Not Really Insurance: The Pre-Existing Condition Debate

May 6, 2017

By DAVID DRANOVE and CRAIG GARTHWAITE

The recent debate over the potential repeal and replacement of the ACA, with the current focus on coverage for preexisting conditions, has drawn a great deal of attention to the concept of health insurance. While our political leaders are constantly talking about it, few of them seem to understand the “insurance” component of health insurance. As a result, much of what they say about preexisting condition coverage is gibberish. We are here to set the record straight.

At its most basic level, insurance provides protection against the risk of unexpected financial losses. We focus on the term risk because if we were risk neutral (i.e., we were indifferent between sure things and actuarially equivalent gambles), then we would not value this protection. But nearly all of us are risk averse, meaning that we would rather not face having to dramatically reduce consumption of everything we enjoy in the event we are hit with an astronomical medical bill. Because we are risk averse, health insurance improves our collective well-being by helping us collectively smooth our consumption. Everyone who purchases insurance consumes somewhat less of everything else when healthy, but does not have to consume dramatically less when sick.

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Jimmy Kimmel Left Out Some Important Stuff About Obamacare

May 5, 2017

By BRIAN JOONDEPH, MD

Late-night comedian Jimmy Kimmel, in a recent opening monologue, spoke tearfully of his newborn son Billy, born with a serious congenital heart defect. Heart defects in newborns, while uncommon, occur in 1 in 100 births. The more serious ones, meaning those needing surgery in the first year, represent about a quarter of all congenital heart defects.

Jimmy’s son fell into the latter category, with Tetralogy of Fallot, bad plumbing in the heart, causing oxygen-poor blood to circulate out into the body without picking up a fresh supply of oxygen from the lungs. Hence the newborn baby turning blue.

I have firsthand experience with this, as my youngest son was born with the same heart defect. He needed surgery as an infant and then two additional open heart procedures before reaching adulthood. I have walked in Jimmy Kimmel’s shoes and understand exactly what he is feeling – terror, anguish, guilt, helplessness, and hopelessness.

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The Return of the Angry Granny State

Apr 26, 2017

By CHARLES SILVER

Texas should call itself The Granny State. That’s because it’s a nanny state in which the public officials who run the place have the values of a tea-totaling, Bible-thumping biddy who knows how God wants everyone to live and can’t resist telling them. No buying liquor on Sundays when people are supposed to be at church. No gambling ever. No whacky-weed for medicinal uses or recreation, even in the privacy of one’s home. No gay marriage, preferably no gays, and no transgender folk deciding which restrooms to use. And, of course, no sex, sex education, birth control, or abortions. Women should have sex only in marriage and then only to reproduce, and those who get pregnant must carry their babies to term, regardless of the consequences for themselves or anyone else.

These religion-inspired policies have served Texans poorly. The state’s maternal mortality rate nearly doubled in just two years after Texas cut its budget for family planning by two-thirds and eliminated funding for Planned Parenthood clinics. It’s now the worst in the developed world, not just in the US. Texas ranks 8^th from the bottom in the frequency of STDs and has the 5^th highest teen pregnancy rate too. Its 35 births per 1,000 girls aged 15-19 are nearly double the national average. Meanwhile, Colorado and other states have achieved miraculous reductions in teen pregnancy rates and abortion rates by providing young women with long-acting contraceptives, like implants and IUDs. If Texas is following God’s plan, then God’s plan is a bust.

Now Granny is once again sticking her nose where it doesn’t belong. Currently before the Texas legislature is Senate Bill 25, which would eliminate the wrongful birth cause of action that the Texas Supreme Court recognized four decades ago in Jacobs v. Theimer. The facts were as follows. While traveling, Dortha Jacobs became ill. Upon returning home, she consulted a physician, Dr. Louis Theimer, who discovered that she was newly pregnant. Fearing that the illness was rubella—also known as the German measles—Jacobs asked Dr. Theimer if there was reason for concern. Rubella can injure a gestating fetus severely. Dr. Theimer told her not to worry, but he did so without performing an available diagnostic test. In fact, the disease was rubella and the child “was born with defects of brain, speech, sight, hearing, kidneys, and urinary tract,” among others. The medical expenses were extraordinary.

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A Modest Health Care Economics Experiment to Fight Rising Costs

Apr 20, 2017

By HAYWARD ZWERLING, MD

Healthcare providers, medical institutions, local pharmacies and pharmaceutical companies generally set the price of their products/services well above the payment they expect to receive from all insurers. These healthcare vendors set their fee schedule at 150%, 200% or 1,000% of the maximum payment they expect to receive from their most generous payor.

Here in Massachusetts, when a healthcare product or service is consumed and the patient has health insurance, the vendor submits a bill to the insurance company who specifies the “allowed fee,” which is considerably less than the “billed fee,” and the vendor “writes off” the balance of the “billed fee” from their books.

For example, I recently had some blood tests done at Quest Diagnostics. Quest Diagnostics sent a bill to my insurance company for $660. The “allowed payment” was $110, so Quest wrote-off $550 and the “allowed payment” of $110 was divided between me and my insurance company.

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