In the strangest healthcare business story of 2020, the major health insurance companies are thriving despite—or because of—the pandemic. As the second quarter reports of United, Anthem, Cigna and other insurers reveal, their COVID-19-related costs were outweighed by the sharp drop in claims for other healthcare services.
As a result, the second quarter operating gain for Anthem, one of the largest national carriers, jumped 65% from the prior-year period, while the portion of its premiums spent on member benefits dropped to 78%. The earnings of UnitedHealth, similarly, vaulted 98% as the percentage of its premiums spent on health care fell to 70.3%. Such a low “medical loss ratio” has probably not been seen since the 1990s.
At the same time, the big insurers’ membership has been rising, but not among workers covered by employer-sponsored plans. Commercial insurance members served by United, for example, fell by 270,000 to 26.8 million, following a drop of 720,000 in Q1. In contrast, the number of people in United’s Medicaid managed care plans rose by 330,000.
These trends track with the short-time fallout of the pandemic. Families USA reported that 5.4 million workers who lost their jobs from February to May also lost their health insurance. Another study predicted that by the end of 2020, 10.1 million people will lose employer-based insurance tied to someone in their household.
Powers once assumed are never relinquished, just as bureaucracies, once created, never die.
As we ponder the 100 day count down to the Presidential Elections, the rhetoric and ranting swirling around the best solution for our nation’s healthcare crisis, is hitting decibel levels not heard since the passage of the Affordable Care Act. As with any major entitlement legislation, there are commendable elements, inefficiencies, and a host of unintended consequences. The current administration’s obsession with repeal while the ranks of uninsured people grow, begs the question, “what is the blue-print for expanding coverage and reducing waste, fraud and abuse while increasing transparency, quality and overall public health. Answer: There is no plan and if there was, it would fall well short of achieving many of these objectives given the deeply entrenched stakeholder who actually do not benefit if the cost of healthcare declines. It a classic NIMBY response: “I’m all for reform as long as I maintain my role and revenue in whatever solution is proposed.”.
The Affordable Care Act is a solid foundation to build a 2.0 version of a solution to solve for the uninsured and to act as a catalyst for market reforms that will either reshape the misaligned incentives and embedded inequities in our current system or it will lead to voters demanding the expansion the role of Medicare and Medicaid. 70M adults and children are covered under Medicaid – including those who benefited by the passage of the ACA. Approximately 55M are covered under Medicare resulting in 125M covered under some form of state or federal aid. 155M receive coverage through employers.
Its estimated by the Economic Policy Institute that 29.8M individuals who received coverage as a result of ACA expansion would lose coverage if no legislation replaced it. Add in the severe economic dislocation arising from Covid-19 that could result in an additional 14M unemployed and you could see a worst case of uninsured swell from a current 27M to as high as 70M according to Policy Advice, a non-profit industry watch dog.
So how can you change the current market to drive reforms without a legislated intervention? It starts by enforcing laws already in place and challenging regulators to do their jobs – ensuring that we minimize waste, fraud and abuse. As of 2020, the average annual cost of family health coverage has eclipsed the cost of a mid-sized economy car. We must tackle the affordability problem by reducing the number of intermediaries who extract profits from the delivery system but do not play properly in the sand box of regulation that is often poorly monitored. We must demand transparency and deconstruct expensive bureaucracies only inflate the cost of care without improving it. It’s impossible to moderate the cost of healthcare without reducing the size of the pie and those feeding on it.
I’ve been covered by private insurance my entire life. Even more telling, I worked in the health insurance industry for — gasp! — some thirty years. It’s not just paid for my healthcare, it’s financed my life.
Today, though, for the first time in my life, I’m covered by public insurance — and I couldn’t be more relieved.
Now, I’m not going to go all Wendell Potter. I know many people have their health insurance horror stories, but, sadly, people have them about pretty much every part of the healthcare industry. I believe most people working in health insurance, like most people working in healthcare generally, sympathize with the people they serve and are just trying to do a good job.
The problem is that the health insurance model has outgrown the times. I’ll try to explain some ways how.
