Keep One Hand on Your Wallet

With President Obama set to speak before congress tonight on health care, it seemed an opportune time to look back over some of the key players and the money issues they bring to the health care table.

Insurers – Insuring for the Bottom Line:

Back in June, the House subcommittee on Energy and Commerce held meetings on Rescission. Don Hamm, president and CEO of Assurant Health had this to say in his prepared testimony:

"…there are times when we discover that an applicant did not provide complete or accurate medical information when we underwrote the risk. …

The decision to rescind is made only in cases where the undisclosed information would have made a material difference to the underwriting decision based on our guidelines. …

Rescission is rare. It affects less than one-half of one percent of people we cover. Yet, it is one of many protections supporting the affordability and viability of individual health insurance in the United States under our current system."

600px-Money_and_pills_in_three_colorsWhat could sound more reasonable? Insurance companies are for-profit entities. They are in business to make money. Selling insurance is just how they do it.

And yes, rescission is purely about business – the business of limiting losses and increasing profits.

Insurance companies first make their money when people pay in, so the more the merrier. As long as you are willing to pay and you will not yet cost them money, they will happily sell you coverage and collect your money. And they will consider you a great customer, regardless of the accuracy of you application and medical history, right up to the time it starts to look like your health (or lack there of) may actually require them to pay out money. Then, they will want out. And then, that oh so rare rescission percentage doesn’t look so small.

According to Health and Human Services research based on 2002 data

Half of the population spends little or nothing on health care, while 5 percent of the population spends almost half of the total amount.(2) In 2002, the 5 percent of the U.S. community (civilian noninstitutionalized) population that spent the most on health care accounted for 49 percent of overall U.S. health care spending (Chart 1, 40 KB). Among this group, annual medical expenses (exclusive of health insurance premiums) equaled or exceeded $11,487 per person.

In contrast, the 50 percent of the population with the lowest expenses accounted for only 3 percent of overall U.S. medical spending, with annual medical spending below $664 per person. Thus, those in the top 5 percent spent, on average, more than 17 times as much per person as those in the bottom 50 percent of spenders.(2)

So for all the finger pointing at the lack of complete and accurate information on applications, the insurance companies are not truly interested in solving “the problem”. Because it works beautifully for them. Having an escape clause that they can activate at any time is one of the best features of the system.

And don’t forget, rescission is only one of several tactics including dumping group plans, denying for pre-existing conditions and consolidation that are used by insurance companies to ensure their profits regardless of what it does to the physical, emotional or economic health and well being of the american people.

For an eye opening, must see insider view of the insurance industry, don’t miss thisBill Moyers’ interview with Wendell Potter, the former head of Public Relations for CIGNA with 20 years experience in the industry and now a whistleblower.

Health Care – Profiting Off of Sick People:

How well can a health care system function when its legal obligation is to maximize profits, its incentives are to increase the number of patients procedures, and its processes focus on minimizing and standardizing individual patient interaction? When can the intended goal of caring for the patient be achived? And how much benefit do patients actually gain?

Financial journalist, Maggie Mahar’s spent years researching the health care industry and talking to doctors for her book MONEY-DRIVEN MEDICINE: THE REAL REASON HEALTH CARE COSTS SO MUCH. Here are a few transcript excerpts from a Bill Moyers Journal segment on her book.

MAGGIE MAHAR: A physician takes an oath to put his patient’s interests ahead of his own. A corporation is legally bound to put its shareholders’ interests first. And this is part of the inherent conflict between health care as a business, part of our economy, and health care as a public good and part of our society. …

DR. DONALD BERWICK: … Just as long as it’s a human enterprise, yeah, at some level, someone’s got to make some money or why would… they won’t do it. So we’re going to have profit even if you call it a non-profit system. What are the incentives? Right now the incentives in America are if you want profit, do more. You make money by doing stuff and there’s no limit. So we do and do and do and we get this oversupply, this excess activity because that’s how people, hospitals, doctors make money.

And with more and more hospitals and medical organizations being run by CEO’s with MBA, you can imagine which side of the patient vs profit conflict comes out ahead.

