The NY Times never called so I guess they’re never going to publish my letter about Karen Ignagni, the head of AHIP, in response to her letter the other day to the Times about Krugman’s column. I referred to it in my post on Friday. So what did she say and why was I so miffed?

Well let’s just say that if I had made so many factual mistakes in an essay in the third grade I’d still be standing in the corner wearing the pointy white hat with the big D on it. Here’s her letter with my comments cut into it:

In making a case for a one-size-fits-all health care system, Paul Krugman ("A Private Obsession," column, April 29) ignores the private sector’s progress in adding value to our health care system and stretching consumers’ health care dollars.

It is of course a joke to suggest that Krugman’s calling for a one size fits all system–which is code for government-provided (socialized) medicine. He explicitly criticized the UK system for being that, even while acknowledging that it was better for the poorer Brit than ours was for the poorer American  The vast majority of single payer systems (including the UK!) have a safety valve private care delivery sector, and in some of them (e.g. France, Germany, Japan) it’s much bigger than the government-run system. And by the way, some data on our government-run system, you know the one that’s good enough to our brave service men and women, suggests that it’s pretty damn good compared to private HMOs. But let’s ignore that and focus on the other end of the sentence, the part about how the "private sector is stretching consumers health care dollars".  OK, so in 1997-8 or thereabouts AAHP (Ignagni’s then employer, and forerunner of AHIP) put out a press release extolling a brilliant in-house study claiming that managed care plans had saved the economy billions of dollars in comparison to what people would have spent on health care had the rate of premium increases in the mid-1990s been the same as it was in the late 1980s–when they were going up three times the rate of inflation. That was such a crappy piece of "research" that I wrote a special article for my corporate clients explaining why, and suggesting that they never allow this kind of stuff to get out with their name attached to it. Of course we never saw the corresponding article published in 2004 or 2005 when those same health plans which had supposedly been so great at taming health care inflation completely capitulated, and the "consumer" saw their prices going through the roof. I suspect their researchers are still working on it. But it’s good to know that, for Ignagni, apparently the last 5-6 years of double digit health inflation has seen the private sector "adding value"! I guess if you’re a senior exec at  health plan, it does seem that value has indeed been added — mostly to your bank account of course. But there’s more:

During the 1990’s, Americans decisively rejected a single-payer system. They were concerned about the rationing of care, endless delays and lack of access to state-of-the-art procedures experienced in countries with government-run systems. That’s why residents of these nations go to great lengths to gain access to American health care, and why their leaders are reaching out for disease management, care coordination and other private-sector initiatives.

Next we come to the most blatant lie in the whole brief letter. Apparently Americans rejected single-payer in the 1990s. This is complete rubbish and Ignagni knows it. Ignagni claims that Americans were offered a single payer proposal in the 1990s. They were not — the Clinton plan explicitly kept a role for large private health plans. The political gambit of the Clinton’s was to ensure that they didn’t have total enmity from the private health plan sector. They were sufficiently successful that several members of the AAHP — the "large insurer" association which Ignagni then headed — initially supported the Clinton plan. Did she forget?  Well maybe selective amnesia has reared its head, as the HIAA (the small insurer association that merged with AAHP to form AHIP a few years back) was of course violently opposed to the Clinton plan. HIAA was opposed because the plan would have put most Americans into large purchasing groups and would have effectively banned risk-shifting and medical underwriting — the only way small (and many large) plans make any money.  It was HIAA that came up with the "Harry and Louise" ads which sowed FUD amongst wavering Democratic politicians with an astro-turf campaign run by PR agency Porter Novelli. But the rejection of the Clinton plan was caused by a bunch of factors, mostly connected to the fast improving economy and the  scandal mess the Clintons were getting themselves into over Whitewater, Travel-gate, Vince Foster, and Bob Dole refusing to let the moderate Republicans meet with Hillary about health care. Single payer had precious little to do with it, even if many Americans had a clue what it meant, which most didn’t (and still don’t).

And of course the issue about foreigners (i.e. Canadians) rushing down here for health are has been conclusively proved to be complete rubbish by the UBC/Michigan team that used actual data and actual research to look into it, and then published it in the leading academic journal in health policy — an approach that AHIP hasn’t exactly been known to much concern itself with. Meanwhile Ignagni continues:

Mr. Krugman’s government-versus-private juxtaposition minimizes the complexities of reforming health care and overlooks the vibrant public-private partnerships that millions of Americans count on. For example, Medicare and Medicaid patients who opt for private-sector plans are getting better care at lower costs than their counterparts in the government-only side of the program.

Perhaps Ms Ignagni doesn’t hold much truck with those Canadians and their biased use of data.  However, there’s a minor research organization called the General Accounting Office attached to a place called the US Congress that AHIP may have passing familiarity with, so perhaps we should introduce some of their research at this point. The GAO has twice in the past decade looked into the subject of the "Medicare and Medicaid patients who opt for private-sector plans (and) are getting better care at lower costs" and found that while those seniors in Medicare HMOs may indeed have been having lower costs than their colleagues in the standard Medicare program (because they were covered for their drugs) the actual costs to the overall Medicare system — that is to you and me the taxpayer — went up because Medicare was overpaying the HMOs. The HMOs were of course recruiting healthier than average seniors, pocketing an amount close to average cost for a Medicare recipient, and the taxpayer was making up the difference. Funnily enough as soon as those payments were cut to closer to what the seniors were actually costing the plans, the private sector bailed out of Medicare as fast as it could. Only now after huge bribes payments for private plans to recruit seniors were put into the MMA to buy AHIP’s member plans’ support is the number of Medicare recipients in private plans starting to tick up again. GAO by the way isn’t exactly brimming with optimism that the new PPOs, introduced as part of the MMA, are going to save any money either. But undettered Ignagni continues: 

