By JOHN GOODMAN, PhD
Matt you can’t have it both ways.
First you attack a well-known Harvard professor, Regina Herzlinger, for accepting an invitation to become a director at a company that only later was publicly accused of accounting problems. Then you denigrate her when she goes public with her attempts to get the board to move more aggressively to tackle those problems and ruffles the feathers of several board members who retaliate. You then insinuate that she profited while shareholders suffered and yet you dismiss it as sour grapes when she resigns before her term ends (costing her a significant sum of money in the process).
And while we’re at it, how can a site with the name “The Health Care Blog” routinely ignore the ideas of one of the most creative thinkers in health policy? This field is so completely dominated by unoriginal thinking; I don’t know why you don’t welcome with open arms someone who is not just parroting the latest fad.
And speaking of character, we have just been through a period when an embarrassingly large number of leading health policy analysts sold their souls, their self-respect, their reputations and whatever is left of their intellectual honesty to the highest bidders in what we loosely call “health care reform.” In the midst of all that, I would think that someone also has shown the unimpeachable rectitude and character Professor Herzlinger has is deserving of a THCB award.
John C. Goodman, PhD, is president and CEO of the National Center for Policy Analysis. He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system. Dr. Goodman’s Health Policy Blog is considered among the top conservative health care blogs on the internet where pro-free enterprise, private sector solutions to health care problems are discussed by top health policy experts from all sides of the political spectrum.
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to bevMD: People need to have some form of Medical Savings Accounts and catastrophic insurance coverage so they take the responsibility for paying for their own health care needs, and, unfortunately, we continue to need to rely on Medical Assistance for those who are TRULY impovershed and do not have the ability to have such accounts.
I have no respect for what health care insurance has done to the profession, and the sooner it becomes a non profit business, the sooner it may actually provide coverage and allow people to get care. But, with the Nate’s in the world being the spokespersons to argue otherwise, this will not happen in my lifetime, eh?
“The only people that take COBRA are those with large claims that can’t get cheaper insurance elsewhere.”
Not true. I know quite a few responsible folks who stay on COBRA and are as healthy as they come. Why do you make generalizations?
I found 123 plans from multiple payors (all the big guys plus some locals), available in my area:
2 with zero deductible, 8 with 500 deductible, everything else was 1000 and up
There were no plans for 250, 750 or 200
43 plans were 5000 and above.
Also when you click on these contraptions, some, but not all, say that the deductible is actually double since two family members have to independently reach it.
You can holler or laugh again, but this insurance business is no country for nice men (or women).
“but you are not funding their HSA any more, so in effect you got rid of the biggest expense.”
LOL Margalit how many times do you have to be wrong before you give it up? Groups don’t pay COBRA premium the individual does. If someone only has $5000 or less in claims do you really think they are going to pay $3000-$5000 in COBRA premium? The only people that take COBRA are those with large claims that can’t get cheaper insurance elsewhere. The couple thousand in contributions is meaningless. As many times as you have been factually wrong today why do you keep putting your foot in your mouth?
“so in effect you got rid of the biggest expense.”
if it wasn’t so sad it would be funny how clueless you are on everything your talking about. Your like the Ezra Klien if THCB. At least your not getting paid for all these mistakes.
” I would say that it is pretty hard to find a low deductible plan nowadays, so they must be pretty good for business.”
Not sure what your trying to say with this gibberish. You found 8 from one carrier with an internet search. How many $250, $750, $200 plans did you find? How many different $500 plans do they need to have for them to be good or bad for business?
If you fire someone they do stay on your COBRA, which means you have to keep paying the insurer, but you are not funding their HSA any more, so in effect you got rid of the biggest expense.
When I did my little experiment with that fictitious family in Missouri, there were only 2 zero deductible plans and 8 with $500 deductible, out of 123 plans. I would say that it is pretty hard to find a low deductible plan nowadays, so they must be pretty good for business.
