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POLICY: Ignagni, AHIP, and the pesky fact checker that I am…

The NY Times never called so I guess they’re never going to publish my letter about Karen Ignagni, the head of AHIP, in response to her letter the other day to the Times about Krugman’s column. I referred to it in my post on Friday. So what did she say and why was I so miffed?

Well let’s just say that if I had made so many factual mistakes in an essay in the third grade I’d still be standing in the corner wearing the pointy white hat with the big D on it. Here’s her letter with my comments cut into it:

In making a case for a one-size-fits-all health care system, Paul Krugman ("A Private Obsession," column, April 29) ignores the private sector’s progress in adding value to our health care system and stretching consumers’ health care dollars.

It is of course a joke to suggest that Krugman’s calling for a one size fits all system–which is code for government-provided (socialized) medicine. He explicitly criticized the UK system for being that, even while acknowledging that it was better for the poorer Brit than ours was for the poorer American  The vast majority of single payer systems (including the UK!) have a safety valve private care delivery sector, and in some of them (e.g. France, Germany, Japan) it’s much bigger than the government-run system. And by the way, some data on our government-run system, you know the one that’s good enough to our brave service men and women, suggests that it’s pretty damn good compared to private HMOs. But let’s ignore that and focus on the other end of the sentence, the part about how the "private sector is stretching consumers health care dollars".  OK, so in 1997-8 or thereabouts AAHP (Ignagni’s then employer, and forerunner of AHIP) put out a press release extolling a brilliant in-house study claiming that managed care plans had saved the economy billions of dollars in comparison to what people would have spent on health care had the rate of premium increases in the mid-1990s been the same as it was in the late 1980s–when they were going up three times the rate of inflation. That was such a crappy piece of "research" that I wrote a special article for my corporate clients explaining why, and suggesting that they never allow this kind of stuff to get out with their name attached to it. Of course we never saw the corresponding article published in 2004 or 2005 when those same health plans which had supposedly been so great at taming health care inflation completely capitulated, and the "consumer" saw their prices going through the roof. I suspect their researchers are still working on it. But it’s good to know that, for Ignagni, apparently the last 5-6 years of double digit health inflation has seen the private sector "adding value"! I guess if you’re a senior exec at  health plan, it does seem that value has indeed been added — mostly to your bank account of course. But there’s more:

During the 1990’s, Americans decisively rejected a single-payer system. They were concerned about the rationing of care, endless delays and lack of access to state-of-the-art procedures experienced in countries with government-run systems. That’s why residents of these nations go to great lengths to gain access to American health care, and why their leaders are reaching out for disease management, care coordination and other private-sector initiatives.

Next we come to the most blatant lie in the whole brief letter. Apparently Americans rejected single-payer in the 1990s. This is complete rubbish and Ignagni knows it. Ignagni claims that Americans were offered a single payer proposal in the 1990s. They were not — the Clinton plan explicitly kept a role for large private health plans. The political gambit of the Clinton’s was to ensure that they didn’t have total enmity from the private health plan sector. They were sufficiently successful that several members of the AAHP — the "large insurer" association which Ignagni then headed — initially supported the Clinton plan. Did she forget?  Well maybe selective amnesia has reared its head, as the HIAA (the small insurer association that merged with AAHP to form AHIP a few years back) was of course violently opposed to the Clinton plan. HIAA was opposed because the plan would have put most Americans into large purchasing groups and would have effectively banned risk-shifting and medical underwriting — the only way small (and many large) plans make any money.  It was HIAA that came up with the "Harry and Louise" ads which sowed FUD amongst wavering Democratic politicians with an astro-turf campaign run by PR agency Porter Novelli. But the rejection of the Clinton plan was caused by a bunch of factors, mostly connected to the fast improving economy and the  scandal mess the Clintons were getting themselves into over Whitewater, Travel-gate, Vince Foster, and Bob Dole refusing to let the moderate Republicans meet with Hillary about health care. Single payer had precious little to do with it, even if many Americans had a clue what it meant, which most didn’t (and still don’t).

