I had fun writing this piece on behalf of health plan CRM and Business Outsourcing company Connextions to help launch their new series of Thought Leadership Profiles. Some of the really rude stuff hit the cutting room floor, but given what’s been said about some of their clients over here on THCB I’m pretty heartened that they asked me to contribute.
Gordon Norman is Exec VP and Chief Science Officer at Alere Medical, formerly head of DM at Pacificare and a font of knowledge and opinion about disease management, technology, the role of health plans, and the chances for overall change in the system. We agree much more than we disagree, but if you have any interest at all in the restructuring of health care, I’m sure that you will enjoy our conversation.
You’ll also enjoy Gordon’s recent talk at Healthcare Unbound–his slides are here
A version of SCHIP that doesn’t touch Medicare passed the Senate last night. It has a veto proof majority. Of course it now has to be reconciled with the house bill that raises more taxes and cuts Medicare Advantage. So this will now go one of two ways. Either the bills will get reconciled along the lines of the Senate bill and probably get signed by Bush, or the emerging bill will have a hack at Medicare Advantage and get vetoed.
My guess is that it’ll be the latter. It’s just too tempting for the Democrats to provoke the veto and then campaign on the fact that Republicans hate children. (Some temporary extension for the current SCHIP will be worked out as it expires in the background).
Meanwhile despite all the rhetoric remember this:
The Congressional Budget Office says the Senate bill would cover 3.2 million uninsured children, including 2.7 million who are currently eligible but not enrolled. The House bill, it said, would cover 4.2 million children, including 3.8 million already eligible for benefits. In addition, both bills would provide money to prevent 800,000 children now on the program from losing coverage.
According to KFF there are 8 million uninsured children today. So we’re only talking about covering up to half of currently uninsured kids. Which makes all the rhetoric about socialized medicine a little overblown. Even though unlike some of the more timid moderate Democrats I’m happy to say that socializing the insurance side of health care —as in putting everyone in one pool — would be a very good idea.
Meanwhile, perhaps the recent pressure on managed care stocks is a little over done? (Far be it from THCB to recommend a buy on UNH, but it’s at $48 which is way below where it’s been for a while!)
UPDATE: AHIP isn’t taking any chances, Its headline in its propaganda this morning is (I shit you not) "House Votes to Push Millions of Seniors out of Medicare Advantage" Click thru and you can see a video of my favorite lobbyist telling only a small number of lies in 44 seconds. Did you know that Medicare Advantage is a "safety net" for seniors? Neither did I….
You’ll be seeing more and more of Maggie Mahar here as she works blogging into her new role at The Century Foundation. But of course, she’s not the only one who’s made this connection. If you want to see more of your host’s caustic comments on Medicare Advantange, and lots of good comments around it, try here, here here, here or here. Here’s Maggie on this week’s dust up.
A debate rages in Congress: Who needs the money more – UnitedHealth or the kids?
This week, a storm hit the House of Representatives when law-makers began to debate a proposal that would, in the words of a Wall Street Journal editorial, “steal nearly $50 billion from Medicare Advantage, the innovative attempt to bring private competition to senior health care” in order to beef up the State Children’s Health Insurance Program (SCHIP), a program that delivers health care to poor children.
Last night, the House voted 225-204 to pass the legislation.
SCHIP is scheduled to expire September 30; the House bill would renew the program while expanding it to include another 5.1 million children at a cost of an extra $50 billion over five years. The bill’s backers propose to fund the legislation by increasing the federal cigarette tax by 45 cents while simultaneously paring the premium that Medicare pays private insurers who provide Medicare to seniors. The goal of the bill, reformers say, is to ensure that all children in the United States have health insurance. The Wall Street Journal’s editors see things otherwise: “Democrats apparently want to starve any private option for Medicare,” the editorial concluded.
Rupert Murdoch hasn’t yet weighed in, so I decided to take a look at the proposal. Would the House bill really make it impossible for private sector insurers to continue to offer needed benefits to seniors?
I spent a little time last year on the issue of Mega Life and Health. There’s only one term for this company, and what’s really frightening is that it’s a major player in AHIP. If AHIP is ever going to get itself out of the self-serving position it’s in and transition to being an organization of responsible private health plans that can have a reasonable conversation about the positive role health plans can play , the plans who could live in a future of community rating need to leave, or jettison the scumbags like Mega.
