Your (Benefits) Package has arrived

Our friend Evan Falchuk has started a new, bi-weekly "carnival" highlighting developments and issues in the world of "benefits;" that is, the folks on the front lines who have to deal with the everyday tasks of deciphering and implementing what Congress has wrought and insurers offer.

The debut edition of The Benefits Package features posts on mini-meds from FoIB David Williams and an exhortation from Dan Buckles ("The Group Guy") on why employee well-being is so critical, not to mention our own Mike Feehan's post on Medicare and Medicaid cost-shifting, and much more.

The Benefits Package promises to be an interesting, and potentially important, resource for folks interested in the real-world application of health care policy.

Our (Current) System isn't "Broken"

Mike sends along this video, admonishing us to "remember this the next time some ignorant yahoo bleats that the US medical care system has "failed:"

The Game of Life

In the past two weeks, I've had the privilege of helping the families of two clients who have passed away. I say "privilege" because it means that we were able to help grieving loved ones with something more tangible that condolences and more lasting than a casserole (which is in no way meant to minimize the value of either). Long after the flowers have wilted and the cookies are gone, the cold, hard cash that is the ultimate result of a life insurance policy will be there to help pay the mortgage, fund a son or daughter's college education, and pay off hospital bills.

The first of these two folks had been a client for many, many years. He lived a reasonably long life, passing away at age 81. His wife, also a client, knows that any expenses left behind will be taken care of, and she and her children and grandchildren will benefit from his legacy for years to come.

The other is more tragic: cut off at the painfully young age of 53, she leaves behind a grieving husband and three daughters, one of whom is to be married in a few short weeks. As a labor and delivery nurse, she was responsible for helping to bring life into this world; as a matter of fact, she helped to deliver our youngest. How does one console the family of one taken so young?

The other day, my good friend Bill M sent along an email he'd received, with the provocative title "Sue thanks God Greg had life insurance:"

"Tuesday, October 18th was one year to the day that my friend and client Greg Murphy died suddenly. He left behind a wife and two children. He was only 52 years of age ... Sue, Greg's wife, is one of the fortunate ones. Greg left her a substantial amount through a life insurance policy. If he had not, their family would be doubly devastated; emotionally and financially."

The scary part came a bit later:

"Statistics show that 34% of Americans have no life insurance [and] 48% don't have enough life insurance for proper family protection."

But that's just one email, right?

Turns out, there's more. A lot more. According to today's McPaper:

"The percentage of U.S. households with life insurance coverage is at its lowest in 50 years, leaving millions of families without a safety net, industry experts say ... Only 44% of households have an individual life insurance policy, and 30% have no individual or employer-provided life insurance."

Professionally, I discount group-based life insurance because it is specifically designed not to be in force when it's most needed. Nonetheless, it's arguably better than none at all. What's so mind-boggling is that, from a simple cost standpoint, life insurance rates are at historical lows.

As always, there's a raft of excuses for why folks keep putting off that purchase. Personally, I think the internet has a lot to do with it: there's so much information, and so many quote-sites vying for attention, that information overload sets in, and the decision-making process grinds to a complete halt. Which is a shame, because it means that there are going to be a lot of un (and under-) protected families out there.

Don't be one of them.

And another (Symbolic, but still Awesome) Step Forward

A few days ago, we noted the faltering steps toward derailing ObamaCare©. Today brings news that South Carolina's new governor, Nikki Haley, stood up to PresBo, virtually demanding him to repeal ObamaCrap. When he (of course) refused, she then requested (a la McDonald's) a waiver for the Palmetto State. It's doubtful, of course, that this will be forthcoming (although she says he promised to consider it, who would bet on it?), but it's heartening to see the pushback from newly-elected leaders against this train-wreck.

Kudos, Nikki!

