Stupid Carrier Tricks: Umpteenth Edition

Sometimes, it seems as if we could populate this blog exclusively with stories of the dumb things insurance companies do. Of course, we’d have to change its name, but still.

Our latest installment in this “series” comes from Anthem Blue Cross/Shield, which has notified those of us who sell their group plans of their newest requirement: when submitting a Request for Proposal, we must now include the Federal ID number (EIN) of the group in question. This is idiotic.

Why, you may ask?

Well for a number of reasons:

First, employers are no less subject to identity theft than indiviuals, but Anthem’s not requiring us to submit those when getting a quote [ed: Hush! Don’t give ‘em any ideas!]. (And, yes, most of us do quote individual products on our own PC’s, but not all agents have this ability)

Second, and IMHO, more egregious, is that this effectively shuts out competition. How so? Simple: if one is not the incumbent agent, how likely is it that a prospect (who may be a referral, or a cold call, or a friend of a friend) will be likely to part with that information simply to obtain a quote? More likely, they’ll just call their existing agent and avoid the bother.

Third, what possible reason would a carrier have to require this information simply to provide a quote? It’s just one more example of heavy handed tactics that occur when a carrier dominates a given market.

Stupid, stupid, stupid.

(There, I feel better already!)

UPDATE: It gets dumber [ed: this is possible?]. Since there's no way for Anthem to verify the abovementioned EIN, why wouldn't agents simply make one up for quoting purposes? What's the worst that could happen? "Here's a new, sold case. Oh, I accidentally included an incorrect EIN with the quote request? Gee, I'm sorry."

Boo! (Gotcha!) And so does Grand Rounds

Dr E A Poe, or rather, Dr Michael Hebert, presents a spooky (and terrifyingly creative) 'Rounds, built around the classic "The Raven." There are a haunting number of posts, all worked into a poetic treat.

Hospital CEO (and blogger) Nick Jacobs poses some interesting (and controversial) thoughts on end-of-life healthcare issues. Scary, but serious.

Carnival Monday

LA Money Guy hosts this week's Carnival of Personal Finance. He's collected and categorized well over 60 posts. Alas, none include a summary.

If you pay bills (as some do), you probably have to restock your check supply from time to time. Five Cent Nickel has some tips on how to save money when doing so.

Insurance Dispatch

This week, we revisit (and update) our Travel Advisory post on folks traveling to (and, of course, from) Israel.

And while you're at The Medical Blog Network, be sure to check out some of the other interesting columns.

Good News: Redux

We've had an overwhelming response to Bob's post (well over 100 comments), and for that we're most grateful to our talented and insightful IB readers.

One particularly industrious poster, John Fembup, has gone beyond the call, and analyzed both the survey we posted and its 2004 predecessor. Originally posted in the aforementioned comments section, John has graciously consented to post his analysis on the front page:

So now there are TWO Kaiser Family Foundation surveys on the table, one from 2004 and one from 2006. BTW, here is a link to the actual 2004 Kaiser survey.

At the risk of triggering another 100 comments [ed: fine with us!], here is what I’ve read so far.

1. The 2004 KFF survey reports people’s responses about quality across the US, and it also reports their responses about the quality of their OWN health care. These responses differ significantly. That is an obvious disconnect. Does the abc news summary mention that disconnect? No.

The percentage of people who reported in 2004 they were dissatisfied with their own health care is shown on page 15 of the 2004 survey, split by ethnic group. Note for backs and whites, the dissatisfaction with "own care" is very significantly LESS than the answer respondents gave for the nation as a whole. This is the identical pattern reported by KFF in 2006. [That is not the case for the 2004 latino sample which suggests an important area for further research; I don't yet find any mention in the KFF report] These difference constituted a huge disconnect in the 2006 KFF survey. The same disconnect was reported in the 2004 survey.

2. The 2004 KFF survey reported that "Four in ten say the quality of health care has 'gotten worse' in the past five years" [since 1999] and the same survey also reports "When asked in an open ended question to name the most important factor in determining the quality of health care patients receive, there is no general consensus"

So the survey reported .. . what, exactly? That people who don’t agree on what quality is, nevertheless believe that whatever it was had declined sharply over the prior 5 years? And where would they get that idea? From their OWN care? From personal knowledge? Clearly Not. (page 15 again). From where then? I think from the uninformative – worse, misleading - media reporting on health care.