What’s the activity I’m so upset about?
Mega Life and Health sells health insurance door to door to poor to middle and low income working people. They claim that they are selling a product which their customers understand. But the point their customers clearly do not understand is that the insurance has severe limits on what it pays, especially what it pays per day in cases of expensive care. So if a policyholder gets sick and needs hospital care, Mega only pays out a fraction of what the hospital charges, leaving the poor sucker patient on the hook for the rest. Last year the California Supreme Court ruled that this con, like all the best cons, is legal. And this type of policy continues to be sold (more or less legally) in most states.
I think that most of the latest fines for Kaiser, which are only vaguely related to its original problems at the kidney transplant unit and are for poor performance of peer review and handling complaints at its hospitals are generally much ado about nothing. I got quoted by Barbara Feder in the SJ Mercury News saying as much.
This does not, though, absolve Kaiser for not coming fully clean about what happened with the kidney transplant scandal, and for its reticence in having anyone at TPMG talk about it. That’s still the elephant in its living room that both KP and the Dept of Managed Health Care are ignoring.
Over at The Doctor Weighs In Brian Klepper talks about the transparency conundrum. Should We Have Health Care Performance Transparency? By Whom? And How?. Should transparency be left in the hands of untrustworthy health plans with their own proprietary techniques? Probably not. Is that a reason for abandoning the whole concept? Not exactly.
Meanwhile, I have a hell of a travel day today, and I’m miles behind on some other stuff. I will though be back with an interesting set of updates about Health2.0–User Generated Healthcare on Monday, so please check in then.
AHIP’s annual conference last week, and Karen Ignagni was recently spotted in USA Today slagging off Michael Moore as part of that newspaper’s “fair and balanced” look at the topic, and telling yet more lies about “Canadians coming to the US for health care.” Apparently her research team doesn’t subscribe to Health Affairs. I meanwhile was at Meditech having way more fun (more about that anon). But an anonymous THCB reader did indeed make it to Vegas. And considering AHIP’s somewhat risky current political tactics, I’d think Vegas was an appropriate place for them to have the show! Here’s his report:
The AHIP (America’s Health Insurance Plans) conference was everything that you would expect from a group of health insurance executives and the people who want to sell them stuff. Held at the posh Wynn resort in Las Vegas, it brought together the who’s who in health insurance, although fewer CEO-level folks than the World Health Care Congress. Unlike HIMSS, which is both much larger and pushing to include payers, purchasers and health information exchanges, AHIP doesn’t seem to be pushing such democratization. This is the business of health insurance.
Of course the triple 800-pound-gorillas in the room were the release of Michael Moore’s “Sicko,” the public awareness that CDHP wasn’t panning out to be the panacea that it was positioned to be, and the Democratic takeover of Congress.
Karen Ignagni, AHIP’s fearless leader, opened the conference with a less than rousing invitation for the assembled attendees to pat themselves on the back for all of the good work that they are doing to improve healthcare…and to consider themselves among “the patriots” on July 4. Maybe it was the early hour, but I believe that I counted exactly twelve people clapping.
Ignagni introduced her “close personal friend” former Secretary of Health and Human Services Donna Shalala (under President Clinton) and current president of University of Miami. I think that Shalala was chosen as a way of demonstrating that AHIP has connections with Democrats as well as Republicans. Shalala told the audience to support AHIP because Ignagni is among the most connected people in Washington on health issues…and – again to a smattering of applause – echoed the sentiment that those in the audience were somehow “patriots” in the cause of improving healthcare. Shalala continued about her co-chairmanship (with Senator Bob Dole) of the commission looking into the mistreatment of troops at Walter Reed. It’s a very difficult problem because there are very few experts on the military health system. But, she told us, that it was an example of a single payer, government run system…and look, look…at all of the problems, especially in transitions of care (that I’m sure have nothing to do with the rivalries that exist between military branches and are all about the MHS being “single payer” and government run). She went on to speak about how unlikely it was that there would be transformational change anytime soon because while there is widespread agreement that healthcare needs reform that there is not widespread agreement on how to fix it. We could expect incrementalism or worse, and that she (and the Clintons) had mis-read the public’s desire for change in 1993. (Ed’s note: It appears that the time and options Shalala has acquired on the United HealthGroup board have softened her liberal credentials somewhat!)
