Matthew Holt

Well, point-less?

OK, so it’s a terrible and stolen pun but Wellpoint’s recent history is getting more and more bizarre. First they become the poster child for the recissions scandal (even if not the worst offender)—which eventually helped push the “evil insurer meme” which helped health care reform along its way.

Then they helped kill Arniecare, and tried hard to kill Obamacare, all the while being a fringe member of the AHIP coalition which actually wanted health reform. And they managed to both showcase a bizzaro interview with CEO Angela Braly and then ended up pouring gasoline on the fire dying embers of health reform in late February, early March by their crass mismanagement of their individual market business —which apparently required increases of 39% despite their alleged excellence at accurate market pricing.

Now we have a new article from Reuters who are zeroing in on the actual way that Wellpoint went after cancer patients with the aim of figuring out if there was any reason to cancel their coverage. It’s pretty unsavory stuff, but everyone knows from Lisa Girion’s reporting that this stuff was going on with all California insurers and most everyone else who could get away with it.

But is there anything new in this report? Well I guess the most interesting data is the date. The recission scandal blew up in March 2006. Here’s a cool article written by little ol’ me about it in my then column in Spot-on.

We all kind of assumed that this stuff was going to stop when all the plans agreed to behave better, as they all, including Wellpoint, did in California (with the exception of Blue Shield) by the end of 2007

What Reuters found in the long version of their report (which is tough to find online BTW and well worth looking at) is that the naughty stuff continued all the way up until last year. In fact misrepresentation is now not the reason for one of the worst cancellations—it was apparently failing to answer a question to a letter that apparently wasn’t received.

Technically, rescission was not the reason Relling lost her health insurance, according to correspondences with the company she provided to Reuters. Rather, it was canceled because she did not answer letters from her insurance company requesting information about her employment history.

Relling says the letter was sent to an address which she hadn’t lived at it for some time, and she never even saw it until recently. When she brought this information to WellPoint’s attention, she said, the company ignored her.

This really doesn’t pass the sniff test. If that information was really important—as it clearly was to the patient—surely Wellpoint has other ways of tracking it down, and finding out the truth. And this happened in the middle of 2009.

You might imagine that with the spotlight on them, Wellpoint would figure out a way to do better. As I have noted numerous times, it’s not like the result of all this has been them doing a fabulous job restricting health care costs for their employer and individual clients.

So this really does beg the question, societally, what exactly is the point? George Soros said this about Goldman Sachs today in the FT. Just read it and think about the role of Wellpoint in today’s system. Do they remind you of Goldman?

Whether or not Goldman is guilty, the transaction in question clearly had no social benefit. It involved a complex synthetic security derived from existing mortgage-backed securities by cloning them into imaginary units that mimicked the originals. This synthetic collateralized debt obligation did not finance the ownership of any additional homes or allocate capital more efficiently; it merely swelled the volume of mortgage-backed securities that lost value when the housing bubble burst. The primary purpose of the transaction was to generate fees and commissions

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Categories: Matthew Holt

51 replies »

  1. “When Wal Mart rolled out their $4 generic program we steered out customers there for the best deal. When others followed me changed our drugs plans once again. When Giant Eagle started giving away free antibiotics we notified our members so they knew. Now that Wal Mart if the cheapest on Generics again we once again direct people to the best value.”
    Gee Nate, your clients must live in a cave with no contact to the outside world. How would they survive without you.

  2. Not sure why I feel like picking a fight with you tonight, must be cause the cavs are playing so crappy.
    “What does Wellpoint (or for that matter his little company) do to add any value to society?”
    Innovation and flexibility. Decisions and reactions I do on a quarterly basis would take Congress years if not decades. We try out new ideas and modify/improve them on the fly. We are also considertably more efficient at finding value then politicians will ever be.
    When Wal Mart rolled out their $4 generic program we steered out customers there for the best deal. When others followed me changed our drugs plans once again. When Giant Eagle started giving away free antibiotics we notified our members so they knew. Now that Wal Mart if the cheapest on Generics again we once again direct people to the best value. I’ve never calcualted the savings to our members but when has any public plan changed that quickly and helped their members save money like that?
    That fine sir is called value, I await your acknowledgment of such and any additional admirmation you wish to bestow. And if you need me to price some drugs for you just drop me an email.

