HEALTH PLANS: I beat Lisa Girion!

This might be my proudest moment in blogging. Anyone can be ahead of the WSJ by 5 years. But on THCB I connected the dots between LA Times coverage of the dumb public relations of Wellpoint in California, and New York AG Andrew Cuomo’s assault on UnitedHealth Group yesterday afternoon.

That’s at least 6 hours (maybe 7) before Lisa Girion did it in the LA Times. I emailed Lisa to crow about it this morning…..of course she’s probably too busy being the de facto head of health insurance reform in California — and now the US — to email back, admit defeat and come work on THCB instead!

Being serious for one second, Lisa’s work in exposing the behavior of health insurers may be the most important series of work in health care journalism in the last few years—even more so than the series which exposed the problems at King-Drew and Walter Reed. There’s no question in my mind that it will lead to significant legislation which will go some way to cleaning up the health insurance industry.

And it’s not as if Lisa was mailing this in. She found the recission (retroactive insurance cancellation) stories herself, she did the digging in the courts, and she got what at first blush sounds like a very unsexy type of story to be a major issue in California’s most important paper day after day.

To my mind she’s become a national treasure and I hope that the powers-that-be at the NY Times or perhaps Pro Publica are paying attention!

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11 replies »

  1. First a reply to Peter, then Jim.
    Peter – Ouch! you either mis-read my comment above or I wrote it poorly. I’m with you so why rub my face in the MA mandate mess? HR 676 is the ultimate reform goal (676 is John Conyers bill for Improved Medicare-for-all reform). And I have consistently railed against the MA Chap 58 law, since even BEFORE it was passed. It IS BAD POLICY AND WILL NOT WORK. Google my name with “MA Chapter 58” or “MA health reform” and you’ll find that I regularly dissect the ways in which the MA faux reform plan is horrible policy.
    Jim – “Show me a single payer system that works”. Well, Canada’s nat’l Medicare-for-all is single payer financed and works pretty darn well according to Canadians and by independent int’l measures (WHO etc). It’s also largely underfunded by neo-conservative gov’t officials; Canada spends ~9% GDP on healthcare while US spends ~16% GDP and still has 47Mil uninsured and >100MIl seriously underinsured. YOu and others might be interested to take a look at this recent article “Mythbusting Canadian Health Care” written by a Canadian-U.S. author.

  2. “Someone needs to show me a model of a single payer system that actually works.”
    What’s your definition of “works”?

  3. Someone needs to show me a model of a single payer system that actually works. Lots of folks who are uninsured can afford it but choose to be self insured.
    John – I have never seen an MLR as low as 55%, what are you smoking? Most carriers shoot for 69% but feel good about hitting 72%.
    The truth about risk selection is this; in the individual market carriers introduce new products every 3 to 5 years because the U/W has warn off and they need to reset the price to remain competitve. At renewal time they encourage those who can stand U/W to apply for the new products, leaving those who can’t go through U/W in a pool where prices continue to rise because of their combined poor health. This is refer to in the industry as the death spiral. Catchy term huh. You would be surprised how old some of these pools are and how high the premium gets.
    Why isn’t anyone talk about the patch work of regulations created by leave states in control of insurance regulations.

  4. There is a big difference between legal risk selection and health insurers “cherry picking” their customers.
    If this weren’t the case, then plans would have large and advanced underwriting groups….not that I blame them…because that’s what “the market” demands.
    Much more constructive competition would involve reframing competition in a way that requires plans to actually improve member aggregate health and cost in order to profit. That’s simply not the case today, though.

  5. John you are too smart to really believe that health insurers don’t make rampant profits on risk selection between large and medium groups and even more money in the individual market. There’s a reason Blue Cross/Wellpoint objected to the MLR rate being set at 85% in the recent legislative kerfuffle. That’s cos their MLR is something like 55% in the small group and individual market and it’s where they make a bunch of their profit. BTW Mega Life and Health’s MLR is closer to 30%. And if you think there isn’t risk selection in Medicare managed care, well I have some CBO reports for you to bone up on.
    And then there’s the main point–health insurers have made way more profit during a time of rising health care costs than when those costs were flat. That’s a straight fact viewable by looking at the stock chart of any major health plan.
    So tell me again why their market incentives are to restrain costs in the system. Or are you just a Trotskyite like me?!
    Meanwhile if you’re not prepared to cross subsidize smokers, what about skiers?

  6. Matthew,
    What risk selection? Risk selection has never happened in large groups, was mostly outlawed in small groups in pretty much all states in mid-1990s, so can only be practiced in individual market, and even then not in large states like NY, MA, etc. Also, subtract Medicare, Medicaid and other government programs and I’d bet less than 5% of the U.S. population are in a health insurance market where risk selection is allowed (by insurers, at least: perhaps employers do so).
    (By the way, we need more risk selection, not less: the number one risk-rating is for smoking. Can people really be saying that non-smokers should subsidize smokers, and that the government profiting from excessive tobacco taxes is a better way of paying for tobacco-related illnesses?)