Next up was Newt Gingrich, who began by recommending Nicholas Sarcozy’s new book and focused on the new French President’s admission that the French people need to “work harder”. He said that he might run for President but was waiting for the current group of those “interviewing” for the position to narrow a bit. He declared the Medicare drug benefit and the sign-up process a success because of the power of consumer choice. Using a metaphor he dubbed “Medi-Cruise” for government run or single payer healthcare, he likened the ability of senior citizens to navigate the complexities of choosing vacation cruises with their abilities to choose optimal drug benefits. Seniors – according to Newt – did a much better job of choosing a benefit than if the government had chosen a one-size-fits-all benefit: Just imagine if the government chose your cruise for you – “Medi-Cruise”…and if everyone was forced to have the same-type room! As if a cruise – paid for on a voluntary basis by people themselves and health benefits – necessary and paid for by the government – are the same thing. Gingrich – on a positive note – said that the National Health Information Network (including digitization of individual providers) should be viewed on the same importance and scale as the national highway projects under Eisenhower. He rationalized this huge government project because it was for national security. He also focused on ferreting out fraud and abuse instead of making wholesale rate cuts. Ultimately, Gingrich is among those who believe that transparency of cost and quality information and consumer incentives will make healthcare a functioning market. He expects consumers to lead transformative changes in healthcare. There was no mention of the recent CDHP story in the WSJ.
Possibly fearing disruption or protest, Q&A at both sessions was short, seemed tense, and required clear identification by name and affiliation…not unreasonable…I had the feeling that any overtly accusatory questioner would be cut off, ushered out, and pilloried by the crowd. Ignagni seemed loaded for bear.
AHIP’s response to Sicko. Lined up in “cut to” style with answers but no questions so that it can be dropped into local news (check out the weird “B-roll” at the end). And again some of what she says is reasonable, if not a real reflection of what most of her members have been doing for the last 7 years.
But always the lie, always. She just can’t help it! Go to minute 1.00 of the video. Note what she says about Canada. And then take a look at the data.
Dan Weintraub who’s an interesting (and rare) right-wing journalist working in health care wrote a pretty dumb opinion piece in the Sacramento Bee last week saying that regulating health insurers was the wrong idea and wouldn’t work—because of course most of the money they get in goes out the door to the health care system—so it’s the wrong place to look. In the specific instance of rate regulation only, he may be somewhat right—but of course there’s a whole lot of regulation of insurers that could make a huge difference to that underlying health care system.
I was going to rip him a new one, but THCB regular Matt Quinn did it for me and the Bee printed his letter on it on Sunday.
"Regulating insurers won’t cut health costs," June 10: Daniel Weintraub correctly argues that current proposals to regulate health plan profitability will not materially impact overall health care costs. Imposing rules mandating spending on medical care or requiring permission to raise rates could perversely impact the quality and affordability of care. However, he misses a couple of key ways that regulators could impact the affordability and access challenges plaguing health coverage.
Mandating both guaranteed issue (requiring insurers to cover all comers) and community rating (prohibiting insurers from factoring in age, sex, previous medical conditions, or other factors in setting rates) sets a level playing field for insurers to compete on delivering value to their customers. Guaranteed issue and community rating require each other and are both necessary for reform efforts to work. Since the managed care backlash in the 1990s, insurers have largely given up on holding down health care costs and today compete primarily on underwriting — skimming healthy people and shedding sick or otherwise unprofitable ones. Some have even been caught underwriting retroactively or canceling coverage for members who incur medical bills. Mandating both guaranteed issue and community rating forces insurers to compete on their ability to deliver quality, cost-effective care for a population — and not on their skill in underwriting.
Although Matt misses one extra thing need to make guaranteed issue and community rating work—compulsory participation in the system by all (universal coverage) and cross-subsidization to those who can’t afford to buy in from the wealthier taxpayers. The good news is that the Democrats running Arnie’s reform efforts know about that.
THCB's Podcasts
Listen to them on Itunes or Spotify
