Tag Archives: health insurance

Healthcare Reform Frustrations

In a plain-spoken way, Sarri Gilman on HeraldNet.com expresses many of my sentiments on the pace of healthcare. You can read her opinion piece here.

The Huffington Post reprints a depressing AP article today. The AP reports that the Senate Finance Committee has a plan to “exclude a requirement many congressional Democrats seek for large businesses to offer coverage to their workers. Nor would there be a provision for a government insurance option..” You can read the entire article here.

Now, Senator Max Baucus is the chairman of this committee. Could his efforts to drop these two key provisions have anything to do with special interest groups donating money to him?

The Washington Post reported recently that “Health-related companies and their employees gave Baucus’s political committees nearly $1.5 million in 2007 and 2008…” In late May, Baucus held a dinner to discuss “health-care legislation under consideration by his Senate Finance Committee.” In attendance were 20 healthcare industry representatives. To attend this dinner, a donation of “$10,000 or more to the Democratic Senatorial Campaign Committee” was required.

Moreover, the healthcare industry “gave nearly $170 million to federal lawmakers in 2007 and 2008…”

The Post’s article can be found here and you can judge for yourself how unbiased the Senator is in crafting this legislation.

Health Insurance: Part 1

At some point this year, we are likely to see meaningful efforts by Congress and the President to reform healthcare.

The discussions so far, though, focus on cost. But that is not “a change we can believe in.” I don’t think so anyway.

The radical question would be: what is the best way to structure and fund health care in America, for all Americans? The chief focus now shifts to best medicine and best practices and best utilization.

Unfortunately, as the discussions now focus on prices, some of the chief causes of inflated health care have the loudest voices. These are the insurance companies and the bureaucracy around heath care.

In recent discussions, the health insurance lobby has made some concessions and bargaining points. According to the NY Times, “The health insurance industry said…it was willing to end the practice of charging higher premiums to sick people if Congress adopted a comprehensive plan requiring all Americans to carry insurance.” But, “insurers wanted to retain the right to charge different premiums based on the age, place of residence and family size of subscribers.”

Further, “Insurers remain staunchly opposed to creation of a government-run health insurance plan.”

They propose, instead, “more aggressive regulation not just of their premiums, but also of their benefits, underwriting practices and other activities. Such strict regulation, they said, would make it unnecessary to create a new public insurance program offered through the federal government.”

Very nice of them to make such generous offers. Look closely though and it is clear that they are making no concessions and that the overall price to the nation would be the same if not higher than at present. The winner, not surprisingly, is the insurance industry.

First, if the insurance companies are billing all Americans, then their gross income is all the larger. They can spread the cost of insuring significantly ill persons among all of the people being insured. Since the number of insured persons is so great, the added expense per insured person of treating the severely ill is barely noticeable. What the insurance companies aren’t saying is that this formula allows them to maintain their profit margins. The insurers give up nothing.

Moreover, the insurance companies still want to be able to fudge the numbers by charging higher costs based now on age, place of residence, etcetera, instead of history of prior illness. Need more profit? Just increase the premium on single females living in urban areas who are over 45 years of age. Or what ever other demographic they can devise where they think the rate can be increased without too much outrage.

Finally, the insurance companies do not want the federal government to offer an insurance plan to the citizens. Instead, they say “regulate us more.” Well, who is going to pay for the added layers of bureaucracy that will oversee all the various insurance companies in America and the lawsuits to get the insurance companies to comply? That would have to be the taxpayer. How does that save us any money?

Have you ever tried to question an insurance company about a denied payment or procedure? An onion has fewer layers and its center is easier to reach than getting through the insurance company’s decision-making hierarchy. They are designed this way to make it cost more for the provider or the insured to pursue the claim or the procedure than to just write it off.

Remember the lawsuit in California against the insurance companies who dropped people after they got ill? It took from January of 2004 to January of 2009 to address the matter. Along the way, lots of state money was spent pursuing the charges. The insurance companies also spent large sums of money defending their position. Money that was supposed to be providing coverage of medical expenses. Let’s not forget, that if you are critically ill, waiting five years for a final decision is no help at all. You are likely to be dead at that point.

A final note for this post. According to the Physicians for A National Health Program, “because private insurance bureaucracy and paperwork consume one-third (31 percent) of every health care dollar. Streamlining payment through a single nonprofit payer would save more than $350 billion per year…” And this bureaucracy diverts caregivers’ attention away from the patient and into the morass of insurance companies. Before managed care, social workers in hospitals had time for individual, group, family therapy and arranging quality aftercare for patients. Now, social workers spend the bulk of their time dealing with managed care personnel at your insurance company.

How the issue gets phrased, then, is almost as important as raising the issue at all. If you want cheap health insurance, the insurance companies will be happy to arrange that for you. Now, if you want the best system of healthcare, they are not so quick with a response, as we will see in later posts.

Notes on Lucre and Healthcare

Two recent articles show the influence of healthcare related industries on the provision of treatment.