  3. “As for the role of insurers–Wellpoint et al helping spciety with DM programs. You really are making me chuckle there Nate. Go bacak and read the Len Schaeffer interview referenced on THCB where he says that they stricturally can’t do anything to change care patterns–which Karen Ignagni says too.”
    I know a journalist or blogger reporting on something always knows more then the people actually doing it Matt but this was pretty interesting read in my email this AM, I know I know it doesn’t work as you told us all but boy it just seems so believable.
    I know my actual experiences implementing these programs and seeing people stop smoking or taking their medicine, or eating better wasn’t real, part of my propoganda I spread to justify being allowed to live, but I just can’t kick the feeling maybe just a little bit you don’t really know what your talkign about when it comes to these matters.
    “Remarkable advances in medical knowledge and technology over recent years have transformed the practice of medicine and delivery of care. But despite these innovative triumphs, experts estimate that up to 30% of care delivered in America may be unnecessary.1
    The steady outpouring of new information and technologies is challenging health care providers and patients alike, especially when it comes to making the “right” treatment decision. Deciding the most appropriate way to care for a condition with multiple treatment options involves more than being clinically up to date. Decisions must also take into account a patient’s preferences and values. A more transparent two-way dialogue between doctors and patients is critical. Unfortunately, research shows that few patients actively interact with their physicians.
    “When consumers are informed of various treatment options and participate in the decision making, they are more likely to comply with a treatment regimen, which results in higher quality of care,” states a new OptumHealth white paper featuring its Treatment Decision Support (TDS) program. Many consumers also will choose more conservative treatment if given the options and information, as suggested in a recent OptumHealth research study.
    How Treatment Decision Support works
    Specially trained nurses use a proprietary call model to proactively engage and educate consumers on the full range of evidence-based treatment options. Using an industry-leading predictive model developed by OptumHealth, the TDS program mines claims information to identify individuals who are most likely to face a treatment decision within the next six months.
    Nine conditions are targeted, including musculoskeletal, coronary artery disease, obesity and conditions that impact men’s and women’s health. These conditions have been selected because they are quite common in the workplace and account for a large percentage of medical costs. However, even more importantly there is also documented treatment variation for these conditions, which can yield varied health outcomes.
    In an ongoing effort to evolve and refine the TDS program, OptumHealth’s Culture of Health Institute recently conducted a demographic engagement study. The complete findings will be explored in an upcoming OptumHealth Webinar. The study’s objective was to determine what role an individual’s age, gender and risk score – illness burden over the past year – played in determining who was most likely to participate in the TDS program.
    Key demographic findings by condition
    For back pain, participation varied by gender and age. Women were 19% more likely to participate in the program than men. Also, the older one was, the greater the likelihood a person would engage in the coaching outreach effort. In addition, OptumHealth discovered that the higher a consumer’s risk score was, the less likely the call would result in a “treatment shift.” A treatment shift occurs when individuals choose a more appropriate treatment option based on their preferences and clinical situation than was initially planned.
    When it comes to knee problems, age rises to the top as a major demographic influence. People in their 40s were more likely to participate in the program than any other age group. And the higher an individual’s risk score, the more likely he or she was to undergo a treatment shift that resulted in a more appropriate treatment.
    Hip problems were the only conditions to demonstrate that men were more likely to participate than women. And those in their 40s were less likely to participate than any other age category.
    Participation varied by age for benign uterine conditions, coronary artery disease and prostate cancer. The older an individual was, the more likely he or she was to participate in the program.
    In a second analysis, the TDS program’s effectiveness becomes evident when claims are reviewed 6 months after engagement with a TDS nurse. Of those enrolled, the analysis reflected a 28% treatment shift rate and 6% shift rate to a quality designated provider after talking to an OptumHealth TDS nurse. The research demonstrated an impressive 3:1 program return on investment.
    “Although the TDS program will continue to deliver and operate as it does today, plans are underway to initiate a pilot program that incorporates the findings of the demographic study,” says Matt McDonough, senior director of OptumHealth’s decision-support products. The hope is to refine OptumHealth’s predictive model and more deliberately approach engagement techniques based on demographic variables.
    “The goal is to expand the number of people who participate in the TDS program and, ultimately, increase the number of individuals who experience better health care outcomes because of an informed treatment decision,” he added. Interested parties can contact OptumHealth for more information about treatment decision support, wellness programs, industry trends and study results or e-mail engage@optumhealth.com
    1Henry J. Kaiser Family Foundation; U.S Health Care Costs Background Brief; kaiseredu.org

  4. 20-25%
    Are you talking about term life there Danny or the AFLAC policy your dad sold you?

  5. ~~20-25% of premiums are broker commish in ind mkt – real high, will def get cut in 2011

  6. they might not want to change it but even less do they want to pay for it. What it would do to the cost of insurance is far worse then what excuse they will come up with for allowing carrier to continue. Government is taking over funding healthcare for a large portion of this country. Just like Medicaid and Medicare once the bills start comming due they will want to push people off and lower their cost.

  7. “no pre-ex won’t last. That portion will be reworked before 2014.”
    That’s actually the only provision in the law that no politician wants to change. Good luck.

  8. ideally, and this is what I love about self funded, nothing should be in the premium. If you want to load 15% commission into a rate you need to increase the rate 1.18 to 1.23 depending how the carrier does the math. No are you not only paying your broker $x you are also paying premium tax on his compensation which makes no sense. Being the leach on society I am, like Matt says, I personally try to never collect any commission. On almost all of our business we sell the rates net them charge our fees outside of the premium. Not only is it cheaper but more transparent, the group knows how much we are making and can then judge if we are worth that.
    I wouldn’t be surprised to see health insurance go net, I think it should. Agents will then get paid a fee or make their money selling ancillar services.
    The other problem with commission is the same as in real estate, it takes as much work to sell a cheap home as an expensive one for the most part. If I wanted to sell policies to young healthy 21 year olds I would make $5-6 per month, hardly worth my time unless they were all hot and female. If I instead sold policies to 55 year olds now I make $40+. If brokers instead charged a flat fee that truly relfected the cost to sell and deliver a policy everyone would come out ahead but the brokers neglicting hot 21 year old coeds.
    no pre-ex won’t last. That portion will be reworked before 2014. It is such a fundemental flaw of reason it can’t stand. MA, NY, and other states are already seeing the effects of adverse selection, congress will realize what they did and change it.
    On exchange plans I don’t think there will be a place for brokers. 4 plans and 2-3 carriers to choose from you really don’t need a broker. People will pay for advice on how to get out of the exchange and find a policy they can actually afford though. It will probably end up as two classes, poor people will get subsidized insurance from the exchange and anyone that can afford to will get it elsewhere.

  9. Nate – That was very helpful information regarding the broker commissions. I appreciate it. With respect to the application fee, once insurers can no longer use pre-existing conditions for underwriting but can still use age, smoking status and the like, won’t it be much easier for brokers to determine who has the most competitive rate for a given benefits package, deductible, network, etc.? If so, couldn’t an application fee or maybe a consultation fee that the broker would collect and keep make sense if the commission percentage is forced lower? It’s the individual market where this is probably going to be an issue for insurers. It looks as though state and federal taxes will likely be taken out of the denominator and health related costs like nurse hotlines and disease management will be added to the numerator in calculating the medical cost ratio. The National Association of Insurance Commissioners is working on this question of how to define medical vs. administrative costs among other issues now and is scheduled to have a draft proposal for CMS by May 11th, I believe.

