Tuesday LinkFest

First up, FoIB Sam B tips us to the story at the McPaper which reports that "little of the medicine they receive is actually backed by evidence."

Well, d'unh! How about a little Tort Reform to rein that in?

Oh, and in a nice touch, the reporterette includes the long-debunked (and silly) canard that the "USA ranks low among industrialized countries in life expectancy, at number 50."

Next up, our friend Holly R has some good news for those underpaid docs:

"WellPoint [has] announced a plan to pay primary care doctors as much as 10 percent more.

The idea is to reduce the overall cost of health care, by increasing the number of primary care physicians."

Now about that Medicare DocFix...

Lastly, ever wonder why Medicare drug costs seem to fluctuate from state to state? Well wonder no more. According to a new University of Pittsburgh (PA) study (just published in The New England Journal of Medicine), variations "across the United States [are] largely due to the use of more expensive brand-name drugs and not because of the amount of drugs prescribed"

Who knew?

[Pitt Study Hat Tip: Allison Schlesinger]

ADDENDUM [Offered without comment]:

"64-Year-Old Can of Lard Still Edible Today ... a can of lard that Hans Feldmeier, an 87-year-old man from Germany, has kept for the past 64 years ... Feldmeier decided to save the lard tin for emergencies and he has held onto it ever since."

Paula Deen says "Hallelujah!"

Tooting our own horn

Recently, I was offered the opportunity to tout InsureBlog to online college students considering a career in the exciting field of insurance. My first reaction was "what, are they nuts?!" But apparently there are still young people interested in this field, for which I am truly grateful.

And so I shared my thoughts on insurance and blogging, and these have been included (along with those from a handful of other sites) in this post written by Jim Varnon.

Thanks, Jim!

Maybe it’s because you are a business…

I have come across another article about how physicians are losing money. The usual culprits are blamed, “Among the factors they cite for their shrinking revenue: falling insurance reimbursements, changing regulations and rising business, medical liability and drug costs.” While all these factors contributed to the situation, the blame must lie at the feet of the physicians. I have worked with doctors for over 10 years, both as a provider and as an administrator and I am constantly surprised at their inability to grasp the concept that medicine is a business. In a business, if your revenues continue to drop year after year and expenses continue to grow, then maybe you need a new business model. The article does discuss concierge medicine; however, that is a limited business model that does not deal with the situation at hand.

“From 2000 to 2011, Small Business Administration loans to physicians' offices, including private practice doctors and mental health specialists, ballooned to $675 million from less than $60 million.”

It is interesting that the article cites the growth of Small Business Loans to physicians began about the time that Medicare froze the Fee Schedule, effectively keeping a physician’s reimbursement at pre-millennial dollars. When a business is suddenly facing a reduction of revenue, for whatever reason, the successful business changes to meet the new reality, businesses that do not change fail. Doctor’s did not change to meet the new reality of medicine and as a result are failing.

The successful physicians are those that realize that they do not have the business acumen needed to keep up with the changing landscape. They will actively seek professionals in the healthcare business field to assist them. A successful physician, either through consulting or direct hire, is going to work with professionals to develop and implement the business changes needed for success. They will put the needed funds into technology, staff, marketing, billing, and administration. They will diversify their services, have office hours when patients want to be seen, and offer products for purchase. They will recognize that right now medicine is a volume business; the more patients that are seen in a day, the more money that comes into the office. Finally, doctors will recognize that medicine is no longer the cash cow it once was and work with business professionals to keep their medical practice viable so they can do what they went to school to do, practice medicine. In other words, they will begin to act like other successful businesses and businessmen.

Romantic Grand Rounds

Dr John's Valentine's Day-themed collection of medblog posts is bright, cheerful and full of heart-healthy info.

Wherein Free gets Very, Very Expensive

Frequent commenter Nate Ogden is a TPA (Third Party Administrator) in Northeast Ohio. In that role, he sees exactly what medical care costs, because his firm arranges payment for it. And he has some very disturbing information about ObamneyCare©'s most recent paean to Big Pharma, the one that's been making headlines the past few days:

As Henry mentioned, I'm a Third Party Administrator, which means that I help employers with "self-funded" plans track and pay for health insurance benefits. Generally, we pay claims based on the agreement we have with the employer (client); when we go over a pre-arranged maximum, we turn to our reinsurer. Think of it as a really high deductible plan.

