Thursday, April 28, 2016

NAHU *almost* gets it

Full Disclosure: I was a member of the National Association of Health Underwriters (NAHU) for many years and was, in fact, co-founder of my local chapter. That being said, I am generally ill-disposed towards most so-called agent associations, because - by and large - they tend to represent the carriers more than the agents. On the other hand, the organization's current president has a background as an actual agent, which lends some legitimate cred to his latest offering on why some carriers have decided to forgo paying commissions on business written after Open Enrollment ended.

Here's his take:

"Carriers are cutting out their brokers because they don’t want to sell their policies."

And that, in a nutshell, is exactly right: carriers lose money on virtually every policy they sell, particularly those sold on-Exchange (primarily because the vast majority of these are subsidized).

And he goes on to (quite correctly) point out the value that agents bring to the table (which is, of course, part of his job). And that's what we call "necessary, but insufficient;" that is, it's demonstrably true that the agent adds value in sorting through all of the options, calculations and decision-making. But I don't hear Mr Goldmann calling out state DOIs to investigate what's happening to those unpaid commissions. As we've pointed out, they are priced into the products already, a separate calculation from MLR, etc.

Instead: crickets.

Well, Mr G?

[Hat Tip: EBA Magazine]

Privatizing CanuckCare©

We've written about the Canadian health care system many times over the years. It's "free," which means that one gets what one pays for. As with all such schemes, actual care is rationed, most often by the use of long wait times that work on the basis of attrition.

That's changing, however, at least in one Province:

"Wait times ... dropped significantly in the Saskatchewan province after private, for-profit clinics were introduced to the area."

On the one hand, this would seem blindingly obvious to anyone with even the most remote grasp of how markets work. But it's a hopeful sign that, at least for now, some government bureauweenie(s) "get" it.

Interestingly, this isn't the first time our Neighbors to the North© have considered privatizing at least a part of the health care sector.

From 2009:

"Hoping to capitalize on patients who might otherwise go to the U.S. for speedier care, a network of technically illegal private clinics and surgical centers has sprung up in British Columbia, echoing a trend in Quebec."

What's Canadian for "What took you so long?"

[Hat Tip: FoIB Holly R]

Wednesday, April 27, 2016

UHC Folds, Anthem Stands Pat?

As we saw this morning, UHC continues to exit the Marketplace in state after state. Which should be a pretty strong signal of unsustainability.

But perhaps the death of the Marketplace has been exaggerated:

"Anthem ... seems inclined to help the [PPACA] public exchange system keep its doors open and products on its shelves in 2017."

So (at least) another year promised by The Blues.

Be interesting to see what their stakeholders think of this move.

Too good *not* to post

Unvetted from the web:

I've reached out to Mr Alameddine in an effort to ascertain from whence he obtained his screenshot. It's not from the site (I've been on that enough times to know) but perhaps from a state-based Exchange or carrier website? Will update this post as appropriate.

UH C You Later - UPDATED

Add Iowa and Kentucky to the list of casualties - that makes 26 out of 34. UPDATED MAP BELOW

The shake up of the individual market begins. On Tuesday United Health Care announced that they were going to be leaving the individual marketplace in all but "a handful" of states in which they currently sell Obamacare policies.

This isn't something that we should be surprised to see. With losses in 2015 of $475,000,000 and projected losses in 2016 of $500,000,000 why would any business continue to operate in a losing market? Especially considering UHC's enrollment across the 34 states they participate in is only 795,000 people.

So where does UHC stand at this point? Thanks to some excellent tracking by Zach Tracer at Bloomberg we know that UHC is leaving 24 states. They have verbally agreed to participate in only two states so far for 2017.  Here's a handy little map to see where UHC stands in your state.

While we don't know the exact fallout yet, consumers should be prepared for more insurers to follow. With a couple of years of actual claims data and the constant churn happening in the individual marketplace, it's going to be difficult for insurers to find profitability in this space. At least they won't be profitable until the true costs of care are actually factored in to the premium pricing.

Then we will have what we always believed Obamacare to be, an unsustainable high risk pool paid for by your tax dollars.

Tuesday, April 26, 2016

"Junior" Fights Back: Tales from the MVNHS©

Earlier this year, we reported that "junior doctors" employed by the Much Vaunted National Health System© had engaged in a pretty severe work slowdown, in protest over "pay and working conditions." In fact, these "junior doctors" comprise up to half of all doc's in England.

As with almost all government-run enterprises, the folks in charge heard the junior doc's pleas, and agreed to a mutually beneficial resolution.

Er, no:

"U.K. Junior Doctors Withdraw Emergency Care in ‘All Out Strike’"

On the one hand, the work stoppage lasted a mere nine hours, but of course that impacted tens, perhaps hundreds of thousands of patients (for better or worse is another question entirely, of course).

Under proposed MVNHS© regs, junior doc's would be required to work weekends and evening at "regular" pay scale, not "premium" (aka overtime, one presumes). This is necessary, of course, in order to rein in out-of-control healthcare costs.