[Hat Tip: RedState]

December Wikio Health Rankings

Once again, we've been asked (exclusively!) to post the new Wikio Health blog rankings. Although we've slipped a couple spots, we're still in the Top 20 (which still amazes me):

1	Well
2	Kevin, M.D. - Medical Weblog
3	Respectful Insolence
4	Science-Based Medicine
5	In the Pipeline
6	Pharmalot
7	The Health Care Blog
8	Dr. Wes
9	Better Health
10	John Goodman's Health Policy Blog
11	The Last Psychiatrist
12	Age of Autism
13	Health Beat
14	Gary Schwitzer's HealthNewsReview Blog
15	Healthcare Economist
16	White Coat Underground
17	ScienceRoll
18	Running a hospital
19	Health Care Renewal
20	InsureBlog

Ranking made by Wikio

$3 Million Seersucker Suit

With emphasis on the "sucker" part:

"The federal government spent $3.1 million on TV ads in which actor Andy Griffith touts the new health care law, but a non-partisan watchdog group says those ads are misleading."

Well, it's not just the "watchdog group" (FactCheck.org) who made that call; we "fisked" the former Mayberry star's infomercial in August, pointing out, for example that:

"as a senior citizen, he's about to see his own Medicare benefits - including choice of doctors - severely curtailed."

We were off the mark, though, in one aspect: we understood that the effort cost less than a million dollars. Turns out, it actually cost about 4 and a half times that.

That's more than Floyd charges for a perm!

Happy Chanukah 2010/5771

The Festival of Lights begins tonight. Enjoy!

One step forward, one step back...

First, the good news:

"Florida Rep. Dean Cannon, the state's new House speaker, took a shot at healthcare reform ... questioning whether government should require citizens to purchase health insurance or raise taxes to give insurance to those who can't afford it"

Now the bad:

"A federal judge in Virginia on Tuesday rejected a legal challenge to the healthcare reform law"

U.S. District Judge Norman Moon based his (wrongheaded) decision on the stretched-beyond-anything-meaningful Commerce Clause, ruling that "there is a rational basis for Congress to conclude that individuals' decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market." [emphasis added]

Once again, we see misinformed individuals (notably, in this case, a Federal jurist) conflate health care with health insurance.

Sheesh.

Wednesday LinkFest

■ First up, from FoIB Bob D:

"In an open letter to America's medical students, Representatives [sic] John Barrasso (R-WY) and Tom Coburn (R-OK) warned of the consequences the health care law will bring to their future practice of medicine. In particular, they chastised the law for interfering with the personal relationship between doctors and patients."

Ya think?

■ Next, HHS Secretary Shecantbeserious has allowed the CMS to publish next year's Medicare premiums and deductibles:

■ And finally, FoIB Holly R tips us to this little life insurance doozy:

"Insurers have long used blood and urine tests to assess people's health — a costly process. Today, however, data-gathering companies have such extensive files on most U.S. consumers—online shopping details ... that some insurers are exploring whether data can reveal nearly as much about a person as a lab analysis of their bodily fluids."

On the one hand, insurers aren't allowed to use genetic testing, but if shopping's in your blood...

Cavalcade of Risk #119 is up!

Nina Kallen makes her CavRisk hosting debut with this terrific edition, categorized and anotated for your reading pleasure.

The (Doc) Fix is in....Or is it?

FoIB Holly R tips us that the so-called "Doc Fix" is in, meaning that (as we discussed over the weekend) providers' fees have once again been spared the axe:

"Congress agreed to a one-month delay in Medicare payment cuts to doctors yesterday, giving a short-term reprieve to a looming crisis over treatment of the nation’s senior citizens."

Except that it really doesn't. Let's ask Kelley Beloff, our resident Medical Office Manager, what this really means:

"What was passed was the extension of the current fee schedule that was supposed to expire today, to go to the end of this year. However, we are still facing a 29% cut on Jan. 1, 2011. That was not in this piece of legislation. While history is not always an indicator, Congress has let cuts go into effect at least 3 times since the cuts were started in the mid 1990's. I am anticipating the cut to go through on Jan. 1, 2011.

