Matthew Holt

Karen Ignagni tells the truth, unfortunately

There’s a big to-do about whether there are really any cost-saving measures in the House and Senate bill. Most people say that the answers are “no” and “sort of”. There’ll be much more discussion about that on THCB this week, and I suspect the answer will really come down to whether or not pilot programs which have the potential to reduce costs can be both successfully piloted, then extended by CMS and then protected from Blue Dogs, reps from academic medical centers, Republicans saving Medicare and basically everyone in Congress carrying the industry’s water. So “sort of” may well mean no.

But let’s not dwell on that. Instead let’s have some fun. Regular THCB readers will know that AHIP’s Karen Ignagni has told half-truth after half-truth after outright lie to protect the position of her members. All the while somehow holding together a coalition that really should have broken apart long ago (and may yet still do that). And she gets paid very well for that role.

But today in the WaPo she told the truth:

Karen Ignagni, president of America’s Health Insurance Plans, said the Senate bill includes only “pilot programs and timid steps” to reform the health-care delivery system, “given the scope of the cost challenge the nation faces.” Unless lawmakers institute changes across the entire system, Ignagni said in a statement Wednesday, “Health costs will continue to weigh down the economy and place a crushing burden on employers and families.”

Don McCanne (who runs the Quote of the Day service from the PNHP) puts the boot in:

There could not be a more explicit admission that the private insurance industry is not and never has been capable of controlling our very high health care costs. <snip> Karen Ignagni says that the lawmakers must institute the necessary changes across the entire system (because the insurers can’t). Let’s join her in demanding that Congress take the actions necessary, and then thank her for her efforts, as we dismiss her superfluous industry from any further obligations to manage our health care dollars.

And it’s basically true. Health plans have no ability to overall restrict health care costs. And worse, because they’ve been able to charge more to their customers than the increases they’ve received from their suppliers, they do better in a world in which costs go up.

Of course Ignagni knows that gravy train can’t roll on forever, so she’s trying to craft a future in which the health plans can continue to make money, yet not bankrupt their customers outright. Whether it’s good for the rest of us remains a very open question.

Meanwhile, in another example of catching someone saying something that they don’t really understand the meaning of, Uwe Reinhardt busts Sen. Kay Bailey Hutchinson (R-TX) as saying that not having insurance coverage is rationing and shouldn’t be allowed. Well she may know have thought she was saying that, but that’s what she was saying.

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RickiPam T.PeterMGMargalit Gur-Arie Recent comment authors
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Nate
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Nate

rbar there has never been a meaningful study to prove co-pays fail. There have been bias polls done to confirm someone’s preconceived notions but never a serious and supportable study. If someone is going to claim they didn’t take their medicine becuase of the co-pay you then need to study their entire financial portfolio to gauge the value. If someone forgos their Rx and instead buys a pack of cigs is the co-pay really the problem? You can give everything away for free but we know that leads to waste far greater then some savings from preventing disease. There needs… Read more »

rbar
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rbar

Barry, I agree with your statements, but to my best recollection, there is quite good empirical evidence that copays backfire – i.e. that they curb both necessary AND unnecessary care. I think one solution could be that docs can fall back on rigid rules, sthg like: “Axial backpain for 2 weeks? Well, your MRI is not approved, but if you want to pay for it out of pocket” (I am talking about guidelines here). Of course, every kind of cost control will be hugely unpopular, with patients and docs alike. I have seen narcissistic docs at work who spread their… Read more »

Ricki
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Ricki

For all those interested this is where the blowhard Nate works
http://www.obatpa.com/
Apparently he is the director of marketing…and he went to UNLV. Not exactly stellar credentials, but it wouldn’t matter anyway, since he is always correct.

Margalit Gur-Arie
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Margalit Gur-Arie

See Barry, my intuition is that the cost of “sniffle” visits is negligible compared to the cost of no early treatment, not to mention that the results of the latter can be lethal.
I really think someone should start collecting and analyzing data on all these things. Maybe there are a few millions somewhere left over from the HIT bonanza…