Once upon a time, most people had employer coverage, and those employers paid all or most of its cost. Those days are gone. Employer coverage is still the predominant form of private health insurance, and employers still pay the majority of its cost, but percentage of people with employer coverage continues to drop and the amount they pay for it continues to increase.
As hopefully most of you know, Rep. John Lewis, civil right icon and longtime member of Congress, died this past Friday. Rep. Lewis was often described the “conscience of Congress” – perhaps a low bar in today’s Congress but important nonetheless — for his unwavering commitment to social justice. I have always been struck in particular by one of his quotes:
Rep. Lewis must have been heartened by the fact that, in 2020, plenty of people are, indeed, making noise and getting into good trouble, necessary trouble over issues that he cared deeply about, like Black Lives Matter and voting rights. There are others who are better able to write about those people and that trouble. So I’d like to talk about his call to action with respect to healthcare.
If you are working today in healthcare — especially in the United States — or, for that matter, someone getting healthcare or having a loved one get it, then you should be making some noise and getting into good trouble, because our healthcare system most definitely makes it necessary.
It should come as no surprise that we’re not very happy with our healthcare system, rating it lower than do citizens in most other developed countries. And for good reason: it’s the world’s most expensive while delivering sub-par health results and leaving tens of millions without financial protection. Even our physicians don’t like it. Even our latest, best effort for improving the sorry state of our healthcare system — the Affordable Care Act – is under risk of repeal due to a lawsuit brought by 18 states and backed by the Trump Administration.
Every day, too many of us suffer in the healthcare system, ranging from waits to indignities to critical mistakes, and some face financial ruin due to the care — whether good or bad. Most of us suffer in silence, or only complain to our friends and family. We don’t see a lot of mass protests about the pitiful state of our healthcare system, and I have to wonder why.
I knew about TikTok, but not “TikTok Teens.” I was vaguely aware of K-Pop, but I didn’t know its fans had common interests beyond, you know, K-Pop. I’d been tracking Gen X and Millennials but hadn’t really focused on Gen Z. It turns out that these overlapping groups are quite socially aware and are starting to make their influence felt.
I can’t wait for them to pay more attention to health care.
This is the generation that has grown up during/in the wake of 9/11, the War on Terror, the War on Drugs, the 2008 recession, the coronavirus pandemic, and the current recession — not to mention smartphones, social media, online shopping, and streaming. Greta Thunberg is Gen Z, as is Billie Eilish, each of whom is leading their own social movements. This generation has a lot to protest about, and a lot of ways to do it.
They were in the news this past weekend due to, of all things, President Trump’s Tulsa rally. His campaign had boasted about having a million people sign up for the rally, only to find that the arena was less than a third filled. An outdoor rally for the expected overflow crowd was cancelled.
It didn’t take long for the TikTok Teens/K-Pop fans to boast on social media about their covert — to us older folks — campaign to register for the rally as a way to gum up the campaign efforts. Steve Schmidt, an anti-Trump Republican strategist, tweeted: “The teens of America have struck a savage blow against @realDonaldTrump.”
The expansion of Medicaid under the Patient Protection and Affordable Care Act (ACA or Obamacare) was not the first attempt the United States government made to increase the number of people with health insurance. In 1945, the Truman administration introduced a Universal Health Care (UHC) plan. Many Americans with insurance insecurity, most notably Black Americans and poor white Americans, would benefit from this healthcare plan. During this time, health insurance was only guaranteed for those with certain jobs, many of which Blacks and poor white Americans were unable to secure at the time, which resulted in them having to pay out-of-pocket for any wanted healthcare services. This reality pushed Truman to propose UHC within the United States because it would allow “all people and communities [to] use the promotive, preventative, curative, rehabilitative and palliative health services they need of sufficient quality…, while also ensuring that the use of these services does not expose the user to financial hardship.”
Paul O’Neill, who died from lung cancer earlier this month at age 84, was one of my personal heroes, but not because of anything he accomplished as Alcoa’s chief executive officer or as Secretary of the Treasury.
