Archive | July, 2010

Mr Rangel-just retire, politics is not a career-or rather shouldn’t be

31 Jul

Is Rep Charles Rangel unethical, did he stretch the limits on his dealings? The answer is probably he did along with scores of other politicians. The fact his legal bills are being paid by union PACs and other lobbying organizations should tell you something. But no matter Democrats are not worried, their constituents don’t seem concerned. The past history of voters seems to say they rarely care.

Ethics aside, Mr Rangel is 80 years old and it’s time to go. He has been in Congress since 1970. No human being let alone a politician can play the Washington game without coming under the influence of just about everyone wanting something.

After forty years doing this you are not an elected official, you are a government employee.   This is just another case illustrating the need for term limits.

Steven Levitt’s (Freakonomics) view on health care reform.

29 Jul

I have said repeatedly that the PPACA does not address the real problems of health care and health care costs.  I have also said that in reality the law reinforces the wrong behavior and perspective on who should pay for health care.  The PPACA also further shifts costs from the government to the private sector both insured and self-insured.  Take a look at what Steven Levitt says about health care reform (I added the bold highlight).

(Money Magazine July 2010) — Had Steven Levitt taught your college Econ 101 lecture, you’d surely remember more of it. The University of Chicago professor takes the basic tools of economics — reams and reams of data, and the understanding that human beings respond to incentives for gain — and applies them to surprising new subjects.

“Freakonomics” and “SuperFreakonomics,” are his bestselling books   By turning economics into a good story, Levitt has become his field’s greatest popularizer — the Carl Sagan of number crunchers.

No wonder he was the hands-down readers’ choice for this month’s Visionaries interview. We asked Levitt to answer your burning economic questions; Money contributing writer David Futrelle chimed in with a few of his own. Edited excerpts follow.

Health reform

You write about how incentives shape decisions. How do you expect the new health reform to change the way we use health care? –Donna Sako, Taneytown, Md.

The law fails to address any of the important questions about health care. People are not paying on the margin for the health care that they are receiving — after they pay their premiums, the insurance picks up the tab. When neither the doctors nor the patients are directly paying for health care, people have no incentive to make careful decisions about how to spend money on the margin. That’s one reason we spend 15% of GDP on health care.

A reasonable health care reform would shift the incentives so that when I go and get expensive health care, I pay enough of the costs to get me to think twice about whether the benefits outweigh the costs. It makes sense to have catastrophic coverage. That’s the idea behind insurance: When someone is unlucky, you don’t want that to ruin their life financially. But we as a society often will spend vast sums at the end of a life trying to keep someone alive for an extra month. It’s not something society likes to talk about, but I think people should face a tradeoff: Do I want my mother to live another week, or do I want to have enough money to send my kids to college?

That sounds like a very personal version of the death panels we argued about in the last election.

People don’t like it, but inevitably we need to think about both the costs and the benefits of health care. We cannot avoid the financial consequences.

The other real problem in the U.S. system is that health care is tied to employment, and that leads to people getting locked into jobs. Everyone agrees that that’s not an ideal solution, and the current bill if anything makes the connection stronger rather than weaker. It seems like we did everything wrong with the health care bill.

We’d spend less on medical care if people had healthier lifestyles and avoided heart disease and cancer. Any way to create incentives for that? –J.P., St. Louis

The thing about chronic diseases is that most of the costs fall on the person who’s got it. If you have diabetes or heart disease or cancer from smoking, you bear the burden of being ill. It’s not so clear there is a role for intervention. You might say we could inform people of the risk, but the research suggests that smokers are well informed. They like to smoke, or they can’t help it.

Health Insurance Claim Appeal Regulations are issued

27 Jul

What the heck is health insurance anyway?

Last week HHS issued interim regulations on the new claim appeal process under the Patient Protection Affordable care Act.   As one may suspect they add a considerable administrative burden and cost to the operation of all health benefit plans.  Regulations address both internal and external claim reviews.  However, the regulations do not address the external claim appeal process for employer plans that are not subject to State regulation, essentially this is a self-funded employer plan which includes most large employers many of which already employ internal and external review procedures.  HHS says there will be supplemental guidance on external review for these plans.

Here is a Fact Sheet (and promotional piece) from HHS on the new Claim Appeal Regulations.    Here is a .  Are you sure that you want to give up grandfathering for your plan?

Complying with preventive care rules under PPACA will be a major headache for doctors, insurers and employers…patients, time to get creative

26 Jul

The interim regulation for preventive services under PPACA are out. Remember during the health care reform debate that you heard all the talk about insurance company overhead and not spending enough of their revenue on health care.  Well these regulations and the administration of preventive services are going to add to those costs and to premium substantially.  Sure, you may not have to pay one penny for a cholesterol screening or your kid’s immunization, but you are paying one way or the other.  The rules appear simple, but the actual implementation by health plans, well, not so much.  If you have any experience in employee benefits, you will easily recognize the problems we are about to unleash.  

Keep these names in mind because they are going to determine what is and is not preventative, what goes on the list and comes off the list.  In addition, you can be sure that this group or that will be lobbying to add every conceivable service and product to the list of 100% covered preventive items.  

