Puzzling Carrier/Government Tricks

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

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

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

Let's take an example:

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

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

So carriers forbid this practice, and life goes on.

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

Until now.

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

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

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

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

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

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

ObamneyCare© Glitch - IB Ahead of the Curve

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

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

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

Ooops.

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

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

FoIB Tax Update LexisNexis bleg

Our good friend Joe Kristan, whose outstanding Tax Update blog is always a must-read, is in the running for "LexisNexis Top 20 Tax Law Blogs." As Joe says, there's nothing else quite like the Tax Update: fresh material several times a day, and Joe's unique way of making even the driest of tax-related info interesting and fun.

Voting's easy: just click here, and sign in (you can even use your FaceBook or Twitter ID!).
Vote for Joe - you'll be glad you did.

Cavalcade of Risk #144: Gobble it up now

Nancy Germond hosts this week's Thanksgiving-themed roundup of risky posts, and it's all gravy.

Pull up a chair and enjoy!

Grand Rounds at Sharp Brains

Alvaro Fernandez hosts this week's collection of the best medblog posts. Do check it out.

Mazel Tov to the 2011 Top Insurance Law Bloggers

A heartfelt congratulations to the 2011 Honorees, which include our friends Nina Kallen, David Harlow and Emily Holbrook. Kudos!

And thanks to all of our readers for their support. Yes, we're disappointed to miss out for the first time, but that's life in the blogosphere.

This Sceptered Isle, Part CXLXXIII

Hullo, what's this then? "NHS managers have been banned from rationing treatments while patients wait to die".

I guess that practice was wrong after all - so kindly stop doing it, you NHS Managers.

For some people this little bit of news from the Sceptered Isle may come as a surprise, for others it will simply be a confirmation.

PowerLine Blog puts it this way: Under government medicine, the patient isn’t the customer, the government is. The patient is merely an inconvenience who can make things easier by going away

Sounds right to me.

And meanwhile on these "progressive" western shores of the Atlantic, the U.S. Supreme Court has agreed to hear arguments that Obamacare is brought to us by the federales for our own good.

ObamneyCare© meets SCOTUS

One supposes that we'd be remiss in not remarking on this news:

"The U.S. Supreme Court will hear a challenge to President Obama's signature law on health care ... The challenge in the case, brought by 26 states out of Florida, is based on the constitutionality of the individual mandate in the Patient Accountability and Affordable Care Act, which requires that all Americans purchase health insurance."

The case at hand is the "biggie" comprising 26 of the 58 states, and which argues that the (Evil) Individual Mandate is unconstitutional.

Dunh.

At this point, all we know is that the Supremes have agreed to hear the case, presumably next Spring. Given the Court's current make-up, and recognizing that IANAL, it's anybody's guess how they'll eventually rule.

Shall we set up a pool?

Kiwi HIStorectomy?

One of my favorite fellow health policy wonks, Russell Hutchinson, has a disturbing story from his native New Zealand. As I understand it, the NZ health care system is a combination of government and private enterprise. Many (most?) folks are part of Primary Health Organisations (PHOs), which provide primary care (dunh!) but may not be the perfect choice for more complicated issues.

Then again, maybe they beat the government-run alternative:

"Man told pain due to hysterectomy"

As Russell explains, it's bad enough that the system made this inane call in the first place, but in a fit of bureaucratic pique, they doubled down:

"Mr Kennington's nurse took the matter up with the DHB [District Health Board] but they just sent the same report back. Which means, that even when a nurse said there was something wrong, they didn't even look at it."

And believe it or not, it gets worse.

Go read the whole thing.

Lasers vs Epilepsy

In what could prove to be a watershed moment in treating this dread condition, Golden State doctors have used a special laser-tipped device to zap specific cells in a pre-teen's brain:

"Early Friday afternoon, doctors at Sutter General Hospital slipped a laser-tipped probe into 11-year-old Jack Petersen's brain and turned on the light, sizzling some of Jack's most problematic brain cells in seconds at temperatures near 130 degrees Fahrenheit."

Although it's still considered experimental, this could be a major breakthrough in curing what is an often debilitating illness. Certainly, it could prove much less dangerous than the surgical method that's been the go-to method for many years.

Here's hoping that it works out for Jack P.

Told Ya So: Bye Bye Group Plans

As we've predicted since the very moment of its passage, ObamneyCare© spells the death knell for group insurance.

Here's the latest installment in its demise:

"A new Gallup poll shows ObamaCare is working just as planned: kill the private health insurance industry in order to implement a single-payer government system ... The percentage of American adults who get their health insurance from an employer continues to decline, falling to 44.5%"

The proof, as they say, is in the numbers, and those are stark indeed.

But of course, ObamneyCare©'s good outweighs its bad, right? That is, we've made great strides in reducing the number of uninsured Americans, providing more citizens with health insurance than ever before, right?

Right?

Not so much:

"The percentage of adults with no health insurance has been increasing in 2011"

So much for "if you like your health insurance you can keep your health insurance."

UPDATE [11-12-11]: And it's not just health insurance getting the axe, but actual employees:

"Stryker, the Kalamazoo-based maker of artificial hips and knees, will cut 5% of its global workforce by the end of next year to reduce costs in the face of new fees on device makers required by the U.S. health care law."