The first is obviously scandalous. Scientific American reports on Dr. Scott Reuben. He evidently traded his professional integrity for rewards from the big pharmaceutical companies. As Scientific American puts it: “Anesthesiologist Faked Data in 21 Studies.” The result was “the sale of billions of dollars worth of the potentially dangerous drugs known as COX2 inhibitors, Pfizer’s Celebrex (celecoxib) and Merck’s Vioxx (rofecoxib), for applications whose therapeutic benefits are now in question.”

There are many unanswered questions in this story. One is how much Dr. Reuben was paid by the pharmaceutical companies. “Pfizer spokesperson Sally Beatty…was unable to provide information on the dollar amount of the grants.” And Baystate, the hospital where Reuben worked and carried out the studies, says that it “has no records of those payments and says that the research funds could have been paid directly to Reuben. Such an arrangement would be ‘highly unusual…'”

Another question is why it took 12 years for the hospital to perform a “‘routine audit’ [that] revealed Reuben’s widespread data fabrication?”

Still another question is the role of Pfizer in reviewing and vetting the studies. The same question holds for the peer-reviewed journals in which Reuben’s articles were published.

Reflect, if you will, on the “billions of dollars” that was needlessly, erroneously spent on those medications in the past 12 years.

This episode of malfeasance comes on the heels of the Dr. Fred Goodwin, formerly of The Infinite Mind which aired on NPR. (For those interested, you can read a rather rambling disclaimer from Alicia C. Shepard, the NPR Ombudsman.) Slate.com broke the story after Goodwin and three other physicians touted the benefits of Prozac and minimized the risk of some of the potential side-effects, including suicide, during an episode.

However, as Slate points out, “All four of the experts on the show, including Goodwin, have financial ties to the makers of antidepressants. Also unmentioned were the “unrestricted grants” that The Infinite Mind has received from drug makers, including Eli Lilly, the manufacturer of the antidepressant Prozac.” The incident caused something of a tempest and Goodwin is no longer host of The Infinite Mind.

Clearly, you want your doctor to prescribe only medications that are helpful and where you are clearly advised of the actual risks, benefits and side-effects. That cannot happen when money and quests for fame taint the process.

On another front, the scandal is less obvious but nonetheless still present. The New York Times published a story on March 15 about the costs of the health insurance programs in Massachusetts. They note that the costs of healthcare in Massachusetts are rising faster than the national average. Moreover, the healthcare program is “threatened first by rapid early enrollment in its new subsidized insurance program and now by a withering economy…”

A commission on payment reform was recently established. The Times reports that “The commission is looking at various options, but all would do away with the fee-for-service system, which provides perverse incentives by paying physicians and hospitals for each patient visit. The changes under consideration include reimbursing for episodes of care rather than individual visits and bundling payments to groups of providers who would together take responsibility for a patient’s health.

Blue Cross and Blue Shield of Massachusetts, the state’s largest insurer, recently devised an innovative model that pays doctors a flat fee per patient, with adjustments for age, gender and health status, and then adds bonus payments for high standards of care.”

Take a moment and read those last two paragraphs a second time, if you will.

The “solution” proposed is a capitation system that offers financial rewards for the briefest episode of care. Providers would not be reimbursed or would be otherwise penalized when dealing with patients who have treatment resistant or refractory conditions or disorders which require more treatment than the insurance companies’ algorithms suggest.

I am all for quick, efficient treatment. But I have seen the effects of capitation first hand. They are not good. And contrary to the Times opinion, it is not innovative. Nor do I consider it “perverse,” as the Times seems to think, that a provider should be paid for services rendered.

Do you really want your provider to be thinking in the back of his/her mind how they are going to explain to an administrator why they are scheduling another appointment for you, a statistical “outlier,” when the hospital, agency or practice is not going to be paid for that session?

Or do you want your practitioner to be first and foremost considering what is in your best interest?

Let’s recall Deep Throat’s advice back in the days of Nixon, “Follow the money.”

In none of the recent debates on healthcare have I heard discussions of limiting the salaries of health insurance executives, pharmaceutical employees or hospital administrators.

Yet I do relentlessly hear that doctors and direct healthcare providers make too much money. So let’s take a closer look.

First, as a point of reference, what is the total compensation of one of the most consistently profitable CEO’s in the country?  According to salary.com, Warren Buffet, the Oracle of Omaha, received $175,000 in 2008.

With that in mind, consider that, according to the Providence Journal, Lifespan President George Vecchione “made $2.9 million in 2006.”

Then there is Stephen J. Hemsley, CEO of United Healthgroup, who, according to salary.com received a total compensation in 2008 of $13,164,529.

Looking at the pharmaceutical industry, salary.com informs us that Henry A. McKinnell of Pfizer received a total compensation of $19,418,446.

Now, compare that to the average salary of a psychiatrist, according to allied-physicians.com,: $169,000.

The average for social workers in 2006, according to innovatorsguide.org,: $37,480.

A registered nurse with a bachelor’s degree working in a large agency or hospital in Rhode Island, according to salary.com, earns an average of $59,900 yearly.

And for a certified nurse’s assistant in the Northeast, salary.com reveals the yearly income of $25,700.

I leave it to the reader to determine where there is room for salary reviews and fiscal oversight and legislative mandates to help cut back on the high costs of healthcare while maintaining the quality of care.