  7. “Peter and John -it’s not an either or scenario, we need both areas of reform that you each mention, and more.”
    Ann, while I have commented on the need for cost controls outside of the insurance industry and understand that insurance is not the front line of cost creation, reform of our health system starts with insurance reform. To think that somehow keeping the present insurance model is key to better healthcare is like thinking perpetual war is key to a better future. Starting with an insurance model got MA the healthcare they deserved, and I hope they enjoy the outcome of ideology over solution.
    If we are to keep any part of commercial insurance it would be only as a paper processing function (they do that best) and maybe only about 10% of the health insurance market for some limited additional coverage. Other than that we don’t need commercial insurance. Government needs to set a basic package of covered benefits funded through the income tax system where your income, not your health status, determines what price you pay, and most important, set a healthcare budget which will force inovation in cost effective delivery of care by providers. Government will negotiate payments to providers, not insurance, then we can be assured that the cost savings will be passed on to tax payers/patients and not disappear into executive bonuses, profits, and investor returns that do not go into improving healthcare.

  8. Here’s a quiz, John. See if you can pick the right answer
    Q1 when health plans really tried to keep costs down via managed care(mid-late 1990s) profits were a) high b)almost non existent
    Q2 when health plans went back to strategies of risk selection and increasing premiums faster than medical costs every years (2000-present) their profits were a) worse than in the 1990s, or b) sky high with stock values to match.
    If John thinks that health plans really want to keep health care costs down, it appears that he’s lost his faith in the incentives emanating from our most glorious free market!

  9. Peter and John -it’s not an either or scenario, we need both areas of reform that you each mention, and more. I agree that a nat’l everybody-in-nobody-out Improved American Medicare-for-all would go a long way toward those needed reforms.
    We desperately need a Lisa G. in these parts (Massachusetts). Trying to get the health reporters to do any kind of investigative reporting has come up nil. For years. And there’s lots to dig up and a reporter wouldn’t have to go that deep. It would make for a potent expose’ on the profit-driven behavior of so-called nonprofit healthcare sector.
    Here’s just a little taste (from an email update I sent out to our listserve today)
    Background on MA mandatory purchase of insurance law:
    The Massachusetts Health Insurance reform law has been crafted, promoted, and implemented using intentionally deceitful manipulation of well-meaning health reform advocates and the public, both in Massachusetts and the nation. This has gone on long enough. Don’t be one of the people who will later be saying “I wish more people had spoken up and tried to stop what happened in MA from moving forward.”. Now is the time to have your voice heard! (please contact Governor Patrick using info. above) .
    To those who would have us believe that the degree of secretiveness and collusion that exists among corporate special interests and the MA legislative leadership is the norm, do not believe it. This is NOT the way politics and health policymaking happens everywhere…
    Exhibit A: “Lobbyists took in [record breaking] $7.5 Mil on health bill”, By Scott Helman, The Boston Globe, 4/5/06
    “Lobbyists for hospitals, insurance companies, and other major players in the healthcare industry were paid at least $7.5 million in 2005 as the Legislature took up a major healthcare bill, records show…
    …In the end, House leaders agreed to a more modest $295-per-employee assessment on those businesses. Associated Industries of Massachusetts, which spent $279,000 on lobbying overall last year, was instrumental in the change ”I think it was a good investment,” said Richard C. Lord, CEO of AIM…” AIM members include the Mass. Ass’n of Health Plans.
    Dick Lord was then appointed by Gov.Romney and served on the Connector board that’s charged with implementing the individual mandate law! Lord is also President of the board of the so-called “Mass. Medicaid Policy Institute” that has close ongoing collaboration with the state’s HHS Medicaid Div. Does anyone else think it’s strange that the Mass Medicaid Policy Inst is a project of MA BCBS???
    So we have Lord, who’s the CEO of the state’s largest business lobbying group whose members have a vested interest in getting more of their workers on state funded insurance programs (to reduce the pressure from thier workers and advocates for the poor for an employer mandate). But on the other hand Lord and his AIM insurance co./HMO members have a vested interest in selling more of their product (enter the individual mandate law with Lord at the helm of implementing it).
    Something doesn’t smell right here.

  10. “In Los Angeles, City Atty. Rocky Delgadillo has assembled a team of investigators and prosecutors to probe industry practices such as canceling patients’ coverage after they get sick.”
    Yup, that’ll keep those pesky healthcosts down.
    “For example, he said, a market survey showed physicians typically charge $200 for a routine visit. But the insurers, using Ingenix data, claimed to their members that the typical rate was $77. Applying the 80% reimbursement rate, they covered $62, leaving the patient to pay $138 out of pocket.”
    Yup, more honesty from the insurance industry. That’ll also keep costs down.
    Gee John, what would we do without the health insurance industry looking out for our interests.
    As for this in-network/out-network crap it’s just another way to control patient choices and market share. With single pay it’s all ONE network with ONE price, go to the doc you think provides the best care.

  11. Well, that’s a very nice Valentine’s card, Matthew.
    Yes, she’s doing outstanding work. But I wish she’d turn her guns away from the only parties in U.S. health care that are trying to contain costs. It’s easy to beat up on for-profit health insurers (or non-profit ones too, I suppose), or Big Pharma.
    How about doctors who needlessly order extra lab tests, upcharge their claims, refuse to join the 21st century (or, for that matter, the 1980s) with respect to using information technology, resist being measured for quality, and then moan and groan about how 3rd parties are trying to tell them how to “practice medicine”?
    I know whereof I speak: I had a chest X-ray that one doctor’s office in San Francisco sent to another doctor’s office in San Francisco and it got lost in a “black hole”, according to 2nd doctor. But that’s alright, according to the 1st doctor, just “come in for another X-ray.” After all, it’s “free” right?