This is big news because of our prediction last Spring that this would indeed be the case:

"ObamaCare© mandates a new excise tax on certain classes of medical devices (including certain female-related products). This in turn is creating a chilling effect amongst those companies doing R&D on the next generation of life-saving devices."

Fewer jobs, fewer choices, Papa Washington.

Cavalcade of Risk #144: Call for submissions

Nancy G hosts next week's CavRisk, and wants your risk-related post. Entries are due by Monday (the 14th).

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

Once there, you'll be asked to provide:

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

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

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

Thanks!

LabCorp Update

A month or so ago we interviewed the principal litigant (and whistleblower) in a lawsuit targeting alleged Medicare fraud. Today comes word that Mr Baker's efforts have captured the attention of (at least) two high-profile lawmakers:

"Senators Chuck Grassley and Max Baucus are asking the leaders of three major health insurance companies and two leading clinical laboratory testing companies for information about a practice where insurers receive discounted pricing from labs in exchange for referrals ... Grassley and Baucus said they want to “protect the interests of our nation’s Medicare and Medicaid beneficiaries and the federal health care programs.”

One supposes that this is good news (at least for Mr Baker and his supporters), but of course Medicare faces significantly more important and drastic challenges than this.

[Thanks to Ania Kapla for the tip]

Health Wonk Review: Olio Edition

No, not oleo, but olio: "a miscellaneous collection (as of literary or musical selections)." And this week, that means great posts from some of our "regulars," as well as an eclectic selection from folks that are new to the 'Review. Regardless, as always when we host HWR here at IB, we're strict constructionists regarding the Review's Founding Purpose of "policy, funding, insurance, managed care, infrastructure, IT, the uninsured, economics and trends."

After hosting countless 'Reviews, I'm going to invoke "Seniority," and lead off with my own blog. I hope to be forgiven, however, since the post in question is the first ever from My Better Half, who proposes a rather unique, if outside-the-box, solution to a vexing health care financing problem.

Something I noticed this time around was a sort of "pattern" to the submissions: half were about, or related to, health care financing (aka health insurance), which isn't all that surprising. But almost as many were about topics I don't recall seeing in previous editions, ranging from teens in trouble (of a sort) to quacks (but not not duck-related). I think you're really going to enjoy this one:

■ Gail Stern is a Project Management Professional with an emphasis on IT Infrastructure [ed: don't feel bad if you don't quite get that - I often need subtitles as she discusses her work at our dinner table]. In her first ever blog post, she turns her (considerable) talents to resolving an expensive government-sponsored health insurance conundrum.

■ In a somewhat related post, Jonena Relth reports on the latest EMR/EHR trends being tracked by the Healthcare Information and Management Systems Society. The challenges facing our health care system and its reliance on information tech are mind-boggling.

■ We here at HWR-HQ have never claimed to be speciest, so we're happy to include Rachel Cleary's thought-provoking post on pet obesity, and how to prevent and/or deal with it. Ruff! Meow!

■ Our first insurance-related item (I'll be sprinkling them throughout this edition) comes from my favorite Health Care Economist, Jason Shafrin. This week, he tackles something currently on the minds of a lot of seniors (and those that care for and about them): how to choose a Part D plan to help pay for meds. Timely and informative.

■ If choosing a plan, or even writing about how to choose one, becomes too stressful, Charles Chua has just the ticket: how about making every day a holiday? No, Jay, he doesn't mean playing hooky, he means adjusting our mindset. And isn't mental health policy just as important as physical?

■ NewsFlash: #OccupyHWR is in effect! Well, in a way: Roy Poses is ticked off at what he considers "crony capitalism" in the health care marketplace. His post is important, because it vividly illustrates that financial issues aren't just about banks and taxes, but pills and x-rays, too.

■ Does your employer help pay for your health insurance? For folks covered by employer-sponsored (aka "group") plans, the answer's yes (sort of, but that's another post). But as Louise Norris points out, it's a whole 'nother matter when you've got an individual plan and your boss wants to help out with the premiums. There's a lot more here than you might think: Federal Law vs State Regulations, for starters.

■ Did you know that almost 10% of American teenaged girls are moms? Or that we have one of the highest teenage pregnancy rates in the world? Neither did I (and me with two daughters!), which is why this post from the folks at DNA Testing blog was both an eye-opener, and quite relevant.

■ Jaan Siderov has an interesting take on a special kind of health care vendor, and why its roller-coaster stock pricing may be less than meets the eye.

■ Workers Comp Insider's Jon Coppelman fisks the idea that charging higher health insurance premiums for smokers and, um, plus-sized folks will ultimately close the gap between premium income and claims outgo. But he goes further, pointing out that the net effect may be to actually harm those least able to afford it.

■ It's really good to hear from too-long-silent med-school blogger NotWithStanding. NWS poses an interesting conundrum [ed: you really like that word, don't you?]: is it possible to legally ban health care quackery without forever politicizing questions of scientific and medical truth? Careful with your answer: the Law of Unintended Consequences awaits you if you falter.

■ And finally, unlike yours truly, Mark Hall is a fan of the Individual Mandate. In his post at the Health Affairs blog, he sets out to show that keeping the mandate will lead to a more predictable, stable market, and that it's absolutely vital to the success of the new health reform law (what we here at IB call ObamneyCare©)

And that concludes this edition of the Health Wonk Review. Since we're big fans of tryptophan, we'll be skipping the Turkey Day HWR festivities, and reconvening at Brad Wright's place on December 8th.