  • United States Preventive Services Task Force (“Task Force”)
  • Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention (“CDC”)
  • Health Resources and Services Administration (“HRSA”)

 What may appear simple is not so on closer look. We are setting up scenarios for patients to attempt to influence the billing and coding by providers.  We are encouraging “fraud.”  We are making life much more difficult for doctors and for those who process claims.  For employers, maintaining their plans to stay in compliance with these regulations will be on ongoing job because there is nothing static about the list of preventive services and there will be a need for constant communication with plan participants and for the updating of Summary Plan Descriptions. Because of the complexity of all this, there will be more controversy as to what was paid and how it was paid.  This will lead to increased claim appeals…thank heaven we have new regulations on internal and external claim appeals too

 Now, to illustrate the possibilities here are a few examples.  These examples come from the law firm of Davis & Harman LLP 

  • If a “recommended” preventive service is billed separately from an office visit, then cost-sharing MAY be imposed with respect to the office visit only
  • If a “recommended” preventive service is NOT billed separately, AND the primary purpose of the office visit is for such preventive services, then cost sharing may NOT be imposed with respect to the office visit
  •  If a “recommended” preventive service is NOT billed separately, AND the primary purpose of the office visit is for a reason OTHER than the delivery of preventive services, then cost- sharing MAY be imposed with respect to the office visit 

An individual covered by a group health plan visits an in-network health care provider. While visiting the provider, the individual is screened for cholesterol abnormalities, which has “in effect” a rating of A or B in the current recommendations of the Task Force. The provider bills the plan separately for an office visit and for the laboratory work of the cholesterol screening test. 

  • May impose cost-sharing on office visit because billed separately 
  • Cannot impose cost-sharing on screening because constitutes “recommended” preventive services 

A child covered by a group health plan visits an in-network pediatrician to receive an annual physical exam described as part of the comprehensive guidelines supported by the HRSA. During the office visit, the child receives additional items and services that are not “recommended” preventive services. The provider bills the plan for an office visit and does not use separate billing. 

  • Notwithstanding the fact that child received services other than “recommended” preventive services, the “primary purpose” of the office visit was for the delivery of “recommended” preventive services. Thus, the plan may NOT impose a cost-sharing requirement with respect to the office visit. 

An individual covered by a group health plan visits an in-network health care provider to discuss recurring abdominal pain. During the visit, the individual has a blood pressure screening, which has “in effect” a rating of A or B in the current recommendations of the Task Force. The provider bills the plan for an office visit and does not separately bill the blood pressure screening. 

  • Even though no separate billing is used, plan/issuer may impose cost-sharing because “primary purpose” of office visit was NOT delivery of “recommended” preventive services

If you think you know what preventive services are, better read this from the regulations:


For the purposes of this analysis, the Departments used the relevant recommendations of the Task Force and Advisory Committee and current HRSA guidelines as described in section V later in this preamble. In addition to covering immunizations, these lists include such services as blood pressure and cholesterol screening, diabetes screening for hypertensive patients, various cancer and sexually transmitted infection screenings, genetic testing for the BRCA gene, adolescent depression screening, lead testing, autism testing, and oral health screening and counseling related to aspirin use, tobacco cessation, and obesity.


I think I need an aspirin.  Think of the conversations in the doctor’s office about how to get services covered at 100%.  Think of the opportunities to unbundle services to obtain a separate fee (how many doctors do you know who charge separately today to take your blood pressure?).  

Think about the cries of abuse if the insurance company or plan administrator denies a service the patient thinks is preventative or pays differently for the office visit and the cholesterol screening.  Think of the careful planning that will take place to be sure you have the correct “primary purpose” for the office visit.

 Ah, stop thinking you will end up with a preventive MRI.

Tax cuts to expire, is this any way to stimulate the economy?

24 Jul

Who took this darn picture anyway, I’m only smiling because I just won the Nobel Prize

According to Paul Krugman and other liberal economists, the current state of the economy calls for more government stimulus (and the initial stimulus was insufficient).  They acknowledge that such additional stimulus will add to the deficit, but in the short run that is not bad and the deficit can be dealt with later when things are better.

Ok, so let us say we buy that idea (which is a leap of faith).

At the same time, the Administration is saying that it will allow the Bush tax cuts to expire for the top earners, presumably those earning more than $200,000 or $250,000 for a family.

It is well known that these Americans pay the bulk of taxes already, about 40% of all taxes.  However, here is the important point, they also account for about 30% of all consumer spending in the US.  Granted, in a few cases it may be spending on refurbishing the yacht or second home, or it may be a lavish vacation or even a leased jet for those at the very top, but one thing is for certain, this kind of spending has a ripple effect in stimulating the economy.  It keeps people working.

Leaving the current tax rates in effect does not add to the deficit, but does make it easier for people to spend more thereby stimulating the economy.  More government stimulus does add to the deficit and may or may not stimulate the economy, but certainly does not stimulate anything in a very lasting or efficient way. 

Hey Barney, did you hear someone whisper “unintended consequences?”