“Are insurers loosing money on HDI plans? Are they making a horrific business error in pushing more and more high deductible plans with higher and higher actual deductibles?”
Not sure what you mean by pushing, a number of carriers are not only not pushing them but taking them off the market. Aetna eliminated most of their 100% plans, Humana severly underpriced theirs and was giving out 40% increases to healthy groups. Small carriers like Alden and some others are “pushing” HDHPs. Your big carriers like Anthem would probably prefer they go away.
I don’t think Anthem and some of the Blues could stay in business if everything went HDHP. If your average composit premium is $6000 a year then carriers have 900-1200 to work with. That is $75-100 PEPM, they can have nice offices and big CEO salaries with that. If everything went HDHP they would only have 37.5 to 50 to work with, that ain’t going to keep the lights on. I can survive on that but I don’t make 7 figures and my offices aren’t that nice.
My answer would be they aren’t pushing them and no they can’t survive as they are on that low of premiums.
” Not to mention that their rates are higher than even a small employer to start with.”
No Margalit individual rates are not higher then small employer rates, small group rates are substantially higher then individual rates. Again this is basic fact, it’s not an opinion or something we can disagree on your just wrong.
“How does a private person buying in the individual market get the same benefits?”
Buy buying an HSA and funding it with Premium savings.
“The sick employee can always be dismissed”
Here we go again, no Margalit you can’t fire sick employees that is illegal. Further have you never heard of COBRA or are you typing faster then you can think? Even if you could fire a sick person they would stay on your plan for 18-36 months. This is an example of the pointless conversation I was talking about. Your arguing things that don’t exist, most of your argument doesn’t exist.
“An individual for whom the risk materializes cannot do either.”
You must also not be aware that group business is rerated every year. If the health of your group goes from good to bad you will receive a substantial rate increase, most states have caps but 40-80% increase is common for sever illness. Individual policies are pool rated, a sick person in an individual pool receives the exact same increase as everyone else in the pool. What you said was once again absolutly 100% incorrect and the exact opposit of reality.
Nate, let me ask you a very simple question. Are insurers loosing money on HDI plans? Are they making a horrific business error in pushing more and more high deductible plans with higher and higher actual deductibles?
As to your TPA services, the employees in your plans do not really have high deductibles. They have one plan from the big insurer and another for small things from their employer. How does a private person buying in the individual market get the same benefits? Not to mention that their rates are higher than even a small employer to start with.
I would also submit that the risk for the employer is much smaller than for an individual. The sick employee can always be dismissed and/or the plan can always be switched back next year to lower deductibles.
An individual for whom the risk materializes cannot do either.
Um, Exhausted, what kind of payment system would you like to see? I’m not sure I recall you actually commenting on that part of things. I am asking seriously. You gotta get paid somehow.
As for Nate, I refrain from comment except to say thanks for answering my question. I understood the answer, thanks.
Exhausted you don’t seem to know the difference between an opinion and lies. You also don’t have the slightest idea what I do for a living, it might help to know that before you comment on it.
Please do explain how I; “You may scam some health care providers” this is sensless drabble, sorry attempt to insult someone when you don’t know what your talking about. Seeing as I sell providers nothing in what matter are they scammed? Seems you yourself are; ” nasty, projective, minimizing, and deflecting comments!”
You know what, Nate, your 6/19 8:35 comment does not invalidate all your prior nasty, projective, minimizing, and deflecting comments! You run a bully pit, have absolutely zero tolerance for a differing opinion that sells your profit driven motives short, and you are like Maggie M in the end, full of sound and fury, signifying nothing. Throw out lots of numbers, confuse with the shell game antics, and then cry foul when someone catches on to the shenanigans!
Make a point, use responsible facts, and if your agenda is honest and fair, objective and unbiased readers will see such agenda.
But it really isn’t, is it? You may scam some health care providers who are stupid in just doing what is told to them, as they are still in the residency mind frame, but beware, there are doctors who think and know better than to listen to the failed mind set of insurance industry profit motives.