Thanks as always to Julie Ferguson for helping to make hosting as easy and fun as possible. Speaking of which, she's always on the hunt for new hosts, so why not drop her a line and grab an HWR for yourself. You won't be sorry.

Another 1,000 Words....

[Courtesy of PowerLine]

Are you protected?

Quick, which is more valuable: the Golden Goose or its eggs? Or put another way, your most valuable asset is (most likely) your ability to earn a living.

Unfortunately, Disability Income (aka Income Replacement) insurance is one of the least-bought products in our portfolio. As agents, we're partially to blame for this: how many of us really "push" DI?

And there's this: in most cases, I think individually-owned policies are preferable to those available under an employer-sponsored plan. Still, any coverage is better than none, and group plans are often more affordable than individual ones.

Independent agents (such as yours truly) represent multiple carriers, and there are any number of quality choices available. One such is Unum, which provided this video as a helpful introduction to the topic. It's relatively short (just over 5 minutes), and has a wealth of interesting info:



If your employer offer such a plan, maybe you should look into it. And if he doesn't, well then, maybe you should suggest that he do so.

Because you never know.

Stupid Client Tricks: Cancelled Life Insurance Edition

MarySue is a successful mid-level executive at a fast-growing small business. For a number of years, her employer paid for her $100,000 term life insurance policy, which cost less than $300 a year, and was guaranteed to stay at that rate for a total of 20 years. It was also "convertable," meaning that she could trade up to a permanent plan pretty much any time she wanted, locking in her coverage for the rest of her life.

A few years ago, she developed breast cancer, which was quickly removed with no apparent long-term effects. Still, it meant that her ability to buy life insurance was dramatically reduced for quite some time.

No problem: she still had better than 15 years left on her term policy.

Then, a few years later, her employer decided to discontinue paying her premiums for her. She could have easily taken them over herself, which is what we advised her (rather vehemently, given her recent cancer scare) to do.

But she was having none of that, and so she chose to let it lapse.

Was this a poor choice?

You tell me:

Recently, she called and asked about buying a new policy. I checked with our primary carrier; the underwriter informed me that, based on the facts of the case, MarySue would not be eligible for consideration for a few more years, and that whatever her rate would have been at that time, there will be an additional surcharge on her annual premium.

That means that her policy would start out "in the hole," and that's before the "regular" rate is applied.

Ouch!

Since she wants coverage now, and doesn't want to wait 2 or more years, I contacted our local "problem case" gurus, who told me that, after checking their markets, the best they could offer would be a guaranteed issue, graded benefit plan. These plans have reduced death benefits for the first few years before taking full effect, and are generally quite a bit more expensive than "regular" plans.

Could all of this have been avoided?

Of course: for less than 85 cents a day, she could have kept her perfectly good existing term policy, and even converted it into lifetime coverage with a level premium guaranteed never to increase. We always urge clients not to cancel existing coverage before a new policy is issued, but this goes beyond even that: she cancelled her policy after she already knew she had a major problem.

Life is tough...

[Special Thank You to Bob V]

Still think Long Term Care insurance is a "luxury?"

Well, then, think again:

"Daily private-pay rates for long-term (custodial) nursing home care were obtained for private and semi-private rooms in licensed facilities ... National average rates for a private room increased by ... to $239 daily or $87,235 annually in 2011."

But then, you'll probably prefer home health care instead, right?

Well:

"The 2011 national average private-pay hourly rates for home health aides and homemaker/companion services remain unchanged from 2010 at $21 and $19 respectively."

At, say, six hours per day (let's lowball it), that comes to about $2,600 a month, or over $31,000 a year. Still not convinced?

Fine:

How about now?

[Hat Tip: FoIB Jeff M]

Sins of Omission

If you still doubt Death Panels, then consider this:

"32% of elderly American patients undergo surgery in the year before they die ... Dr. Amy Kelley ... labeled the 32% figure a "call to action" - to reduce costly surgeries, intensive-care stays and other high-intensity care for the elderly."

Notice a missing word in the very first sentence?

Let's correct the omission, and see how the story works:

"32% of elderly American patients who undergo surgery in the year before they die ... Dr. Amy Kelley ... labeled the 32% figure a "call to action" - to reduce costly surgeries, intensive-care stays and other high-intensity care for the elderly."

In the original, that missing word explicitly led the reader to believe that almost a third of seniors undergo expensive surgery, from which they perish. But that's not at all what the Medicare data -- on which the Lancet based its conclusions -- actually said.

In fact, most seniors who undergo surgery do just fine. Of course, the nature of the surgery matters: a hip replacement is different from cataracts is different from heart-valve surgery:

"[A]ge does not appear to limit the health related quality of life benefits" of surgery. Even patients over 75 had symptom relief and improvements in quality of life "on a par with improvements seen in younger patients."

The bottom line is that those who would seek to emulate the MVNHS© are forced to obfuscate the truth to advance their cause.

Color me unsurprised.

[Hat Tip: FoIB Bob D]

La plus ca change: Deadlines

A little over a year ago, we reported that HHS Secretary Shecantbeserious "has missed one-third of the deadlines contained within the legislation for the first six months under Obama's new health care regime."

But certainly Mme Secretary has cleaned up her act, and things are now well underway, right?

Right?

