Matthew Holt

Karen Ignagni lie of the day, part 68

6a00d8341c909d53ef0105371fd47b970b-320wiThe big insurers now seem to be doing anything they can to prevent a Medicare-equivalent public plan 
being launched to beat them up. Yes AHIP has apparently decided to throw the schlockmeisters off the boat, and more or less agree to end medical underwriting.

Those of you who listened to my interview with Tom Epstein of California Blue Shield will recall the cognitive dissonance he was suffering when he had to defend Blue Shield and other insurers’ behavior in the individual insurance market (hey, it’s the man’s job), while at the same time calling for policies that would essentially end the individual market and create a near-universal purchasing pool. By definition, that would require some level of uniformity of benefits and some risk-adjustment mechanism, and consequently it would put several currently profitable lines of insurers business out of business—yes I am talking about Tonik and Mega Life & Health among others. In general this might be a good trade for the bigger plans as they’d add a bunch more younger healthier lives at a higher price point (although what Wellpoint’s actuaries and accountants really think about it is yet to be determined—note their opposition to the similar ArnieCare legislation).

So as AHIP makes this big cognitive leap—presumably to be traded for Baucus getting rid of the public plan in the forthcoming legislation—it sends its head lobbyist out to tell the world how different they all are.

Except that she just can’t help it. In a live blog of Ignagni’s presentation at USA Today there’s this little gem (assuming it’s not a misquote and it does fit with her “record”):

2:15 p.m. ET: On the subject of health care costs, Ignagni says "we've got a very good record in our health plan community of bringing costs under control." And insurers, she says, are developing "a new 3.0 version of those tools" to keep costs from soaring even more than they have.

This is what drives me nuts about health plans in general and Ignagni in particular. There ought to be a role for properly incented intermediaries to manage providers in terms of improving cost & quality on behalf of their members. Medicare FFS sure as hell doesn’t do it well.

But in what universe was Ignagni living in the last decade if she thinks that "we've got a very good record in our health plan community of bringing costs under control."

And what level of credibility can we give the “health plan community” if they allow their main lobbyist to spout this kind of nonsense. If the big plans have decided to throw some AHIP members overboard, perhaps it might be time to throw the organization’s President with them. Defending the egregiousness of the Bush/Cheney health plan years isn’t what AHIP needs to be doing, and apparently Ignagni just can’t stop.

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  1. The Center for Media Research has released a study by Vertical Response that shows just where many of these ‘Main Street’ players are going with their online dollars. The big winners: e-mail and social media. With only 3.8% of small business folks NOT planning on using e-mail marketing and with social media carrying the perception of being free (which they so rudely discover it is far from free) this should make some in the banner and search crowd a little wary.

  2. So, a little history here.
    In 1973, Congress passed the HMO Act, and provided millions of dollars in taxpayer financing for startup health plans. Among these were the original “community” not-for-profit health plans that converted over a period of time to for-profit status, and which then became the public behemoths now known as Coventry Health Plans, United HealthCare, Aetna Healthcare, many of the various Kaiser plans and Blue Cross health plans, and so many others.
    Take the case of Coventry Health Care, founded by the current Governor of Tennessee, Phillip Bredeson. In the mid 1980s, Bredeson did a “roll up” of a dozen local not-for-profit taxpayer financed health plans through a public offering of stock under the name HealthPlans Corp. The Federal government allowed him to convert these to profit making companies with a small concession to minimally fund for a limited time a local foundation to ease public perception of the scam. HealthPlans became HealthAmerica, and HealthAmerica continued to acquire other not-for-profit, as well as for-profit health plans and become a multi billion dollar player in the health care game.
    Take the case of Charter Med, the company know known as United HealthCare. A physician named Bill McGuire helped found this not-for-profit company in the Minneapolis area in the mid 1970s and soon it was on a mission to merge other federally-financed local HMOs into what has now become United HealthCare. McGuire, never one to shy away from a “big play” was found to have been involved in back-dating United stock options several years ago and between he and the company, a nearly billion dollar settlement banished him to a still luxurious retirement. Note that United bought The Lewin Group, which is churning out dubious data about our current health care system’s success.
    The “HMO revolution”, funded nearly entirely by Federal tax dollars, became a revolution of millionaires and billionaires, as the early leaders took their companies public and enriched themselves and their colleagues beyond their wildest dreams. The original intent to revolutionize health care and make it more affordable, putting people and primary care physicians first and foremost in the front lines of health care, degraded into pure profit making.
    When questioned as to why health plans do so little to collaborate in any efforts aimed at cost containment as health care costs have risen to absorb over 20% of our GDP, one health plan executive shared with me “the dollar value of an 8% profit margin on a $200 premium is much nicer than on 8% of a $100 premium”.
    The list is very long of these taxpayer funded entities who now control the health care debate and whose industry trade organization, AHIP, is quietly but assertively attempting to kill any effort to diminish their profit making potential. AHIP, formerly known as the Group Health Association of America, the American Association of Health Plans and the Health Insurance Association of America, is an organization run for one purpose: to protect the profits of that industry.
    Nothing at all is being written about this. It is easy to research. It is easy to connect the dots. This should be squarely out there in the health care debate.

  3. MD as hell:
    Are ER doctors’ rates so high due to collecting a dollar for every three billed?
    I recently took my mother to the ER, she had a kidney infection, the doctor’s bill was $350. They checked her and prescribed Levaquin, that’s it. Is the price overinflated? Of course, I think so, but in your opinion…
    Also, we went to the ER as she does not have a primary care physician and I didn’t know where else to take her, urgent care not being open until 5PM. She is without insurance but able afford care, though she hadn’t been to see a doctor in about 30 years.
    She had a follow-up visit with a primarycare physician referred to us by a family member. He seemed peeved at her not having insurance though she paid for the visit in cash. He made mention of her essentially not having a medical history for him to refer to, since she’s been out of the “system” for so long. This made me think that the relationship to one’s doctor crucial to preventive care, if one is lucky enough to find a doctor that is interested in preventive care & not just prescribing antibiotics & steroid based medications on the fly.
    Another question, how much care is being spent on people who are essentially half-dead, on life-support, etc, unable to live quality, meaningful lives? I imagine this must also be a question that anyone with a “higher” ethos asks. Peoples’ drive to squeeze out whatever little life is left must be some sort of crude philosophy.

  4. > Allow PCPs to capitate their services
    > and you just created a medical home.
    This is more or less what a big group ( here in St. Louis is doing: they formed a Medicare Advantage plan of their very own. Of course, this simply can’t work for the typical practice. But then I think the typical practice is far too small.
    Anyhow, if Esse/Essence get to the point they do this pretty well, maybe they’ll form a regular HMO as well — the staff model HMOs of the 1980s & early 1990s is where a lot of their docs come from. Culturally, they seem to have a “lean-ish” practice style, and they rely a great deal on tech. Lately they’re adding some clinical decision support tools built into the EMR/Practice Management/Rx system they use (
    It seems to me they’re positioning themselves very well for whatever sort of “reform” comes along. I really admire them.

  5. “One payer with a patient smart card and a predetermined price for the doc who gets his money promptly – now that’s efficiency, that’s simple. ”
    Private insurance offers this now, how close do you think Medicare is?

  6. Nate, my ability to fly to India for healthcare is not a statement of success for choice – it’s a symptom of failure for U.S. healthcare. So are the dental clinics in Mexico. Just because I can do it, or just because I can afford a HD plan AND actually have resources in the bank to pay the deductible as well as my prmiums as well as support myself if sick, does not mean this is the solution. It does serve a section of the economy, just not enough of it. It does not serve the majority of working people in this country. If this were only a PCP world we wouldn’t have an affordability crisis, but it’s also a hospital world where too few can afford the price of care. Trips to India are a backlash to unsustainable costs here because of the prices. Going to your PCP efficient, but not with 100s of insurance companies forcing docs and patients through paperwork and rules hoops just to get a $65 office visit paid for is rediculous. One payer with a patient smart card and a predetermined price for the doc who gets his money promptly – now that’s efficiency, that’s simple.