  10. mail order isn’t green, I ride my block down the street and get them from this guy standing behind 7/11

  11. Would someone kindly give the mail order Rx outfit that Nate has clearly mismanaged his contract with a call & tell them to please, PLEASE ship him his refill overnight? At the rate he’s typing/foaming at the keyboard, he’s bound to break the blessed internet before lunchtime tomorrow.

  12. I agree 100% Paolo, no system is perfect and there is always a couple really smart people with to much time on their hands.
    It is a very slipperly slope when your talking insurance versus speeding for example. Right now public plans have fraud rates around 10%, that is way to high and not sustainable. Once you get even close to that amount the incentive for others to cheat gets to be to great and the whole thing collapses. Private insurance has 1/10th the fraud public plans do becuase they have pre-ex, rescission, and other methods to protect against it, or they did, now that those are gone expect private fraud to very quickly track that of public plans.
    “As long as there are reasonable enforcement efforts,”
    This is where liberals always screw things up. There are ZERO enforcement efforts let alone reasonable. The logical solution would have been to start the reasonable enforcement, then once those are effective and there is no longer the need for rescission out law it. Instead Liberals outlaw rescission and do no enforcement, and claim it will lower cost.
    Barry,
    Varies by carrier and how high the cost of insurance is but individual commission usually runs 10-15% first year and 5-10% second.
    Small group runs 8-10% large group around 3-5%.
    Brokers don’t get the application fees the carriers do to defray the cost of underwriting. Problem is until a policy is underwritten you don’t know who has the best quote. People don’t want to pay $35 to 5 carriers just to see who is most competitive. Carriers don’t want to spend $30 to query Rx database and other sources to underwrite 10 people if only one will buy a policy. People don’t undertand how our current system is the way it is becuase it usually is the most efficient way. Relying on people being honest is the most economical way to write insurance, if someone needs to start auditing every fact it is going to get very expensive and cumbersome.

  13. Just because some people don’t pay taxes, it doesn’t mean that we should abolish all taxes. Just because some people commit crimes, it doesn’t mean we should have no criminal laws.
    Similarly, just because some people may avoid the insurance mandate, it does not mean we cannot get rid of rescission and medical underwriting. As long as there are reasonable enforcement efforts, we can live with some small degree of non-compliance and fraud, just like we do with every other field of law.
    The real question is whether the guarantee of always being able to get health insurance is worth the cost of some fraud and the potential nuisance of a mandate. The American people will come up with an answer over the next few years.

  14. “they also use to charge a fee just to apply, people complained about that to.”
    Nate – Minimum medical cost ratio rules take effect next year. Insurers will be required to spend at least 80% of premiums on medical claims for individual and small group members and 85% for large group members. Broker commissions are the big swing factor in this. Perhaps you could tell us how much broker commissions are now as a percentage of the premium in the individual and small group market or, at least, what the range is. It seems that bringing back an application fee of $25 or $35 could help brokers live with reduced commissions and make it easier for insurers to meet the new MCR requirements. Insurers, for their part, could simplify their offerings thereby making the brokers’ job easier. If I recall, travel agents started to charge a booking fee when airlines cut their commissions a few years back. Couldn’t the same principal work here? Perhaps the application fee could even be applied to the first year premium if the client is approved and actually buys the policy.

  15. “There is no gaming as all are automatically covered and all are required to pay for coverage.”
    Peter read and digest my other comment about liberals inacting outcomes without giving any thought at all to how you actually achieve those results. Lets look at the current reality, of the 4X million uninsured around 20 million are already eligibile for free government insurance and don’t enroll. Medicare has provisions and consiquences for people that don’t enroll when they are suppose to. Medicare Part D had even harsher consiquences and both of those are much cheaper then what the new healthcare is going to cost.
    So while you and the people that are put in congress like you would write a bill saying we are now single pay and we don’t need to worry about this you would once again we wrong. If the government could automatically cover people like you claims then we wouldn’t have all these uninsured people. If the government could force people to pay we wouldn’t have tens of thousands of IRS agents chasing hundreds of billions of unpaid taxes.
    So once again back to square one, how do you make it work without recission Peter?

  16. “The only reason rescission exist is because people try to game the system, and your solution is to do nothing..wonder how that will turn out”
    My solution is and always has been government controlled single-pay. There is no gaming as all are automatically covered and all are required to pay for coverage. I.D. would be required to prevent fraud, such as covering your dog or covering someone not a legal resident.

  17. while insurance companies could be cleaner or more upfront with their efforts your still castigating the victim. It’s a very liberal thing to do and I totally disagree with it. If someone breaks into your house I don’t think the homeowner has any obligation at all to measure his response or try to determine the intent of the criminal. If you don’t want to get shot dead don’t break into peoples’ homes. If you don’t want the insurance company to cancel your policy when you get sick, don’t lie on your application.
    That’s the problem with you liberals, you have these ideas in your head of how you would like things to be so you try to force your desired result but completely ignore what causes the problem in the first place. You can’t have guarantee issue, no rescission, and everything else you want without first making people responsible and eliminate the gaming of the system. You read these sob stories like this latest one from Reuters, so full of errors and half stories it can’t even pass for news, then get all worked up and say we should outlaw rescission. What has any single one of you proposed to do about the lying and insurance fraud? Nothing.
    You all say you want affordable insurance then you make bone headed moves like this. How much money would you like insurance companies to spend verifying all the data on members’ applications? You all complain about how little money goes to pay for actual medical care then three post later you complain insurance companies don’t spend enough investigating applicant fraud, do you not see the hypocrisy there? The big carrier in NV use to require applicants to get a drug test when they applied and people hated it, complained up and down, they also use to charge a fee just to apply, people complained about that to. Those extra measures made sure people didn’t lie on their apps though. They stopped doing all of it.
    That’s what it will come to if you get your way, and when it does come to that you will complain about it more then you complained about rescission. It’s amazing how many millions of people lack common sense, if you want affordable insurance the first thing you do is get rid of the fraud and waste. When a liberal wants affordable insurance the first thing they do is regulate lower rates then all act shocked when the system blows up and fails. How many times are you going to make the same mistake before you learn? Address the problem and the results will follow.