And of course the issue about foreigners (i.e. Canadians) rushing down here for health are has been conclusively proved to be complete rubbish by the UBC/Michigan team that used actual data and actual research to look into it, and then published it in the leading academic journal in health policy — an approach that AHIP hasn’t exactly been known to much concern itself with. Meanwhile Ignagni continues:

Mr. Krugman’s government-versus-private juxtaposition minimizes the complexities of reforming health care and overlooks the vibrant public-private partnerships that millions of Americans count on. For example, Medicare and Medicaid patients who opt for private-sector plans are getting better care at lower costs than their counterparts in the government-only side of the program.

Perhaps Ms Ignagni doesn’t hold much truck with those Canadians and their biased use of data.  However, there’s a minor research organization called the General Accounting Office attached to a place called the US Congress that AHIP may have passing familiarity with, so perhaps we should introduce some of their research at this point. The GAO has twice in the past decade looked into the subject of the "Medicare and Medicaid patients who opt for private-sector plans (and) are getting better care at lower costs" and found that while those seniors in Medicare HMOs may indeed have been having lower costs than their colleagues in the standard Medicare program (because they were covered for their drugs) the actual costs to the overall Medicare system — that is to you and me the taxpayer — went up because Medicare was overpaying the HMOs. The HMOs were of course recruiting healthier than average seniors, pocketing an amount close to average cost for a Medicare recipient, and the taxpayer was making up the difference. Funnily enough as soon as those payments were cut to closer to what the seniors were actually costing the plans, the private sector bailed out of Medicare as fast as it could. Only now after huge bribes payments for private plans to recruit seniors were put into the MMA to buy AHIP’s member plans’ support is the number of Medicare recipients in private plans starting to tick up again. GAO by the way isn’t exactly brimming with optimism that the new PPOs, introduced as part of the MMA, are going to save any money either. But undettered Ignagni continues: 

Americans deserve a real health care debate and real solutions, starting with evidence-based medicine, medical liability reform and the information they need to make better decisions. That’s a more complex but ultimately more productive path to reform. (Karen Ignagni,  President and Chief Executive, America’s Health Insurance Plans, Washington, April 29, 2005)

It is indeed nice to know that we deserve a real debate, not some phony scare tactics cooked up by, say, members of the HIAA which never got close to discussing an actual "solution" in 1994 when they had their chance to be constructive. And frankly given the huge amount of cash that her members and their executives have been pulling down the last few years, why would any of them be interested in "reform"? I guess that given it’s a debate about health care in the US, we can’t  expect many actually correct facts to be brought up, but surely there should be some kind of special award to Karen Ignagni for getting so many wrong in so few words!

Coda: One thing I didn’t know about Ms. Ignagni before googling her is that she used to work for the AFL-CIO. Well at least she knows how to pick a winner!

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Site Worth CheckgadflyRickGrahamAbby Vigneron Recent comment authors
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Site Worth Check
Guest

Definitely consider that which you stated. Your favourite justification seemed to be on the web the simplest factor to consider of. I say to you, I certainly get irked at the same time as other folks consider worries that they plainly do not recognise about. You controlled to hit the nail upon the highest and outlined out the whole thing with no need side effect , folks can take a signal. Will probably be back to get more. Thank you

Ron Greiner
Guest

Sorry Graham, I went to December 2003 not 1993. So you must be 25 now. I have doctors as friends, clients and family. I have one doctor client that was paying the premium on his 25 year old son and let it lapse after the son was diagnosed uninsurable. Oh, the son was mad. Usually when I go to a doctor’s office its a small group health insurance plan with the nurses and the receptionists covered. I point out that currently, if an employee gets too sick to work, their current coverage would terminate after a short COBRA. That is… Read more »

Graham
Guest

Not sure what the pretty nurses comment was about. And you’ll have to excuse my lack of activism on my website in 1993 (no Internet just yet): I was 13 at the time. I’m not even sure if you wrote the last comment; there are plenty of countries where doctors make more than $100,000 per year, and their health care systems do great. (I’m all for lowering doctors’ salaries in exchange for cheaper med school, by the way.) And even though I don’t agree with it, I find it hard to believe you’ve never heard the argument about why doctors… Read more »

Ron Greiner
Guest

Abby,
Our insurance is world wide coverage.
I have had clients get hurt overseas. We paid the bills.