3. Page 9 includes this:

"After being read the following definition of a serious medical error: 'Sometimes when people are ill and receive medical care, mistakes are made that result in serious harm, such as death, disability, or additional or prolonged treatment. These are called medical errors. Some of these errors are preventable, while others may not be.' About one in three say that they have experienced a medical error in their own care"

In politics, this technique is known as "push-polling" and is considered unethical because the interviewer influences the response in a particular direction. In this case the interviewer prompts the reporting of an error. It is hard to avoid suspecting that the pollsters were pushing for answers that included reports of errors and worries about quality. That is a newsy result. But how truthful?

Having read the first 20 pages of the 2004 survey, I am now going to watch the world series. So far, I would say the most significant findings in 2004 were:

1. People were much more satisfied with their own care and costs than they thought other people were. This is the same finding as reported in the 2006 Kaiser survey. It is also consistent with findings from health care polling that I have seen since the 1970’s. I still think this disconnect results from the continual, breathless media reporting of a "crisis" in US health care.

2. People were surprisingly ignorant about health care and the cost of health care. When asked to rank quality factors by importance, they tend to rank in reverse order – this is true for both the 2004 and 2006 polls. Why would this be? Again, I think this reflects what people think they know, and what they think they know reflects the faulty media coverage of health care.

3. By 2004, people were beginning to use the internet to obtain health care information. This received almost no attention in the 2004 survey – just a small remark. But I think this was the appearance of a very important trend, because information is power. "Info to the people!"

So far I have not found information that contradicts the 2006 Kaiser survey. There ARE however contradictory statements in the abc news summary of the 2004 survey. The abc summary is skewed by its failure to point out any of the above findings. I think that the skewed abc news summary supports the point I’ve been making about the media having bungled the reporting of health care over the past several decades.

Thanks, John!

Of Insurance Companies and Morality

Recently, a blogging acquaintance whose opinions I respect (if rarely agree with) posited that “insurance companies are immoral.” His premise was that, since carriers make a profit, but do not then plow that profit (back) into the healthcare system, they essentially consume funds that could be served to increase medical research spending, build new facilities, etc.

I had, I must admit, a visceral reaction to this: after all, since I represent said carriers, I must be part of the problem, and therefore immoral myself.

After careful reflection, though, I came to realize that my commenter’s assertion was unsupportable on its face; that is, companies (whether health insurers, car manufacturers, or newspaper publishers) are simply impersonal entities and, as such, can be neither moral nor immoral. Consider this: is a rock moral or immoral? Well, one could say that a rock that hits you in the head is immoral, but it is really the ethos of the person who heaved it at you that’s in question. Rocks and insurers, are, in fact, amoral.

Further, it seems illogical to me that one should expect an insurance company to take its profits and gift them to, for example, science. For one thing, the company (presumably) exists to make a profit for its shareholders, and to provide employment for its, well, employees. It is not in the business of delivering health care: it is in the business of paying for it. By way of example, no one expects Campbell’s to provide a personal nutritionist to folks who buy vegetable soup. Does that make them “immm-mm-moral?”

So why would an insurance company be any different?

On the other hand, businesses are required to follow the law. Again, the law itself is neither moral nor immoral: it is a set of rules by which we, as a society, have agreed to abide. Reason I bring this up is because my personal convictions (outlined so eloquently above) are being sorely tested of late.

The group insurance market is a funny thing (if by “funny” one means “frustrating”). To wit: most group health insurers require that, if you’re going to place a group with them, you must write not only the health insurance, but the group life insurance, as well. From a business standpoint, this makes sense: the group health business is barely profitable, while the life side is extremely so, thereby “balancing things out.” And, truth be told, it often makes sense to do it this way: one bill, one phone number, etc. But there are times where it is not desired, and the law in Ohio says that a carrier cannot require a “tie-in” sale such as this.

At least, that’s what I’ve always believed. I used to have a copy of the pertinent law; it is long ago lost in the paper black hole that is my office. I recently had occasion to write a small group case with XYZ [ed: Name of carrier redacted not to "protect the innocent," but because it is not the only "guilty" one], which has not previously had the life requirement. Now they do. Problem is, I already have the group life for this group written with another carrier, and neither the client nor I are particularly moved to change that. Now, though, XYZ has refused to underwrite this group absent the life. No problem, says I: I’ll dig up my copy of the relevant section of the ORC (Ohio Revised Code) and wave that in front of them. Only I can’t find the darned thing.