  18. Nate;
    I think we all accept that some people lie on any insurance application, but I agree with whichever commenter above who noted that other insurance companies do a better job vetting the applicant up front, instead of happily taking their premiums until they get sick – THEN looking for “lies” or inaccuracies on the application. This does smack of profit-taking rather than doing one’s homework. It’s analogous to giving a mortgage loan to anyone who claimed they could pay on their application without checking, just to pocket the fees – and we all know how that turned out.

  19. Of course in your world anyone who doesn’t hold your opinion is a liar.
    No Peter those who lie and make up facts are liars. Those that honestly express opinions are just people with a different view point.
    Nice to see how little thought you give to your opinions. Why would someone need to give name and proof of ID to be covered they should be covered since birth. If they aren’t covered since birth that means your back to the original problem of people waiting until there sick to get covered. I know your a little slow but you just managed to accomplish absolutly nothing.
    The only reason rescission exist is because people try to game the system, and your solution is to do nothing..wonder how that will turn out
    Noticed the corrections are starting to be issued by Reuters. Oddly they closed comments on it as well, guess the public fact checking got to them.

  20. “Peter in your world when would you hold the person lying on the application accountable?”
    Nate, in my world there would be no need for an app., no need to lie or not. Just give your name and address and some ID proof and you’re covered. My world does not give insurance companies control of who gets coverage and who doesn’t. My world is one big risk group, because if an insurance company doesn’t want a certain risk client it doesn’t get rid of the risk, it just passes it along. Insurance won’t solve health costs and access. Of course in your world anyone who doesn’t hold your opinion is a liar.

  21. “Some of Kaisers’ competitors save money by dropping patients when they get sick. Kaiser doesn’t do that.”
    Maggie again where do you get this? I had an 80 life prospect couple months back that was with Kaiser. They gave them an 80% rate increase. No carrier just drops people as that would entail their license being frozen but they get rid of sick groups by giving them unaffordable rate increases. Something Kaiser does just like all the others.
    Peter in your world when would you hold the person lying on the application accountable? You can’t have a sustainable system when large numbers of people are allowed to break the rules when they feel like it. I have never heard anyone that is against rescission offer a better alternative. You can not allow people to wait until they are sick to start paying premium, it doesn’t work.
    “As for my contribution? It’s attempting to help putting people like you out of any position of influence so that everyone can be guaranteed access to health care without having to worry about the money, or having to turn to “saviors” such as yourself…”
    I bet you are so partisian Matt that if I delivered exactly what it is you claim you want you would still oppose it purly on the grounds I was delivering it. I don’t think you really care at all about making insurance and healthcare affordable for all you care about the politics and power that controlling healthcare would bring. What is wrong with the plans I administer? They have great benefits, low cost, and efficient, everything you claim you want, yet you want to eliminate them.

  22. Maggie,
    I’m sure you know a lot more about Kaiser than I do. I know you like to extol their virtues, but they’ve also had their problems like the kidney transplant fiasco a couple of years ago. While HMO’s are more accepted in CA than anywhere else, most people prefer a broader network insurance product unless the premium differential is compelling (25%-30% cheaper for similar benefits). Your point about consolidation among hospitals resulting in market dominant providers shaking down insurers for higher payments should, if anything, work to Kaiser’s advantage from a cost standpoint.
    No matter how good a job Kaiser does in providing care and keeping people healthy, as I noted in my prior comment, it’s model simply cannot be easily replicated outside of its established geographies because it needs a large critical mass of both providers, including hospitals, and patients from day one.
    To add to Nate’s comments regarding insurer value added, employers would tell you that insurers’ willingness to assume the actuarial risk to cover the cost of a defined set of medical benefits for a fixed annual premium is extremely valuable because it allows them to budget for their employees’ medical expenses. For larger employers that self-fund, insurers administer the plan, often provide disease management services, pay claims, etc. The problems around rescission, while regrettable, are in the individual market which accounts for only about 10% of commercially insured members and probably less than 7%-8% of commercially insured revenue. That problem should go away by 2014 when insurers can no longer consider pre-existing conditions when offering health insurance.
    Many states are moving more and more of their Medicaid beneficiaries into managed care plans run by insurers because they can deliver care more efficiently than unmanaged fee for service Medicaid can. The states are saving money as a result. I consider that value added as well.
    Administrative simplification is coming, and those savings will accrue mostly to providers. With more price and quality transparency, higher co-pays for doctors and hospitals who charge more because of market power and not better quality, an end to all or none contracting by hospitals, and, eventually, tort reform, I think there is lots of opportunity to improve the current system without pushing insurers, either for profit or not for profit, out of business.

