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HEALTH PLANS: Legal cons abound in health insurance

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(Hat tip to Don McCanne). Apparently being a scummy insurance company and selling not-quite-fraudulent policies to dumb consumers is all fine and dandy—or at least legal. This is not the first or last we’ve head of this type of thing—a company called Mega Life and Health selling a cut rate policy via commission salesmen to unsuspecting punters. When something really bad happens the punter discovers that the policy is worth basically squat, and they owe $200K plus. The judge says this is America and you should have read the fine print. We all know that the best cons are the legal ones.

There’s a related category of insurers who pay out on small claims but dissapear completely when enough big ones come in. Jon Cohn’s soon to be published book will blow the lid of that bunch (I hope) so I won’t say much about them. But essentially these are all on a sliding scale from California Blue Cross cancelling coverage after the fact, to Golden Rule selling their underwritten products, to the con artists and outright fraudsters. And given the collapsing state of the employer insurance market, and the growth in desperation from people like the couple in this article, I guess it’s only a matter of time before these insurers become a bigger and bigger piece of the market and someone like United HealthGroup buys them.

And if Active Health Management is over on the Yin side of the health insurance world, these shysters are out there on the Yang end. There is a possible solution to the whole thing, but if the responsible heads in the insurer world won’t push for serious reform of their own industry, these kinds of stories will make a government run system much more likely. I suspect I’ll be saying “I told you so” in 2016 or thereabouts

CODA: I missed this at the time, but the (now fortunately dead) Shadegg bill would have aloowed the shysters at Mega and their ilk to do this everywhere, as PBS NOW reported. See the excellent transcript.

HEALTH PLANS/POLICY: Policy wonks explaining the bleeding obvious

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KFF has some new reports out. The first is a Comparison of Expenditures in Nongroup and Employer-Sponsored Insurance. Here’s what the press release says:

The first Snapshot examines the differences in costs associated with individual, nongroup insurance and employer-sponsored insurance. Premiums for nongroup health insurance available from online brokers or reported by insurance industry surveys are much lower than premiums observed for employer-sponsored coverage. This is surprising to some because nongroup health insurance has higher administrative costs. The paper uses data from the Medical Expenditure Panel Survey and finds that people covered by individual insurance have much lower health care spending on average than people who have employer-sponsored insurance, but pay a greater share of that spending out-of-pocket. It also shows that those with individual insurance are significantly more likely than those with employer-sponsored insurance to report that they are in excellent physical and mental health. These findings may help explain why premiums for individual coverage are actually lower than group coverage. The analysis suggests that proposals to extend coverage to lower income people through lower cost nongroup health insurance need to account for the higher out-of-pocket costs associated with these policies.

In other words when someone tells you that eHealthInsurance.com is selling a product cheaper  than employers buy it for (as the Galen folks and David Gratzer’s book have recently done), you need to understand that they’re not only selling something different (lower benefits) but that they’re refusing to sell it to people who might actually use it.

The second is a little more subtle. It’s about the ratio of sick people to healthy people in an insurance pool, and the impact on the pools overall cost (premiums). Again from the press release:

The second Snapshot examines the sensitivity of health insurance premiums to enrollment shifts by high cost enrollees – a process often referred to as adverse selection. The introduction of high-deductible, consumer directed health plans has raised concern about their potential to attract younger and healthier people away from more traditional insurance plans, which could increase the costs of those plans. The public discussions of this possibility are often phrased in rather extreme terms – for example, that consumer directed health plans attract primarily the young and healthy. The new report shows that extreme selection behavior is not needed to produce real premium differences between insurance pools, and that the shift of even a small percentage of high spenders from one risk pool to another can have a dramatic impact on average costs – and, therefore, premiums – in the pools

In other words, you only need to avoid a very few sick people to make your pool cost much less. This is something that Medicare Advantage plans (and the GAO) as well as those in the individually underwritten market have known for years. And it’s why the only rational policy outcome (note I said rational, not likely) is a single national pool.

CODA: This is too funny. The very next email into my inbox after the KFF one was the charlatans at Consumers for Health Care Choices (Greg Scandlen) promoting a dinner for Pat (loony) Rooney–the guy who founded Golden Rule and pushed HSAs, and basically is more responsible than anyone else for fracturing what was left of the nation’s insurance pool, and causing all the problems that KFF is explaining!

TECH: Big practices using IT, less so in smaller ones

Another incomplete but useful study from HSC on physician technology use. Essentially the investments made by big groups in EMRs are showing up in the data, with nearly half those in groups of 50 and above using ePrescribing—perhaps the key indicator of whether a doc is using a computer for a basic clinical function.

But for those in the 1–9 sized group the number went from 8% in 2001 to 13% in 2005. A big increase in percentage terms, but not exactly setting the world alight.

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PODCASTS/TECH/CONSUMERS: Health2.0 roundtable

Here’s the transcript from last weeks podcast. It gives you a window into one of the hot areas at the moment, Health2.0 (perhaps I should trademark that quick!). The participants are three leaders of new online health focused companies, all of whom are relatively new and very ambitious. The original podcast post is here.

