From the No Harm In Trying The Obvious Dept. …. A while back I said Charlie Baker had failed to justify his existence — well, to be nicer, and more accurate, his company’s existence. Why must we have health insurers at all? But in reading the must-read MassINC article on health care costs, I thought of something he could do … trouble is, it’s been done — sort of. And according to Baker, folks didn’t like it.
Harvard Pilgrim is a major consumer of health care on behalf of its members. It pays the bills. It stands to reason that it doesn’t want to pay more than it has to, but Baker complains that it must, even though HPHC has no idea what it’s paying for, or how valuable it is. There’s seemingly infinite demand for treatments of tiny marginal value over cheaper ones, and more expensive docs and drugs.
Well, OK. Instead of waiting around for the state to publish cost and quality data (at the cost of somewhere between $200,000 and $2 million — who knows this?), why doesn’t Harvard Pilgrim collect its own data — and share it with the public? Does Harvard Pilgrim have $2 million kickin’ around somewhere? (And why pick on Charlie — what about the Blue Cross Blue Shield?) They already do this for the Group Insurance Commission, which then leverages the information to get better deals for state employees. What’s preventing them from doing it for themselves?
According to Baker, folks didn’t like that:
I?m not trying to pass the buck when I suggest that the public sector has a major role to play in making this happen. Health plans are not viewed by the public at large as disinterested players in the health care game. Most people think we have a vested interest. Ten or fifteen years ago, health plans did try to define ?medically necessary care? and ?evidence-based care,? and people hated it. We were the bad guys ? denying people access to care and services. Any attempt to get serious about measuring performance, studying best practice, and engaging the public debate around what should and shouldn?t be funded has to come from either the public sector, or from the plans in conjunction with others.
The reason I like an Institute for Health Care Delivery, built along the lines of the other Institutes of Health, is because the feds fund the research, but the work gets done by clinicians and researchers. Docs, researchers and hospitals studying and reporting on health care delivery, thereby establishing standards of practice, is a much more effective way of engaging the debate and getting something done than an approach that involves the health plans on their own.
I don’t know — how about making a number of plans available out there, one with savings based on publicly available quality and cost data, and the other based on our current voodoo system? That would be interesting, and relatively non-coercive. Has that been tried?
We keep hearing that there’s no constituency for dealing with health care costs. I don’t believe that. Every single employer who offers insurance has to be part of the constituency — it’s big, big money out of their pockets. Every employee — every dollar going toward health insurance is a dollar not going into your pocket. Every patient — we pay for it in co-pays and cost sharing. Every shareholder of every company that isn’t directly in the health care industry ought to be part of that constituency. That’s most of us — even in a state heavy in health-related industry.
If your town or state is struggling with health care you don’t need to worry about costs, just add a casino.
Charley, I wouldn’t assume that HPHC or any other private insurer loses sleep over spending more than it needs to for health care. Unless high premiums start driving away healthy folks – the dreaded adverse selection – they have little incentive to keep costs down. Some would argue they have an incentive to do just the opposite. The higher the premiums the more investment income from them – a major source of profit for any insurer regardless of the line of business.
<
p>
Now that we have an individual mandate, adverse selection should no longer be an issue. Everyone, healthy and sick alike, will have to buy insurance if they can afford it. The market pressure on insurers to keep premiums down has been removed. All that remains is political pressure and the threat of rate regulation down the road.
<
p>
The GIC has kept costs down because its run by a savvy person who really cares about the health of its members. But more important, it faces the annual political and fiscal pressures that private insurers do not. The state budget is limited and the state, state employees and the GIC have no interest in having their coverage become a “budget buster”.
<
p>
What do you think the odds are that the Legislature, the Connector or anyone else will take one the interests that are very happy with the system as is? As the MassINC article points out, there’s not much sign of it yet.
<
p>
Hopefully, waiting for meaningul quality and cost reforms won’t be like waiting for Godot. But collecting more data will just postpone it – although it might help HPHC and other insurers with its next round of rate negotiations.
<
p>
The state has plenty of data to point us in the right direction. Senator Moore didn’t just make up the numbers when he announced that 2,200 people died in MA last year from avoidable hospital-acquired infections. It was a human tragedy that cost/wasted $675 million.
<
p>
That might be a place to start. Stop paying for medical errors – for substandard care. Save lives and hundreds of millions of taxpayer and premium payer dollars. Create a real incentive for hospitals to clean up their act. It’s even profitable for the hospitals!!
<
p>
Those 2,200 deaths are just the tip of the iceberg. Most medical error victims don’t die. A very good thing since 1 in 3 hospital patients are victims. The cost/waste is staggering – 10-15% of hospital spending – at least $2 billion.
<
p>
Private insurers invested in promoting competitive markets and keeping premium costs down might have done this long ago. I’m sure they don’t pay for a shipment of faded red tape. Ya think?