Turns out, not so much:

"[HHS Secretary Shecantbeserious] has failed to meet more than half of the new health care law's deadlines"

Who'da thunk that things could get worse under these rocket surgeons? A year ago, they'd only missed a third; now they're up to a half.

At this rate....hey, wait-a-minute...this could be GREAT news!

Next Week's Health Wonk Review here at IB

The bi-weekly roundup of health "policy, funding, insurance, managed care, infrastructure, IT, the uninsured, economics and trends" is here at InsureBlog next week.

The theme is, as always, health "policy, funding, insurance, managed care, infrastructure, IT, the uninsured, economics and trends."

You can submit posts either through the Blog Carnival submission tool or via email. Make sure to include:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post (no recap, no linky)

Submissions are due next Wednesday (the 9th).

Have a GREAT weekend!

Thursday Morning LinkFest

■ First up, FoIB Jeff M tips us to this rather sorry Tar Heel State of affairs:

"[North Carolina] one of the least competitive health insurance markets"

Apparently there are just two viable "competitors" left in the state, The Blues and UHC. And that's before ObamneyCare© goes into full effect.

■ Next, one of my favorite health policy wonks, Cato's Mike Cannon, pens a fascinating take-down of what we call ObamneyCare©. Here's a sample:

"During the initial debate over ObamaCare, House Speaker Nancy Pelosi (D-CA) famously said, “We have to pass [it] so you can find out what’s in it.” One irreverent heir to Hippocrates quipped, “That’s what I tell my patients when I ask them for a stool sample.” The similarities scarcely end there…"

■ And finally, we've posted quite a few times on the inherent tension between insurable interest, stranger owned life insurance, and life settlements. Now Sheriff Joe's adoptive home state is getting in on the act:

"The life settlement industry is welcoming a pair of recent Delaware Supreme Court decisions ... the court has affirmed the common law ability of a legally insured person or insurable trust to sell a policy on that person's life for market value."

There are the usual caveats, but at last we're seeing a bit of common sense being brought to the subject.

Another LTCi rate hike on the way?

The next shoe is apparently about to drop in the Long Term Care insurance market. According to a source, MassMutual is set to announce a rate hike on new business for 2012.

It's not anticipated that this will affect in-force policies, but folks "on the fence" may want to pull that trigger sooner than later.

Can't say this is unanticipated, according to email:

"[MassMutual] LTC business exploded in 2011 due to the changing marketplace. While MassM wants to be competitive, we do not want to be a low price leader. That tends to attract excess business that may not be as desirable as slower, steady growth."

In other words, if you're looking to buy business, you're going to get burned.

I don't think that this is a particularly bad move on MassMutual's part: we're going to see rate increases more and more often now, as Boomers hit their mid-60's and look for ways to protect their assets. Being out front of the wave is a good way to avoid drowning.

Cavalcade of Risk #143: It's a Beautiful Day in the Neighborhood Edition

Julie Ferguson channels her inner toddler to bring us this week's fun and insightful Cavalcade of Risk. Button up your cardigans and enjoy!

BTW: We're now scheduling for late 2011/early 2012. Hosting is fun and easy, just drop us a line to grab yours.

The Facts Can Set Us Free

[From time to time, we offer posts from guest bloggers with particular expertise. Today, we're pleased to offer this contribution from certified Project Management Professional (PMP) Gail Stern. In it, she proposes a solution to one of the more vexing problems of the current PCIP (Pre-existing Condition Insurance Plan) model: the fact that there is no (current) way to verify the insurance status of any given individual.

As a side note, this solution could also provide factual confirmation of one other data point of contention. Can you guess what that is?]

I’m an IT Infrastructure Project Manager, so a good portion of my professional time is spent documenting and communicating facts on which my Customers and Teams agree. These include tasks my projects will accomplish (as well as those already completed), the issues a Project Team encounters and how they will be resolved. Working within IT Infrastructure means that the projects I manage to successful completion are in support of software that enables a corporation’s mission and is used by a corporation’s customers and associates.

Almost 30 years of marriage to The Professor means that I hear about the challenges of finding affordable health insurance (NOT health care) for the citizens of our Great Country.

My greatest and most valuable skill as a leader of, and guide to, my Project Teams is my ability to ask probing questions. So here it is –

WHEN will Insurance Carriers begin feeding some very simple information into a current information storehouse that will contain the FACTS about whether an American has private insurance coverage?

Proposed Project Charter – creation of a Warehouse of Insurance Coverage Data (WICD) that would validate the health insurance coverage status of every American.

Justification –

1.Valid and current information would make available the FACTS about who is privately insured and who is not. Availability of WICD is no guarantee that this information would be used by the right people (AKA State Employees, State and Federal Legislators and The Press, all of whom are so fond of using un-validated information as facts), but it’s a start. I know, it’s a blue sky thought. But if we could speak consistently about using available facts, it’s support for the right direction.

2.To make WICD available would be a mighty task of cooperation amongst Carriers, and a huge technical challenge to make correct information flow on a regular basis.

A gut level sizing of such a venture would start with documenting requirements; determining and communicating design; communicating with stakeholders at all levels; selling the value of such a cooperative effort to Carriers and the benefits to Legislators and The Press; acquiring funding; and hiring Project Staff (at a minimum: IT Architects; Software and Human Factors Engineers; Hardware, OS, Database, Network, and Storage Engineers; data center Support Staff; Project Managers; Testing Coordinators; Technical and Business Testers; Training Coordinators; Trainers; Procurement Professionals; Communication Staff). With executable plans in place, the first release of WICD might be ready by November 2016 if we started today.