Americans deserve a real health care debate and real solutions, starting with evidence-based medicine, medical liability reform and the information they need to make better decisions. That’s a more complex but ultimately more productive path to reform. (Karen Ignagni,  President and Chief Executive, America’s Health Insurance Plans, Washington, April 29, 2005)

It is indeed nice to know that we deserve a real debate, not some phony scare tactics cooked up by, say, members of the HIAA which never got close to discussing an actual "solution" in 1994 when they had their chance to be constructive. And frankly given the huge amount of cash that her members and their executives have been pulling down the last few years, why would any of them be interested in "reform"? I guess that given it’s a debate about health care in the US, we can’t  expect many actually correct facts to be brought up, but surely there should be some kind of special award to Karen Ignagni for getting so many wrong in so few words!

Coda: One thing I didn’t know about Ms. Ignagni before googling her is that she used to work for the AFL-CIO. Well at least she knows how to pick a winner!

So for the final post on the theme of the uninsured and how messed up our health system is, I turn to the pages of the New York Times which shows that the taxpayer (or as Don Johnson calls us — the "market customer"!) is trying to get WalMart to not dump the cost of its employees’ benefits onto the public.  Maryland just passed a bill aimed at Walmart and supported by Giant stores, a local grocery chain which does cover its workers’ health care costs, insisting on better benefits coverage from Walmart and employers like it. In California a not-dissimilar ballot initiative just failed last time and will come again this fall probably. While I’m not in favor of an employer mandate (or for that matter employers being involved in health insurance at all) it’s clear that Walmart benefits from being stingy to its employees while its competitors such as Safeway and Costco which pay better wages and give better health benefits make less money.

And as everyone joins in a race to the bottom, the number of jobs that have health insurance attached dwindles, and the number of those uninsured or falling on to the taxpayer’s plate increases. For those without insurance and not poor enough for Medicaid, the individual market beckons like a Siren attracting a ship onto the rocks. The individual market sucks, and for many  examples of how, see the comments to this recent post.

Part of the reason the individual market is such a mess is the the aggressive underwriting behaviors of the plans reprensented by Karen Ignagni at AHIP.  She has a letter in the NY Times today attacking Krugman’s column in which he opposed private health care.  It’s an incredible piece.  She manages to make more straight factual errors in three paragraphs than I would have thought possible. It’s so bad that that I actually wrote a letter pointing them out to the Times. If they don’t publish it I’ll do a longer version here next week. But her overall point is that what’s important is to debate some more…..anything than to solve the problem.

Cover the uninsured week continues (mostly by chance here at THCB), as I don’t hold much hope in changing anyone’s mind in our current political impasse and imbecility. You might want to check out the huge number of comments to yesterday’s post — particularly one from Don Johnson that veers close to Lord of the Flies territory in terms of "you’re poor, sick and stupid?  Well you should have got educated and gotten rich". However, I don’t really have the stomach to tear into the conservatives on this issue any more.  They’re at once morally wrong, economically illogical, and seem to have mythical interpretations of the facts. On the other hand, The Industry Veteran does have the stomach for it:

Your colloquy with Don Johnson reminds us that for conservatives, the chimera of the market is an article of religious faith.  Never mind that what they call a
market lacks many of the necessary elements required for labeling some activity
a market. As long as their perfervid perceptual grid can label a phenomenon as
non-government and afford someone the opportunity to make a pile of dough,
conservatives will slap the sacrosanct market label on it.  Now if substantial
government activity, such as buying, selling and deciding who else can
participate proves necessary to the existence of this putative market, that
doesn’t bother these Thomist marketers.  Whatever they deign as a market is
virtue, the rest is sin.

If logical rigor has nothing to do with what
they call a market, and if they remain untroubled by the fact that US health
care possesses the shortcomings of markets and non-markets, it is only fair to
ask what is the sine qua non whose presence calls forth the blessed
appellation of "market" upon some shabby activity. I maintain that for America’s
medievally fixated conservatives, profit-making is this indispensable quality.
If the system in question is one that most observers might call communism,
organized crime or government-managed capitalism, that matters not a fig to Mr.
Johnson and his erstwhile colleagues at the Wall Street Journal‘s
editorial page.  Henrik Hertzberg recently referred to the Journal as
the church newsletter of the non-evangelical right wing and Mr. Johnson is at
least a deacon in that deranged parish. Profit-making provides their road to
eternal salvation.

Now profit-making is the caloric of this pre-modern
thought process.  It is an ethereal fluid whose presence and quantity can be
judged only by the enlightened clergy. This means if friends of Mr. Johnson and
his fellow seers judge that profits in some system flow to people who lack their
favor (e.g., commissars or made men) while remaining beyond the reach of people
in whom Johnson sees the divine light (e.g., Pfizer, Amgen or Medco), then the
activity loses its market designation.  Even if the divinely inspired Pfizer and
Amgen possess many of the same compelling powers as the netherworld government,
their presence hallows the activity into market status.

As people with a
religiously closed mind, Johnson and his compatriots are beyond the reach of
rational argument.  Evidence and logic cannot persuade them.  They transvalue
values to make good into evil, sin into virtue.  Quite frankly, I don’t think
they justify the time or effort required to rebut their nonsense.