in Florida and other coastal states after a string of catastrophic hurricanes, Mr. Buchmueller has started a company offering policies that hardly anyone else wants to sell — and at as little as half the going rates.”

His “hook” is that his company will only write homes that are worth at least a million dollars. Why?

Well, for one thing, the industry’s own statistics seem to show that such homes (especially newer ones) are better built, with features (such as special windows and shutters) that are, to coin a phrase, hurricane-resistant.

And although he hasn’t explicitly said so, it occurs to me that such homes will also generate larger than average premiums, as well as little “extra’s” like scheduled items (lots of jewelry and art), and excess liability umbrellas (insert your favorite “umbrella in a hurricane” joke here).

He’s also hedging his bets in another way: limiting the amount of business (number of homes) that he’ll write this year (his first), and using a lot of reinsurance to offload his own exposure.

[ed: Reinsurance is a mechanism insurers use to limit their own potential losses. They contract with insurance “wholesalers” for specific amounts, so that the policy is really insured by at least two entities]

If nothing else, I like the creative thinking that went into this kind of plan. As to whether or not it’ll work, well, there’s always the next hurricane season to test it out.

Grand Rounds...

Four time host GruntDoc (a first!) has put together a terrific collection of some 60 posts, and (TaDa!) no theme. There are however, interesting categories and helpful context.

And for those keeping score, Bob's up 2 to 1 (yes, my post made it in).

Here at IB, we often talk about the pitfalls of nationalized health care. An English physician, who lives that "dream," has some insights on how expectant mom's can anticipate being treated under such a system.

Carnival Monday (Yay!)

MapGirl hosts a terrific Carnival of Personal Finance this week. Built around a Circus theme, she's put together almost 60 high quality posts, in a half dozen clever categories.

What's more, she put Bob's post on the perils of mandatory coverage at the very top...WooHoo!

It will come as no surprise to regular IB readers that I found Wenchypoo's helpful (and unique) kitchen tips to be the Star of the Show.

The Carnival of the Capitalists is also up, at its new home: Bizosphere. CotC honcho Jay has "rebooted" this venerable financial potpourri, "to return to the root concept of showing off the best business and economics posts you might not otherwise see."

In this case, he's posted 19 entries (out of 34!), and we're pleased that Bob's post on the dangers of carriers being forced to pay claims that weren't really covered made the cut. (hmmm, looks like a two-fer for Bob, we'll see if I make the Grand Rounds Cut tomorrow).

In the event, I really lit up for this post at Photon Courier; it's an illuminating expose of light bulbs.

In The Future . . .

Everyone will have access to free health care. No one will pay a dime out of pocket. All their needs will be addressed completely by a taxpayer funded system. Everyone will have coverage, regardless of their needs or existing health condition.

If you want to look at what a "free" health care system in the U.S. looks like, here is what you might find.

The gown he wore was torn. The wheelchairs were old and broken.

Gowns & wheelchairs. These are low tech. Makes you wonder what it will be like for state of the art.

Stories of neglect and substandard care have flooded in

Neglect & substandard care? Is this some third world medical center?

No, it is supposed to be the pinnacle of care for our most precious resources. The soldiers of the Armed Forces.

The mold, mice and rot of Walter Reed's Building 18 compose a familiar scenario for many soldiers back from Iraq or Afghanistan who were shipped to their home posts for treatment. Nearly 4,000 outpatients are currently in the military's Medical Holding or Medical Holdover companies, which oversee the wounded. Soldiers and veterans report bureaucratic disarray similar to Walter Reed's: indifferent, untrained staff; lost paperwork; medical appointments that drop from the computers; and long waits for consultations.

Unsanitary conditions. Bureaucratic disarray. Long waits.



Sandy Karen was horrified when her 21-year-old son was discharged from the Naval Medical Center in San Diego a few months ago and told to report to the outpatient barracks, only to find the room swarming with fruit flies, trash overflowing and a syringe on the table. "The staff sergeant says, 'Here are your linens' to my son, who can't even stand up," said Karen, of Brookeville, Md. "This kid has an open wound, and I'm going to put him in a room with fruit flies?" She took her son to a hotel instead.

Is this the future of "free" health care?

If so, I don't want any part of it.

Insurance Dispatch...

This week's column asks "What’s the relationship between insurance and risk?" Even though you can buy wedding insurance, and cancer insurance, should you?

Check it out at Trusted.MD

Stupid Carrier Tricks # (What, 327?)

We’re a very small agency, in a little suburb of a modest-sized Midwest town, but we do provide health insurance for those of our employees who want (and/or need) it. For a number of reasons, we’ve stayed with the same carrier for more than a few years (NTTAWWT). Of course, we’ve changed configurations over those years; the most recent was selecting a slightly higher deductible and installing an HRA (Health Reimbursement Arrangement).