You have scammed the politicians well, though. I’ll give you that! ‘Cause if the health care deform was really that damaging to your institution of disruption, it wouldn’t have passed. Your lobby is strong, unfortunately. So, unbiased and objective readers, think about that last comment and why insurers aren’t taking out full page ads in well read publications and running serious commercial time in visual mediums to fight inappropriate intrusions into their businesses. And, that is what health care insurance is, a business.
By the way, Ms GA, thanks for the supportive comment! It is nothing less than nauseating to play around with sick people. Which is why the business model does not fit into the health care process.
But, hey, business people will scream in your face otherwise. Because, profit and addiction is a fine line, isn’t it! And you don’t want your doctor to be acting like an addict, DO YOU!?
For starters SmartSense $5000 isn’t an HSA. If you had ran a Lumenos quote the OOP would have been $10,000.
In NV your $500 Ded Smartsense has a premium of $752. OOP is $6000 but co-pays don’t apply to OOP so they go on forever.
$5000 Lumenous HSA has premium of $337 with OOP of $10,000 but Rx and office visits are paid at 100% after deductible. HSA products also usually have much better preventive benefits and wellness services.
That is a savings of $4980 more then enough to pay the additional OOP cost of $4000 and it is also a better plan as it starts paying at 100%, so the potential savings of $980 is in fact even greater.
Somewhere around 95% of the American population are not sick every year. Under your $500 deductible plan you want to buy you pay that extra $5000 in premium every year no matter what.
Under the HSA in the 4 out of 5 years you are healthy you will be saving $1,000 to $3,000 in premium that can be left in your hsa for an additional savings of $4,000 t0 $12,000.
As I said before and as this clearly shows the HSA is a far better deal. Buying a $500 deductible is just wasting money.
“a private person/family has no way to spread the risk and no one to fund the HSA.”
I don’t understand this comment, how can they pay the carrier an extra $5000 in premium but not have $5000 to fund their HSA?
“If I’m an employer with lots of employees, it may be OK to do this”
Lots being 19? That is how many the company I cited has. Lots being 8? I actually have a client with 5 employees doing this.
“Buying health insurance is very affordable if you don’t need health care.”
Insurance should always be more expensive then the known healthcare or it isn’t insurance.
Nate, I went to eInsurance website and entered a fictitious family of 4 here in Missouri, and picked Anthem and two identical policies in everything other than deductible.
SmartSense 500 – Premium $598.22
$500×2=$1000 deductible 30% coinsurance $35 Office visit OOP $8000
SmartChoice 5000 – Premium $299.89
$5000×2=$10000 deductible 30% coinsurance $35 Office visit OOP $17000
If I pick SmartSense I pay $7178.64 per year and may end up paying $1000 more and $8000-$1000=$7000 more if things get dicey.
If I pick SmartChoice I pay $3598.68 per year, which is a savings of about $3500 compared to the previous choice. However, now I am on the hook for $9000 more.
If I’m an employer with lots of employees, it may be OK to do this, but a private person/family has no way to spread the risk and no one to fund the HSA.
I think we are talking about two very different circumstances and hence the disagreement.
Buying health insurance is very affordable if you don’t need health care.
I’m so misunderstood. I am the nicest person in the world to honest people. I spend hours every week educating and assisting people for free. But when someone is going to lie and make things up for political gain they need taken down. I’m not going to equate healthcare reform to genocide but propoganda when left unchecked leads to very bad things. If people would be honest they wouldn’t be liars, their decision not mine.
I own firms referred to as TPAs, Third Party Administrators. We process claims and handle the day to day administration of health plans. We are equivalant to the administration piece of an insurance carrier. We don’t have an insurance license, contracts with providers, or the other parts.
Our main business is self funded plans, although some TPAs do have fully insured business as well. In the self funded market the pieces are usually broken up, the carriers also do self funding but it is much more common for groups to build their own plan. They hire the TPA to process the claims, they pick one or more PPOs for discounts, they pick a UR/UM firm to pre-cert and manage treatments, PBM for the Rx etc.