No problem, repeats I: I’ll find it online (the ORC and OAC are both on the web). Several hours (and cups of coffee) later, no dice. Still no problem, hopes I: I’ll call up my friendly neighborhood insurance department, they’ll have it toot-sweet [I know, just let it go]. Only they can’t find it, either.

No problem, panics I: I’ll call up a friend who works at LexisNexis, that’ll do the trick. Only, several hours later, she comes up empty-handed, as well. Now what to do? I know that they can’t force me (I actually have a very good reason to know that I’m right, but that’s not relevant here). Except, they can. They won’t back down, time is running out, and I won’t put my client at risk. Back down, counsels I: and I did.

So what’s the “moral” of this little tale? Well, it’s pretty simple: insurance companies are not immoral.

But insurance company policies sure can stretch that envelope.

Workin' in the Golden Years

Found this little number, based on a Pew Research Center study, enlightening:

Turns out that, even though a majority of those surveyed believe that they'll have to continue working even after they retire ("Hello, welcome to Wal-Mart!"), it may not be so. Apparently, only a bit more than 10% of retired folks currently work outside the home (either full- or part-time).

Our goals about when we'll retire seem a bit unrealistic, however: although the Average Joe (sorry, Joe!) believes he'll retire at about 61, folks are actually retiring (on average) at the ripe old age of 58. Who knew?

Most surprising (but pleasantly so) was the finding that -- 2 to 1 -- the folks who think they'll be working post-retirement expect it'll be because they want to, not because they have to.

Interesting.

Cavalcade #11 is up!

Spencer Hill hosts this week's edition. The CoR continues to grow and thrive, thanks to folks like Spencer, who presents over a dozen posts, categorized by risk-type.

Perhaps best of all, our own Bill Halper makes his CoR debut with this edition.

I was intrigued by this post from Michael Cannon over at the Cato Institute: he effectively fisks the idea that employers that offer health benefits will be at a competitive disadvantage. Interesting points.

FYI, we'd love to have YOU host an upcoming edition; you can volunteer by email. As Spencer can tell you, it's fun, it's easy, and it gets you off "the nag list."

Grand Rounds...

An excellent 'Rounds today; Bob Coffield, host of the Health Care Law Blog, presents over 50 posts (including 2 from IB!), all helpfully categorized and summarized. Plus, he's added "live links" to Flickr pix for some of them. Very cool!

I love to grill salmon (medium rare) and tuna (rare! for me). And, fish taco's (well, burrito's, really) are a family favorite. Now comes word, via Dr Emer at Parallel Universes, about two conflicting studies about how healthy fish really is (are?). I know I'm hooked (Sorry, Charlie!).

Carnivals!

The Carnival of the Capitalists is hosted this week by the legal beagles at Blawg Review. Broken into useful categories, each of the more than 40 entries has its own summary.

The Photon Courier (is that cool blog moniker, or what?) has the skinny on a new use for a (very) old product.

And this week's Carnival of Personal Finance is up at Fat Pitch Financials. Over 60 posts, also categorized and summarized, grace FPF's tremendous efforts.

As a self-professed "funny guy" myself, I especially enjoyed this little gem from Long or Short Capital.

Insurance Dispatch

In this week's column, available at The Medical Blog Network, we discuss a new survey of which indicates that, even with health insurance premiums increasing, most employers don’t plan to delete their plans. And Kentucky even has a new plan to help them out.

Please stop by.

Health Care Poll

Frequent IB commenter (and fellow blogger) Marc Kashinsky has an interesting new poll up, as a result of Bob's recent post on the recent ABC News/USA Today/Kaiser Foundation poll on how the American public views its healthcare.

Hey, it's an election season people, go vote!

We'll let you know the results when they're in.

Weekend Fun

It's been a while since we last touted the incredible talents of the folks on our BlogRoll.

And so:

■ Joe at Roth & Co tells us that the IRS has no fury like a woman scorned.

■ Ever thought of your cell phone as a life saver? Dave at the Health Business Blog has some good advICE.