As to physicians opting out of Medicare. Now is the time to opt out. In fact I have sitting on my desk the CD with the forms in it to opt out of Medicare. Once the New Year begins, the physician is locked in for another year. So the physician has to ask himself, does he feel lucky, do I opt out on the chance the cuts will go into effect, or do I stay in and hope that Congress reverses themselves. My guess is that physician's will not opt out in the numbers predicted and continue to see Medicare patients, though on a more limited basis."

Gee, good news all around.

Thanks, Kelley!

And what is the most significant way the Federales control their medical care costs ?

Milliman has calculated the cost-shift from Medicare and Medicaid into the private sector as roughly $90 billion a year, or 15% of private insurance costs.

In brief, this happens because:

(1) the government plans pay less than what the medical service providers think their services are worth (2) How does the government get away with this? Just as Hank says, "because they're the government". (3) service providers then increase the fees they bill their privately-insured patients, to make up as much of the difference as they can, meaning that (4) there is a significant shift of costs actually incurred under Medicare and Medicaid, but which emerge as private insurance costs and are then paid for by private insurance plan sponsors and privately-insured people.

This so-called "cost-shift" makes Medicare and Medicaid appear less expensive and makes private insurance appear about 15% more expensive. Private plans would have 15% lower premiums in the absence of the cost-shift and Medicare and Medicaid would have higher premiums. The Milliman work reveals this difference is a serious amount of money.

This cost-shift from the public sector into the private has been going on for as long as I've been in the business. In fact, I first learned of it in this iconic 1970 Atlantic Monthly article.

You’ll find the cost-shift mentioned toward the end of this article, just click to page 4 and read the author’s 4th and 5th conclusions. He calls the cost shift "welfare reimbursements". The amount in his analysis is $10.00 added to the daily hospital cost of $60.00, resulting in a total billed charge of $70 per day (remember this was 40 years ago) - - in other words, the need to recover federal cost underpayments in 1970 resulted in a daily hospital charge 16% higher than it would otherwise have been. Remarkably, just about the same as Milliman finds today.

The author of the article was a 27-year-old physician. You will recognize his name - and you'll do yourself a big favor if you take the time to read his entire article.

So there is no doubt that this cost shift has existed for decades, and that it makes private insurance premiums roughly 15% higher than they need to be. Its existence raises important questions that need to be answered. Here are some of the questions:

1. What will Medicare do, if or when there is no longer a private sector into which it can shift a meaningful share of its costs? How would the Federales explain the noticeable increase in required funding that will emerge? Who would the Federales then blame? Who would the Federales then tax?

2. What will medical service providers do, if they can no longer recover from private insurance plans some or all of the revenues they cannot collect from Medicare or Medicaid? How might threats of reduced incomes affect medical professionals' fee negotiations and their willingness to participate in Medicare and Medicaid? How would community hospitals survive? How many physicians might simply retire early? How many talented young students might decide not to pursue careers in medicine?

Where have you seen these questions addressed? Where have you even seen them asked?

Post-Thanksgiving Grand Rounds

Our friends Jay and Louise Norris of the Colorado Health Insurance Insider blog host this week's terrific round-up of interesting and diverse medblog posts.

In Vino....What?

At the Jewish New Year, which we call Rosh HaShannah ("Head of the Year"), we celebrate by dipping apples in honey. There are various interpretations of this ritual, but the most prevalent one is that the apple represents life ("the circle of life") and, of course, the honey represents sweetness.

We also offer a "kiddush," a blessing over wine as we toast the New Year.

And how, exactly, does any of this relate to health, much less insurance?

Turns out, more than is immediately obvious:

"Supplements derived from apple skins, red wine and tumeric might someday help slow the onset and progression of Alzheimer's and related diseases..."

