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Tag: Insurers

Taxing Health Insurance Companies to Pay for Health Care

The Congress has investigated about every conceivable way to tax people to pay for the health care proposals—a millionaire’s tax, bigger taxes on home mortgages and charitable contributions, and a couple of dozen more ideas.

Now Congress looks to be the most interested in taxing insurance companies to pay for a big chunk of their health care proposals. The new taxes would come in two parts––a 35% excise tax on any health benefit cost above an $8,000 single and $21,000 family annual premium as well as a flat $6 billion annual tax on the industry to be allocated among the companies proportionate to their premium.

There is certain logic to this. Taxing high priced benefits could help deflate the health care economy. Taxing all of the health insurance companies that stand to get more than a $1 trillion in new business—most of it in the from new private insurance and Medicaid subsidies and the rest from the consumer’s share of those new private plan premiums—seems fair at one level.

Calling for a tax on that big rich insurance company also sounds a lot better to the politicians than looking voters straight in the eye and raising their taxes directly.Continue reading…

CBO: HELP Bill’s Public Plan Not Much Help on Costs

The green-eyeshade meanies in the Congressional Budget Office took another whack at the public plan today, at least the one contained in the health reform bill passed by the Senate Health Education Labor and Pensions committee last June. Responding to queries from ranking member Michael Enzi (R-WY), CBO chief Doug Elmendorf noted on his blog that “premiums for the public plan would typically be comparable to the average premiums of private plans offered in the insurance exchanges.”

The reason given was the HELP bill emasculated the public plan’s ability to piggyback on the administrative efficiencies of Medicare and required it to be “financially self-sufficient.”Continue reading…

Not Really an Option

To: Executives leading U.S. Hospitals

The public option appears to back in the national dialogue and I’m wondering how concerned you all are about that.

After all, many of you have been quite successful at minimizing the appearance of true profit by growing your cost structure on the backs of private insurers, right?

Thinking back over the last ten to fifteen years, many things have changed.Continue reading…

Winners and Losers – Strategy in a Post-Reform World

Kramer

Most health policy experts are focusing
on the daily ups and downs in the political battles over health reform.
Within the health care industry, however, there is a
buzz
about who will be
the winners and losers after health reform passes.  A.M. Best’s U.S. Health and HMO Insurance Index has been
volatile since last November, reflecting high uncertainty about the
effect of health reform.  Earlier this summer, there was some speculative
analysis about the potential impact
of reform
on health care stocks.  Will health insurers come out as winners?
What about hospitals, doctors, drug manufacturers, and insurance agents?

It’s good to look ahead, but I think
most people are asking the wrong question.  Each of these health
industry sectors – in aggregate — will probably do just fine in the
post-reform world, as Bob Laszewski points out in his recent blog post.  The more important question is: who
will be the winners and losers within each sector?

Continue reading…

Here We Go Again – Again

By RICK PETERS

Last Friday morning, delirious, wasted, bone tired, driving home from the Emergency Room at 8AM in my beat-up little truck with only one speaker working. Amid all of us awash in the blogosphere thank the stars for NPR and professional journalism.  Steve Inskeep, from Morning Edition was interviewing Angela Braly, CEO of Wellpoint.  Perfect! Wellpoint is the largest health insurer in the U.S. in terms of covered lives. Also, Wellpoint, the former non-profit Blue Cross of California converted into a very profitable for-profit corporation, represents the epitome of for-profit medicine.

Mind you I’ve already thrown in the towel.  Any meaningful reform seems well past doomed. Harold and Louise are already back channeled through Newt and Sarah, and fringe lunatics are getting airtime, calling Obama a Nazi because they cannot understand the difference between National Socialism and Medicare. It would be comedy writ large if not for the gullibility of the American electorate. Oh well, here we go again.

The trouble is that our problems are so deep and fundamental that any sort of government driven health reform is destined to have limited impact despite the best intentions.  That’s what was so painful and profound about Inskeep’s interview with Braly.1 If we are going to even start to move this mountain we are going to have to foster change from within the system. That change is going to have to come from all of us as a society and as patients, families, health care providers, health care organizations, and influential health care managers and executives.