  7. Peter,
    I can’t remember where I read it last night but there is a small town just over the Mexico border with 350 dentist, 11% of the population practice dentistry. Some dentist have bed & breakfast set up and you can take chartered day bus trips from some company on the American side. I woke up this morning the lawn is covered in frost and piles of work waiting at the office, 2 days in Mexico for some minor dental work almost sounds appealing.
    Your example is one of my best arguments against single payor/Medicare. Not everyone is alike, different people have different needs. When it comes to protecting against catastrophic conditions almost all of us need protection, true insurance can do that very well. Where we vary is on the day to day small items. That is why insurance for routine care is so inefficient. In your case you would best be served by a high deductible, save the premium you don’t pay to an insurance company, then once every five years when something comes up you have the money to pay for it. For those people that have chronic conditions or require more care capitation is the most efficient payment method. If you know you need to see Dr. Muney every month for years to come why not avoid the 20% mark up and just pay Dr. Muney direct? No matter if you or the insurance company pay him he needs to be paid, it’s just cheaper and more efficient for you to pay him yourself. For risk gauging, data collection, and public health Dr. Muney should still submit claims to the insurance company but with EDI today that cost pennies. Dr. Muney would also save money because he is not processing payments or waiting to collect.
    I see only 1 downside to direct capitation, it’s illegal. This has baffled me for years, we looked into this for some larger self funded clients, we wanted to capitate certain care but every state we checked would not allow this. The reason is loss of regulation and tax revenue. Under current tax law the states would lose billions if providers accepted capitation outside of insurance companies. This is another example of regulation inhibiting cost effective care and innovation.
    Consider the efficiency of capitation and dental care. Most people are more loyal to their dentist then their medical doctor. It’s very easy to calculate the annual cost of two cleanings and x-rays. Why would anyone insure these?
    To get into a more complex discussion take what we are talking about and apply it to the numerous post on THCB about medical homes and upping reimbursement to PCPs. The complexity of the proposals including devising completely new reimbursement methodologies are all because states won’t allow direct capitation. Allow PCPs to capitate their services and you just created a medical home. No reinvention of the wheel, no billion dollar government program, no untried complex reimbursements. How much simpler of a solution could we ask for? But it will never fly…
    1. It would greatly reduce carrier premium which would;
    a. Greatly reduce carrier profit
    b. Greatly reduce premium tax collection
    c. Not give politicians billions of dollars to play with
    2. It is too simple, people could understand it which would lead them to asking questions why the rest of the healthcare system is so complex and over regulated.
    3. People might start taking responsibility for their health and realize we don’t need so much government intervention. Government is more afraid of a healthy America that doesn’t rely on public programs then it is of an unhealthy America barreling towards bankruptcy. Government thrives in 1.8 trillion dollar disasters where they can make undeliverable promises and dole out patronage. Government would wither and die in a 1 trillion private/personal healthcare system that didn’t need them.

  8. Nate, I’ll need more information before I’ll accept your example of Dr. John Muney’s business plan at face value (concierge business). His statement, “I’m trying to help uninsured people here” is dubious. It may help people with cronic conditions (?) but not sure about many others. Would a family of 4 pay $316 per month + co-pay? I last saw a PCP for a lung infection a month ago, prior to that I hadn’t needed a doc for 5 years, cost me $65 for walk-in office visit + $72 for drugs at pharmacy across the road.
    This is what I’m planning on doing:

  9. I trained in Germany and can tell you that there (other countries may be different), end-of-life care is less aggressive, but there is no uniform standard, and care may vary tremendously (as it does here), but arriving at, on average, doing all in all less.
    How much one could save? I don’t think anyone could tell for sure, since there is no good data and one can argue what is appropriate/benficial and what is not (for instance, should you get head and neck MRAs in every CVA as many neurologists do? I would say that in over 75 yo patients, it doesn’t matter – you will miss a few dissections and intracranial stenoses, but it doesn’t matter that much since the NNT to benefit someone is skyhigh. But most laypersons (and even a lot of MDs) in the US don’t want to acknowledge that.
    But if you just aim for foolproof, undebatable savings by following just existing guidelines (i.e. no MRIs for episodic migraines in patients with nl exam, no MRIs for axial neck- and back pain etc.), I would guess that savings might be between 10-40% depending on the respective service area (and associated/subsequent costs of overtesting which are hard to estimate). Let me tell you an uncommon, but fairly typical story:
    A. 30 yo person with axial neck pain hoes to the PCP
    B. PCP orders neck MRI (against guidelines) C. neck MRI shows questionable MS plaque or artifact D. Neurology consult E. Neurologist thinks that plaque is an artefact but asks F. Radiologist for opinion. Rad. recommends repeating film E. Repeat MRI is normal, pt. relieved, end of story. I estimate the whole cost of superfluous costs (B to E) somewhere between 4000 and 5000 Dollar. Usually, it ends with B (2000 Bucks), but there are multiple cases with furter testing and visits F-K. And consider this variation: C. neck MRI shows disc prolapse D. Neurosurgeon does cervical fusion )mp good indication for this) E. Pain not better F. Pt. goes to pain clinic for chronic narcotics since neck sx made pain likely worse.

  10. Another interesting example of how government fights to keep insurance and healthcare expensive;
    “The state is trying to shut down a New York City doctor’s ambitious plan to treat uninsured patients for around $1,000 a year. Dr. John Muney (pictured above) offers his patients everything from mammograms to mole removal at his AMG Medical Group clinics, which operate in all five boroughs. His patients agree to pay $79 a month for a year in return for unlimited office visits with a $10 co-pay.”
    Employer buys every employee a HDHP and pays 100% of the cost. THe employee pays $79 a month for this and his own Rx until they hit the HDHP. It’s this type of innovation and cost saving that regualtion and reform kills. Why does a doctor need an insurance license to capitate his own services?
    Notice how when they are trying to regualte and collect premium tax how precisly they define insurance.

  11. rbar,
    I absolutely agree on the need to reduce wasteful and cost-ineffective utilization of healthcare services. To that end, I would be interested in your ballpark estimate of the potential cost savings that might be realized from (1) the reduction in defensive medicine over time if we enacted the tort reforms that you prefer and (2) a far more sensible approach to end of life care which I would define as something close to (I think) European practice patterns in these cases.