Apple parings and a nice Merlot contain within them copious amounts of a "compound that, in Petri dishes at least, sops up type-2 alkenes and protects nerves from harm."

Although scientists still have no idea what causes Alzheimers, neurotoxicologist Richard LoPachin believes that stopping type-2 alkenes holds promise, and both apple skins and red wine are able to drink them up and throw them off.

L'Chaim ("To Life")!

Presenting Ezra the (Not So) Magnificent!

Once again, Ezra the Disingenuous demonstrates his inability to prove an argument. Last time out, he tried to (re)sell the snake oil that is RomneyCare, only to be taken to the woodshed by Bob. This time, he wants us to believe that the federally implemented national health care system known as Medicare is just hunky dory, and actually better than insurance companies at controlling health care expenses.

Here's his "evidence:"

And here's his interpretation of said "evidence:"

"One of the dirty little secrets of the health-care system is that Medicare has done a much better job controlling costs than private health insurers." [emphasis added]

Wrong.

Medicare, owing to the power that is the Federal Government, can control expenses in a way that no insurer can, simply because the law says that it can. Not the marketplace, not the free and unencumbered exchange of goods and services: simply, The Law. Which Law, by the by, means that the costs aren't gone or even lower, they're just shifted to thee and me.

So again, Ezra, you're certainly entitled to your own (wrongheaded and disingenuous) opinions, but you are not entitled to your own facts.

[Hat Tip: FoIB Holly R]

The (True) Cost of Health Care

An overarching theme here at IB has been that health care costs drive health insurance costs. While this may seem obvious to us, it bears repeating.

Why, you ask?

Well, a fundamental precept of ObamaCare© is that by controlling health insurance costs, health care costs can be better controlled. This is patently and (more important) demonstrably untrue:

"What Anderson might not know, however, is how Sutter's battle for market share in her corner of suburbia is affecting her bottom line. Hospital prices in the Sacramento region are among the highest in California, driven in large part by the negotiating clout of the hospital chain Sutter Health."

The Anderson family lives in a suburb of Sacramento, California, but their plight is far from unique or geo-specific. As hospital "chains" grow, competition is reduced, and prices increase. That's basic economics, of course, but a lesson lost on many folks who continue to believe that "reforming" health insurance will have any impact on the cost of care. In fact, the opposite is true. As we've previously discussed, ACO's (Accountable Care Organizations) threaten to dramatically change how health care is delivered, and the price we pay for that delivery. Bob sent me an interesting link, from an outfit called American Medical News, which underscores just how insidious these new entities really are. Here's what they want us to see and believe:

"Accountable care organizations ... generally involve a combination of physicians and hospitals taking responsibility for a defined population, working together to improve care and cutting costs."

Can you see the problem in that very short statement? A "combination" implies a partnership of co-equals. But that's laughable on its face. In any such "relationship," the hospital (and more likely, the chain of hospitals) is going to be the Big Dog, and is going to determine how the organization behaves. The doc is simply another vendor in this equation, with precious little say-so in how (and how much) health care is delivered.

And there's this little tidbit:

"Though ACOs are primarily defined as cooperative agreements between hospitals and physicians, health plans are keenly interested in the model and need to keep on top of developments because they will be the ones to reimburse the new entities for care."

Once again, what they want you to see and what's really happening are two very different things. The primary problem is that there's still that pesky third-party (the insurer) sandwiched betwixt the provider and the patient. Let's ignore for a moment the lack of consumer participation in this equation; if consumer-centric health care is predicated on choice (and it is), then it's DOA when it comes to ACO's. That is, what choice does one have when, as in the Anderson's case, there are only one or two plans that include the biggest ACO, er, hospital chain in the area?

And then apply that to the whole country.

This is a recipe for economic disaster: less choice (competition) means higher health care prices, which means higher health insurance premiums. And, as Bob's pointed out, this is exacerbated by the looming shortage of carriers.

Talk about your death spiral.