Barry Carol
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Barry Carol

rbar, I think a good case can be made for eliminating copays for maintenance drugs like those to control blood pressure and others to manage chronic disease that patients are supposed to take every day. Some plans have done just that, at least for generics and other first tier formulary maintenance drugs. Eliminating the copay for a discretionary office visit such as to seek reassurance that a sniffle is nothing serious and will resolve itself in a couple of days is a different matter. Particularly with respect to health insurance plans that are financed with tax dollars, my preference would… Read more »

rbar
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rbar

Barry, The low copays don’t help much. The well off worried well go to the doc w/o 2nd thought, but the people in financial stress will hesitate to go and have their antihypertensives refilled. I thought of exactly that reason that you suggested (have mandatory substantial copays that the doc may waive), but at the end, the patients will expect that docs will waive the copays for all “legitimate visits” and will be devastated when it doesn’t happen. Dr. Kirsch, I understand that HMOs were not popular for thje reasons that you mentioned. Is our current system popular or effective?… Read more »

Barry Carol
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Barry Carol

“Barry, do you view co-pays as a method to control utilization or spread the cost of healthcare more to those that use it most? “ Peter – The answer is primarily the former. I think utilization driven by a combination of defensive medicine and the desire to make money under the fee for service structure are issues that as I’ve said before could be addressed by changes in payment policy – bundled payments, tiered co-pays, capitation, etc rather than fee for service. I’m somewhat skeptical about the magnitude of healthcare costs that are accounted for by people who deferred needed… Read more »

Peter
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Peter

” I think we should have co-pays coupled with the opportunity for doctors and hospitals to waive them on an ad hoc case by case basis.” Barry, do you view co-pays as a method to control utilization or spread the cost of healthcare more to those that use it most? If the purpose of co-pays is to control over-utilization and you recognize that lower income folks may once again avoid early treatment due to financial circumstances, then how are we to reduce costs that arise from delayed medical treatment which could have been handled by a PCP rather than an… Read more »

Margalit Gur-Arie
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Margalit Gur-Arie

What are the costs of patient induced overutilization?
What are the costs of “defensive medicine”?
What are the costs of abusive self referrals?
etc. etc.
I don’t think there can be any conclusions without data. All we have are wildly different opinions based largely on anecdotal evidence. How can we start cutting costs if we don’t understand EXACTLY how we spend, or misspend, our dollars?

Pam T.
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Pam T.

Of course the private insurance industry doesn’t have the capability to cut health care costs the way the system is currently set up. The past several decades are proof of that. Maybe if there was more actual competition between insurers private market forces would do what theory suggests and motivate insurers to cut costs better. As it is, individuals do not have the real ability to choose their health plans and switch between them. The dominance of employer-sponsored insurance in the US system motivates insurers to set up plans that appeal to large employers and what is best for their… Read more »

Barry Carol
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Barry Carol

“HMO patients often had no copay and, therefore, overutilized the system. They came to the office after 2 sneezes and a sniffle”
In Taiwan, patients who overutilize the system get a visit and a talking to from a member of the government. That would go over like a lead balloon in the U.S. Personally, I think we should have co-pays coupled with the opportunity for doctors and hospitals to waive them on an ad hoc case by case basis.

Michael Kirsch, M.D.
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I was in the country during the HMO era. The patients hated it and so did we physicians. It was a disaster for the doctor-patient relationship. The patients thought they we were holding back care to save money. Indeed, there were some improper conflicts of interests where physician compensation was directly tied to utilization. I realize that fee for service medicine has its own conflicts. HMO patients often had no copay and, therefore, overutilized the system. They came to the office after 2 sneezes and a sniffle. If patients under any system had some ‘skin in the game’, then utilization… Read more »

Peter
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Peter

“I have many clients that are paying less today then they where 5 years ago.”
Who are your clients, employers or emplyees? It would help Nate if you detailed how those clients are paying less and how much. Right now I assume you found a way to off load their risk to their employees or some other entity.

MG
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MG

I don’t get Nate’s argument about bringing up the point about insuring 20-29 dependents as the major cost driver. By far the lowest cost group bar none. Not uncommon that an overwhelmingly majority of individuals in this age group will not use a single health care resource in an entire year. As for his other ones, Nate brings up pretty of valid points. Private insurance companies get made out to be one of the principal bogey man of health insurance costs. There is some truth to that portrayal (e.g., increased administrative complexity, etc) but Nate rightly brings up the point… Read more »

rbar
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rbar

I have to admit that I wasn’t in the country at that time, but from what I have heard (from colleagues) and read, HMOs aggressively negotiated (occ overly so)contracts with medical providers and did cut cost for unnecessary services (such as those MRIs for axial back pain, for instance). That they also denied reasonable care did happen in some cases, but these cases probably are somewhat overrepresented in our collective memory. Not to be misunderstood: I hate money driven medicine and personally, I am in favor of sthg like medicare for everyone willing, with an adjusted fee schedule (higher for… Read more »