  23. Barry–
    As Matthew points out, Kaiser adds value. (Don Berwick and WEnnberg also point to it as a “gold standard.”
    Kaiser improves health. Its smoking cessation program has been terrific. Not a money-maker but it saves lives.
    Kaiser understands that the purpose of the health care industry– including the health insurance industry– is NOT TO MAKE MONEY but to improve health.
    Kaiser’s docs spend more time on prevention and chronic disease management and offer better primary care. Long-term, they may save money (Or they may not– the degree to which better preventive care and chronic disease management will save $$$ has yet to be seen. Chronic disease management is labor-intensive and very expensive. And it’s very hard to get patients to self-manage– particularly because chronic disease are concentrated among low-income not well-educated Americans.) In any case, short-term, Kaiser is spending more on its patients than others. They’ve done an especially good job with heart disease.
    This is one reason Kaiser did not lose customers in 2009–despite the economic downturn. (Humana,United Health, HealthNet, WEllpoint and Cigna all lost customers.
    Kaiser has some heavy expenses: a largely unionized work-force, and capital expenses as it continues to build. It also has special programs designed to benefit hte community: medical research, efforts to improve the health of children. Most insurers do not do these things. Many non-profit hospitals don’t provide as much benefit to the community as Kaiser.
    Competing with for-profits is always expensive for non-profits.
    Unlike most hospitals, it has invested in an excellent IT system.
    It pays its doctors well (Which is one reason why there is a waiting list of docs who want to work for Kaiser.)
    Maintaining its hospitals is a major capital expense.
    As Fitch (the bond rating agency) points out: in California, the competition among health care and health insurance providers Is “intense.” Kaiser competes with for-profits; some are among the sleaziest for-profits in the insurance industry.
    Mega-mergers in the California insurance industry have added to the competitoin. Meanwhile, Cal. largest hospitals are shaking down insurers for ever-higher rates.
    Some of Kaisers’ competitors save money by dropping patients when they get sick. Kaiser doesn’t do that.
    They sell policies that contain many hidden holes. Kaiser doesn’t do that.
    Yet, it manages to remain a very successful business. Here is what Fitch says:
    “The ‘A+’ rating reflect Kaiser’s solid profitability, robust liquidity and capital related ratios and the underlying strength of Kaiser’s integrated health care delivery system.”

  24. Recission for any reason is not healthcare and an attitude like Nate’s (And Wellpoint’s) shows us why insurance companies have no business controlling access to healthcare. Sure people lie, but they also forget and they also get confused and they also play a little doctor by discounting a past event. Cutting health costs should not be done by cancelling policies in the middle of an illness. More reasons why insurance is an impediment to healthcare reform

  25. “what about the woman in her second year of insurance recivved because her pregnancy was a pre-existing condition.”
    If you want me to argue a specific case it would help to have a link to what your talking about.
    “or having to turn to “saviors” such as yourself…”
    Who do you prefer they turn to? You want everyone to line up and beg the government?
    Really don’t care what Len and Karen say, I don’t need to, I have seen it work, and I see it work every day. Its ridiclous to try and claim diabetic programs have not increase compliance and pre-natal programs have not had a tremendous positive effect lowering pre mature births. Are you saying we should get rid of those programs they are worthless?
    seems the only thing being helped is your pocket book, typical liberal result. The Al Gore of healthcare reform, just what society needed.

  26. More stretching of the truth/outright lies from Nate. If every recission case was fraud, what about the woman in her second year of insurance recivved because her pregnancy was a pre-existing condition. What about the woman denied for cancer because of a misreported pap smear years earlier. If it’s all fraud Nate why did a judge in ARBITRATION for jeez sake award a $9 million judgement against Healthnet, and why did a Republican insurance commissioner prosecute several California health plans for the same. And why isn’t it fraud for the insurers to take the insureds money and only investigate their “worthiness” to receive insurance when a claim happens. Aren’t they defrauding everyone else who pays them money? After all if they get investigated they might be recivved too…
    As for the role of insurers–Wellpoint et al helping spciety with DM programs. You really are making me chuckle there Nate. Go bacak and read the Len Schaeffer interview referenced on THCB where he says that they stricturally can’t do anything to change care patterns–which Karen Ignagni says too.
    As for my contribution? It’s attempting to help putting people like you out of any position of influence so that everyone can be guaranteed access to health care without having to worry about the money, or having to turn to “saviors” such as yourself…

  27. “Many of the recissions are not fraud but an honest lack of accurate recall”
    This just isn’t true at all, if you read any of the big cases that have got press they were all fraud, nothing gray about it. Forgetting you weigh 200 instead of 130 is not honest lack of recall. Leaving off the names of drugs you are currently taking. If you actually looked into the full story and not just the MSM attack job you would know this.
    “For example, high-deductible plans, which Kaiser’s CEO told me (on the record) represent “bad public policy.)”
    I’ll bet you them not wanting to sell HDHPs had a whole lot more to do with their system’s inability to bill then public policy. I bid on the contract a number of years back when they were first rolling out HDHPs. They had no billing capability at all, they couldn’t manage a HDHP if they wanted to at the time.
    “For-profit insurers push a doctor out of their network only if he is spending too much time reading mammograms. (or too much time with patients).”
    This is BS and isn’t even logical. Insurer and myself could care less how long he takes to read a mammogram we are paying him the same amount either way. You can’t write a post without just making stuff up can you? Same as spending to much time with patient, who cares it only effects the doctor.
    “its model could not be easily replicated elsewhere because Kaiser would need a large critical mass of both patients and providers”
    The tried to open in OH but hasn’t worked out very well, they sold their facilities and use CC now.
    In SO CA Kaiser is not cheaper by any means, they sell an ideology, one which only 25% of the population seems to care for. Seldom do you see entire groups with Kaiser, they are usually offered as an option for those that like that type of healthplan. For every person that swears by them 3 can’t stand them.
    “Of course private healthcare insurers do not add value to the “system”.”
    Tell that to all the people that would be dead if not for their outreach and education. Their disease management programs alone are responsible for saving thousands of lives every year. Not to mention all the people that wouldn’t have access to insurance and thus care if they didn’t exist.
    “And what Nate can’t answer, because there is no answer, is my main question–What does Wellpoint (or for that matter his little company) do to add any value to society?”
    See above. I’ll wait for your responce, most likly a change of topic or that doesn’t make up for perceived wrongs argument.
    If Insurers weren’t pushing wellness who would be? The little consumerism people do pratice is usually with the help of private insurers.
    What Matt and the other left leaners here can’t answer is why are people allowed to attempt to defraud insurance companies and get away with it?
    So you don’t think professional journalist should be bothered by getting the facts right? As long as the narritive is what you want to hear who cares if they make part of it up?
    “or for that matter his little company”
    missed this th first read over. Today I am helping a company save their benefit plan, they can’t afford their renewal and were going to drop their insurance. Their broker called me and I came up with solutions so everyone can keep a good comprehensive health plan. Thousands of people have insurance becuase of me, what is your contribution to society Matt?