Carrier scope must be nationwide, and given the current ease of running IT Projects with geographically distributed project resources, project staff could reside in any state, which implies NATIONWIDE EMPLOYMENT. And that’s just to get WICD built. To keep it operating acceptably will require a staff of Skilled Software, Hardware, and Support Engineers and Communicators, because to keep people and systems talking is an ongoing support challenge. Who knows what the follow-on enhancements would include.

3. Data scope would be simple – include only information that uniquely identifies each citizen and their health insurance coverage status. Personal and private health information is arguably irrelevant.

4. The begging questions that WICD would satisfy: WHY isn’t this information available for validation today? Without it, My State is mandated to offer tax-subsidized health insurance coverage to anyone who says they’ve not had health insurance coverage for the past six months. Does My State trust and verify? No, because there is no vehicle today that enables this.

My proposal is to make simple FACTS widely available in a current, straightforward way. Without this, My Tax Dollars are being wasted.

Why is this not available today? I think I know why – no one is selling the importance of making this a priority. The issue of available dollars, people, and time are secondary to selling how relevant and valuable this system could be, and to whom.

I’ve never run a project that wasn’t fraught constantly with politics that had to be managed to enable successful project completion. Stakeholder approval of a project charter, and support and cooperation to manage and deliver that charter are the keys to overcoming the politics. Easy is not the operative word; relevance, cooperation and support are.

Thanks, Gail, for sharing your insights and expertise on a crucial subject, and Congratulations on your debut Guest Post.

Grand Rounds: ACO edition

David Williams hosts this week's interesting collection of medblog posts, focusing on the timely topic of Accountable Care Organizations (ACO's).

Express Scripts

Normally, I’m pretty easy going. It really takes a lot to really get me mad. Express Scripts, Anthem's pharmacy benefit manager, has succeeded royally.

Background: Untreated, I have fairly high cholesterol levels. Over a couple of years my doctor and I have worked out a regimen consisting of 10mg of Zetia and 40mg of Lipitor. Lipitor is a statin, a HMG-CoA reductase inhibitor that blocks the formation of cholesterol in the body. Zetia inhibits the absorption of cholesterol in the small intestine. The mechanisms of action are completely different, but both act to reduce serum cholesterol levels. Anthem approved the Zetia prescription and has been paying for it for roughly five years.

Here’s the situation: When I recently ordered a Zetia refill from Express Scripts, somebody there saw that Zetia required a step-therapy approach…other meds had to be tried and failed (been there, done that) before Anthem would authorize that prescription. Instead of filling the Zetia Rx, like they previously had, they called my doctor and told her that I needed to use something else before the Zetia could be filled. I don’t know who suggested Crestor, but that’s what they replaced it with.

I called Express Scripts. After a very long conversation, they agreed to fill the Zetia prescription. Today, I received a letter in the mail that they also cancelled my Lipitor prescription because Crestor and Lipitor are both statins…something I’d pointed out to the rep on the phone call.

I called them back. Will they reinstate the Lipitor prescription? No. Will they accept a return of the Crestor? No. If I send it back, it will be an unauthorized return and they won’t refund the $50 that they charged my credit card. Of course, I can always get a new prescription for Lipitor and that will supersede the Crestor prescription, but…

So…I’m treating it as unsolicited merchandise under the mail order marketing laws. I didn't order it. I wasn't notified ahead of time about the change. My credit card is on file for drugs that I order, not ones that I didn't. I buy a lot of merchandise on-line, but no reputable vendor sends out merchandise that isn't specifically requested...can you imagine Amazon doing so? I've filed a charge dispute with American Express and they’re taking care of it, but I wonder how many tens of thousands of people have had similar problems.

This seems like a class action lawsuit just waiting to happen. Comments?

Laudable Carrier Trick (#4 or 5)

Once in a while, carriers do really great things. This is one of those times, and we want to acknowledge it.

First, check out this touching and inspirational story:

"A legally blind 16-year-old runner, Sami is traversing cross-country courses this season with her new guide dog, Chloe, and is believed to be the first high school athlete in her home state of Ohio to compete with an animal."

The teen and her Golden retriever pup run for fun and in competition. But Chloe wasn't free, and Sami's family needed a hand to help her dream become a reality.

And that's where Union Central Life (a division of Ameritas) comes in: Chloe was sponsored as the result of funds raised at Union Central Life (Cincinnati) from casual days. They sell tickets - often $3 each - to dress casually (jeans) as a fundraiser.

Kudos!

MassImmigration

If you'd like to see the potential impact that caring for illegal immigrants is likely to have on ObamneyCare©, one has only to look at its progenitor:

"A dogged freshman lawmaker who refused to budge from the House chambers ... until the Patrick administration came clean on how much taxpayers coughed up last year for free health care to illegal aliens finally got his answer..."

Care to guess?

No, higher.

Higher.

Bingo: $93,000,000

According to the Boston Herald, that was spread over 55 thousand illegals, at an average cost of $1,700 per.

Now multiply that over the 58 states and however many additional tens of millions of people, and you begin to get a rough idea about cost.