<
p>
Barbara Waters Roop, PhD, JD
at least not as much as costs, on which he has repeatedly called for action. Whether he means it in his heart of hearts I can’t say. But the lack of action on the insurers’ part is quite strange. It would seem there are all manner of measures they could have taken on cost and quality if they decided to do so.
<
p>
And yes, I think the principle of “you break it, you bought it” for hospital errors and infections is a good one.
I happen to know that, at least in the case of one major area HMO, skyrocketing premiums led a large employer around here to drop the HMO all together. So there is at least some market pressure on HMOs to keep premiums under control.
<
p>
After all, if more people have to buy insurance [not just get what their workplace offers], then you have more people price-shopping for insurance. Doesn’t this provide HPHC an incentive to keep premiums lower than other insurers [but higher than their costs], so that they can get your business instead of one of their competitors?
<
p>
That social norms require that we all wear pants doesn’t stop clothing companies from competing on quality or price. Health care is more complex than fashion, but the point remains: that everyone must be a consumer doesn’t eliminate price competition from a marketplace with competing players.
This is what our 3rd party payer health insurance world has turned us into: ignoramuses about our own health and oblivious to the real costs of health care.
<
p>
I defy 5 in 100 employees to state exactly what the before-tax cost of their company-paid health insurance is (i.e., the cost as if they had to pay 100%.) All they probably know is their office co-pay. I’ll bet they are clueless on their aggregate deductibles.
<
p>
Not that we could be consumers even if we wanted to. I asked flat out of a top ear-nose-throat specialist at MGH how much the surgery he was pushing for my apnea and snoring would cost. “Don’t worry, your insurance will pay for it.” I said I’d be paying out of pocket, and he still refused to tell me. We actually argued in the exam room, and I walked out.
<
p>
If you want to control costs, it’s simple — let people spend their own dollars, make their own choices. You’d see medical costs plummet.
<
p>
Why have the relative costs of cars, computers, airline-seat-miles, Big Macs, and digital cameras dropped?
<
p>
Why not health care?
From Charlie Baker, now that’s interesting. I would imagine that costs which allow companies like Harvard/Pilgrim to exist might have an impact on our overall burden.
<
p>
That’s why he ineptly argued earlier about Medicare’s administrative costs. From the fail to justify post. It’s difficult to argue that you want to reduce costs when your industry averages 15% in administrative costs, while the government can do it in a fraction of that cost (3%). Read that again. The GOVERNMENT had a fraction of private health insurers administrative costs. Plus his numbers are wrong, it’s 3% to 15%,
<
p>
His argument was that the costs are higher for seniors which brings the percentages down:
<
p>
For example, he’s comparing a 20-something that might see a primary care once a year to a senior who might have multiple visits, But he conveniently ignores that fact. So if you really wanted to see the impact, compare the 20-something with Medicare’s 3%, $300 a month with 3%, that $9 in administrative costs in comparison to Charlie’s $42.
<
p>
Medical Necessity is alive and well. It is being used at HPHC and private insurers as well as Medicare, Evidence based Medicine is very active. But he is correct in arguing that clinicians should be determining what is medically necessary, not companies driven by profit. A problem with the initial HMO’s was the deals with doctors that had financial incentives that rewarded restrictions of care, or denial of service or coverage. That was the problem, he seemed to gloss over that one.
the political climate has been completely poisoned by the anti-reform rhetoric of government-run, government-run, government-run. and all of that is a fallacy.
<
p>
do you want politicians telling you when you can see your doctor ?!
<
p>
and it’s all bs. that is all a scare tactic framing device to get folks to fear big bad heartless gummint, and continue to let the profit driven healthcare cartels call the shots. and it’s been staggeringly effective.
<
p>
one step in the right direction would be a cultural shift in the discussion that acknowledges that government has a role, ne a responsibility, to exercise regulation and transparency over the healthcare industry. for the plain good of the citizenry. as well as the myriad economic/financial reasons.
<
p>
no right thinking person really expects industrial polluters to effectively regulate themselves (and i doubt that privately anyone in the bush administration does either). so how can we expect the many layers of monied interests in the healthcare arena to do it?
<
p>
oversight comes from without, not within. but in order for public oversight to succeed, the false cries of socialism, and big brother, and the gummint have to be repelled. and dodging the issue or re-casting it does not make it go away. a strong, public, unflinching advocacy for the role and responsibility of public oversight has to be one of the very very first steps to meaningful reform.
…the Harvard Pilgrim annual report and try to figure out their admin costs. They seem to rise with claims…do they not have any economies of scale? Anyway if Mr. Baker wants transparency how about starting with detailed numbers on administrative expenses from their financial statements?
<
p>
Here is 2005 and Here is 2006.
Why must we have health insurers at all?