Newt and Sarah know the game they are playing – they’re politicians.  Their party is out of power and they are using opposition to health care reform to rebuild their base by any means necessary. Braly and her compatriots are a whole different animal.  They know exactly what is at stake.  Listening to the interview you might wonder how this ditzy soccer mom every got recruited to run a major corporation.  It’s uncanny.  She does not answer a single question.  What she does do, however, is illustrate what will essentially kill not only health reform but also real change.  What Braly does is deflect responsibility to everyone else in the system and not once acknowledge that not only do we have a problem but that we all share the responsibility for getting here – Wellpoint, Braly, and every one of us in health care included.

Braly’s no fool.  She is the third highest paid health insurance executive having been compensated $9,844,212 in 2008 by Wellpoint.2 Only Ed Hanway, CEO of CIGNA, and Ron Williams, CEO of Aetna, were paid more.  Wellpoint’s profit in the last fiscal year was close to 4% as even Braly admits, which is equal to or greater than the entire administrative cost of the Medicare program.  Inskeep calls Braly on virtually every statement she makes but as a pro, Inskeep just lets her dig herself in deeper.

I think I fainted.  I crawled out of the car and went in to go to sleep with it all blaring in my head.  My patient with gallstones diagnosed a month ago now with elevated LFTs and awaiting an ultrasound wanting to know if she could just go out a get a carne asada burrito and then come back for the test.  The Alzheimer’s patient who could not walk or feed himself or recognize anyone who fell out of bed and broke his hip and needed a hip replacement not only because he was full code, but because it is the only humane thing to do.  The health information systems we struggle with feigning silence when we know they are archaic and are killing our efficiency.  The practice variation and flaunting of evidence every one of us is guilty of as physicians.  The elderly couple with the husband with pneumonia who has to be admitted to the ICU with the wife pleading with us that the hospital copay will ruin them this month. The healthy forty year old female executive demanding a bone density test because she ‘paid for her insurance.’  The 340 pound 53 year old diabetic back again with an ischemic leg status post three resuscitations this year alone and over $125,000 in fully covered medical expenses now headed towards $175, 000.

Ms. BRALY: Our profit is in the 3-4 percent range – I think this year, around 4 percent. When you look, though, across health care, there are profit margins in a number of sectors around health care that are three, four, five times ours. If you look at biotech margins or pharmaceutical companies or device manufacturers, they’re three, four, five, six times the margin in the health insurance business. And the irony of that is it is our job to get to the efficiency of health care.

INSKEEP: There might be another irony there, as well, because if it’s your job to make things efficient and the cost of doing business keeps going up year after year after year, doubling in five years, as the president says, somebody might suggest you’re not doing a very good job.

The key is that none of us is doing a very good job but it’s too easy to point fingers and deflect blame.  I’m a pessimist about health care reform because I think the blocking and tackling have finally begun in earnest. I’m optimistic, however, about what we can and should still do even if we end up again with the status quo.

In that vein and with Matthew’s and the team at The Health Care Blog’s permission I am going to start a series of blogs called ‘Nuts and Bolts’ to talk about the incremental things we need to do no matter what happens in Washington. We need incremental changes throughout the health care ecosystem and while some need policy changes, others just need personal changes from each of us. The first installment will not be about ‘Death Panels,’ or policy, it will be about how critical it is for each of us to make our own decisions about our own lives and our own sense of death.  It will be called ‘Nuts and Bolts – Advance Directives.’ Then we can go from there.

Are Cooperatives a Reasonable Alternative to a Public Plan?

JosttFirst, a word about history. We have tried cooperatives before.
During the 1930s and 1940s, the heyday of the cooperative movement in
the United States, the Farm Security Administration encouraged the
development of health cooperatives. At one point, 600,000 mainly
low-income rural Americans belonged to health cooperatives. The
movement failed. The cooperatives were small and undercapitalized.
Physicians opposed the cooperative movement and boycotted cooperatives.
When the FSA removed support in 1947, the movement collapsed. Only the
Group Health Cooperative of Puget Sound survived. Over time, moreover,
even Group Health, though nominally a cooperative, has become
indistinguishable from commercial insurers-it underwrites based on
health status, pays high executive salaries, and accumulates large
surpluses rather than lower its rates.