Matthew: Welcome to another THCB podcast. I’m Matthew Holt. Today is pretty exciting. I have got three of the leaders in what’s starting to be called the Health 2.0 movement. Those of us who were around the first time when things got crazy in Silicon Valley in the late 90’s when Netscape and Healtheon came on the scene are somewhat nostalgic for the days when you would go to parties and people would try to recruit you for a job just because you were standing around drinking. And those of us who have lived through the e-health bust are particularly upset about what happened next!But it looks like in the last couple of years, mostly in the last year or so, there’s a lot more interest in health care online, health care search, and health care information. And a lot of that has to do with what’s happened with the Google IPO and how successful Google has been creating a business out of search. Obviously a lot of the buzz in Silicon Valley and on the Internet in general has to do with that.But what I thought we’d do today is take a look at this Health 2.0 movement. So I’ve assembled three individuals who are leaders of companies, all of them at this stage relatively small companies, and all relatively new companies. But all of them are doing something very interesting in a slightly different segment of health care and health care online, or as it’s now starting to be called, Health2.0.And just before I introduce them, I’d also point out that just yesterday Dmitriy Kruglyak at HealthVoices started a manifesto called the Health Train, The Open Healthcare Manifesto, which is a new sort of manifesto promoting the idea of open health care. I’m one of the people who signed that, and I think it’s quite an exciting time in general for the concept of new types of open online heath care.So with that, let me tell you who I’ve got on the conference call with me. I have

  • Dean Stephens, who is the president and CEO of Healthline, based in San Francisco,
  • Tom Eng, who is the Chairman of Healia, based up in Seattle, and
  • Chini Krishnan, who is the CEO and founder of Vimo.

And the good news here is that Vimo was until very recently called Healthia, but for the context of this conversation, thank God, changed it’s name. [laughter] And I had to let Chini come in because when I went to visit Vimo they gave me a T-shirt. And I’ll be expecting the other two of you guys to be sending one along soon. [laughter]Now with that, I want you each to give a brief introduction to your company.

Continue reading…

HEALTH PLANS: Matthew Holt, stock trading pussy

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Sector Wrap: Health Insurers Fall. UNH is down $5 or close to 10% from its high on Tuesday with Allen’s conecession in VA giving the Dems the Senate being probably the clincher today.

Insurers

And was I short, like I said I would be on Monday? Back then the 45 Nov puts were trading at 20 cents, today they’re 55. So how many did I load up with? (no need to add the next sentence!)

HEALTH PLANS: A little more on KP

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Here’s a piece from veteran SF Business Times health care reporter Chris Rauber on the Kaiser saga. I still basically stay where I was, but it’s worth noting that the presumed reason that Cliff Dodd resigned on such short notice (i.e. was canned) is not because HealthConnect (Epic) doesn’t work—it’s because the story that he was a director of the consulting company paid $1m in fees by KP while he was CIO is presumably true! That’s such a visible conflict of interest, it’s bizarre that he and the rest of the board thought they could get away with it. So I suspect that he never told them and no one bothered to ask until Justen Deal dug it out of various filings. Of course you may have your own opinions. I also just noticed that Dodd’s sole academic qualifications were that he has a BA in Sociology. I’ve got one of those (well, sort of)—perhaps they should give me the job!

However, there is no evidence that any other major EMR system works better than Epic, or is written on a more sophisticated, more modern code than MUMPS. The only real competitor in existence when the decision was made was Cerner’s Millenium—not known for its drop dead gorgeous implementations, and lacking an outpatient function at that time. The others, Soarian (Siemens), Eclipsys, McKesson did not have proven ambulatory and in-patient systems.

Why didn’t KP just buy Epic, as has been suggested? Perhaps you should ask the folks at Phillips about how easy Judy is to work with, and how willing she is to sell.

While we can all snipe from the sidelines, there is no question that getting clinicians to use process automation software of any type is really, really, hard. So I’m not surprised that this isn’t all smooth sailing.

Finally, the real scandal at Kaiser this year has not been about the IT system, or even about the pecadillos of various Kaiser executives. The real scandal has been the opaqueness of the management of the kidney transplant program’s collapse, even though that’s stayed out of the national press (beyond the LA Times and Chris Rauber’s work).

At a meeting about PR for blogging that I spoke about, Kaiser’s new press rep (didn’t catch her name) said that they were going to behave differently in the future. At least Halvorson wrote an email about this latest brou-ha-ha. We heard zip from him or TPMG about the kidney scandal.

QUALITY/PHYSICIANS: OBGYNs are scientists, scientists I tell you

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Interesting long article in the New Yorker by Atul Gawande about How childbirth went industrial. Briefly it’s about how we stopped using all kinds of techniques for getting kids out that required a lot of skill because we started measuring the results on a universal scale. And the result is a lot, lot more C-Sections. In the UK they don’t use so many C-Sections, so I asked a recently retired British OBGYN I know rather well for his opinion. Here’s what my dad has to say about the article:
It shows yet again that the worst way to deliver a baby is by C/S following a long failed labour. If you could guarantee a normal labour then that would probably be best for mother and baby, at least at the time. This doesn’t allow for the increase in prolapse and Sphincter Weakness Incontinence (Stress incontinence)in later life. It also shows that female doctors are the poorest judge of how they should deliver!

PODCAST: Lonny Reisman of Active Health Management

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Lonny Reisman is a physician who came up with what he believes is a way to improve medical care and patient outcomes by tracking data and feeding it back to practitioners in close to real time. Aetna liked the idea so much they bought the company, Active Health Management, for $400m big ones last year. More importantly, it might be one way that population care management can become real in the continuing absence of the EMR.

Here’s the podcast.
It’s really interesting stuff and rather better sound quality than some of the recent ones–there’ll be a transcript up soon.

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