Broken out like this I am a commidity, it is very easy to fire me and hire another TPA if my service is poor, I don’t manage claims well, or charge $1 more then someone else. unlike the fully insured market where state licensing limits competition this market is very competitive.
Years ago we use to have a lot of small group self funded plans, employers down to 15 employees or even smaller. For many reasons that entire market disappeared and business consolidated with the fully insured carriers. As they grew bigger they where able to get better pricing from providers. In a strategic error providers thought they where better off sticking the small players with high prices to make up for the deep discounts to the few large carriers, know as BUCA, Blues, United, Cigna, Aetna. Some how they didn’t realize business would just leave the small players and aggregate with BUCA. In large parts of the country it was impossible to compete with the price difference BUCA had.
Thats the long winded preamble to why self funded under high deductible health plan (HDHP) is so popular and works so well.
In order not to be extorted by providers, employers, especially small employers that can’t self fund, have no choice but to buy a policy from BUCA. BUCA has huge overhead, no transparency, and no flexibility. Employers missed the freedom and control of self funding but have to have the discounts.
What they started to do, without BUCA’s knowledge most of the time in the past, was buy lesser benefits then under the table reimburse employees the difference.
Our typical new client has a $250 to $1000 deductible plan and is getting a 20-40% increase from their fully insured carrier. Becuase they are under 100 employees the carrier won’t tell them why or what they can do to fix the problem, either past the cost on or cut benefits.
We tell them to buy a $5000 HSA plan instead of their current low deductible plan. THe employees then have two plans, they have the HDHP from the carrier and a second mini self funded plan administered by me. When they go to the doctor they show both cards, the doctor first sends the claim to BUCA who processes it, takes the discountm, and applies it to the $5000 deductible. The doctor then sends my office a copy of the claim and a copy of the carriers EOB. We make an additional payment that takes the benefits back down to the lower deductible the employee use to have.
When it is all said and done employees have the exact same benefits they had before. In fact becuase co-insurance is calcualted on a lower amount 90% of the time employees OOP actually drops. They have 2 medical insurance cards instead of one but the savings is well worth it. We also provide the group monthly reports so they see how they are running and where the money is going. We also now have the data to educate employees with targeted info.
As an example between;
$0-$250 the employee pays
$250-$5000 my company pays on behalf of the employer
$5000+ BUCA/big evil insurance company pays
Our clients reduce their premium 30-50% and save 10-20%+ to deliver the exact same benefits they had before.
One of my firms has been doing this for 25 years, it is proven and extremly effective at controling cost. Many of my clients have flat cost since we implemented them 3-5 years ago.
long winded but hopefully I answered your question. I am always more then happy to answer questions and will always do it in a friendly manner, we all benefit the more we all know. If you make things up and post crazy stories like Peter, Maggie, or Margalit lately then yes I tend to attack them pretty aggresivly. This is to important and directly effects peoples’ lives to severly to allow self serving comments.
Every month I see groups that over pay and cut benefits becuase they think they are to small to take risk, or HDHPs are bad, or all these other factless self serving lies someone told them for some reason or another. Having seen tens of thousands of employer plans I can say without a doubt it never makes sense to buy a $0 deductible from a carrier, it is just throwing money away. That is exactly what one side of this country wants people to do though.
I hate to agree with Nate because he has reverted to his name-calling ways, but based on at least one anecdotal experience he is generally correct. I am friends with the COO of a mid sized law firm who recently converted his firm and employees to a HDHP and the terms/benefits were generally as Nate indicates.
Nate, explain one thing to me if you can do so without maligning my ignorance – what do you mean by “they hired us to process claims back down to the $0 deductible?” Can you explain that in layman’s terms? (ps I don’t use medical terms on patients either.)
thanks.
so everyone can see how full of it you are margalit lets review an actual example of how it works in reality, outside your made up world of propoganda.