  12. rbar,
    your last paragraph is 100% correct and why I oppose any bill that comes with a price tag. We don’t need to spend more money on healthcare, we need to more efficiently allocate what we spend now and take the eventual savings and redirect it to other problems or tax cuts.
    We need to define our goals and educate the masses on the truth. There is so much misinformation out there the general public has no idea what is true. Most people not educated on HC when asked think the reforms being proposed today are in response to today’s problems. They don’t realize the solutions Democrats propose today are the same ones they proposed in 1970, 1960, 1950, 1940, and 1930’s. They have the same proposals just waiting for the right problem to come along, even if they have to create it.
    100% coverage should not be the goal. 10-15 million of those that go without insurance for part of the year are already eligible and choose not to take it. Instead of fighting those people lets work on the 3-4 million that want insurance and don’t have it.
    10 million of the uninsured are not citizens, time to show them the door.
    We need to drastically change the distribution of funding. Instead of sending our money to Washington or the insurance company we need to keep it in our pocket and pay our own routine care. What we save in premium and taxes will more then pay for the care.
    To curb large spenders we will need an evolution of utilization review. The biggest hurdle to this is government. Even when care is denied for legal and legit reasons insurers are still susceptible to getting sued and usually lose. You can have a policy that in plain English does not cover experimental or off label treatment and you can be sued and lose in court.
    We need to strengthen ERISA and make it clear that insurers aren’t required to pay for care not provided for in the plan doc or by law. If someone wants to buy a policy that has experimental treatment coverage let them do so. We need policies that everyone can afford and everyone can’t afford to live forever.
    We also need to fix malpractice claims. If a doctor follows approved treatment guidelines and documents it he should be immune from tort. We have to be able to tell people no and have to admit doctors are human and can’t be expected to work miracles.
    We can’t afford to make any more John Edwards rich on trumped up science.
    The bottom line was just mocking MMs bottom line, it didn’t have any meaning in the reply.
    As to the aggression I believe war requires it. If you look back at the history of “reform” you will see Democrats have been pushing for compulsory national insurance for 70 years. At no time has the concept every been supported by even a majority of Americans. Democrats know this so in the late 30s and early 40s they decided to try to accomplish it in pieces. Even that did not interest the public. The only way the can pass pieces of their goal is to lie and trick the public.
    “During the 1965 Senate Finance Committee hearings, Chairman Russell Long (D., La.) asked HEW Secretary Anthony Celebrezze, whose department had written the bill, “Why do you leave out the real catastrophes, the catastrophic illnesses?” (U.S. Senate Hearings 1965: 182). When Celebrezze replied that it was “not intended for those that are going to stay in institutions year-in and year-out,” Senator Long countered: “Well, in arguing for your plan you say let’s not strip poor old grandma of the last dress she has and of her home and what little resources she has and you bring us a plan that does exactly that unless she gets well in 60 days.”
    “Celebrezze concurred, stating that means-tested public assistance would provide “additional help.” (U.S. Senate Hearings 1965: 182-83). Long added that “Almost everybody I know of who comes in and says we ought to have medicare picks out the very kind of cases that you and I are talking about where a person is sick for a lot longer than 60 days and needs a lot more hospitalization” (U.S. Senate Hearings 1965: 184). [14] Yet the very element that government officials continued to cite to win public support for Medicare was deliberately omitted from the administration’s bills.”
    “When Rep. Albert Ullman (D., Ore.) cited allegations that the “public is somehow being hoodwinked” and “being misled” and asked HEW’s Wilbur Cohen about the degree to which the public misunderstood the program, Cohen stated that “we do recognize this problem and I think it has been complicated by the use of the term ‘medicare’ which is an erroneous term when applied to this program”
    “As Marmor (1970, 1973: 17) put it, “Strategists expected support from families burdened by the requirement, moral or legal, to assume the medical debts of their aged relatives.” When Senator Clinton Anderson (D., N.M.) asked Celebrezze, “Isn’t it true that younger persons would have lifted a heavy financial burden sometimes as a result of taking care of the aged in their family?,” Celebrezze agreed (U.S. Senate Hearings 1965: 122). Warning that soon after enactment the public would discover the actual benefits to be much less than expected, Senator Allen Ellender (D., La.) stated on the Senate floor that “many sons and daughters whose mothers and fathers are growing old are of the belief that under the pending bill they will be able to get the Government to take care of their older parents, in the event they become ill for long periods of time” (U.S. Cong. Rec.-Senate 9 July 1965: 16072). The political undercurrent was that the “avoiding dependency” rationale gave a respectable gloss to adult children’s desire not to support their aging parents which could be counted on to buttress political support for the Medicare measures.”
    Medicare was passed with lies and false promises. MM, EK, and the others like them are sowing the propaganda for the next big lie. These are all individuals that have no work experience in the field, no serious or broad research beyond the political aspects, and no desire to improve the system, they are all about the politics, just as the Democrats who passed Medicare where. Look at what we where promised with Medicare and what we actually have. Same for Medicaid and VA.
    These individuals have never engaged in honest debate or discussion, I could give you pages of factual errors that have been pointed out to them and they refuse to correct. Blatant ones, like EK saying HSAs discriminate against women because they don’t cover mammograms and pap smears. He’s been sent the section of the law that specifically allows these to be covered at 100% without deductible and copies of carriers benefit plans showing they almost always are. Yet the inaccurate post still stays up…because it was never about fixing the system, all that matters is advancing their ideology. They know a majority of readers won’t go through all the comments and even fewer believe them, so they can post a complete lie and it serves their cause. All they need to do is confuse a vocal minority of the public into believing their false claims, ram some legislation through then on to the next segment of the population.
    Look where we are today, they cover the old, the poor, children, and the sick in some cases. There is not much left. When someone comes for your freedom and fruits of your labor are you going to politely and calmly ask them not to take it or fight back with all the aggression you can and twice the effort they give trying to take it? It’s a lot harder to get your freedom back once you have lost it then it is to protect it in the first place. Is it really expecting to much every time some progressive claims private insurance has 30% overhead to call them a liar and correct it? When someone with no comprehension of insurance says single payor is more efficient and will save money take the time to call them a moron and point out Medicare is an example of the failure of single payor.
    If you don’t get aggressive now you’re going to wake up one day with third world healthcare/insurance and a huge tax liability. Do you want to pay twice as much as you do now for Medicaid quality?

  13. Nate,
    I read your two last posts in their entirety, and I think you would help your cause by being more concise. (And cut down on gratuitous aggression as well).
    For instance, you write multiple paragraphs about various issues, and then end with:
    “Bottom Line: Medicare needs to stop losing ten cents of every dollar to fraud and waste. That level would never be acceptable in private insurance.” That is hardly a “bottom line” conclusion since it is an issue you did not bring up before (or was it hidden somewhere in the preceeding 15+ paragraphs?).
    What MM was arguing and explicitely wrote is that NEITHER the public plans nor private insurance do much to control costs.
    And I actually think that both you and MM (and this writer) can agree that the explosive growth of medical services is the main reason for the HC cost explosion.
    If I read other posts of yours correctly, you would suggest high deductible insurance and health savings accounts. I cannot see how this would curb overall cost explosion in a meaningful way and in the long run … sure, many people who could afford these plans would reduce needed and unneeded care as long as they are in the deductible zone, but since there is no ceiling, expenses for the really sick and the people reaching their deductible would continue to mushroom …. how often did I have to hear nonsensical requests for MRIs and similar tests (like “do everything you would possibly want to do, I reached my deductible for this year”?).
    There is no way around it – if we want to cover 100 or even just 90% of the population without dedicating our entire GDP, we have to curb utilization. Suggestions: Start telling patients that the current system with back MRIs for minor tingling in the great toe and PEGs for moribund and demented people is not sustainable. Enforce best practice guidelines (except for the people who want to pay themselves for the nonsensical staff). Cut reimbursement for invasive procedures (I think most of them are overpaid, although to varying degrees). Initiate tort reform in order to curb defensive medicine. Start bringing down prices of pharmaceuticals to European/Canadian levels (by negotiation).
    There is more than enough money, technology and manpower (except, at present, PCPs and nurses) in the US system to provide excellent care to all US citizens … you just have to reset priorities in order to get decent “bang for the buck”.