O’Neill was my hero because he saved patients’ lives.
Two decades ago, when few dared speak openly about medical error, this titan of industry put his considerable clout behind a radical idea: not a single patient should be injured or killed by their medical care. And in pursuit of that goal, hospitals had to continually make care measurably safer.
No one of O’Neill’s stature, before or since, has shown anything close to his dogged determination to make this ideal real.
O’Neill first embraced zero harm after Karen Wolk Feinstein, the president of a small, local foundation, had the chutzpah to ask him to serve as co-chairman of a coalition to radically improve Pittsburgh’s health care. He make this commitment even though it was a goal championed by a non-physician book author (me) and by a PhD in labor economics (Feinstein), while being denounced as naively unrealistic by respected local medical leaders.
What do the coronavirus
and Navy ships have in common? For that matter, what do our military
spending and our healthcare spending have in common? More than you might
think, and it boils down to this: we spend too much for too little, in large
part because we tend to always be fighting the wrong wars.
I started thinking about this a couple weeks ago due to a WSJ article about the U.S. Navy’s “aging and fragmented technology.” An internal Navy strategy memo warned that the Navy is “under cyber siege” by foreign adversaries, leaking information “like a sieve.” It grimly pointed out:
adversaries gain an advantage in cyberspace through guerrilla tactics within
our defensive perimeters. Once inside, malign actors steal, destroy
and/or modify critical data and information.
The HHS Office of National Coordinator (ONC) hosted a well-attended Annual Meeting this week. It’s a critical time for HHS because regulations authorized under the almost unanimous bi-partisan 21stC Cures Act, three and a half years in the making, are now facing intense political pressure for further delay or outright nullification. HHS pulled out all of the stops to promote their as yet unseen work product.
Myself and other patient advocates benefited from the all-out push by ONC. We were given prominent spots on the plenary panels, for which we are grateful to ONC. This post summarizes my impressions on three topics discussed both on-stage and off:
Patient Matching and Unique Patient Identifiers (UPI)
Reaction to Judy Faulkner’s Threats
Consumer App Access and Safety
Each of these represents a different aspect of the strategic interests at work to sideline patient-centered practices that might threaten the current $Trillion of waste.
The patient ID plenary panel opened the meeting. It was a well designed opportunity for experts to present their perspectives on a seemingly endless debate. Here’s a brief report. My comments were a privacy perspective on patient matching, UPI, and the potential role of self-sovereign identity (SSI) as a new UPI technology. The questions and Twitter about my comments after the panel showed specific interest in:
The similarity of “enhanced” surveillance for patient matching to the Chinese social credit scoring system.
The suggestion that we already have very useful UPIs in the form of email address and mobile phone numbers that could have been adopted in the marketplace, but are not, for what I euphemistically called “strategic interests”.
The promise of SSI as better and more privacy preserving UPIs that might still be ignored by the same strategic interests.
The observation that a consent-based health information exchange does not need either patient matching or UPIs.
At kitchen tables everywhere, ordinary Americans have been grappling with the arcane language of deductibles and co-pays as they’ve struggled to select a health insurance plan during “open enrollment” season.
Unfortunately, critical information that could literally spell the difference between life and death is conspicuously absent from the glossy brochures and eye-catching websites.
Which plan will arrange a consultation with top-tier oncologists if I’m diagnosed with a complex cancer? Which might alert my doctor that I urgently need heart bypass surgery? And which plan will tell me important information such as doctor-specific breast cancer screening rates?
According to Matt Eyles, president and chief executive officer of America’s Health Insurance Plans (AHIP), insurers over the last decade have made a “dramatic shift” to focus more on consumers. That shift, however, has yet to include giving members the kind of detailed information available to corporate human resources managers and benefits consultants (one of my past jobs).
What’s at stake could be seen at a recent AHIP-sponsored meeting in Chicago on consumerism. Rajeev Ronaki, chief digital officer for Anthem, Inc., explained how the giant insurer is using artificial intelligence to predict a long list of medical conditions, including the need for heart bypass surgery. Information on individual patients is passed on to clinicians.