Our renewal came up recently, and we had to make some choices. On the one hand, we’re not dissatisfied with the coverage and overall service of this carrier (they’re no worse – and no better – than anyone else currently in this market), but the experience I’m about to relate certainly earns it a spot in our (not so) coveted Pantheon of Stupid Carriers:

Our current plan is no longer being offered, but was a fairly typical PPO. We had coupled it with the HRA. The carrier’s automatic renewal option (the plan we’d go on by default, unless we specified otherwise, and which we’ll call Option A) is attractive: a $2,000 deductible, then 100%. Office visits are on our own nickel, but count towards the deductible (something the present plan’s co-pays don’t do). There’s still a prescription drug (rx) card, but it would be subject to that $2,000 deductible, which is “non optimal.” On the other hand, the rate is some $700/month lower than a plan with benefits similar to our present one. That would enable us to bump up the HRA numbers to offset the increased out of pocket.

But the deductible/rx tie-in is a non-starter. So I asked if they had a plan that did everything this new one would, but with an rx card that’s “turned on” from the get-go (no deductible). Turns out they do (we’ll call it Option B), so I asked for a quote on that plan.

So far, so good.

So what’s so stupid?

Well, I get all the numbers, and see something very strange : for one thing, they included the numbers for the plan we don’t like (Option A), but the premium is now some $170/month lower than what my actual renewal, which I got from the carrier in the first place, says it costs. They also included the plan we did want (Option B; same as Option A, but the rx card has no deductible), and it’s even less! Now, I’m not usually one to look a gift horse in the mouth, but this is getting stupid: why would the “better” plan (Option B) cost less than the not-as-good one (Option A)? And why are the numbers for Option A now almost $200 a month less than what we were originally told?

But wait, there’s more! I noticed on the speadsheet the carrier sent that there were TWO versions of Option A (the plan we don’t like). They were absolutely identical in benefit structure, but had two different product numbers. Plus: one was almost $200 per month more than the other.

I’ve asked, and I gotten the following response from the carrier (BTW, I’ll give them credit: at least they did respond):

“Yes, the premium is typically higher on the [“better”] plans vs. the [“not as good”] due to the up-front [no deductible] drug card. I have seen a few cases come back where that is not the case but they are pretty rare.

Additionally the [two identical but for price plans] are priced differently primarily due to experience. The [one] series did not run as well as they anticipated which has caused them to receive a higher rate than the [other] series.”

Okay then.

I do this for a living, and am reasonably adept at it, and this blows even me over.

(Warning to those who will say “Well gee, Prof, all the more reason for a national plan, so we don’t have this kind of confusion.” Oh yeah? I’ve got three words for you: I. R. S.)

Across the Pond: Is the NHS "Buggy?"

I really shouldn't make fun of this [ed: but you're going to anyway, aren't you?], but this newest cost-cutting move by England's "much vaunted National Health Service" is too good to pass up:

"THE NHS could save a fortune, free up beds and prevent killer bug MRSA by treating wounds with MAGGOTS.

The larvae take only five days to clean a wound compared to 89 with more conventional treatments."

I'd heard of using leeches to "restore circulation in blocked blood veins," but this technique goes a step further; touted as a replacement for anti-biotics, these little bugs could save the government-run health system millions of pounds.

It may be only a matter of time before this medical breakthrough catches on over here. I suppose that means that Bob and I will have to stop referring to home office critters as "lousy maggots."

EHR Privacy

The Bush administration has no clear strategy to protect the privacy of patients as it promotes the use of electronic medical records throughout the nation’s health care system, federal investigators say in a new report.

In the report, the Government Accountability Office, an investigative arm of Congress, said the administration had a jumble of studies and vague policy statements but no overall strategy to ensure that privacy protections would be built into computer networks linking insurers, doctors, hospitals and other health care providers.

President Bush has repeatedly called for the creation of such networks, through which health care providers could share information on patients. In 2004, Mr. Bush declared that every American should have a “personal electronic medical record” within 10 years — by 2014. With computerized records, he said, “we can avoid dangerous medical mistakes, reduce costs and improve care.”

The V.A. records were compromised.

Same for the D.O.D.

And let's not forget the issues with Bank of America.

No such thing as 100% security.

Double Secret PHI

This could just as well be titled Stupid Carrier Tricks #73 but I opted for more of the Animal House theme instead.

Here's the deal.

Sent an application for individual health insurance to a carrier that (for now at least) will remain Nameless. The guy is a little chubby, about 10# over the limit for standard issue. Takes meds for cholesterol. Has borderline hypertension but the doc has not put him on meds yet. Had a bout with stress about 6 months ago. His doc prescribes medicine for anxiety. After 30 days the stressful issue is resolved, he stops the med with docs approval.

About 3 weeks after submitting the app, Nameless Insurance Company (NIC) declines to issue coverage.

Letter to the applicant to follow.

Being the wonderful agent that I am, I call my contact at NIC to inquire. I am told he was declined due to weight + HBP + cholesterol.

I call my client.

He reads me the letter which states he was declined due to "psychiatric history".