The key is that we have to know what things cost, and we have to know what's supposed to be covered. A lot of readers may not be aware that some 60% of all people covered by group insurance are in self funded plans, and that 85% (or more) of large employers, colleges and hospitals are self funded. Since the "insurer" in this context is actually the employer, not an insurance company:

1. They won't have access to "free" birth control
2. These organizations will be forced to pay for birth control

Here's why: When employers pay claims under a self funded plan, the majority of the time that is coming right out of the employer's general account. So while it may seem like it's "free" to the employees (just like it seems like it's "free" to folks on fully insured plans), it's really coming out of their raises, bonuses, even salary.

Which brings up the first big question, one that hasn't seen much (if any) press: What birth control is provided for free? Can we cover the generic 100%, or if their doctor prescribes something new at $500 per month are we stuck covering that 100% as well? Remember, it's not the insurance company getting stuck with the bill here.

We have seen this in the past when a med went from OTC (over-the-counter) or Compound to prescribed-only: cost skyrockets. And this is the other key point currently being drowned out by other issues:

Knowing that all insurers are required by law to pay 100%, Obama just eliminated all price pressure. No matter what the charge is, we are required to pay it. Why wouldn't manufacturers jack up the price of all birth control? After all, "[w]orkplace health plans will have to cover all forms of contraception approved by the Food and Drug Administration, ranging from the pill to implantable devices to sterilization."

Although much (most?) of the emphasis has been on birth control pills, IUDs are also quite popular. So how would covering them at 100% work out?

There are currently no generic versions of these devices available, and:

"Due to a recent price increase by the manufacturer, UMP has increased the allowed amount for the Mirena IUD from $515.85 to $742.42"

So how does an insurer, required by law to cover a single source Rx or device, prevent the manufacturer from increasing price?

This seems like a great opportunity for providers that implant the IUDs to ding insurance plans (well, those who pay for them, anyway): 100% benefit, no member liability. Why would doctors not suggest it and why would we expect members not to follow their guidance? At $9 a month for "the pill [ed: aye, but for how long will that price hold?], and up to $2000 for some IUDs and insertion? How does an insurer -- required by law to cover a single source Rx or device -- prevent the manufacturer from increasing price?

And when (not "if") they do jack up the price, what happens when insurers are required to pay 100%?

Doesn't this put the lie to all the talk of affordability and accessibility?

Thanks, Nate, for sharing your expertise and insights. I'd like to emphasize two key points you've made, because they really lie at the heart of this "debate:"

First, no health care is "free;" that is, it is paid for either by the patient or his insurance (often a combination of both). So when the President unilaterally says that "birth control" must be free, he means that either its manufacturers must charge zero for it, or that the cost must be passed along to other insureds (and, of course, the taxpayer).

The second issue is that, since there are no boundaries, there are no limits on how much the manufacturers can charge. Of course, there will be claims of "gouging," but who will make them? The consumer? No, because she has no skin in that game: it's "free" to her. By the government? Why? It is, after all, the government that has mandated this outcome.

Which brings us to perhaps the most important question of all: Whatever happened to personal responsibility?

It ain't over - til it's over

And it ain't over:



Not yet, anyway.

Data, Data, Who owns the Data?

While we've occasionally blogged on medical tech, it's usually regarding electronic records keeping issues. While this is important, it's really only part of the equation: many folks have various gizmos implanted in their bodies, from pace-makers to prosthetics, even defibrillators, which are the subject of this post.

These little wonders represent a true feat of medical engineering: technically known as implantable cardioverter defibrillators (ICDs) they're "placed in the chest or abdomen. Doctors use the device to help treat irregular heartbeats called arrhythmias ... An ICD uses electrical pulses or shocks to help control life-threatening arrhythmias."

And they do something else, as well: they collect data about one's cardio system and transmit that information back to the device's manufacturer.

And therein lies the rub:

"Hugo Campos has [an ICD] buried in his chest to help keep him alive. But he has no idea what it says about his faulty heart."

All the pertinent data is collected and then sent back to the manufacturer, which then shares some of it with Hugo's doc.

But what if Mr Campos wants to see that data for himself?

Tough beans. Although Federal law says that patients are supposed to be given ready access to their health records, there's a "loophole" of sorts:

"[I]mplanted defibrillator data is different. The information stays with manufacturers, who use it to monitor and improve their products."

In fairness, it's unclear how useful this data would be to a layman. For one thing, it's apparently transmitted in a proprietary format. For another, raw data may or may not be meaningful to someone without the requisite knowledge (eg med school) to interpret it. On the other hand, Mr C is serious about this, earning a "certificate from the Arrhythmia Technologies Institute."