MAGGIE MAHAR: What’s interesting about the fee schedule is that it’s all about what it costs the doctor to produce the service in terms of time and education. Never does anyone ask, “How much benefit is there for the patient?” This might be a service that, on average, lengthens the patient’s life by 5 months, as opposed to having your diabetes controlled for 30 years, which means that you live a lot longer and you never have an amputation. And yet we would pay much more for that technically very skilled procedure that gave you another couple of months, because we look at it entirely in terms of the work on the part of the doctor rather than the benefit to the patient.

DR. LARRY CHURCHILL: It shouldn’t be any surprise that there is a huge disconnect between the amount of dollars that actually poured into health care and the health indicators of a population because this system was not designed to serve this end. That’s a fundamental realization that we need to come to. And until we do I think, you know, we’ll still be trying to tinker with the market in some kind of funny way. Just a little tweak or adjustment to make it work better, but it was never designed, actually, to meet health care needs.

And remember, these are doctors talking from inside the system.

Government – Reforming for Election Dollars.

In Sick and Wrong, Matt Taibbi of Rolling Stone wrote a devastating and detailed, must read indictment of the health care reform taking place amid political maneuverings, public posturing and private deal making. If you have some how managed not to become thoroughly disgusted with the actions of our government so far and still believe meaningful reform is still a possibility, beware this article is guaranteed to turn the tide on the still hopeful.

"…The bad news is our failed health care system won’t get fixed, because it exists entirely within the confines of yet another failed system: the political entity known as the United States of America.

Just as we have a medical system that is not really designed to care for the sick, we have a government that is not equipped to fix actual crises. What our government is good at is something else entirely: effecting the appearance of action, while leaving the actual reform behind in a diabolical labyrinth of ingenious legislative maneuvers. …

It’s a situation that one would have thought would be sobering enough to snap Congress into real action for once. Instead, they did the exact opposite, doubling down on the same-old, same-old and laboring day and night in the halls of the Capitol to deliver us a tour de force of old thinking and legislative trickery, as if that’s what we really wanted. Almost every single one of the main players — from House Speaker Nancy Pelosi to Blue Dog turncoat Max Baucus — found some unforeseeable, unique-to-them way to fuck this thing up. Even Ted Kennedy, for whom successful health care reform was to be the great vindicating achievement of his career, and Barack Obama, whose entire presidency will likely be judged by this bill, managed to come up small when the lights came on.

We might look back on this summer someday and think of it as the moment when our government lost us for good. It was that bad."

So how bad is bad?   Taibbi:

"To recap, here’s what ended up happening with health care. First, they gave away single-payer before a single gavel had fallen, apparently as a bargaining chip to the very insurers mostly responsible for creating the crisis in the first place. Then they watered down the public option so as to make it almost meaningless, while simultaneously beefing up the individual mandate, which would force millions of people now uninsured to buy a product that is no longer certain to be either cheaper or more likely to prevent them from going bankrupt."

So how confident should we be that our government will finally give the American people affordable, quality health care?  Taibbi:

By the time all the various bills are combined, health care will be a baby not split in half but in fourths and eighths and fractions of eighths. It’s what happens when a government accustomed to dealing on the level of perception tries to take on a profound emergency that exists in reality. No matter how hard Congress may try, though, it simply is not possible to paper over a crisis this vast.

Ah, not much.

Taxpayers/Patients – Paying for Insurance, Health Care and Government Malpractice

a new [Aug. 15] Rasmussen Reports national telephone survey finds that most voters (54%) say no health care reform passed by Congress this year would be the better option.

This does not mean that most voters are opposed to health care reform. But it does highlight the level of concern about the specific proposals that Congressional Democrats have approved in a series of Committees.

So where does all of this reform leave the american taxpaying health care user? Somewhere between a rock of expensive show reform and a hard place of expensive no reform.

From the beginning of the debate, voters have indicated support for the concept of health care reform and for some of the specific ideas that have been suggested. However, they are skeptical about what has been presented thus far in Congress. One reason is skepticism about Congress itself. By a two-to-one margin, voters believe that no matter how bad things are Congress could always make it worse.

Real reform? It is only an American dream. Unless taxpayers revolt, we will be paying MORE for the same dysfunctional health care system because profits are greedy things. They always need more dollars.

So my advice — as you listen to President Obama, keep one hand on your wallet.


[also posted at No Quarter]


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