The Blue Cross/Blue Shield movement, which also began in the 1930s,
shared some of the characteristics of cooperatives. Although the Blue
Cross plans were initiated and long-dominated by the hospitals and the
Blue Shield plans by physicians, they did have a goal of community
service. The plans were established under special state legislation
independent from commercial plans. They were non-profit and, in many
states, exempt from premium taxes. They were exempt from reserve
requirements in some states because they were service-benefit rather
than indemnity plans and because the hospitals and physicians stood
behind the plans. They were exempt from federal income tax until the
1980s. In turn, they initially offered community-rated plans and
offered services to the community, such as health fairs. In some states
their premiums were regulated and they were generally regarded as the
insurer of last resort for the individual market.

Continue reading…

Enthoven’s ABCDs and why that socialist Gingrich is wrong on standardized benefits

Here's Alain Enthoven's four part plan for fixing healthcare. As THCB regulars might guess, it's familiar and very sensible stuff. (Here’s the PDF)

A. Create an exchange with standardized plans, make individuals buy through the exchange and limit outside subsidies to the value of the lowest cost plan.

B. Tax health benefits (starting with those over the value of the cheapest plan)

C. Phase in the same system for Medicare

D. Phase out employer based insurance, giving everyone a voucher for the lowest cost plan based on a dedicated tax like a VAT.

Meanwhile in the LA Times, Newt Gingrich, who continues to smell blood in the Palin-infested waters, spouts BS that would destroy any sensible Enthoven-style reform. Apparently in Newt-world a regulated insurance package of standardized benefits is government bureaucracy run amok.

Continue reading…

Will Hospital Stocks’ Rally Continue?

Since early July, most hospital companies’ stocks have been rallying in anticipation of relief from uncompensated care costs under proposed health insurance reform bills. On Wednesday, however, profit taking hit the stocks in a small way.

The rally got an added boost in the last week from positive earnings reports and guidance by Community Health Systems (CYH) and Universal Health Services (UHS).

Tenet Health Care (THC) Tuesday reported a small loss on increased revenues. Lifepoint Hospitals (LPNT) reported Friday. (After this post was originally published.)

In its conference call with securities analysts, Tenet said the health care reform bills before Congress would relieve it of the cost of uncompensated care of the uninsured and of the cost of charity care. Tenet didn’t say any more about the health insurance reform debate and how the legislation would affect the company.

Continue reading…

KP lawsuit doesn’t sniff quite right

It’s about time we had a fun Kaiser Permanente scandal, as it’s been a while, and it appears that they’re having some influence on the side of the angels in DC these days. And tracking vis HISTalk apparently there is one. You can wonder over to this blog to get the full rhetoric but basically it comes down to KP being sued by a former relatively senior techie in the Northern California region who has had a big time falling out with his boss.He has three main accusations.

1. KP kept a registry of dementia patients on an open internal network2. KP employees were dumping personally identified data in the trash3. KP was and is not tracking deductibles and was forcing their members to count up to them—presumably costing their members money for those who were paying cash when they’d already met their deductible.

So let’s parse these apart.

Continue reading…

A Practicing Doctor’s Prescription for Health Care Reform

Our national healthcare system needs a ‘step-change’, not incremental change. We are facing a vast and complex problem. Let’s use it as an opportunity; rather than blaming our nation’s health problems solely on corporations, providers, insurers, or the government, let’s also think constructively about individual behavior and incentives.

Why do we stop at a red light? Why do we pay our grocery bill when we check out? Why are we compelled to ‘service’ our car when the red indicator light starts to flash? The simple answer is that if we don’t we know we will incur a penalty. Either we have to pay to get things fixed later, or we pay extra financial fees, or we get nasty looks from our neighbors.

A behavioral sociologist would offer a more complex answer: such contracts form the heart of a civic society. We behave in accordance with laws and a sense of civic duty (we abide traffic signals) because we understand that preserving the community is ultimately self-preserving. We act in ways consistent with financial incentives, or disincentives (we service our cars) because it is immediately self-preserving.Continue reading…