Ideally, making this information more easily accessible (and meaningful) may not require government intervention. At least one ICD manufacturer "is looking into ways to provide patients with meaningful and actionable information with regard to their implantable devices."

It seems to me that enabling patients to more fully understand what's going on inside their bodies is simply one more tool in the consumer empowerment tool box. And that might be a very good thing.

Long Term Care News

As we've mentioned, Ohio requires agents who want to work the Long Term Care insurance (LTCi) market to take biennial "refresher courses" (at 4 hours a pop!) in order to stay up to speed on these products. So yesterday I attended such a class, again provided by my colleague Ray Copenheaver, an acknowledged expert in the field.

I must admit to a bit of trepidation: after all, how much could possibly have changed so much in the past two years to justify 4 long hours of information overload?

Turns out, quite a bit.

We already knew about the recent spate of rate increases, and the exits of several carriers from the market, but that was just the tip of the iceberg. For example, it's (relatively) common knowledge that Unum bailed on the individual marketplace a few years ago, but did you know that they also announced (just a couple of days ago!) that they're also pulling out of the group LTCi business? I sure didn't.

There are also several new developments on the legislative front, such as the PPA (Pension Protection Act). This little beauty, which became the law of the land in 2010, has spawned a raft of new LTCi-enabled annuities, offering a potentially attractive alternative to folks who may not qualify for "regular" long term care plans.

And I learned something new about the Partnership Program. As we've previously reported, Partnership-compliant LTCi policies let one take chunks of assets "off the Medicaid table," protecting them from the dreaded "spend down." But it turns out that that's only half the story: folks who avail themselves of these plans may* also inoculate their estates from Medicaid Recovery efforts. This is a very significant bonus, potentially saving those "left behind" from losing the family homestead.

[*This is not entirely clear - I spent a great deal of time this morning with the Ohio DOI, who could neither conform nor refute this. I'll be speaking with the Medicaid folks shortly to see what they have to say.]

All in all, a very productive 4 hours, indeed.

Irony, Thy Name is ObamneyCare©

You can't make this stuff up:

"The Medicaid Health Plans of American (MHPA) ... says letting the government apply the "health insurer fee" provisions in [ObamneyCare©] ... would, in effect, amount to taxing Medicaid plans to help pay for expansion of Medicaid plans." [emphasis added]

Bet MHPA wishes that Congress had read the plan before they passed it...

Cavalcade of Risk #150: Sesquicentennial edition

My Wealth Builder hosts this week's round-up of risky posts. Do check it out.

And BTW: We're scheduling Spring Cavs - just drop us a line to claim yours.

Reflections on a Broken Window

In his groundbreaking analysis, Frédéric Bastiat postulated his Fallacy of the Broken Window. Simply put, it means that there is always an opportunity cost. In his classic example, a window is broken, which some people think is a wonderful thing because it means paid work for the local glazier. The reality, of course, is that the shop owner whose window now lies in shards had planned to buy (for example) eggs from a local farmer, or a new hat from the local milliner; these gentleman are now out of a sale.

Our friend Michael Cannon, Director of Health Policy Studies for the Cato Institute, has penned a short but powerful analysis of his own. While not directly quoting Monsieur Bastiat, the comparison is unavoidable:

"Unfortunately, the money and time this genius spent vandalizing other people’s property are resources that could have gone toward, say, buying him health insurance. Or providing a flu shot to a senior citizen."

Indeed.

HHS Sec'y Shecantbeserious: Hey, it ain't MY money!

One of the stated rationales for ObamneyCare© was that putting the nation's healthcare delivery and financing systems under the control of the Fed's would lead to increased efficiency and cost savings.

So how's that workin' out?

Turns out, not so well:

"In a letter sent Monday ... ask Secretary Kathleen Sebelius [sic] to tighten oversight of taxpayer dollars that flow in and out of the agency, including a $500 million difference between its internal accounting and the Treasury's records, and an $866 million difference in divisional budget reports."

Not to mention billions of dollars in additional discrepancies involving retiree drug plans and Medicare shortfalls.

But of course, accountability and transparency are for "the little people," not Ms Shecantbeserious.

Breaking: Forced Medicare chalks up a win

It's been almost a year since we last had any news on the forced Medicare story. Unfortunately for the good guys, the judge in the case has ruled against them:

"A federal appeals court ruled Tuesday that seniors who receive Social Security cannot reject their legal right to Medicare benefits"

We have a longstanding relationship with the lead attorney on the case, and hope to have his take on this shortly.

ADDENDUM: It occurs to me that this is completely of a piece with a regime which believes that it can force its citizens to buy a product they neither want nor need.