Now that's a scary (true) story.

Walgreen's commits Seppuku

Last week, we reported on the little tug-o-war between Walgreen's and Express Scripts.

Guess who won?

Yesterday, I received snail-mail from Walgreen's:

"[W}e are not planning to be part of Express Script's pharmacy provider network as of Jan. 1, 2012 ... The following health plans in your area use Express Scripts and cannot ensure continued in-network access to Walgreen's in 2012: Anthem Blue Cross and Blue Shield."

Genius, pure genius!

Take one of the two primary carriers off the Rx table, secure in the knowledge that there aren't a gazillion other pharmacies available to provide what is, in reality, a simple commodity. Given that you can't swing a cat without hitting a CVS, or Walmart or Target (trust me, I've tried), it should take all of, oh, maybe five minutes (max?) to find an alternate distributor.

According to their website, Walgreen's filled "778 million prescriptions in fiscal 2010."

So, they're about to instantly lose over 90,000,000 of those.

Now there's a great business model: voluntarily ditch 11% of your customer base.

Sounds like someone's angling for a bailout...

Bug, or Feature?

You be the judge:

"[Medicaid], funded jointly by the feds and the states, was devised to cover the poor. But if a provision in [ObamneyCare©] isn't changed that could be the case for people with pretty healthy incomes."

Ooopsie's.

Turns out, even folks in their early 60's making as much as $60,000 a year could be eligible for Medicaid; that's because the bulk of Social Security benefits aren't taxed, so they don't count toward Medicaid eligibility.

When FoIB Holly R tipped me to this article, my response to her was "Um, as far as I can tell, that’s a FEATURE, not a BUG. Remember, the end-game here is single-payer."

'Nuff said?

Take 2 and skip the Oncologist?

For a while now, folks have been taking low doses of aspirin to lower the risk of heart disease, but who knew that the little pills might be a strong defense against cancer?

Well, some scientists Across the Pond© may have the answer:

"Taking aspirin regularly can cut the long-term risk of cancer ... British researchers found it can reduce the risk by 60 per cent in people with a family history of the disease."

The study, which involved folks from almost a dozen-and-a-half countries, seems to indicate that aspirin can be an effective weapon in the fight to prevent cancer:

"Professor Sir John Burn from Newcastle University, who led the research, said: ‘What we have finally shown is that aspirin has a major preventive effect on cancer but it doesn’t become apparent until years later.’"

In other words, this is a long-term commitment, not an instant panacea. Still, it's an inexpensive way to manage cancer risk, and readily available to the public. The potential downside - increased risk of stomach bleeding and the like - seems to be outweighed by the actual benefits of the regimen.

No final decision yet on the "chewable vs swallow with water" debate.

You're doing it wrong: Life Insurance and Murder

One of the first things one learns in Insurance 101 is that you're not allowed to profit from illegal acts. So, for instance, you're not going to have a lot of success collecting on your home-owner's insurance if you burn down your house (apocryphal cigars notwithstanding).

And murdering your kids for their life insurance?

Fuggedaboutit!

"A South Carolina mother who told police her son killed three family members and himself has been charged with quadruple murder because she wanted their life insurance money."

Words. Fail.

Cavalcade of Risk #143: Call for submissions

Julie Ferguson hosts next week's CavRisk, and wants your risk-related post. Entries are due by Monday (the 31st).

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

Once there, you'll be asked to provide:

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

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

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

Thanks!

Health Wonk Review - Superhero edition now online

HWR co-founder (and all-around mensch) Joe Paduda hosts this week's outstanding round-up of healthcare wonkery.

You won't be disappointed.

Death Panels slog on

There has never been any real dispute that ObamneyCare© will, in fact, reduce health care choices. When the power to decide who's treated (and lives) is granted to the state, personal choice goes away. We've seen this under the MVNHS©, and now we're seeing even more evidence that this is the goal of ObamneyCare©:

"MPAC [Medicare Payment Advisory Commission], whose decisions have the force of law, has voted to impose drastic pay cuts on all doctors under Medicare ... The cuts will effectively reduce the real pay for specialists by 50% over the next ten years ... and cut general practitioners' pay by one-third over ten years"

The net effect of these cuts will be, of necessity, a dramatic reduction in the number of primary care docs willing to see Medicare patients, and even fewer specialists willing to treat them. This is often called rationing, but I think it's even worse: it's relegating the most vulnerable among us, those who have "paid their dues" and relied (perhaps unrealistically) on the implied contract that required them to pay Medicare taxes for all those years.

In the longer term, though, this bodes ill for those under 65, as well. For one thing, it demonstrates conclusively that the aforementioned contract is binding only on the citizenry (death, taxes and all that). But consider this: if reimbursement rates are slashed, then physicians' incomes are reduced. So where's the incentive to spend all that time and money in medical school? If there's no realistic path to financial success, then we've explicitly said "my son the doctor? Oh, I hope not!"

Baby, bathwater, some assembly required.

SOA, ASAP

Got this in email from Anthem, but it is actually pretty industry-standard verbiage.

Which is to say, unfathomable:

"When submitting Anthem Medicare Advantage business, please make sure you are using the correct version of the scope of appointment. The standard template which contains “CMS Approved 09/27/2011” on the bottom of the first page is what you need to use. If this is not used, Anthem will be unable to match the SOA to the application image making it non compliant with CMS. Attached is the correct SOA that you will need to use."