■ Here at IB, we blog (a lot) about health care transparency. Chris at Med Bill Manager has some real life examples of transparency in action.

■ Ever heard an actuary joke? Over at Workers Comp Insider, John has an insight into what makes them tick.

■ I don't do P&C (auto and home insurance), but I find the little gecko annoying. Bob at Specialty Insurance Blog has the story of one agent who's fighting fire with fire (metaphorically speaking, of course).

■ Rounding out our handful of helpful hints, BRC Mapgirl offers some tools for folks facing the daunting task of open enrollment.

Have a great weekend!

Election Time...

No, not that election: employee benefits election time. Our family’s benefits come courtesy of my better half’s employer, and last night was THE night to make our choices for next year.

Why last night, you ask? After all, most employers have weeks and weeks available for Open Enrollment. Well, hers is no different: OE has been on-going for some time. Last night marked its end (well, actually, it ends today, but last night was the first opportunity we’ve had to get those elections made). If you’re thinking “hey, the Prof, guru extraordinaire, is a procrastinating SOB,” well, you’ll get no argument from me.

In any case, I’ll share one of the choices we made, because it's illustrative of how I try to live what I preach: consumer empowerment.

The employer in question offers several health plan options (known in “the biz” as a “cafeteria plan”). Some are high-end, soup to nuts plans, some are “in the middle,” and there were even two HDHP (High Deductible HSA-compatible Health Plans). When I saw that, for the first time, we could choose an HSA, I was thrilled. I couldn’t wait to jump on board that train.

Our current plan is one of those “middle of the roaders:” a modest deductible, 20% co-pays at network doc’s, a prescription drug card. Nothing too fancy, and priced accordingly. Our maximum exposure (OOP) for a catastrophic claim is $4,000 (that number is important; we’ll be coming back to it).

We were offered two HDHP choices: a $2400 family deductible, and a $5,000 family deductible. Neither of those was particularly frightening, until I read on: in addition to the deductible, the plan also added a co-insurance layer of 20%, bringing the max OOP to $7,200 and $10,000 respectively. Yikes!

To put this in context: one of the reasons I like HDHP plans so much is that one can delete the co-insurance (the confusing 80/20, 70/30, 60/40, what day is it?) component altogether. This makes for a simple, and usually inexpensive plan design. In fact, I often tout the lack of co-insurance as the best feature of such plans.

So of course, the HDHP that we were “offered” included a substantial co-insurance chunk, bringing the max exposure on a large claim to over $7,000. But we’d be saving big bucks, right? Well, if by “big bucks” you mean $240 a year well, then, yeah.

Needless to say, we opted again for the “generic” plan. I was quite disappointed: I would really prefer to go the HDHP route, for a number of reasons, but there has to be some “reward” for such a “risk.”

So, am I a hypocrite for pushing HDHP’s? Not at all. If, for example, that was all I ever recommended – a “one trick pony” – then no question, a hypocrite would I be. But I don’t do that; when it’s appropriate, I recommend such plans to my clients, and I continue to blog on their merits (and disadvantages, of course). It’s really up to the carriers to “get it,” and come up with product designs and pricing that make sense.

Cavalcade #11 - Submissions Due

Just a reminder that submissions for next week's C of R are due Monday (the 23rd). Spencer at Hills Personal Finance would love to see your work. You can submit entries:

■ via email

or

■ at Blog Carnival

PLEASE include:

► Your blog's url
► Your post's url
► The trackback url (if applicable)
► A (brief) summary

PS: We're still looking for hosts. If you'd like to host a future edition, just drop us an email.

Ethics in the Workplace

Admittedly, this little gem is not insurance-specific, but I received it via an online insurance news aggregator to which I subscribe. The article intrigued me, and I’d be interested in IB readers’ responses. Feel free to comment anonymously, BTW; this isn’t a test, more like a tweak:

"My boss accidentally left a document on my desk listing the salaries of all the company’s employees. I read only the header, not the contents, then returned it. I felt I did the right thing, but now I’m not so sure. Reading it would have harmed no one, and the information would have helped me negotiate a long overdue raise. But would it have been ethical?"

Randy Cohen (who pens the column) answered that not only was it ethical, but advisable. According to Mr Cohen, his correspondent should have read the contents, and then passed it around to his colleagues. After all, he opines, “(t)he one who benefits most when such information is suppressed is your boss, not you or your colleagues.”