Small group in Ohio, had a $0 deductible in $250 out. 100% co-insurance in network and 60% out. $10 co-pays.
The carrier they are with has 6 tier rates. If they ought this $0 deductible plan from the carrier in 2008 the cost was;
878.59
1757.18
1130.27
1522.77
2008.86
2401.36
Instead they bought a $5000 deductible HDHP with premium;
279.93
554.86
356.04
479.67
634.16
757.46
In 2008 they saved $250,629.52 in premium by doing this. They hired us to process claims back down to the $0 deductible, so in the end their employees have a $0 deductible plan. Total claims for the 2008 plan year where $40,601.39.
2009 plan year They have saved $231,000.56 and paid $65,313.04.
Please explain Margalit how this carrier benefits by giving up $200,000 and $170,000 in premium.
People like you need a big scarlet L next to everything you post.
“You also know that the difference between the HDI premium and the 0 deductible premium with the same coinsurance and copay is usually way less than the deductible amount.”
100% complete lie! I see dozens of these and never once in my life have I ever seen a $0 deductible plan where the group couldn’t buy up to a higher deductible, fund 100% of the deductible and save money.
You have no clue what you talk about margalit. My entire business model is taking people from low deductible plans to high deductible plans because they can fund the difference and still save 10-20%.
something nauseating about how dishonest and clueless you are. You have no knowledge base to say the stuff you do but you still pump it full speed. How many $0 ded to HDHP quotes do you see a year? 0? maybe 1?
Insurers don’t offer HDHPs cause they want to, BUCA would never have offered them if not forced by the market and competition. Take a market like Vegas where there was no competition, they where very late in getting HDHPs from the dominate carrier, not until smaller carriers selling them started taking their business did they react. In Ohio where there has always been a healthier second tier of carriers they have been very prominate becuase they have to.
Carriers hate HDHP becuase they don’t cover their overhead. They push the fully insured market the direction of the self funded market which treats insurance like a commodity with low margins, high competition, and much better efficency.
Just once I want you to answer the question, do you make this BS up yourself or read it somewhere else? You don’t have any remorse for your mass lieing? Think how many people could be benefiting if they didn’t fall victum to your BS and made up stories.
Nate, not all HDIs come with no coinsurance and no copays after the deductible, just like not all regular plans come with coinsurance and copays, and you know that. You also know that the difference between the HDI premium and the 0 deductible premium with the same coinsurance and copay is usually way less than the deductible amount.
These plans were not created so that payers pay more. They were created to tempt people into saving a few hundred dollars a year, while gambling on a few thousand. Sometimes people win, but I bet that these plans would not be offered unless the insurers algorithms showed that in aggregate the insurers always win. Very much like the house always wins in Vegas.
Dr. E is right. There is something nauseating about playing these games with sick people.
This is the third time today I tried to forward a comment, and should it work, another example of why this site is losing its value for the problems here encountered every couple of months:
Nate, you are lame, a hypocrite, and the poster child for the insurance business that has played a large part in screwing up health care as a profession.
All you idiots who insist on forcing the square peg of business into the round hole of the health care model, you must love ruining things. That is why I hate business people as a whole, why I did not choose a business oriented profession, and why the majority of you who argue so vehemently your views to continue this screw job can find out in your futures what it is like to be rectally violated. Yeah, harsh comments, ’cause I am sick of your equally harsh views and lack of respect for the Hippocratic Oath.
Nate, I hope WHEN you need a doctor in your future, he embraces your attitudes and expectations of what doctors should be doing. Ready to bend over, SIR!?
Margalit not to pile on your terribly inaccurate statement but I forgot to factor in employer contribution to the HSA which brings down the deductible even further. In the majority of HSAs the true member liability is a small fraction of that then the traditional plan they came from.
I find it funny that the same people that will harp on the 30% of healthcare that is wasteful and say we need to make changes cry bloody murder when anything is actually done to reduce the 30% of waste.