Now I look like a fool.

So I go back to the carrier asking a simple (and obvious) question. Which is it? His weight + blood issues or psych?

Later I discover a message from an underwriter is left on my voice mail. "We can't tell you because of PHI (protected health information) but what we can say is he was declined for reasons OTHER THAN (emphasis mine) weight, HBP, cholesterol or psych".

Oh really?

So . . . you can't tell me why he was declined because of PHI.

Can you explain why you can't tell the applicant either?

They are supposed to get back with me on that.

Just look for the blue guy. He is the one holding his breath . . .

Fantasy LaLa Land

After 12 years of fighting for reform, we welcome new calls for expanding health care to the uninsured. But while it's a start, we and a swiftly growing coalition in California and nationwide, believe these steps are the prelude to true universal health care for California residents.

And these new steps are?

Our argument is simple: all plans that expand the business of the private insurance industry are doomed to fail because they won't control costs. How can they when their profits, marketing costs and duplicated, look-alike plans currently waste 30% of every health care dollar they handle in California?

Why is it, lot's of folks talk about 30% admin costs but no one bother to validate that figure. This is almost 3x the figure I have seen in the past with carriers, yet too many accept it as valid.

Governor Schwarzenegger wants to cap the "administrative costs" of the insurance companies at 15%. This is a whopping 12% more than Medicare's 3% administrative cost which is roughly the same as the estimated administrative cost under SB 840 and in the health care systems in virtually every other developed nation!

And no one ever challenges the 3% admin costs for Medicare. For what it's worth, Medicare does not adjudicate or pay claims, they farm that out to the carriers.

You know, the same ones that supposedly charge 30% to administer health plans.

So what does Medicare do for their 3%?

That's a good question.

This next point is a valid one.

Why should we expect everyone to buy health insurance, which is even more expensive than auto insurance, when 25% of the drivers in the state ignore the existing "individual mandate" for auto insurance?

Good question.

The rest of the article is fantasy.

I Call BS!

There's a populist-driven whirlwind racing across the land, based on sketchy data, fear of the unknown, and a firm belief that the gummint is (or should be) empowered to make sure that nothing bad ever happens to us or our fellow Americans.

And no, I'm not talking about (so-called) Global Warming.

Recently, the Governor of Texas decreed that young women must be immunized against the dreaded HPV virus. Here in the Buckeye State, a similar effort is afoot. Other states are even now taking up the banner of this "righteous cause," whose proponents consider those with reservations dangerous, misinformed, misogynistic, you name it.

After all, who could be against the health of our children (see, men are susceptible to HPV, as well)?

Well, I am, for one.

"But Prof," you may cry, "you have two (lovely) daughters of your own, surely you want to protect them?"

And indeed I do.

I do.

It's my responsibility, and part of that responsibility is to make an informed decision. Here on IB we talk a lot about personal responsibility when it comes to health care, and I would be a hypocrite if I didn't walk that walk. So let's take a look at the whole brouhaha through the lens of risk:

HPV is the Human PapillomaVirus (no relation to Papillon, of course), which is a virus that causes abnormal tissue growth (warts) and is often associated with some types of cancer. The Centers for Disease Control suggest that up to one fourth of American women (ages 14 to 59) are infected with the disease. And how do they know this? Oh, very simple: by testing vaginal swab specimens from less than 2,000 women. Yup, that's right: less than 2,000 out of an estimated 100 million women in this age cohort.

Gee, what a great statistical model!

And then there's the question of just how dangerous this "menace" really is: less than 3,700 American women are expected to die from HPV related cancer this year. While that's a terrible tragedy, let's keep a bit of perspective, shall we: about 4,000 people die in fires every year; almost 5,000 drown; 5,500 are hit by cars and die; heck, food poisoning kills some 6,500 folks every year (if we assume, reasonably, that half of those are women, then why aren't we outlawing food?).

And by the way, why just daughters? Dr. Eileen Dunne, the CDC's lead, um, person on this issue, says that "HPV prevalence is thought to be high in men as well, but none were studied." Gee, thanks!

There doesn't seem to be a percentage-based definition of an "epidemic," but according to at least one, it's characterized as "(t)he occurrence of more cases of a disease than would be expected in a community or region during a given time period." If some 25% of women (and who knows how many men) have now been infected by the HPV, then why hasn't the CDC called it an epidemic? Gosh, how many people have to become infected?

Now, I won't pretend to advocate that people avoid this vaccine like, well, the plague. But I darn sure can't agree that it's the role of our government to force our daughters (and again, why not our sons? Are they disposable?) to be vaccinated against a sexually transmitted disease. And no, I don't have my head buried in the sand: remember we talked about risk? Well, look again at those stat's about other causes of death. We could easily outlaw swimming pools and cars, require homes to be built of concrete and furnished 100% with non-flammable items, and eat only specially processed (nuked?) foods.

Why aren't the nannies pushing for that?