Abby Vigneron
Guest

Ron,
If you travel out of Canada, you can buy short-term travel insurance. Those Germans and Canadians should have bought that.
With your U.S. based, non-travel policy, you try getting reimbursed when your daughter gets sick in Spain.

gadfly
Guest
gadfly

//All doctors think they need at least $100,000 a year// And don’t forget this shifts what the meaning of “middle class” is for everyone else. I can tell you from experience that a $20,000/yr. clerk wants to throw up when a physician comes in the room and whines about how he can’t make ends meet on $100,000/yr. Health care is a service. It’s not a form of production. People in the health care profession support themselves by taking a cut from everyone else. In business terms health care is a “cost center”. Most businesses operate by trying to reduce the… Read more »

Ron Greiner
Guest

Graham, I went to your website Graham and looked at your writings during December of 1993 when major health care reform was going down. I could NOT find one comment but you do blog about finding pretty nurses. Doctors simply make too much in America. Some doctors make millions per year. All doctors think they need at least $100,000 a year, they want too much. When a doctor’s school loans are paid off why would any doctor need to make six figures? Nurses make too much too. No nurse should make over $100,000 a year either. We need the government… Read more »

gadfly
Guest
gadfly

Graham – having seen the administrative and technology wastes up close and personal, I heartily agree. It seems to me that any solution should address the runaway costs of health care, not find new and creative ways to throw money at the cash cow. Our society can afford public defenders (even though lawyers can earn hefty salaries on the free market), various ornaments of civilization such as libraries and museums…why don’t we have public infrastructure for medicine? I don’t think the costs are too prohibitive. I think people have been hoodwinked by medical profession lobbying into believing that public medical… Read more »

Graham
Guest

Oh come on, Ron.
Please tell me you realize the billions wasted in overlap and administration in the US.
And if you don’t like that argument, read up on Uwe Reinhardt’s papers on the comparisons of health care costs in the US versus elsewhere. Everything just costs more in the US, that’s the only reason other countries couldn’t afford it.

Ron Greiner
Guest

If Canada’s single payor system can’t afford US healthcare how could an American single payor system afford it?
There isn’t a single payor system in the world that tell it’s citizens to use American health care and the single payor system will pay.
A single payor system simply can’t afford United States health care.
Finally we all seem to agree.

gadfly
Guest
gadfly

//most Americans are covered by a GROUP employee health plan// Out of curiousity, just how big is this “most”: or did Ron mean employed Americans? It seems to me once you add up the unemployed, self-employed, and people who work for small businesses, churches, etc., that’s a significant portion of people with either no insurance or individual plans. //I explain it to Mid Western seniors it drives them crazy.// It scares me that Ron’s sophistry is freaking out the MidWest. //only millionaires can afford to pay $131 a month// That’s before the medical bills hit, and these days only millionaires… Read more »

Rick
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Rick

Yay, Ron gets it. The uninsured die prematurely. See, this was a productive day.

Ron Greiner
Guest

I remember when a bus of Germans was hit by a boulder in Colorado. A bunch of the Germans were killed and a bunch were really hurt. The Germans wouldn’t pay the medical costs of their own citizens. My private insurance has world wide coverage. This is very good because my daughter is currently in Spain. Imagine if Canada advertised that Canadians could now get their health care in US hospitals and it will be paid for by the Canadian government. Canada would not last a year. Matthew is right. The Canadians are rationing US health care by not paying… Read more »

Graham
Guest

Great post, Matthew, but let’s please realize that none of the countries you mentioned (France, Japan, Germany, the UK) are single-payer. The UK is socialized medicine (that’s not the same as socialized insurance), France has a reimbursement/tax scheme that works quite well, Japan has an employer + public scheme, and Germany has its sickness funds. Different funding mechanisms = different structures != single payer.
But keep up the great posts! Karma’s a bitch, Ms. Ignagni.

Ron Greiner
Guest

Sue,
You say I think “group employee policies are bad because they have protections that make it harder to exclude pre-existing conditions.”
That’s not true, I said Group employee plans put young women with ovarian cancer to COBRA for insurance termination when they can’t work the required 30 hour per week.
Why do you all love employees losing their insurance if they become too sick to work?
And you say I’m mean if I save them thousands a year and enroll them on individual insurance where they can’t be singled out for termination, go figure.