Apparently patients are incapable of identifying the 30% themselves and if Insurance companies do they are really just pumping profits….ONLY government can really identify and eliminate the 30% I guess. Just pointing out how absurd you are, continue with the crazy.
Bobby G it took all of 5 seconds with a yahoo search, in hindsight I guess I should have linked to supporting documentation first. My bad, caught a case of the lazies.
MG, how does it feel starting your Friday as a moran? I always love liberals that make arguments like this;
“As usual, most of Nate’s posts are ideological ramblings that are very one-sided and a bit lean on substance/facts.”
and have nothing to back it up, where are your facts MG? There is a difference between my post lacking substance and facts and you not being knowledgable enough to understand them.
http://www.ama-assn.org/ama1/pub/upload/mm/368/reportcard.pdf
6.85% for Medicare vs 2.68%-6.80%.
The big take away which makes you look really stupid for spouting out your mouth MG is the 21% on page 11 denied for not medically necessary as determined by Medicare, you don’t see that from private insurance. In fact when you adjust for plan design differenced the gap in denial is even greater, i.e. policy termed becuase they changed carriers, Secondary, etc.
Would love to hear some follow up from you MG, I expect silence though as your type usually doesn’t have much to say after getting it handed to you.
Your turn Margalit, what is it with lefties making stupid statements today, if you don’t know what your talkign about don’t talk, is that so hard a concept to grasp? You say;
“The terms “patient centered” and “consumer-driven” in this context usually mean you pay more money out-of-pocket so we can pocket more of your money.”
And that would be incorrect. If you did even basic math you would know consumer-driven plans usually have lower OOP then traditional plans. The members liability is moved to the front but is substantially less. I.e. under HSAs most pay 100% after the deductible is meet, that means once you hit your $2500 all of your co-pays go away as well, under traditional plans your Rx and office co-pays are always there and your co-insurance is usually 3-5,000 additionally.
Curious Margalit, why are you making stuff up? Did someone tell you wrong and your just repeating it without any verification or do you just make stuff up in arguments and hope no one notices?
“I just wish they wouldn’t insult people’s intelligence with nonsensical terms.”
Is it ok to insult their lack of inteligence? Consumerism, keeping more of my own money and being allowed to determine how it is spent is nonsensical? The problem isn’t the terms its people that never bother to learn what they are talking about. The rest of your comment makes even less sense, you obviouslky have never seen a car commercial, bank commercial, or any other commodity.
” just tell me what your income stream should be after you put in the time, money, and energy to earn an MD degree.”
LOL this sounds like the whiny history major with $150,000 in student loans complaining how unfair life is when he finds out his earning potential is $30,000 a year. For starters so what you earned an MD, that entitles you to a piece of paper and a party if your parents want to throw it. I hear you can get those on the beach in some countries while working on your tan. Yoiur degree entitles you to NOTHING, how you use the knowledge you where suppose to learn while earning it entitles you to as much as willing people are willing to pay. Thank you for exemplifing the entitlement some, a small percent, in your profession show. You chose medical school, we didn’t send you there.
Peter, if you pay all the claims that come in next year premium will be 120 million not 100 million. You flipped the numbers, they make 5% on premium not reserves.
” Of course paying less in claims means they pay less out, that doesn’t mean they are making more profit. Higher claims mean higher premiums at renewal, since carriers have the same margin no matter what the premium…”
Maybe same margin, but 5% of $100 million is much better than 5% of $10 million.
It is obscene to profit from caring for the sick, and Nate has no clue what that statement means, as most of his commenting only defends what has been probably the most obscene element in the growing health care debacle, that being the insurance industry, that politicians are just worsening in logarithmic numbers.
I don’t really know who to believe anymore, as it seems everyone has their own agenda to keep their piece of the profit pie, and when you all jump on me saying I am equally guilty, just tell me what your income stream should be after you put in the time, money, and energy to earn an MD degree.