Subtitles, please?

When is a pill not a pill?

Well, according to Walgreen's, "[o]ur product is not a pill; our product is a health outcome."

How nice for you.

To understand what's happened, let's revisit the Pharmacy Benefits Manager (PBM) model:

"PBM's are (allegedly) a cost-efficient way for carriers to offload the administrative functions of filling prescriptions ... The stated reason for this business model is that it helps carriers to rein in the cost of medications, which make up a disproportionate percentage of claims."

So far, so good, In this case, the PBM is Express Scripts, and their supplier is the friendly neighborhood Walgreen's pharmacist. The latter has decided to enhance its service offering by helping customers manage their own prescriptions. This makes some sense: in theory, the pharmacist knows about the patient's meds and any interaction issues. He (or, of course, she) is often a trusted member of one's health care delivery team.

The problem is that this "enhanced" service isn't free, so Walgreen's is nudging Express Scripts (the PBM) to up their reimbursement rate.

Sound complicated?

It is, but only because we (theoretically) value that extra step on the pharmacist's part. In this case, "Express Scripts' members account for about 90 million of the prescriptions Walgreen fills each year;" that's a lot of pills (and ointments, etc). If the two parties can't reach an agreement, then a lot of current Walgreen's customers will soon be former Walgreen's customers. And it's not like there aren't other options: with a CVS on what seems like every corner, not to mention K-Mart and WalMart and Target all vying for a piece of that rather large (and lucrative) pie, Walgreen's may end up with a rather severe headache.

Is there a pill for that?

[Hat Tip: FoIB Holly R]

Employer Mandate Under the Radar

And under the gun.

The (Evil) Individual Mandate continues to garner the lion's share of press, but the (also Evil) Employer Mandate is beginning to get some (dis)respect:

"Whereas other suits hinged mostly on a challenge to the law's "individual mandate" ... the Liberty University case also challenged similar requirements on employers to extend coverage to workers."

Currently, employers are under no requirement (other than market forces) to offer group health insurance to employees. Under ObamneyCare©, that all changes: employers will be forced to install ever-more expensive group health plans or face a stiff penalty.

As we've long remarked, this is a no-brainer for employers: given the burdensome new minimum health insurance packages required under ObamneyCare©, any fines (aka taxes) will look like a bargain.

Remember that phrase "if you like your insurance, you can keep your insurance?"

Good times, good times.

Grand Rounds: Hush! It's the library edition

Dr Jacqueline (PhD) hosts this week's literary-themed edition of Grand Rounds, presenting a beautiful and eclectic collection of interesting medblog posts.

Do check (it) out.

Romney on ObamneyCare©

Courtesy of the Galen Institute, we have expert analysis explaining just how the President's signature legislation mirrors the Bay State's version:



[Hat Tip: PowerLine]

ACO's: Regulations Cometh

The government came out with its final regulations for ACO’s, or Accountable Care Organizations, all 696 pages of information. As a medical practice manager, my main concern is still “How do I get paid?” The original scheme was a capitation plan, similar to the HMO’s of the 1980’s. In this plan a physician receives a set amount of money to care for the patient, medical care, labs, imaging, etc. If the physician spends less than the insurance company paid him, then the doctor keeps the left-over. If the treatment plan goes over what was paid then the doctor not only is not paid for his treatment, he may owe the insurance carrier. Running the word capitation through the legislation I came across this paragraph.

“Comment: Several comments reflected confusion about the proposed payment model under the Shared Savings Program. For instance, some commenter’s asserted that the program will, in fact, make partial capitation payments, or questioned if providers electing not to participate in the program will continue to receive payment as usual.

Response: We would like to clarify that consistent with section 1899(d)(1)(A)of the Act, fee-for-service providers will continue to receive payments "under the original Medicare fee-for-service program under Parts A and B in the same manner as they would otherwise be made" regardless of whether they participate in the Shared Savings Program. Also, as indicated previously, we do not plan to adopt partial capitation (or other such payment methodologies) at this time, but may do so in the future through appropriate rule-making, depending on lessons learned through demonstrations.”

The reason for ACO’s is to deliver quality healthcare for fewer dollars. It is thought that if the provider is in charge of the money then he will be more judicious on how it is spent. The only problem with this mindset, and why capitation models do not work, is that human beings are not mind readers and all people have different health care needs. A set amount of money per person per year is assuming that the person will not have any life threatening injuries or illnesses. It assumes that diseases that are expensive to treat will not be diagnosed. It assumes that the worst health care issue the individual will encounter is a cold.

Fee for Service plans assumes that each medical patient is unique, that care and treatment will be based on the need of that individual and payments will be made for appropriate services rendered, regardless of cost.

The first paragraph of the 696 page document speaks to new payment methods for Medicare patients. “Value-based purchasing is a concept that links payment directly to the quality of care provided and is a strategy that can help transform the current payment system by rewarding providers for delivering high quality, efficient clinical care.” This is an unneeded process because providers are rewarded right now for delivering high quality, efficient clinical care through the legal system and malpractice suits. If a physician practices poor medicine, then he risks having a malpractice suit brought against him and in some cases, criminal charges. The legal system already has in place safeguards against poor medical practice.

The concept of an ACO is a way to enable the government control over healthcare treatment by pre-setting how much your medical care should cost. In our current system, even with heavy government control, your medical care is still your decision.