I beg to differ. For one thing, whether or not the document (or any document, for that matter) is labeled as “Confidential” or “Top Secret” is immaterial: it doesn’t belong to me, and unless I’m invited to read it, it’s none of my business.

On the other hand, the idea that one’s salary is not necessarily considered confidential intrigues me: why wouldn’t it be?

So, dear IB readers, what say you?

Plasma Recharge

I've never really considered the plight of those with hemophilia, so I found this news compelling:

"Grifols...says its new PatientCare program will provide one kind of support for patients with hemophilia who lose insurance coverage, and another type of assistance for individuals who believe their need for assistance will be temporary."

In order to qualify, patients have to meet certain financial thresholds, and be able to prove that they've had diffculty obtaining health insurance.

PatientCare itself provides access to therapies used to treat both Hemophilia A and B.

Interesting.

It's Wonky!

UberMedBlogger Ezra Klein hosts this week's edition of Health Wonk Review. He presents 10 high-quality posts, and offers his own helpful commentary and context with each.

FoIB Julie Ferguson, blogging at Workers Comp Insider, informs us that employers are increasingly turning to on-site medical facilities to help contain costs.

Pass the Prozac...a mildly cynical view of the future

To state the obvious, one of the pressing issues facing the American economy is the spiraling increase in healthcare costs. All forecasts that I have seen are pretty grim, essentially projecting an unremitting increase in demand, coupled with increasing costs in delivering care.

So far, every solution that has been tried has ultimately failed. PPO plans, by steering patients to providers with pre-negotiated prices, were invented to provide a lower cost alternative for indemnity plans. HMO plans included still more constraints, with the idea that the gatekeeper system would reduce unnecessary utilization and reduce costs still further. Somebody forgot, however, that low copays attract heavy utilizers. Today in California, many HMO plans are more expensive than the PPO plans. So much for Plan B.

The latest trend is to Consumer-Directed Health Plans, a polite euphemism for cost-shifting from the employer back to the consumer, with the aim of encouraging the consumer to make cost-effective health-care decisions. The underlying assumption, of course, is that the consumer has both the ability and willingness to make cost-effective decisions...an assumption, based upon the consumers that I know, I view with extreme skepticism. Consumer-driven health plans also fail to address any of basic cost drivers in the system: the rights of illegal immigrants of procure subsidized care; the large ranks of the uninsured, to whom a high-deductible or consumer-driven health plan is about as attractive as anesthesia-less colonoscopy; the pricing of prescription medication by their "“economic value"” as opposed to the cost of research and production; the rise of large hospital chains with geographic near-monopolies; and last, but not least, the general aging of the population, complicated by modern medicine's ability to extend the lifespan of the aged infirm almost regardless of cost and resulting quality of life.

No, the picture isn'’t very pretty, but I, with apologies to Jonathan Swift, have A Modest Proposal. Almost all insurance policies, with the exception of HMO's, which can, of course, be modified, have a lifetime maximum benefit amount. Up until now this has been impossible to enforce. Simply by changing insurance companies or jobs, the old information vanishes into the ether and the accumulated draw against your lifetime maximum gets reset to zero. This, however, is about to change. There is a concerted effort to implement electronic databases containing one's entire medical history. For the first time, we will truly be able to determine who the heavy users are of medical services and take appropriate action to stop this drain on societal resources. A lifetime max can truly be a lifetime max. When you hit it, you hit it... Let'’s just say that it gives a whole new emphasis to the concept behind consumer-driven health plans.

Just think. Finally there will be a true incentive to exercise. To diet. To stop smoking. Just don't overdo the jogging. You don'’t want your knees to wear out. Replacing them is expensive.

Grand Rounds...

ER nurse Kim, hostess of Emergiblog, presents this week's edition of Grand Rounds. What's all the more remarkable is that she posted it immediately after working a 12 hour shift. WoW!

It's difficult to expresso just how frothy this 'Rounds turned out. It's grande, yes, but it's also well grounded. Really, with 53! posts, it's the cream of the crop.

I was particularly impressed with this post at Inside Surgery. Blogress Lisa Marcucci interviews noted healthcare attorney Alice G. Gosfield, who discusses how she sees healthcare today, and tomorrow.