You bashers and MD haters, I could care less what your perverse rationalizing and minimizing will spew henceforth. I’m asking people who are grounded in reality. We’ll see the reality of that question unfold if Health Care Deform plays out as intended.
You morons in your 60’s, if you make it another 10 years, you’ll see what your unwavering support for this monstrosity of health care intrusions will bring you. After all, you will be the biggest consumers of this garbage to be!
Hey, all you Bush supporters, he spoke well for you: “Bring ’em on!!!”
Nate, 98% of what? “Clean” claims?
The terms “patient centered” and “consumer-driven” in this context usually mean you pay more money out-of-pocket so we can pocket more of your money.
These are usually accompanied by “consumer empowerment” and “personal responsibility”.
I just wish they wouldn’t insult people’s intelligence with nonsensical terms. I don’t see any other industry using this sort of terminology when they have to raise prices because they can’t control the supply chain costs.
And no, this will not drive the cost of health care down, while improving quality and reducing disparities as the legislation aims to do. It will just redistribute the burden, drive quality down and disparities up. The one constant to be preserved will be insurers absolute margins.
BobbyG – Highly doubt it. It certainly doesn’t correspond to the numbers you see from the PayerView rankings from athenahealth or seveal RCM vendors I know.
As usual, most of Nate’s posts are ideological ramblings that are very one-sided and a bit lean on substance/facts.
@Nate – “Something like 98% of all private insurance claims are paid first time, your argument is just false, it is not happening.”
____
You got a credible citation for that? Moreover, anything stratified by, say, bracketed dollar magnitude of claims, vs, just a broad-brush aggregated “incident rate” assertion (simple number of claims).
Just asking.
Lynn your spewing liberal propoganda and talking points minus 90% of the truth.
” The money came into the system with the invention of third party payments and insurance coverage.”
Insurance existed for hundreds of years prior to any complaints about greed and profit taking. No one was complaining about health insurance from the 1920s up until the early 80s. The complaints in the early 80s, being told what doctors to see pale to the complaints of the 90s, HMOs ratioing care. Those complaints might not be as bad as the complaints today about not even being able to get care.
The histroical timelines proves it is not insurance or money that created what you hate, but something about the interaction of insurance, money, and entitlement that lead to something you hate. As one philosphocial tends to do your leaving out the 3rd, and maybe fourth ingredident of this mness. Consumer entitlement/demands plus government are equally or even more respoinsibile for every problem you have then insurance and money.
By far, to a factor of 4 to 5 times I believe, Medicare denies more claims then private insurance.
“I have serious problems when the business model is based on making a profit by promising a service and then not delivering it to assure lower expenses and thus higher profits.”
Something like 98% of all private insurance claims are paid first time, your argument is just false, it is not happening. Medicare on the other hand denies like 8-9% of their claims. If anyone is denying claims for financial reasons it is government plans not private insurance.
“Generally we call that fraud, promising something then failing to deliver.”
Do you call Social Security fraud?
Curious if you also have a problem with conceling facts to get lower rates or insurance you where not entitled to? This is far more common then any claim denials by WellCare yet no one has any problem at all with it.
Spending less on medical claims is a common goal of the majority of the country, Obama and every politician in DC says we need to do it, how can WellCare or any other company do that without you attacking them and claiming it is all profit taking? Of course paying less in claims means they pay less out, that doesn’t mean they are making more profit. Higher claims mean higher premiums at renewal, since carriers have the same margin no matter what the premium it would be more accurate to say WellCare loses money by denying claims. If WellCare really wanted to make a boat load of money they would pay every claim under the sun, some of them twice, and drive premium through the roof. 5% of a bigger number is more money, yet they are doing the opposit.
“John C. Goodman is president and CEO of the National Center for Policy Analysis. The Wall Street Journal and the National Journal, among other media, have called him the “Father of Health Savings Accounts.” He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system.”
“Dr. Goodman’s health policy blog is the premier right-of-center health care blog on the Internet. It is the only place where pro-free enterprise, private sector solutions to health care problems are routinely examined and debated by top health policy experts throughout the country—conservative, moderate and liberal.”