  14. Expanding on what Actuary says I am one of those companies that make $20, I wish $30, per employee per month, I wish per member. The most efficient plans in the country and those with the highest satisfaction are self funded plans. They are also under attack by both states, because they reduce premium taxes, and the federal government because they want more control.
    In all the discussion on reform we completely ignore the most successful delivery method we have. It’s also the most logical. Your claims payor, PPO, UR/UM, disease management, and other programs are all purchased separately if the plan desires. If one doesn’t do a good job, over charges, or is behind the times in technology they are gone. You can replace parts of a self funded plan like you change parts on your car. Single Payor and most progressive reforms want a single solution, take it or leave it with no options or flexibility. If something isn’t working you’re either stuck with it or you change the entire system. Self funding is more logical, if your brakes are bad you replace the brakes not the entire car.
    One of the most important features is information, self funding is more transparent then any other system. Large employers don’t trust an insurance carrier to tell them what their cost or premium should be, they hire their own actuary to review the data.
    In my extensive experience with hospitals, administered both CA Assoc Hospital Districts and NV Rural Hosp Districts, contracted with numerous Hospitals as a PPO, and worked with various other ones around the country I have never worked with a hospital that could survive on government reimbursement. Medicare and Medicaid rates applied system wide is not an option, no way it could work from an actuarial perspective.

  15. Maggie,
    How do you define opinion? I know your side is keen to changing definitions but this seems like a stretch even for you.
    The part about Medicare not cost shifting directly contradicts what not only the PPOs said but the hospital CEOs. What’s is your training and work experience that we should believe you over those that actually had and wrote the contracts?
    Let’s address some outright lies;
    “While Medicare held most physicians’ fees flat during most of this period”
    Payments to health care providers in fee-for-service Medicare are scaled back from the levels anticipated under prior law. In addition, the act establishes new payment methods for nursing facilities, rehabilitation hospitals, outpatient hospital and therapy services, and home health services.
    The 1997 BBA has been devastating to providers, cutting Medicare provider payments so deeply that Republicans and Democrats alike have voted three times to restore funding. The results of the 1997 BBA prove that there is nothing more shortsighted than trying to balance the budget by cutting Medicare.
    Congress to revise the formula used to set reimbursement rates for physicians who treat Medicare beneficiaries — which resulted in a 5.4% reduction Jan. 1. Medicare reduced physician reimbursement rates this year under a formula approved by Congress in 1997, a system based in part on changes in the nation’s gross domestic product
    “private insurers CHOSE to pay physicians more”
    How many providers have you credentialed and contracted Maggie? From this statement I would guess 0. Only the handful of largest PPOs have the ability to force a provider to accept a contract. The vast majority of PPOs must find middle ground and agree to rates acceptable to both the PPO and the provider. When you have 15 hospital and 2000+ physician contracts under your belt then argue this with me.
    “Private insurers also paid some hospitals more–without really trying to negotiate because it realized it could pass teh increases along in the form of higher premiums –“
    Besides Partners in MA show one example of this ever happening.
    “while adding 5% to 15% per service.”
    And the millions of people covered in PPOs with contracts paying more then Medicare +15%? Are we pretending they don’t exist? At this time you still didn’t have strong national networks so Non PPO claims where common, are you claiming those where paid at Medicare +15% as well?
    “Private insurers loosened their restrictions and reimbursements began to soar–climbing by more than 8% a year from 1999 to 2005.”
    Expenditures or per capita spending, in Insurance reimbursement refers to a CPT code, admission or test, you reimburse them at reimbursement rates. Your aggregate claims are not your annual reimbursements. I’ll assume you used the term wrong and where not instead falsely claiming the level of reimbursement increased 8%, the annual inflation per CPT has been lower then CPI, showing the problem with spending is utilization based not per CPT cost.
    “Back to whether Karen I. lied or not: Clearly private insurers have not done a wonderful job of controlling costs.”
    Wow way to leave out half the problem. Medicare Secondary payor legislation didn’t have any effect on cost? State Mandates didn’t add a penny? How about increases in State premium tax, ignore them to? Are we also forgetting AWP and Utilization review regulations?
    “there are far fewer complaints about Medicare denying patients needed, effective care.”
    No one complained about a lack of Rx coverage? By the way Rx inflation is far worse then medical which drives up the cost of private insurance. Dental and Vision coverage would have been nice. Finally who exactly would you complain to? Not like you can change insurers if you’re unhappy. People understand the futility of complaining about government, doesn’t mean they are happy with it just means they know complaining won’t do anything.
    Medicare is mandatory, when everyone is forced to participate it’s easier to hold down cost and not have to deny coverage. Or do you believe adverse selection is make believe and carriers had nothing to worry about?
    Medicare collected taxes(premium) telling you when you turn 65 you have coverage, then changed its mind and said if your covered at work you can’t have the coverage you paid for.
    Medicare collects premium up to 50 years before you can receive benefits, it’s easy to control cost when your sitting on other peoples money for free.
    “Given the many ways that private insurers have of “controlling costs” it’s a wonder that they haven’t done a better job.”
    I hope your not referencing your two poor examples above. If you are then go read up on HIPAA, pre-ex not allowed and neither can they cancel you if you’re already insured. So what exactly are you claiming are the many ways they can control cost?
    Bottom Line: Medicare needs to stop losing ten cents of every dollar to fraud and waste. That level would never be acceptable in private insurance.
    Your entitled to you opinion but it’s the opinion of someone that doesn’t work nor understand the industry. Ask an actuary or someone who understands the full picture what premium inflation would have been without government cost shifting and regulation compared to what it actually was and I think they did about as good as could be expected. It could have been far worse.
    Inflation is not hurting us, look at the reimbursement for 99213 today compared to 1990, 1980, and 1970. It’s lower then CPI. Your either redefining the word inflation or your just completly wrong. Utilization or if you want to stretch it the inflation in utilization is driving cost. Number of Rx, number of office visits, number of test are all rising. What we pay per unit private insurers have done a great job of controlling, what they can’t limit is the number of units people consume.

  16. MD, to align failed government agricultural policy that makes us fat with your belief that the government will fail at single-pay is not even a close shade of paint. Ag policy works for the farmers, the transporters, the manufacturers, and the retailers, it does not work for the eaters in that it makes us fat, but it does make us feel full, satisfied and happy. If the food made us sick right after eating it we would scream bloody hell and have the government change the system. So far not enough people have linked obesity with Ag policy because how could something that makes us feel so good be wrong – until you start looking at the medical bills – which only the uninsured are paying right now. But with healthcare we all know when it’s not working and we would let our politicians know it as well. I can relate what happens in Canada when the “government” does not pay enought attention to healthcare – IT GETS CHANGED. When people start seeing taxes for healthcare covering bad Ag policy, the policy will change.

  17. Maggie:
    I certainly agree with you that neither public or private insurance plans have a sustainable track record in cost containment, but I must respectfully disagree with you that absolute dollars don’t matter. The advocates of the public plan option (as well as single payer proponents) assume that a large, quasi-monopolistic public payer could reap huge savings through lower administrative costs and increased bargaining power vis-a-vis providers that would not be offset by political pressures to further expand benefits and protect the vested interests of academic medical centers, medical device manufacturers, hospital unions, etc. For example, I find it implausible that a monopolistic public payer could resist incurring many of the costs that are now shifted from Medicare to Medicaid plans. By focusing primarily on spending growth rates rather than comparisons of absolute dollars, Jacob Hacker, Marilyn Moon, et al. deflect attention away from this issue. This is disingenuous.