  28. I think we need a government panel that will review all transactions ahead of time for “social benefit”. This will be an independent panel, so the lobbyists can’t get to it, and it will just have people on it who are wise, and kind, and calm, and thoughtful. People like, well, our handsome President.
    And any business that does not provide “value” to society will simply be seized and their assets distributed to the rightful owners, who are most likely Democratic voters.
    Most illegalist of all will be “synthetic” assets, those who don’t have anything to do with anyone getting a home. These actions will be illegal too, so that all investing will be the good kind, the kind that George Soros does, or the kind that the good and efficient and fair government agencies do. The kind where people who need homes just get them, and they get the size of homes they need, and they get their principal payments adjusted when they need them. Not like the bad bankers, but like the good Soros.
    And the insurance companies, they’ll just go under, because they have no function. The government will just give you all the health you need. If you happen to disagree, instead of being shivved by those nameless, faceless, cold insurance executives you can just e-mail the independent panel and the warm, thoughtful, handsome panel will give you what you need, or just adjust your principal, or something.
    And, also, for the children. Did I say that?

  29. And in stop the press news, Nate misses the point again. It doesn’t really matter who recivved the person who wasn’t a Wellpoint member. Without checking I’ll bet it was Assurant.
    It also doesn’t really matter why Wellpoint canceled Relling’s insurance or how her name is spelt.
    What does matter is the date–Wellpoint was correctly castigated by the DMHC in California for its rescission practice in 2007 BUT kept doing it at least in the Relling case in 2008. To save how much exactly?
    Just more appalling PR management from the company.
    And Nate, if you’re going to accuse us of blindly publishing liberal journalists, please at least acknowledge that you’re quoting direct from a Wellpoint press release….
    That from a company who’s lobbyist in California told me point blank that they had no department investigating high cost claims when the state and DMHC has affidavits from the individuals responsible for those activities (not to mention the on air interview of the same people in Michael Moore’s Sicko).
    But of course Nate Wellpoint’s PR department is entirely
    trustworthy… despite being tone deaf.
    And what Nate can’t answer, because there is no answer, is my main question–What does Wellpoint (or for that matter his little company) do to add any value to society?
    Nothing–which is a big pity because, there is a role for a wise intermediary to play in a decent health care system. GO look at Holland…go look at Kaiser…and I hate to say it but you could probably look at Wellpoint if Sam Nussbaum had the power to run the company, and the incentives in the system were to look after their populations–not kick out the expensive members.
    But in the end, Nate and I have a deep philosophical division, and his opinion is just wrong. 🙂

  30. “do they add value to the system”
    Of course private healthcare insurers do not add value to the “system”. By their very nature they drain substantial resources out of it. That is due to the oxymoronic nature of private insurers.
    All the nonsense about regulation and healthcare insurance exchanges represents further waste of resources simply because no one in a decision-making, aka legislative role, is will to acknowledge that reality.
    The analogy to the shenanigans of financial services companies is accurate.

  31. Margalit,
    There are 39 Blue Cross and/or Blue Shield plans in the U. S. Wellpoint owns 14 of them, one of which is Anthem Blue Cross which is their California licensee. Another of their big ones is Empire Blue Cross in New York. Wellpoint also has a strong presence in Missouri, by the way. All of Wellpoint’s licensees are for profits because the parent company, Wellpoint, is for profit. The other 25 plans are non-profits including California Blue Shield, Healthcare Services Corporation (HCSC) which is the BCBS licensee in IL, TX, OK and NM, Horizon Blue Cross (NJ), Highmark BCBS (PA), Independence Blue Cross (PA), etc.
    In California, HMO’s are more widely accepted than in any other state because the model has a long history there. Capitated payments for primary care are also pretty common. The proper way to compare premiums in CA between Kaiser and its competitors, both for profit and non-profit, is to look at a like for like benefits package at each competitor. Whether HDHP’s are being sold in the market or not is irrelevant. If Kaiser has lower costs because it can use its own hospitals for a lot of the care it provides and it pays its doctors on a salaried basis instead of fee for service, it should have lower costs than its competitors. If it is doing a better job of keeping patients healthy, it would be reflected in fewer inpatient hospital bed days per thousand members (age adjusted). If its costs are lower, its premiums should be lower. If its premiums are not lower, it implies its costs are not lower. Even if its costs are lower and its patients are healthier, its model could not be easily replicated elsewhere because Kaiser would need a large critical mass of both patients and providers from day one if it entered a brand new geographic market. This is why it is probably limited to expansion in markets contiguous to where it already has a strong presence.

  32. Funny, I have a good friend that works for Kaiser and cannot stand the health ins. she has with them. According to her they do the minimum necessary. If you have a complex problem that requires a referral, the docs there put it off until you are so sick that the ref. can no longer be avoided. Or they wait until you die. She says Kaiser is crap and it is for the poor.