Whoa there, Henry, wait just a second:

It is a well-known fact that government-run health care schemes systems are far more efficient than our own, and that they're able to keep strict control of health care costs with zero impact on quality or quantity of care.

Um, not so much:

"[T]he British Medical Association, the union for doctors, has countered that it will stretch an already-overburdened workforce even thinner, endangering patient safety."


Good thing that can't happen here.

[Hat Tip: FoIB Holly R]

Obama Signature Legislation and Legacy

Will Obama's legacy be the end of the best health care system in the world? This president's experiment in fascism may well go down in history as a complete failure.

Ronald Reagan told the American people: “The nine most terrifying words in the English language are ‘I’m from the government, and I’m here to help.’ ” Obama wanted to convince Americans that they were not terrifying. And the way he was going to do it was through the only great liberal legislative achievement of his presidency: Obamacare. 
He failed. Even before he leaves office, Obamacare has begun unraveling. - Washington Post

For the handful of people that have been helped by Obamacare there are thousands who now have health insurance they cannot afford, or cannot afford to use.

Health insurance carriers have lost billions. These are the same carriers that, in the years prior to Obamacare, either made a small profit on health insurance (usually 2 - 4% of premiums) or broke even.
The president promised these insurers taxpayer bailouts if they lost money, but Congress in its wisdom passed legislation barring the use of taxpayer dollars to prop up the insurers. Without the bailouts, commercial insurers are being forced to eat their losses — while more than half of the Obamacare nonprofit insurance cooperatives created under the law failed.
There is no way to spin this.

Obamacare is a failure.

#ObamacareFail  #Fascism

Monday, April 25, 2016

Top o'The Week LinkFest

Despite the best (?) efforts of its proponents, ObamaPlan enrollment continues to crater:

"More than 1 million ObamaCare exchange customers have likely dropped out since open enrollment ended on Feb. 1"

That's according to newly released numbers from a handful of states. Interestingly, 80% of those states use their own Exchange portals, while only one (Oklahoma, okay?) sends their victims citizens to

Make of that what you will.

Meanwhile, the ripples from UHC's withdrawal from most markets (as graphically reported last week by our own Patrick P) continue their impact:

"United's financial results in the Obamacare exchanges are more than a blip, they are indicative of what is happening in almost all of the states to almost all of the health plans operating in the insurance exchanges."

That is, UHC represents the (admittedly large) canary in the coal mine. If the largest health insurer can't make money in this market, one has to question the sustainability of that market itself. As uber-wonk Bob Laszewski notes, "Obamacare is not about the insurance companies, it is about the consumers that have nowhere else to purchase individual health insurance in the United States and are already finding the offerings––with subsidies or without––lousy deals."

The reality is that 85% of the folks who buy on the Exchange are being subsidized with taxpayer dollars.

And it gets worse: some 60% of those eligible for subsidies don't even bother to use them.

What's that tell ya?

Finally, via FoIB Holly R, we learn that telemedicine was actually predicted in 1925:

La plus ca change...

More O'Care Lies

We all fondly recall President Obama's pledge that rates would decrease 3000%, right?

Well - and you may want to sit down for this - turns out that he may have fudged just a teensy, tiny bit.

And by "teensy, tiny bit" we mean, well:

"Marilyn Tavenner, the president and CEO of America’s Health Insurance Plans (AHIP), said ... that the culmination of market shifts and rising health care costs will force stark increases in health insurance rates in the coming year."

On the one hand, Ms T has her own issues. On the other, it's not as if there's insufficient 3rd party evidence to support her contention. The reality is that  the ObamaTax is unsustainable, and that we're in for devastating premium increases for the foreseeable future.

Despite President O's promises.

[Hat Tip: FoIB Jeff M]

Friday, April 22, 2016

Passover 5776/2016

In case you were wondering:

Chag Pesach Sameyach!

[Hat Tip: David Williams]

Thursday, April 21, 2016

Stossel Nails It

First, r'fua shleima to Mr Stossel:

"I write this from the hospital. Seems I have lung cancer."

The post highlights some of the more egregious examples of customer service faux pas, but I'd like to focus on one or two specific points he makes along the way.

For example:

"I get X-rays, EKG tests, echocardiograms, blood tests. Are all needed? ... [N]o one discusses that with me or mentions the cost. Why would they? The patient rarely pays directly. Government or insurance companies pay."

This is crucial: when a third party is footing the lion's share of the bill, we become less sensitive (or completely desensitized) as to what that bill actually is. Hence, the kinds of pricing distortion we read about in Kelley's (fantastic) post yesterday on how providers calculate what a given encounter will cost.

Reinforcing this theme, he continues:

"Instead of answering to consumers, which forces businesses to be nimble, hospitals report to government, lawyers and insurance companies."

By implication, reporting to these outside agencies causes the business (hospital) to focus on the process, not the results. And since the provider's true "customer" is the government or insurer, why would it really care about the patient's convenience?