Lipitor Update

In email just received from Anthem:

"Lipitor will no longer be covered, effective April 1"

Since atorvastatin, the new generic version of this venerable cholesterol fighter, is now up and running, Anthem's dropping Lipitor from its covered med list. And according to the email, this means both group and individual business.

Something to consider if you have an HSA-compliant high deductible plan: as we've pointed out here at IB, non-covered items are ineligible for network re-pricing (ie "discounting"); this means you'll pay full retail for the med if you stick with the brand name. Adding insult to injury, since it's a non-network expense, it probably won't count towards your in-network annual deductible, either.

A double-whammy. Ouch.

Ethical Conundrum: Medicaid Planning

Received an email this morning with this provocative subject line:

"Medicaid planning: Should your advice be best for your clients or society at large?"

It's a legitimate question, and one that we haven't previously explored. Roccy DeFrancesco's email included a link to his more fleshed out version. In a nutshell, the question is whether or not it's ethical to find and use "loopholes" to take one's assets off the table when calculating Medicaid spend-down strategies.

He starts with this premise:

"The duty of any advisor is to do what’s in the client’s best interest, and any personal biases about the advice given needs to be left at home."

Along the way, he poses some pretty tough questions, including whether or not it's immoral to advise clients on proper Medicaid planning. The bottom line is that there's an inherent conflict between protecting one's assets while simultaneously pleading poverty.

It's not an easy call, and it's exacerbated by something which Mr DeFrancesco appears to have missed: Long Term Care Partnership Plans. After all, the Partnership Program is really just the government saying "hey, buy some insurance and you can hide protect some of your assets."

Is this ethical?

Grand Rounds: News Junkie edition

Self-described news junkie Dr Jennifer Dyer hosts this week's collection of medblog posts, with a special emphasis on politics.

MVNHS© Puts Seniors in the Crosshairs

How's this for a headline:

"[MVNHS©] 'in peril' if health reforms fail"

Now, one might be forgiven for wondering exactly what kinds of "reforms" British docs might be considering. After all, they don't have to worry about the "Doc Fix,"or being put out of business.

Their issue is that the Much Vaunted National Health Service© pays scant heed to the needs of actual patients, demanding greater "responsibility for commissioning health services." In other words, they're facing exactly the sort of problem about which Bob wrote last month:

"The doctor does not get to decide which services are best for the patient, nor are they allowed to set a price for their time."

Which brings us once again to that eternal question: why would we want to model our health care system on the MVNHS©, as ObamneyCare© obviously does?

ObamneyCare© Perspective

From our friend Michael Cannon at Cato:

"The real tragedy of the Komen/Planned Parenthood flapdoodle is that it overshadowed news that the U.S. House of Representatives overwhelmingly voted to repeal ... the ironically named CLASS Act."

And mind you, this really is a victory: the repeal passed overwhelmingly with a bipartisan majority.

ADDENDUM: I should point out that the CLASS(less) Act had any number of deal-killing problems, not the least of which was that the plans would not have been Partnership Compliant.

So, good riddance.

Unfortunate missed opportunity [UPDATED]

Ever heard of an "Interstate Compact?" Me either, but they're (apparently) for real:

"A voluntary arrangement between two or more states that is designed to solve their common problems and that becomes part of the laws of each state."

There are some hoops through which to jump, but they're authorized under Article I, Section 10, Clause 3, of the Constitution.

That's very interesting, Henry, but why are you telling us this?

Glad you asked:



The Ohio Health Care Compact‏ folks went to a great deal of trouble to produce that video (and rather nicely done, too), and to set up a reasonably navigable website, complete with a contact form.

Which, apparently, no one actually monitors, because we availed ourselves of it earlier this week, expressing interest and support, and have yet to receive any reply.

'Tis a shame, really.

UPDATE: We've just heard from the OHCC folks, and have asked to interview one of the honchos. We'll keep you posted...

The D'unh and the Elephant

FoIB Holly R sends us two seemingly unrelated links which, upon closer inspection, are actually inextricably intertwined.

The D'unh:

"The Congressional Budget Office (CBO) released its Budget and Economic Outlook for years 2012 to 2022 yesterday ... as a result of increasing federal spending on health care, which will more than double between 2012 and 2022."

And the Elephant:

"Federal Reserve Chairman Ben Bernanke warned Thursday that rising health care costs must be curbed ... The elephant in the room is really health care costs."

Now let's try a little exercise: what major piece of recent legislation could possibly have been passed that would cause health care spending to increase so dramatically?

See, it's not so difficult.