Caution: Falling Prices, er, Benefits

Even big-box mega-retailers are feeling the ObamneyCare© pinch:

"Wal-Mart is substantially rolling back coverage for part-time workers and significantly raising premiums for many full-time staff ... Citing rising costs ... any new employees who average 24 hours to 33 hours a week will no longer be able to include a spouse as part of their health care plan."

What was that phrase we kept hearing?

Oh, yeah:

"If you like your health insurance, you can keep your health insurance."

Gotta love the smell of hope and change.

[Hat Tip: FoIB Jeff M]

Remember: I'll Drink to That!

As we've noted before, a little tipple may be enough to offset the risk of developing dementia. And now, there's even more evidence to support this theory:

"Researchers analyzed 143 studies that looked at the association between moderate alcohol consumption and mental abilities ... most showed that drinking moderate levels of alcohol showed no effect or a decreased risk of dementia and cognitive impairment"

The research stretched back to disco days (1977), and seems to reinforce the idea that, while it's not a good idea to get bombed on a regular basis (which, as it turns out, could actually increase your risk), a reasonable amount on a regular basis could help reduce your risk of these dread conditions.

Salut!

RomneyCare© Floundering

"After three years of study, the state’s legislative leaders appear close to producing bills that would make Massachusetts the first state — again — to radically revamp the way doctors, hospitals and other health providers are paid." [emphasis added]

Not the brightest lights in the (Boston) harbor, are they?

As we've long noted, one of the biggest problems with RomneyCare© is that increasing the number of insureds means that demand for health care increases. And when demand increases, what did they think was going to happen to prices (given the fact that they're not exactly drowning in doc's)?

The plan that seems to be most likely to be implemented is a variation on the "global billing" model. Now, this has some advantages: for one thing, it seems likely to eliminate the problem of "hidden providers."

It's hoped that this method would essentially "crack the code" of increasing costs.

But will it?

Um, no:

There is no "secret code" to increasing health care costs. There is a finite, limited supply of health care providers and facilities, and they are all in business to make money (or at least not lose too much). When more people have third parties (eg insurers) paying the lion's share of their health care tab, they're going to demand more services. That leads directly to, oh what's that word?

Oh, yeah: rationing.

How do we know that the dim bulbs in Beantown have no clue?

Pretty obvious:

"Those who led the 2006 effort to expand coverage readily acknowledge that they deferred the more daunting task of cost control for another day ... Predictably, the plan did little to slow the growth of health costs that already were among the highest in the nation."

Ooopsies!

In fact, overall health care costs in the Bay State are 15% greater than the national average, while for the past couple of years, health insurance premiums there have risen upwards of 10% a year.

Rock, hard place, some assembly required.

Cavalcade of Risk #142 - Expert edition, now online

Van Mayhall makes his CavRisk debut with an outstanding collection of risk-related posts. Each entry is highlighted and annotated with a deft touch.

Great job, Van, and welcome to the (hosting) club!

MVNHS©: Deadly for Seniors

Speaking of Death Panels:

"Elderly patients are being condemned to an early death by hospitals making secret use of "do not resuscitate" orders"

Here in the 'States, Do Not Resuscitate (DNR) orders are "affirmative;" that is, one must pro-actively sign a special form indicating that this is indeed one's desire. Absent such permission, it's generally difficult to legally force a health care provider to withhold or end treatment (cf: Terri Schiavo).

Not so in Merry Olde England:

"The orders ... are routinely being applied without the knowledge of the patient or their relatives ... At another hospital, junior doctors freely admitted that the forms were filled out by medical teams without the involvement of patients or relatives."

How's that "first, do no harm" thing working out for the Much Vaunted National Health Service©?

And it's widespread, as well:

"The findings emerged in spot checks of 100 hospitals ... A charity for the elderly said the disclosures were evidence of "euthanasia by the backdoor"

Of course, it's an easy "fix:" dead grandma's don't have much to say or about which to complain. And talk about savings: cutting off medical care is a sure-fire way to meet funding quotas, especially when end-of-life care has become so expensive. Here, of course, we simply lop off a half trillion dollars from Medicare to fund a major health care overhaul (to the immediate benefit of Junior Americans).

Which begs the question: are American seniors safe?

Grand Rounds (with a hint of Garam Masala)

Dr Sumer Sethi hosts this week's tasty collection of interesting medblog posts, sprinkled with beautiful photography.

Anatomy CLASS

Now that HHS Secretary Shecantbeserious has subjected the CLASS Act to a very real Death Panel, a postmortem is appropriate.

Let's note first that we called this some time ago (not that this was any great feat of prognostication). The fact is, this program was never fiscally sound or sustainable in the first place. Then, too, Long Term Care insurance is one of the two most complicated products in the life/health marketplace, which made it a less-than-ideal candidate for any type of government-run plan.

There's a larger, more immediate issue, though: the "savings" anticipated by the CLASS program were among those counted on to help fund the rest of ObamneyCare©, and those (alleged) savings are now gone in a puff of smoke. This leaves the rest of the initiative struggling even harder with regard to funding, even as we begin the last laps towards full implementation.

Finally, it's fascinating to me that a cornerstone of the President's signature legislation has just been deleted by fiat, courtesy of his own agency. No vote, no public discussion or disclosure, just...gone.

How's that for transparency?