  33. Margalit–
    Kaiser’s premiums are in line with everyone else’s because being in a market with very aggressive for-profits forces them to sell products that they don’t want to sell. For example, high-deductible plans, which Kaiser’s CEO told me (on the record) represent “bad public policy.) They also are paying for devices, drugs and tests in a market dominated by the for-profits (who are happy to over-pay–they just pass the cost on in the form of higher premiums.)
    The difference between Kaiser and the for-profits is that on avearge, Kaiser’s doctors and hospitals provide significantly better care. Kaiser actually fires docs who aren’t doing a really good of reading mammograms. For-profit insurers push a doctor out of their network only if he is spending too much time reading mammograms. (or too much time with patients).
    Kaiser has single-handedly reduced mortalities due to heart disease in Northern California. (Heart disease there is no longer the leading cause of death.) Kaiser has offered free smoking cessation clinics.
    Finally, yes, the model where the insurer is also the provider works very well. They’re both on the same page: their goal–to improve the patient’s health.

  34. Can someone explain the exact nature of the relationship between BCBS, Anthem and Wellpoint? Nate?
    I don’t think there’s anything as non-profit insurers any more.
    Kaiser and Geisinger are not insurers per se. They are IDNs. There’s a huge difference. That model seems to be working, although I’m not sure that it is as cost effective as people seem to think. Kaiser premiums are very much in line with everybody else.

  35. Nate
    “This is just another example of why we need universal health insurance.”
    I interpret this statement as a response to your statement about WellPoint trying to get correct patient information. You would not need to ask or answer these questions to determine coverage if there was universal health insurance.
    I doubt that it had anything to do with
    “A made up news article and hit piece with no facts is why we need universal insurance?”

  36. Matthew–
    Great parallel between Goldman and Wellpoint.
    As Soros notes, Goldman wasn’t adding to the wealth of the nation. And that’s the real question about insurers—do they add value to the system?
    I would argue that the best non-profit insurers do. Kaiser has actually helped improve health in Northern California. Geisigner has innovated in ways that could provide a model for Medicare reforms.
    Wellpoint, on the other hand, is simply a poorly run business. There’s no reason to bail it out. I’m hopeful that, if the regulations in the reform legislation are forced, and insurers aren’t allowed to fudge on things like the 85/15 rule, insurers like Wellpoint will simply go under. I’m predicting (hoping for ) a big
    shake-up in the industry. Wellpoint’s a short. A Big Short as Goldman would say. (Of course there’s always the problem of getting the timing right . . .)

  37. And part of the reason very few people can accurately recall their medical history going back 10 years or more is that there is no central repository, online or on paper, at home or elsewhere,of their medical history. I recently faced a question on a pre-MRI form about surgical staples…..having had a laparotomy in 1986, I had no idea if they left staples or not. My husband suggested contacting the (out-of-town, now bought-out) hospital and I died laughing! Assuming they could even find my record, it would have taken weeks if not months to get it! (Fortunately, the MRI people didn’t care.)
    Lack of easy access to such records does worse than make you “lie” on an insurance form – it may kill you someday due to lack of vital information timely. Pathologists have to keep microscopic slides for 20 years, so there’s precedent. Let’s get on the bandwagon…..

  38. “Errors discovered are generally not fraud but a lack of recall or a misunderstanding of the health questions.”
    I agree that this is often the case. Moreover, the error or omission frequently has nothing to do with the illness the patient needs treatment for. I think insurance executives should ask themselves how they would feel if they or a friend or family member faced rescission under these circumstances. While I have no doubt that some people misrepresent their medical history in order to qualify for insurance or win a lower rate than they would qualify for if their application were completely honest, very few people can recall their complete medical history with 100% accuracy going back 10 years or more. To not honor a claim because of an innocent and medically irrelevant mistake on an insurance application is dealing in bad faith and it hurts the industry’s reputation. Ironically, for most of the large carriers, the individual business is a very small percentage of their total revenue. In the case of UnitedHealth Group, for example, only $2 billion of its estimated $92 billion in 2010 revenue is from the individual insurance business. Another $35-$40 billion is from the commercial small, medium and large group business, $40-$45 billion is from Medicare Advantage and Medicaid, and $6 billion is from miscellaneous products and services. Yet, most of the negative publicity relates to the individual market. Go figure.
    Along the same lines, hospital executives should ask themselves how they would like it if they were uninsured and received a bill from their hospital expecting them to pay full chargemaster (list) price and then employed aggressive collection tactics to try to force payment. Common sense, good faith and fair dealing often seem to be scarce commodities among both hospitals and insurers. Both can and should do better.

  39. It is virtually impossible to fill out an individual health policy applications even 90% correctly. How many of us can recall our medical history form 9 or 10 years ago. Many of the recissions are not fraud but an honest lack of accurate recall of our medical history from 5 to 10 years ago, which is what the applications require.
    As I said above, the more reputable companies will check an application with the applicants prescription drug usage available in databases. They will conduct phone interviews and bring up any discretpancies for clarification. In borderline cases, they will obtain doctor’s records. Recissions are vitually nil for these companies.
    Others like Wellpoint do not go through rigorous up front checking. They feel that their profitability is enhanced by underwriting many who probably do not meet their usual criteria. Only a few of theses will turn out to be unprofitable. These are the ones whose applications are scrutinized. Errors discovered are generally not fraud but a lack of recall or a misunderstanding of the health questions. If you don’t believe me, take a dy or two to fill out and individual health insurance application.

  40. the way to fix rescision is stop the fradulent applications. Not demonize the carriers who are being defrauded.