[Hat Tip for NPR item: FoIB Holly R]

Karma's a (W)itch

Looks like somebody didn't send in their WaiverMania check to HHS Secretary Shecantbeserious:

"One of the largest union-administered health-insurance funds in New York is dropping coverage for the children of more than 30,000 low-wage home attendants ... The union blamed financial problems it said were caused by the ... new national health-insurance requirements."

Looks like they won't be #112 on "the list."

I found this little tidbit interesting:

"Currently about 6,000 children are covered by the benefit fund, some until age 23."

"Age 23?" Under ObamaCare©, that's supposed to be "age 26." Someone miss the memo?

For its part, the union is pointing the finger of blame at the Empire State, claiming that, under directives that took effect 2 years ago, "it expected that ... many of its members would qualify for state assistance for health-insurance coverage." So the wonderful gunion members counted on saps, er taxpayers to foot their bills?

State officials, on the other hand, are having none of that:

"The state is not forcing 1199 to do anything regarding its employee health insurance,” said Jeffrey W. Hammond, spokesman for the New York Department of Health."

Classic Mexican standoff, or missed opportunity? You be the judge.

MVNHS©: A Most Deadly Game

Our Cousins Across the Pond©, whose "health care" scheme we're attempting to emulate, have a little problem:

"Nineteen hospital trusts are today exposed as having alarmingly high death rates in a major report that also reveals how hundreds of people are dying needlessly because of substandard NHS care."

Okay, so not so "little," after all. A new report, compiled by the British Department of "Health," and Dr Foster Intelligence ("a public-private partnership ... that aims to improve the quality and efficiency of health and social care through better use of information") casts an unflinching eye on the debacle that passes for health care in the UK, finding that tens of thousands of innocent Brits "developed avoidable blood clots, suffered from obstetric tears during childbirth, had objects left inside them after operations or were not given immediate treatment after a stroke."

Still not convinced? Then click here for the gory details.

Told ya so.

We have to pass this bill so that you can find out what is in it

Perhaps missed in the excitement over other wonderful things we have been finding out about health insurance reform, here is a snippet from the Institute of Medicine:

"At the request of the Secretary of HHS, the IOM is undertaking a study that will make recommendations on the criteria and methods for determining and updating the essential health benefits package."

At first I misread this. At first I misunderstood that the Institute of Medicine was asked to define essential medical services. I am relieved to find out instead that IOM has been assigned to work on the design of insurance benefits.

Medicare and Cancer: Both Underwater

The first being metaphorically, of course:

"Want an appointment with kidney specialist Adam Weinstein of Easton, Md.? If you're a senior covered by Medicare, the wait is eight weeks ... Top-ranked primary care doctor Linda Yau is one of three physicians with the District's Foxhall Internists group who recently announced they will no longer be accepting Medicare patients."

So why is our Medicare health delivery system beginning to look like the MVNHS©?

Well, when you have a limited supply and a (virtually) limitless demand, systems tend to end up that way. And if you think it's bad now, well, "that's not even taking into account a long-postponed rate-setting method that is on track to slash Medicare's payment rates to doctors by 23 percent Dec. 1."

The so-called "Doc Fix" is due in a few days, unless it's postponed (again). Hey, it's only (our) money, right?

The good news is that, if seniors manage to survive Medicare, they may also live long enough to benefit from some wonderful treats from the sea:

"Cyanobacteria live in every ocean and on every continent in both salt and fresh water. One species causes a rash known as swimmer’s itch; another blooms in lakes and reservoirs, expelling a neurotoxin that can be fatal to humans."

Ooops, that wasn't the good news. This is:

"(A) family of cyanobacteria called Symploca emits a toxin that attacks tumors."

Apparently, and this is still in the initial testing phase, these little sea assassins can target bone and breast-cancer cells (among others), destroying them without harming healthy cells or tissues. Unfortunately, it could be another 10 years before it can be approved and manufactured.

Keep your fingers crossed.