“And while we’re at it, how can a site with the name “The Health Care Blog” routinely ignore the ideas of one of the most creative thinkers in health policy? This field is so completely dominated by unoriginal thinking; I don’t know why you don’t welcome with open arms someone who is not just parroting the latest fad.”
Yes, the right’s usual “market forces” solution – inspiring and original. Like market forces fixed The Savings & Loan Industry, Wall Street’s latest exercise is market dishonesty and theft and the BP/Gulf Oil mess. I can’t wait until market forces brings us affordable healthcare.
Nate: I’m not against being fairly compensated for providing a medical or health service whether billed by diagnostic code or time. I have serious problems when the business model is based on making a profit by promising a service and then not delivering it to assure lower expenses and thus higher profits. Generally we call that fraud, promising something then failing to deliver. This was apparently the WellCare model. It is also the nature of the incentives in many managed care plans–spend less on medical care make more profits (or in the case of insurance plans have larger reserves!)
Catholics aren’t the only religious group to provide health care services as a charity, there are others. Modern hospitals across this country were the creation of community doctors working together to create community hospitals as charitable institutions. The money came into the system with the invention of third party payments and insurance coverage. Dr. Arnold Relman has warned for many years about what happens when medicine ceases to be a noble profession and it becomes just a business. I happen to agree with Dr. Relman’s world view.
We need the power of greed to bring innovations, design smart solutions and influence people in positive way.
So nothing obscene in taking payment in return for good health. Time has changed. Altruism is mostly dead.
What is obscene is not being accountable for money and being beyond measurement and evaluation.
Its interested that author mentioned unoriginal thinking in the field. I have had certain set of ideas around improvements but I have it extremely difficult to find a forum where I could present same and challenge some of the existing premises. So it’s a rather closed industry or maybe different ideas are not welcomed.
Ahhh… let the ad homina, straw men, red herrings, perfectionism fallacies, and false dilemmas ensue with gusto.
Fundamentally it is obscene to…
have people living on the strees so we get public housing
Fundamentally it is obscene to…
have kids without parnets so we get orphanges to abuse them
Fundamentally it is obscene to…
have people living in poverty so we get welfare to enslave them to poverty
The only thing fundamentally obscene is people that don’t know what they are talking about standing on soap boxes declaing things fundmentally onscene and demanding actions they don’t understand nort the consiquences of said action, see healthcare reform as the latest example
“Fundamentally it is obscene to profit from caring for the sick.”
What a complewtly stupid comment, its scary to ponder some people actually think like this. In case you haven’t noticed Lynn Catholthic Heatlh Charities isn’t exactly growing. With the exception of the nuns NO ONE cares for the sick absent profit. Every nurse, ambulance driver, pharmacist, etc does it for profit, dismiss then all and you have no care.
As an economist I know the meaning of “Caveat emptor.” At least Dr. Herzlinger has sufficient information to know how the WellCare Health Plans business model for worked. This is more than the low income Medicaid and Medicare beneficiaries have. Dr. Herzlinger encountered the difference between economic theory and the reality of business practices or the application of business ethics and wink nod of insurance company practices. It was never about quality healthcare but it was always about profits at the expense of vulnerable sick people.
Fundamentally it is obscene to profit from caring for the sick. The wise/smart use of appropriate market incentives may do much to influence the efficient and effective delivery of healthcare services but is health truly a capitalist service? Either health/medical care is a noble professional calling or its a commodity to be bought and sold, it can’t simultaneously be both. To Dr. Herzlinger healthcare was always a commodity to be efficiently allocated by market forces.
I found THCB’s comments enlightening as Matt highlighted the “Queen of Market Healthcare’s” personal and public struggle with theory meets reality. Dr. Herzlinger is not the victim here. She is a fully informed grown-up and she knows or should have known long before the New York Times and Wall Street Journal exposed what WellCare was doing. I think she owes Matt the apology.