<
p>
It is my belief that, for employer (or group) based health insurance, the insurance companies don’t do a lot of insuring. What they do do, is provide two basic services. One, an actuarial estimate of the health care costs for the year, from which the premiums are calculated for the particular employer or group. And, going forward, claims processing. There isn’t a lot of “insurance” going on. The employers or groups are basically self-insured, since the premiums are based on the employer’s or group’s individual experience, not spread over all or a significant portion of the employers or groups that subscribe to the particular insurance company.
<
p>
Some health insurers negotiate with certain health care providers for rates, and they pass whatever savings they can negotiate on to their customers if the insureds use the “in-network” providers, but that’s about it.
<
p>
A general observation, that I’ve been meaning to make about Baker at the head of HPHC. Why do these organizations keep hiring what are nothing more than washed-up politicians into their upper management? It’s bad enough that universities keep hiring washed-up politicians (like Dukakis at Northeastern) but why does a private company like HPHC hire a washed-up politician like Charlie Baker to be its head?
We DO NOT NEED health insurers and, in fact, we must get on track to largely EXCISE HEALTH INSURANCE CO’s out of our HC system. See this week’s Newsweek for a great article by Jane Bryant Quinn endorsing “Medicare for All”
<
p>
A U.S. Medicare For All program must be created if we are truly sincere about achieving the cost controls necessary for providing universal quality care for everyone. HR 676 seeks to achieve these reforms phased in over a 15 year period and we can help provide leadership toward that goal on the state level by enacting SB 730 here in MA.
<
p>
Anything less is mere tinkering that keeps the elements of our broken, wasteful, and harmful system firmly in place and may indeed make things worse, as many people are pointing out that the MA Chap 58 law will do.
<
p>
Canada?s reform that led to the civilized model of guaranteed comprehensive care for all began one province at a time and evolved into a national program.
<
p>
At present the Canadian Universal Medicare program is underfunded; spending about 1/2 less per person than we spend in the U.S. on HC. But it is a good model that uses streamlined single payer financing to guarantee cost effective access to needed care for everyone.
<
p>
We Americans are a smart and caring people who, if given the choice, would gladly take the option to modify such clearly preferable models such as Canada?s and France?s to meet our needs and our budgets and enact an improved Medicare For All U.S. health care program.
<
p>
After all, healthcare should be for people, not for corporate profit and individual fortune, right?
<
p>
To learn more visit
http://www.DefendHea…
and
http://www.MassCare….
<
p>
<
p>
P.S. This is my take on why some politicians are where they are now in the MA HC-Medical Industrial Complex:
<
p>
1. Baker is a shrewd businessman – he’s got his HMO, HPHC, a Not for profit public charity that we taxpayer saps subsidize here in MA in a lucrative national business deal with UnitedHealth, the biggest FOR PROFIT insurer in the country.
<
p>
2. Phil Johnston has been riding the corporate HC gravy train for years as a ‘Consultant” to the HC industry. He was one of the ten original signers of the the citizens healthcare amendment then didn’t do anything that I know of to help it survive the criminal actions of the state legislature to kill it. BTW Legal challenge pending before the SJC.
<
p>
3. Dukakis knows a lot and shares it with students at NU but it’s too bad he doesn’t have the courage nor the vision to help led the political movement for real universal HC reform.
<
p>
4. Barrios just left the state Senate mid-term — foisting yet another “special election” expense upon the taxpayers — to ride his own type of gravy train (and ego train) to head up the so-called Blue Cross Blue Shield “Foundation” which doles out hush money, oh, I meant to say “grants” to “advocates” and “academics” across the state and the nation to push the insurance co.-centric fake reform model…
…you are quite correct. But my point was a bit orthoganal to your point. My point was that, for most employer based health insurance, the supposed insurers are not insurers, they are largely claims processors. Claims processing is not insurance.
<
p>
I have made no bones about the fact that I believe that the German system of health care financing is much better than the American system (including a mixture of Government organized and private financing), but it has several prerequisites (such as Kostenlos university) that does not exist in the USofA.
Point well taken
<
p>
It’s now our job to to create the “prerequisites” for Medicare for All reform to take place here in MA and across the nation.
<
p>
(what’s Kostenlos university?)
I am self-employed (small business) and have paid my own (and family’s) health insurance for I don’t know how many decades.
<
p>
Yesterday I got a quote for what my premium would be for next year. It went up roughly, 30-40%. The quote was double for what I paid in 2005-2006.
<
p>
I called my insurer in shock this morning. They suggested a plan that is slightly more manageable financially, but will still be very difficult to fund. And I will find some way to pay it.
<
p>
BUT, if this is health insurance reform, it does not work for me (vast understatement). And a whole lot of people must be in the same situation that I am in. And I don’t know even how or where or what to begin to do about it.
<
p>
I feel completely panicked.
but is ALL TOO COMMON and getting worse
<
p>
Sign up for the listserve at http://www.defendhea… if you’d like to be kept informed and involved in efforts to bring some sanity to this mess. You can also email me at ann@defendhealth.org
<
p>
-Ann E Malone, RN, MSN