  18. US Postal servie is reporting that a big part of their decline in revenues is do to a decline in junk mail being sent.
    What is the lesson?
    WHen you have less people using your system, the more expensive it gets per unit of service. I work with imaging equipment. You can either make the cost of a scan very high and do a few people to keep it operatinal, or you lower the cost so that it can be run around the clock.
    The lease costs you the same , you add on the labor for the operator and whatever deal you make on servicing. A CT does not have to cost 2,300 dollars. With newer scanners, your throughput of patients increases so that you can run more patients with the same labor costs then before. In Japan, when faced with the costs of a high tech equipment, they did somethng very unique in health care, the companies which make the equipment made smaller, cheaper to run, and less expensive to use equipment.
    Spmeone can also tell me how a hospital with a multi million dollar gift , builds an imaging center and charges the same for their work as another place which has a mortgage to pay for that same square footage? SHouldn’t the elimination of that capital cost of the building make their costs lower?
    Imaging is considered the highest margin service in many facilities. My local paper had a nice article about how the booming business in health care is now medical bill reviewing. In one bill they featured, the hospital was charging over 200 dollars for a WARM blanket, 125 dollars a pop for an accucheck, 10 dollars for each alcohol prep envelope to clean skin for venipuncture and 68 dollars for each set of non sterile disposable gloves.
    An imaging director I met at a conference tells me that German health insurers have local reps in several US cities to go over the charges for German citizens who have emergency care here in the USA to weed out the crap being piled on to a bill.
    Back to the Post office. We have FedEx, UPS, couriers and other businesses who can deliver material. I really do not have it in my heart to make this country into a place where mailing a letter is a several dollar proposal. I do not wish to have an America where water is a luxury item or that electricity is rationed per hour. We are rich enough and have enough compassion that we have raised the living standards for many and have not let those in the bottom percentile drink from streams. You can make little money, like most students, people starting off away from home, elderly who have not been able to save and invest and still live a life here where being poor is better then most of the world.
    We pay for that because we like being good to our citizens. Show me where the entire military budget turns a profit and is self supporting. We subsidize that because it is in our national interest to do so and allows us a freedom to do something else instead of having every person’s main job to be repelling invaders.
    If you want water, we have tap, if you have money, go buy the bottled. I see no reason why with the money we our spending that many of us here and in other places can not demand, request, hope and pray for sometype of order which allows us to cover citizens. We pay too much for too little for too few.
    Why do I want EMR? Because of the freakin time wasted in our office when we get a patient who is scheduled for a CT with contrast and we find out that he has one kindey and no one sent us his lab work and his MD office is closed for lunch between 12 and 2 PM for calls .
    We can use EMR for the patient I saw last week who spent 60 days in a hospital which billed him one million dollars doing every test under the sun to explain his collapse. The story is so silly, but here goes, Like a few people in SLFA, he lives in both NYC and SFLA. He finally found an MD in NY who diagnosed him with Cushing’s disease , but since he went to the ER unconscious, no one knew his diagnosis, medical history or who is MD was. WHen he woke up after a few weeks, he told them about his MD, they contacted him and were able to finally discharge him. The MDs joked that they could have saved weeks in figuring out what was wrong with him if they knew his MD or had his health history available.
    I really have a hard time with why my conservative friends have such a hardon with health care. The Swiss, hardly known to be wild eyed Marxists figured this out in the 1990s. Puerto Ricans, in Puerto Rico, not here, have smart cards.
    I can never forget a PBS Frontline special on health care around the world when the Swiss leader said that it is unheard of and an insult to his people to have a Swiss citizen go bankrupt because of health care costs. Yet this morning, I have to read about a local grade school teacher with health insurance whose class is having a fundraiser to help her pay off her uncovered medical bills.
    Is this what I am to understand is “pulling yourself up by the bootstraps” in America?
    Medicare pays the bills, it does not do the work. We are in a private setting and work off of what Medicare pays. I do not want the gov to own the infrastructure or the employees. We have a big problem here in SFLA with about 4,500 people being contacted by the VA for possible infections due to the inadequate sterilization of colonscopy hardware used in one of their facilities.
    There are a tremendous amount of questions to be asked in cleaning up waste, fraud which hits both private and gov insurers. There are plenty of questions to be raised about the best treatments and the pricing of this compared to the results. There are many ethical questions about health care.
    Like how come I live a clean life in not smoking or drinking, yet I can’t sell my liver or kidneys if I die to someone who has not led a clean life? Why does everyone make a buck off of my carcass except my family? How about giving a scholorship to the offspring of organ donors to offset the missing income when their parent dies?
    We can go on and on with medical costs and ethical debate forever. I propose that one views this like security costs for anyone, anywhere in the USA.
    No matter where you live, you probably have a local police force to protect you. If you live in a higher crime area, you pay more to have that police force. If you have a need for more personal coverage, you can hire someone. If you want more coverage for your business, you can hire private guards. No one is without some sort of mimimal protection, you can do a lot for yourself and if you have the funds, you can get more.
    It would be crazy to sugest that we should just abandon whole areas of any police since we see what happens when we do. I am hoping for the day my kids can ask themselves why it took so long for the USA to come to its senses and finally figure out how to make health care work.
    Finally, I have yet to meet the person who can claim that theyhave not had a single health incident as they got older. You are all going to have some need for health care, it just varies when.

  19. Skeptic & Peter
    Rate of growth is everything–health care inflation is what is killing us.
    We can afford $1.7 trilion (put it this way, we are affording $1.7 trilion) what we cannot afford is 8% inflation which means that number doubles in 9 years.
    GDP will not double in 9 years. Your wages and mine ill not double in 9 years.
    The point of the chart is that NEITHER MEDICARE NOR PRIVATE INSURERS are doing a good job of controlling spending.
    Septic– precisely because the chart compare
    s GROWTH of spending, absolute dollars don’t matter. We’re comparing private insurers against their own base; medicare against its own base.
    The chart shows that neither private insuers nor Medicare has a handle on controlling inflation. I disagree with Jacob Hacker. He uses only part of this chart, turning it into a bar chart and leaving out
    1993-1997–when managed care was “controlling spending” ,even if often doing it the wrong way.

  20. I think comparisons of Medicare vs. private insurance spending rates should be taken with a strong dose of salt, such as the data cited by Maggie Mahar. I realize that single payer and public insurance option advocates such as Jacob Hacker et al. (and perhaps Ms. Mahar) may regard these data as definitive evidence that public plans have a better cost containment track record than private plans, but I find the published studies on this topic by Marilyn Moon, Chapin White, and others unconvincing. These studies generally compare Medicare vs. private plan spending by focusing on a common set of benefits. That approach makes sense up to a point, but the studies that I am familiar with generally exclude from Medicare spending the payments made by employer-sponsored and individually purchased Medicare supplemental plans, as well as Medicaid expenditures on behalf of impoverished Medicare beneficiaries who can’t afford to pay Medicare policy deductibles and co-pays out of their own pockets for acute-care services. Collectively these payments amount to billions and billions of dollars, thus they represent a form of cost-shifting from Medicare to other insurers. In other words, even if there was no cost shifting from providers to private insurers, I think its reasonable to argue that Medicare bears ultimate responsibility for these costs. I don’t know what the spending trends for Medicare would look like if these costs were included, but they should not be ignored by researchers.

  21. Nate,
    Although we have disagreed in the past, I’m with you on this thread.
    A few additional points:
    1) In the case of large employers (about 100 milliom Americans – rough estimate) insurance companies just collect small admin. fees (maybe $20-30 per member/per month)to allow employers to use their networks, process the claims, and run programs to try to get employees to stop smoking, eat right, take their medication, etc.
    2) If Physicians & Hospitals have to rely solely on the government to pay their bills, they are going to lose quite a bit of revenue.
    3) No national carrier has a 75% loss ratio. Anyone who parrots the 25% admin. cost statement is ill-informed.
    Private insurers had “trouble” controlling costs because legislatures mandated that they couldn’t… and yes, there is cost-shifting.

  22. Peter, Agriculture is totally controlled by government; food policy would be government in action, which you are advocating on a much larger scale for healthcare.
    Maggie, Rate of growth doesn’t mean anything about total spending or appropriate spending or about per capita spending.
    Private insurers are not out to control healthcare costs. They are out to control their costs. They are out to give their subscribers what they want so they continue doing business with them. No one liked managed care. They tried managed Medicaid, but the population of Medicaid patients basically ignored any management. The capitation per Medicaid patient was not enough to put up with them. The rate of private spending growth probably relects the change in the population as far as needing MRI scans for headaches instead of Tylenol. The private insured are becoming more and more addicted to healthcare. The ranks of the worried well are swelling faster than any other group. Industry and schools require a doctor’s note to excuse absences. If that one piece would change, corporate America could save a ton of money.