  41. “OK, let’s compare. What is the percent arrested for insurance fraud?”
    I have never been able to find a number, I would guess under 1 person a year is ever arrested for lieing on their application to get insurance they are not entitled to or at rates cheaper then they should.
    I can’t find a case of anyone ever actually being in any sort of trouble at all but civil brought by insurance companies. Even that is less rare then rescision.
    There is absolutly 0 inforcement of fraud laws. This entire complaint about carrier rescission is as absurd as ignoring jaywalking laws then being offended and shocked pedestrians get ran over. To make it more absurd liberals then want to charge the drivers for hitting those jaywalking.

  42. thats a fair gripe and would make for a honest article, much better then the lies and demonization we see instead

  43. “1/10th of 1% of their individual policies were rescinded, compare that to ho many people were arrested for insurance fraud”
    OK, let’s compare. What is the percent arrested for insurance fraud?

  44. The problem with Wellpoint, Golden Rule (UHC), and Assurant is that they are not rigorous in their investigation of individual health insurance applications upfront. They would rather uncover discrepancies after large claims, rather than denying coverage.
    Other insurers such as CIGNA, Aetna, Humana, and many regionals, have rigorous application health questionaires followed up by phone interviews and pharmeceutical database searches. If questions arise, they will pay to obtain doctors records. Theses insurers reject more applicants up front but do not have recission issues.

  45. “WellPoint declined to comment on the women’s specific cases without a signed waiver from them, citing privacy laws.”
    What sort of BS journalism is this? Come on Matt you have to be joking, talk about not passing the sniff test of journalism and basic reporting 101.
    It’s a freaking federal law, HIPAA specifically disallows talking about peoples health and treatment without their consent yet this joke of a journalist implies they are hiding.
    “told Reuters that no one in the White House knew WellPoint was systematically singling out breast cancer patients like her.”
    Seeing as how they didn’t even insure her I would imagine they didn’t single her out.
    entire article is lies and BS, she can’t even report basic facts correctly let alone the political bias she dumps all over

  46. “This really doesn’t pass the sniff test”
    Maybe your nose is so liberal you can’t smell anymore Matt? Did you even bother to read the other side of the story, also known as the facts?
    Typical MSM they misspelled her name throug out the entire article, it is Reilling.
    The 2007 quote from DMHC saying no evidence they investigated or established ommission was an erroneous statement of legal standard. The DMHC found 90 percent meet the heightened standard.
    They accused them of resinding coverage to Robin Beaton who wasn’t even a member of their plan.
    Instead of lobby to quash third party review they were the first to institute it in 2008.
    And your hero butchered the computer algorithms.
    Typical liberal journalism, make it up throw it out and hopethe Shit sticks no matter how untrue. We have been seeing a lot of that around here lately.
    “This is just another example of why we need universal health insurance.”
    A made up news article and hit piece with no facts is why we need universal insurance? If that is your best argument it goes to show how much we don’t need Universal Insurance.
    Why is it everyone agrees we need to reduce fraud in healhcare, but when a private company actually does it they are the devil? The left wants to pretend they care about cost and want to lower it but when it actually comes to doing any of the things ncessary to prevent fraud or lower cost they cry how unfair it is.
    Follow the simple logic, no person in america would ever have to worry about rescissions if they bought insurance and kept it. That is the simple facts of the matter. Only people gaming the system, trying to get away with no paying premium when they are healthy then forcing someone esle to pay when they get sick have to worry about rescission.
    1/10th of 1% of their individual policies were rescinded, compare that to ho many people were arrested for insurance fraud, the problem is not carrier rescission it is unchecked applicant fraud. Liberals want to treat insurance like illigrations, just come in when ever you feel like it and “The Taxpayor” will foot the bill.

  47. This is just another example of why we need universal health insurance. Insurance companies will do anything to maximize profits. They are a not suitable vehicle to issue health insurance.
    If we had universal health insurance then everyone would be covered, everyone would pay (through a broad based tax), and we wouldn’t have these profit motivated private companies denying needed coverage.
    We need to get insurance companies out of the health insurance business. It doesn’t work for society.

  48. Is that the same George Soros who likes to collapse currencies for personal gain. If anyone knew a sham transaction it would be him.
    Why do we never see a single article about people doing this same thing to insurance companies? Not once do you see a front page article about someone getting caught lying on their app and getting prosecuted. Maybe if even the slightest effort was made to inforce the other side of the problem insurance companies wouldn’t react so badly.
    “surely Wellpoint has other ways of tracking it down,”
    Instead of speculating why not offer some examples. What legal means does wellpoint have to gather this info without you then accusing them of invasion of privacy or some other social injustice. No matter what they do you will still blame them. I find it hard to beleive while all this was going on she never once called then to make sure everything was ok at which time she would find out they had an old address. Notice she never claimed she gave them the current one or they used an old one. Who’s fault is it she didn’t provide current info?

  49. I keep trying to make the point that insurance executives by nature are not a good fit with health “insurance”. Behavior designed to minimize their risk and get rid of high claimants is more fit for homeowner’s or auto insurance. (For instance, a number of insurers stopped insuring waterfront property in my home state after recent weather events – and it’s not Florida.) It’s just not the right mindset for health “care”. We need some other type of company to do this, however one wants to arrange the financial aspect.
    And yes, I know all about spreading the risk across the population, etc. etc. I am simply saying dropping people who are high risk is typical behavior for an insurance company – but it doesn’t fit the customer needs in health care. Hence they are vilified as bad guys – understandably. Just not the right skill set, people…….

  50. At some point you have to look at the Board of Directors of badly behaving companies. WellPoint has Susan “Mrs. Evan” Bayh and William H.T. “Uncle Bucky” Bush in service. They’ve made millions in board compensation during their terms.

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