And then he gets to a very interesting point. He notes that we're told, over and over, that we can't legitimately second-guess these providers, because health care is " too complex for consumers to negotiate."

That may nor may not be true (and I would argue that it's likely at least partially true in the case of brain surgery or cancer treatment, but perhaps less so when it comes to less serious ailments), but Mr S notes that:

"[C]ars, computers and airplane flights are complex, too, and the market still incentivizes sellers to discount and compete on service."

True, and he underscores that by pointing out that we generally buy these goods and services with our own money, not the government's or an insurance company (company cars and travel excepted, of course).

Regular IB readers know that I've long been a fan of consumer-driven healthcare; the challenge is that I fear that that ship has sailed.

Springtime Health Wonk Review

Peggy Salvatore hosts this week's innovative collection of health care wonkery. From Big Pharma to Grandthered ObamaPlans to a video on Worker's Comp there's bound to be something to pique your interest.

Wednesday, April 20, 2016

Medical Fee Schedule: Explained

David Williams from Health Business Blog has some questions about how the medical world comes up with its fee schedules. Specifically, he was relating a story regarding his wife’s recent visit to an Urgent Care Facility and the resulting charges associated with that visit. Let’s take a look at those questions and see if we can provide some answers for inquiring minds.

If something is billed for $427 but reimbursed at just $22, it seems that BI is overcharging or Blue Cross is underpaying. Or is it both?

Actually it is neither. The only set fee schedule that is relevant is the fee schedule put out by Medicare each year. This is the fee schedule from which all other fee schedules are derived.

To create a fee schedule for a medical office there are several factors to take into account:

1) The reimbursement set by Medicare via the Medicare Fee Schedule,

2) The usual and customary charge for a similar service in your geographical location,

3) The fee schedules of all other insurances of which you are contracted, and

4) How much money the facility/doctor needs to generate to stay in business.
In creating a fee schedule for a medical facility the starting point is 150% of the Medicare fee. Then this number is compared to all other reimbursements from all other in network contracts to ensure that you are billing more than they are paying (if you bill less than the contracted amount, you will be paid the amount billed. If you bill more than the contracted amount you will be paid the contracted amount.) Next, you ascertain how much your competition is charging for the same service and finally you figure out how much money is needed to keep the doors open. From all these factors a fee schedule is created.

A final piece to remember is that in medicine the worth of a practice, hospital, or urgent care is based on its Accounts Receivables. In Medicine, A/R is the charges billed, not the monies received. If charges are high, then the A/R is high. This means that conceivably the A/R amount will be coming into the business.

What happens to the poor schlub who’s out of network, or worse, lacks insurance? Is the $427 from rare patients like that –who pay 20x what Blue Cross pays– accounting for more than 100% of the center’s profits?

In terms of the out-of- network patient or the patient without insurance, their overall patient responsibility will be higher based on the higher charge. However, in today’s high premium/high deductible atmosphere few patients seek out out-of-network or cash payments. Straight out-of-network/cash patients do not financially support a medical facility, unless that facility’s business model is set up as such. In this case, the Urgent Care is set up on an Insurance Reimbursement Model.

If a medical facility so chooses, they can institute a policy where by out-of-network or cash patients pay a discounted rate, as long as the discount is given to each patient.

Is what I see on the EoB actually the economic reality behind the transaction? Or is BI or my wife’s BI practice being paid a capitated amount for her care and is this bill only meaningful for calculating our cost?

The charge listed on the EOB is the fee that the practice has determined is the equitable amount of money it should receive for the service provided. The reimbursement from the Insurance Company is the amount of money that it is willing to pay for the service rendered. Each insurance company has its own fee schedule, so the charge has to be high enough to ensure payment from each company for each service rendered (see answer question 1).

As a matter of practice most medical facilities will have a 30-40% write-off from what was paid to what was billed.

This is not a capitated amount. Capitation is a set amount of money paid lump sum to a provider for the overall care of a patient. An urgent care facility would not receive capitation payments since it caters to emergency one time only patients and does not cover a full episode of care.

What is a patient who’s interested in “transparency” and “cost effectiveness” supposed to think? Did we do the right thing by going to urgent care or not? I think it would have been a lot more useful to see a comparison between the actual urgent care visit cost and a hypothetical visit to the ER or physician office.

You are correct, the information from the EOB does not allow you to compare to any other facility. Transparency is defined as the medical facility notifying the patient of the charge for the procedure. I would not compare my price to my competitor since my goal is to get your business, nor would I give out my fee schedule to any other provider for the same reason.

There is no hypothetical visit as each medical facility would have its own charge and each facility will have its own contracted rate, thus there could never be apples to apples comparison.

I understand that on the surface the difference between the charge and the fee seem in-congruent, but you have to remember you are looking at one small piece of a very large financial picture. Another patient with the same procedure may have an insurance company that reimburses that charge at 66% and yet another patient’s insurance company reimburses at 80%. Fee schedules are created to ensure that all reimbursement possible is captured.