  23. Whether or not private insuers have done a good job of controlling costs is not a matter of opinion.
    Here are the numbers comparing annual growth in private insurers’ spending on health care to annual growth in Medicare spending on healthcare.
    Medicare Private Insurers
    1970-2005 8.9% 9.8%
    1993-1997 6.1% 2.8%
    1997-1999 1.3% 4.4%
    1999-2002 5.9% 8.5%
    2002-2005 6.6% 8.0%
    As you can see, private insurers succeeded in controling costs in one perid- from 1993 to 1997 spending grew by only 2.8% a year. During this time,
    HMOs were managing care–saying “no” to many expensive
    treatements. (Unfortunately, most for-profit HMOs did not make these decisions based on how effective the treatment was–cost was the main consideration.)
    Then came the backlash against managed care. Private insurers loosened their restrictions and reimbursements began to soar–climbing by more than 8% a year from 1999 to 2005.
    This was NOT a result of “cost-shifting” from Medicare. While Medicare held most physicians’ fees flat during most of this period, private insurers CHOSE to pay physicians more–following Medicare’s fee schedule very closely, while adding 5% to 15% per service. Private insurers also paid some hospitals more–without really trying to negotiate because it realized it could pass teh increases along in the form of higher premiums –which it did (This is when premiums really took off.)
    Today, it is generally agreed that Medicare is overpaying some physicians at the top of the income ladder while underpaying primary care and other physicians at the bottom of the ladder.
    Back to whether Karen I. lied or not: Clearly private insurers have not done a wonderful job of controlling costs.
    Neither has Medicare, though it is worth noting that overtime (1970 to 2005) Medicare has done somewhat better (inflation of 8.9% a year vs. 9.8%)
    Moreover, in contrast to the private insurers Medicare doesn’t refuse to insure some people because they are sick (one way of holding down costs); it doesn’t cancel your insurance once you become sick (another way of holidng down costs) and there are far fewer complaints about Medicare denying patients needed, effective care.
    Given the many ways that private insurers have of “controlling costs” it’s a wonder that they haven’t done a better job.
    Bottom line: Medicare needs to do a better job of controling costs by taking a close look at what it is paying for and refusing to pay for expensive treatments that are no more effective for most people than the less expensive treatments and products that they are trying to replace. A small group of patients who fit a particular profile might benefit from the more expensive treatment, and if their doctor documents their profile, Medicare would pay for t.
    Medicare also has to refuse to overpay for certain over-priced services and drugs.
    When Medicaure makes these changes, private insuers will follow.

  24. “They teach very badly, so maybe they can screen for and intervene on things like hypertension and obesity.” “I am all for everyone being given the opportunity to be healthy.”
    MD, you need to read Michael Pollan’s book, “Omnivore’s Dilemma” and/or see a rental DVD called “King Corn” to understand how corn subsidies and a system of agriculture that has only existed since the end of WWII and under Earl Butz, Secretary of Agriculture to Richard Nixon, made us the fattest people on the planet. It’s NOT about choice, it’s about a destructive agricultural and food policy driven by subsidies to corporate food producers and a mono food culture of corn and corn based products.
    I don’t advocate single-pay to cost me more, I expect it to cost way less, but I do know that our present system WILL bankrupt us AND the 25YOMs. We have a huge bureaucracy now doing a terrible job of providing cost effective healthcare – it’s called the insurance industry. At least we can vote out government, we can’t vote out corporate incompetencey – only bail it out.

  25. -I can not blame anyone in this country who wants a single payer after you really look at what you pay for health care.
    Yet it is the single payor systems in the US that are the most expensive and have been driving up the cost for everyone. Why do you pick the worst performing plan and move everyone to that?
    -We have numerous examples of public and private versions of similar systems such as mail and shipping, police, prisons, utilities etc.
    THe post office lost 2.8 billion last year and is on the verge of bankruptsy, the same place public healthplans are headed, isn’t this a clue maybe the government is incapable of running such large systems?
    -People will pay for more coverage based on their needs at that time in their lives. You may be better off with a higher deductible plan with catastrophic coverage if you are a working 25 year old or maybe a barebones plan which does not cover certain procedures.
    This is exactly true, and it also isn’t allowed in Medicare, Medicaid, and the single payor proposals.
    -We are slowing down and in some cases, preventing the growth of small businesses in our economy when heatlh care issues thwart private plans of many people to do new things in their lives.
    They are thwarted even worse by high taxes to cover inefficient public plans. A healthy person can still start a business and afford insurance, overtaxed citizens can’t. So you went from a sitution where a small minority of people might not be able to afford going out on their own to one where no one can.
    There is no reason on God’s green Earth that the country which invented shopping malls and supermarkets and 500 channels of TV can not offer the same array of choices for American Health consumers.
    Sure there is, politicians preventing us from doing it becuase they think they know better then we do. When you turn to the politicians that created the problem for solutions they aren’t going to fix it just make it worse, as illustrated by the last 40 years.

  26. PKinSFLA,
    A well written post. I agree with all of what you said. The people working should have employer-funded plans. Too often they are part time and don’t qualify for plans offered. McDonalds employees are frequently on Medicaid.
    Public policy is fine, but forcing everyone onto a program and then taxing them for it is not fine. There are risky behaviors that lead to healthcare costs. The individual is reponsible for those costs. I specified “male” in my earlier post exactly because Women’s health is moe complicated than men’s healtcare at that age.
    At 56 y/o I have had health insurance for 26 years and never made a claim. I am an ER doc. If your wife lay in the hall for four hours with no one else in the department sommething is wrong with that ER. I stand to benefit from single payor with everyone covered. Right now I collect one of every three dollars billed.
    Unsofisticated patients only know how to access the system (if we really have a system) by going to the ER. Any universal plan will need to adopt some controlled access policies in order to not crush the system.
    Healthcare will almost certainly start in schools. They teach very badly, so maybe they can screen for and intervene on things like hypertension and obesity. They have forever preaced and taught about drugs and why not to use them. Why is our drug problem so bad?
    I am all for everyone being given the opportunity to be healthy. I don’t believe that coverage for all will change behaviors or reduce costs or help the economy. Why are healthcare profits bad for the economy but the stimulus bill is good for the economy? The President said spending was spending.
    Are we to have a new huge bureaucracy? I hope not. With everyong covered there should be less bureaucracy, since all costs will be paid (for every qualifying use, anyway.) But all things political, which universal coverage unversally is, cannot stand not to have “accountability”. Health coverage should be just as easy as voting…just register at the clinic or ER and get your care. If it is not that simple then the agenda really is not coverage and care, but control and power. Bring it on. I am tired of arguing about it. But name me a federal program that has ever turned out as envisioned.

  27. We CHOOSE to buy insurance or we CHOOSE to get a loan for a house. We do not choose to be taxed to death. That would defeat the purpose of healthcare. Also, to deficit spend for healthcare is insane and unsustainable. What country will forever loan us ever larger amounts of money so we can continue to fail to make basic choices about life, liberty and the pursuit of healthcare?
    We already have unfunded entitlements that will run up $30 trillion. We have unfunded social security liabilities. Shouldn’t we get those straight first? “Let’s ignore the house payment, Michelle. How about a vacation we can’t afford either?” Rediculous.

  28. Why should a low risk person subsidize a high risk person?”
    Because one day YOU (or your children) will be a high risk person – probably when old age catches up.
    “What young healthy 25 year old male wants to support this lemon with higher taxes?”
    What young healthy 25 year old male wants to support anything except girls, cars, and a carefree/future be damned, I’ll live forever lifestyle? MD, do you really want public policy based on 25 year old male perceptions?
    I would like to end this idea that is being promoted that a 25 year old does not need health insurance or their premiums are only good to pay for the old. Life is way too complicated to have general health care be reduced to cheap AM table radio banter.
    25 year olds have kids, they get pregnant, need ob/gyn care. Young people have issues with ADD and other problems where having the appropriate care and follow with meds if required keeps them employed and in stable lives to add to the tax base and generate new revenue.
    25 year olds take up sports and activites which may be very good for their cardio, but also end with numerous medical problems in their bones/joints, concussions and other problems which stay with them for life. You want to guess how many younger and very healthy looking 35 year olds became that way from snow boarding, runnning, biking and doing what you see on those great truck commercials on TV in the mountains?
    25 year olds also develop addictions to drugs which are better resolved via medical means then in prison.
    Those same 25 year olds cause a lot of the health care expenses by the crimes they commit when they are younger which are often more violent then a 75 year old commits. As I have said to my legislators, locking up a violent criminal is actualy cheaper for ten years then the costs of the medical care he (usually) will inflict against his victims. Many local law enforcement officials will show how many of the people they arrest for certain crimes have physical and/or mental health issues which end up becoming a criminal issue.
    25 year olds will also be in the military and in much more physically demanding jobs then a 50 year old. The 50 year old is not on the roof, in the ditch, sorting the boxes, lifting the boxes, fighting criminals and fires. They usualy are supervising the 25 year olds.
    The point of all of this is that health care is not something which can be turned off or on in life as there will be plenty of episodes in life where you will be needing to see someone. How many people would have much better lives if they were covered in their 20s and were getting a grip on their blood pressure, blood sugar and other potential problems so they do not develop much more expensive problems later on when they are not 25?
    How many women should be getting GYN care for issues which when ignored or not covered, evolve into massive health problems as they age?
    This is not so easy to just pick and choose who needs coverage or who does not.
    I am fully supportive of revenue generation on things which have a risk to them. If you want to smoke, then we need to cover the true cost of smoking in that pack you buy. You like extreme sports? Who pays when you fall and break your leg and watch it on YouTube? You like ingesting massive amounts of food, then pay a bit so we do not go bankrupt later. There are plenty of activites and jobs which generate risk. We used to in large degree and many of the over seas economies do now, under estimate the future costs due to environmental problems. How many people we take care of now who worked their entire lives with certain materials which later were found to be hazardous? There is a reason why things cost more to do in a modern society and a reason why most of the things which we used to do have ended up overseas where safety , clean up and health are not part of the final cost of a product.
    We have a potential gold mine in creating a workable system where public and private funding of heatlh care can cover more and more people as the waste has been barely borught back to earth.
    For example, my family is overinsured and pays far more then just what is taken out in my spices check for family coverage.
    There are the following direct costs.
    -Actual premiums paid by the employer.
    -The portion we pay.
    -The deductables and out of pocket costs via an HSA.
    -Workman’s comp paid by our employers.
    -400 dollars a year for PIP (Auto injury coverage, up to 20K per incident we pay on our aurto insurance.
    -458 dollars a year paid via our property taxes paid into the county hospital district tpo civer uninsured.
    -The inflated bill my wife recieved from HCA when she had her car hit from behind.
    HCA eventualy went from 9K to 4.5 K after I argued with them over their inflated costs. UNder PIP, they actuall received TWICE what Medicare or most private insurance plans would have paid for the exact same care. They did 2 CTs at 2,300 dollars each when the exact same tests are about 250 dollars in anoutpatient setting. The frist thing out of the HCA reps mouth was.
    “Well, these are very expensive machines and cost a lot to operate and our advanced”
    I told her.
    ‘Cut the nonsense, I am a technologist who used to work per diem at the same ER my wife was sent to. Your machines are leased via GE capital and HCA gets a better deal then a private imaging company because of the volume. Your techs make the same money as our techs. Your machine was a 16 slice and not a 128 slice so don’t tell me that this was state of the art. You pay less for contrast then we pay since HCA is a multi million dollar client of the contrast supplier. My wife was not in a private room, or even in a private cubby in the ER. With no one in the ER, you kept her for 4 hours in the hallway on a stretcher. You ER was partially funded by my tax dollars after 9/11 to be made better in the event of a bio attack”.
    The point is this.
    -I can not blame anyone in this country who wants a single payer after you really look at what you pay for health care.
    -We pay for duplicate coverage in many cases while others end up with health care by default as those costs are tacked on to our bills and premiums.
    -There is no transparency or useful means of determining true costs for both the hospital and insurer side as there is more imagineering there than in a Disney studio.
    -We have numerous examples of public and private versions of similar systems such as mail and shipping, police, prisons, utilities etc.
    -People will pay for more coverage based on their needs at that time in their lives. You may be better off with a higher deductible plan with catastrophic coverage if you are a working 25 year old or maybe a barebones plan which does not cover certain procedures.
    -The current model works against our economy as available capital and potential profits are eaten up. The best auto manufacturing growth is within three hundred miles of Detroit, unfortunately, it is on the Ontario side of the 300 mile radius.
    -We are slowing down and in some cases, preventing the growth of small businesses in our economy when heatlh care issues thwart private plans of many people to do new things in their lives.
    -We are neglecting the fact that health care is a solid middle class life for Americans employed in it. WHen the costs rise too fast, we will see it become more common to fly overseas for some procedures. One big hospital and related support will be as big an employer and economic stimulus as a large manufacturing facility.
    There is no reason on God’s green Earth that the country which invented shopping malls and supermarkets and 500 channels of TV can not offer the same array of choices for American Health consumers.
    You all live in America and not inside a cheap AM table radio. True Americans think about, lobby and work to figure out how to cover their fellow Americans instead of figuring out how to not cover them.

  29. “when he had to defend Blue Shield and other insurers’ behavior in the individual insurance market (hey, it’s the man’s job), while at the same time calling for policies that would essentially end the individual market and create a near-universal purchasing pool.”
    The same is true of at least some of Scott Serota’s (head of Blue Cross and Blue Shield Association) comments at the one-day healthcare conference in Washington D.C. a few weeks ago.
    He made a clear argument for a single, community-rated pool for all USA residents while trying to explain the need for a better reinsurance pool for the most expensive cases that private insurers need to off-load to some other entity. All the convoluted mechanisms that are needed hold together the current patchwork and dysfunction of the medical services/healthcare insurance system in the USA go away immediately under a single pool system.

  30. MD, 25 year old males should be mandated in because they then have skin in the game to affect policy. If costs increase so that the future sustainability of healthcare is at risk, all the more reason for 25YOMs to be in the system.
    “The only ways to control costs are decrease demand and therefore utilization”
    Not the only way – but part of the way. Establishing universal budget would reduce utilization in a far greater and faster way.
    “tort reform”
    Ok, but not tort elimination.
    “and HSA that people have to spend for their deductible (or not).”
    Only works for people well off enough to save in an HSA. If people have all that much extra income then they shouldn’t mind putting it into a national universal healthcare system they can use.
    “Now, according to you, we are to simply pay it forward because we might need it later ourselves?
    Isn’t that why we would participate in a successful Savings & Loan? Isn’t that why we pay for insurance of any kind – not because we WILL need it, or because we WILL get our money back, but because “we might need it later ourselves”?

  31. Peter,
    What about my other points? And BTW, a savings and loan was a way to help your neighbor build a house; your money, pooled with others, was loaned to the homebuyer. You got interest and could withdraw your money. You could be the borrower at some time. Now, according to you, we are to simply pay it forward because we might need it later ourselves? That model won’t work when the younger generation is too small to carry the load. And since when was this country a commune?

  32. “Stop complaining. For the next 48 hours you can make your point at:”
    Joel, I went to the link and clicked on healthcare, then “View Questions” – no wonder the insurance industry is worried (that can only be good). Many people ARE asking, “Why not universal single-pay?”.
    Notice they’re not asking, “Why does Medicare cost shift to private insurance?”, or “Why can’t we have more private insurance companies because they’ve done such a good job at bringing costs under control”? or “Why should a low risk person subsidize a high risk person?”

  33. “Why should a low risk person subsidize a high risk person?”
    Because one day YOU (or your children) will be a high risk person – probably when old age catches up.
    “What young healthy 25 year old male wants to support this lemon with higher taxes?”
    What young healthy 25 year old male wants to support anything except girls, cars, and a carefree/future be damned, I’ll live forever lifestyle? MD, do you really want public policy based on 25 year old male perceptions?
    Nate, the “cost shifting” is from the out-of-control non Medicare/Medicaid system that thinks government plans that attempt to control costs/disbursements are somehow robbing them of their ability to take profits. If costs are shifted to private payers it is because they can, not because they should. It’s the reason we have unsustainable 6% – 10% costs increases per year. All the more reason for universal single-pay where cost shifting would not be allowed – providers would actually have to cut costs to meet budgets – wow, now there’s a novel idea.

  34. I’m not sure I follow what you’re trying to say. Is this really surprising? Of course MCOs are more than thrilled to trade the individual risk market and move to a community rating type scheme in exchange for an individual mandate! Add 40 million beneficiaries to the private insurance market, a good chunk with a government subsidy?…that’s a no brainer. Hasn’t this been their position for the past 20 years, or am I misunderstanding what we’re talking about here?
    Of course, remove the mandate and any support from AHIP will instantly turn to opposition, a la 1992.

  35. “since it could improve US health care without driving the US into bankruptcy. ”
    Seeing as how it is Medicare and Medicaid driving us to bankruptsy how are these plans going to solve the problem?

  36. Very interesting line of attack for a dishonest argument. How does one lie about an opinion? Is Matthew accusing her of not really thinking they have done a good job?
    From 1989 through 1996 premium inflation dropped from 18% to 1%. Then in 1997 something happened and private insurance premiums took off. That something was drastic cost shifting from Medicare to private plans via the Balanced Budget Act of 1997. That drove premium inflation from 1% to 13.9 in 2003. Since 2003 rate of inflation has decreased every year, just in time for Obama to pass another major cost shifting bill.
    PPO contracts can’t be changed over night. You can’t role out a cost management program in a couple months. When outside forces change your environment it takes time to adapt then thrive.
    State mandates, Medicare secondary, reimbursement cuts, premium taxes, and other nefarious “reforms” have been shifting cost from public plans to private plans every year.
    The question is, in light of these dynamics, what does a propagandist like Matthew expect private premium inflation to run? In 2008 private premium increased 5%, most knowledgeable people would consider that an incredible feet in light of all the additional burdens public plans place on private ones.
    In his zeal to attack the system he wants to replace Matthew will never discuss these facts. From 1997 to 98 Medicare inflation plummeted to zero from the cost shifting, then it shot up to almost 10% in 2001. Like clockwork Congress cut Medicare reimbursements 5.4% Jan 1st 2002.
    Medicare inflation is expected to be higher then private insurance the next few years baring another cut in Medicare Reimbursements. If Private insurance is outperforming public plans without the benefit of cost shifting what’s not to be proud of?
    The other fact that Matthew won’t lay on the table is out of pocket cost plummeted, if insurance is picking up a larger portion of a larger bill you can’t expect it to track inflation. These are all adjustments you would need to make for an honest debate on the performance of private insurance before you could call someone a liar.

  37. Thanks Matt-
    I’ve learned never to underestimate the self destructiveness of institutions (AHIP) or individuals (Karen Ignagni)
    Be Well,
    Dr. Rick Lippin

  38. I agree with most of the OP, but as a side note, isn’t what Holt labels “cognitive dissonance” just a well known variation of the “Tragedy of the commons”? When all insurers are forced to take everyone, they can feel free to abstain from the cherry picking the market forces them to do right now.
    A public plan, combined with true cost control and fee restructuring is the only realistic hope at this point, since it could improve US health care without driving the US into bankruptcy.
    AV block, I speculate (given your title) that you are a fellow physician, if not a cardiologist/electrophysiologist. From a physician, I don’t necessarily expect altruism, but some form of advanced ethos. Are you aware that your ethic standards are comparable to: “I don’t care if you are starving, life is unfair?”.

  39. The only ways to control costs are decrease demand and therefore utilization, tort reform, and HSA that people have to spend for their deductible (or not). What young healthy 25 year old male wants to support this lemon with higher taxes?

  40. I’m not sure third-party payers, whether public or private, have a good mechanism for truly controlling medical costs. Perhaps we should let them focus on controlling their own admin costs and let providers, public health agencies and patients partner to control health costs. The payers could help with data mining, but I’m starting to think it shouldn’t go beyond that.

  41. If not a mis-quote; might it be the unique blend of “koolaide” served up in the AHIP corporate offices?
    It would be a reach to even claim bending the MCR as an accomplishment v. actual cost control.
    The whole industry is thrived in an environment nestled in creative “cost shifting” paradigm; until that playing field is flattened, the merry go round will no doubt continue.
    Such a shame, i remember the good ol’ days of GHAA, with Roger Greaves, Rich Lipeles, even the LHS visionary Sam Tippets, et al; they all did pretty well in their respective for profit conversions; yet they were wellness revolutionaries at one point.

  42. Matthew, some help – how would scuttling medical underwriting put product lines like Tonik out of business? I can see that the former might impact the latter’s pricing, but….?

  43. “we’ve got a very good record in our health plan community of bringing costs under control.” Give me a break.
    Has Ms. Ignagni seen the latest settlements by many of the big MCOs (Anthem was sued today 3/25/09) regarding their illegal and potentially RICO-violating use of the Ingenix (UnitedHealth subsidiary)out-of-network fee databases? That’s the way to bring costs under control. What about Dr. Bill McGuire’s $1.6 billion in UnitedHealth stock options, fraudulently backdated? Another way to bring costs uinder control. Oh, and those 75% medical loss ratios? Another way to bring costs uinder control while we spend 25% of your premium dollar “bringing costs under control” paying providers at less than Medicare. But please, don’t make us compete with Medicare. Let us just continue with our oligopsonies while we pay our execs millions.

  44. This is not a “Karen Ignagni lie”: it’s a matter of opinion and judgment whether their cost-containment efforts are “good” or not. Also, how do you know AHIP is planning to throw some of their members “overboard”? Maybe some members are planning to jump! I expect that the health plans have analyzed the profit margins and risk-adjusted return on capital of health plans in social-insurance systems of continental Europe and decided it’s ok. Others will have a different conclusion.
    Preserving U.S. health care’s “original sin” (as the WSJ aptly puts it) of tax discrimination in favor of corporations and against families purchasing their own health insurance is far more important to the “health-plan community” than underwriting.

  45. Why should a low risk person subsidize a high risk person? A high risk person should pay a higher premium. That’s the way it is with auto insurance. That’s the way it is with life insurance.
    It’s a sad reality that we face trying to finance healthcare. To avoid bankrupting this nation we have to recognize the reality that it isn’t fair that someone has a higher susceptibility to a disease than others…

  46. The real question, Matthew, is “will it work”? Will abandoning risk rating be sufficient to keep the Medicare-for-all crowd at bay.
    Awaiting your opinion.