Barney Frank wants the “wealthy” to pay their fair share, but what we need is for them to spend their fair share and beyond.  Billions spent on fixing roads has not done much for the economy other than to make it harder driving from here to there, why make it harder for the people who can, to spend and spend?

It is unfortunate that politicians are more worried about their public appeal and what plays well on the evening news, than in solutions that actually make sense.

Here is more logic for you, the current tax on dividends is 15%.  This too will change on January 1, 2011.  It may go to 20% or some would have dividends counted as ordinary income.   With interest rates near zero and savings accounts paying nothing (which has a devastating impact on many people on a fixed income), is now the time to raise taxes on another source of income counted on by many seniors?

I too am very concerned about the national debt, I want to see the deficit reduced, but isn’t it counterproductive to do that by taking from Americans who are the only ones who can bring the economy back.  Rather shouldn’t we be cutting spending of all kinds?  I have heard numerous times over the last year that Americans spending beyond their means was one of the causes of our current meltdown; can government doing the same be much different?

The Puplic Option. It hasn’t gone away.

23 Jul

If you think the public option is dead, think again. Why would a member of Congress ask for this information now? One can only speculate, so I will.

Someone has figured out health costs are not going to be controlled by 2014. This means that the subsidies paid by the government for millions of Americans are not to be controlled either and may be higher than anticipated. Sooooooo, stick a public option in the mix, control payments and coverage and shift more costs to the private sector thereby making them less competitive. Then claim you are reducing the deficit This payment methodology should make the medical community happy too.

Another view and likely true is that House liberals are just trying to appease their base by demonstrating they are still trying get a public option…someday.

Read the following from the CBO Directors Blog:

“Analysis of a Proposal to Offer a Public Plan Through the New Health Insurance Exchanges

This morning CBO released a letter to Chairman Fortney Pete Stark analyzing a proposal to add a “public plan” to the options available through the health insurance exchanges that will be established under the recently enacted health care legislation—the Patient Protection and Affordable Care Act, or PPACA (Public Law 111-148).

Under the proposal, the Department of Health and Human Services would establish and administer a public health insurance plan and would charge premiums to fully cover its costs for benefit payments and administrative expenses. The plan’s payment rates for physicians and other practitioners would be based on Medicare’s current rates but would not be subject to the future reductions required by Medicare’s sustainable growth rate formula; instead, those rates would initially increase by 5 percent and then would rise annually to reflect estimated increases in physicians’ costs. The plan would pay hospitals and other providers the same amounts that would be paid under Medicare, on average, and would establish payment rates for prescription drugs through negotiation. Health care providers would not be required to participate in the public plan in order to participate in Medicare.

CBO estimates that the public plan’s premiums would be 5 percent to 7 percent lower, on average, than the premiums of private plans offered in the exchanges. The differences between the premiums of the public plan and the average premiums of private plans would vary across the country because of geographic differences in the plans’ relative costs. Those differences in premiums would reflect the net impact of differences in the factors that affect all health insurance premiums, including the rates paid to providers, administrative costs, the degree of benefit management applied to control spending, and the characteristics of the enrollees.

CBO estimates that roughly one-third of the people obtaining coverage through the insurance exchanges would enroll in the public plan. We anticipate that, under the proposal, about 25 million people would purchase coverage individually through the exchanges on average during the 2017–19 period; in addition, about 13 million people would obtain employment-based coverage through the exchanges—so total enrollment in exchange plans would be about 38 million. Total enrollment in the public plan would thus be roughly 13 million. Given all of the factors at work, however, those estimates are subject to an unusually high degree of uncertainty.

CBO and the staff of the Joint Committee on Taxation (JCT) estimate that the proposal would reduce federal budget deficits through 2019 by about $53 billion. That estimate includes a $37 billion reduction in exchange subsidies and a $27 billion increase in tax revenues that would result because a greater share of employees’ compensation would take the form of taxable wages and salaries (rather than nontaxable health benefits). Those changes would be partly offset by an $11 billion increase in costs for providing tax credits to small employers. (The proposal would have minimal effects on other outlays and revenues related to the insurance coverage provisions of PPACA.)

The bulk of those budgetary effects would occur in the second half of the decade; the savings estimated for 2019 are about $14 billion. Although CBO and JCT have not yet extended to 2020 the models they use to estimate insurance coverage, the proposal would probably reduce the federal budget deficit by about $15 billion in that year, bringing the total budgetary savings through 2020 to about $68 billion. As discussed in CBO’s letter, those estimates are smaller than figures that have been previously reported regarding the savings from establishing a similar public plan because those previous estimates were related to legislation that differed in a number of ways from what was enacted.

This entry was posted on Thursday, July 22nd, 2010 at 10:56 am and is filed under Health.”

Medical Cost Trends for 2011, health care going up 9%, hey, that’s progress-employees beware

22 Jul

According to a recent report from PricewaterhouseCoopers’ Health Research Institute, The medical growth trend is expected to decrease from 9.5% in 2010 to 9% in 2011. Sounds like we are headed in the right direction, but it is more complicated.  Much of the decline is coming about because employers are simply shifting costs to workers in the form of higher out of pocket costs and fewer choices in health care plans.  Plans that manage care more closely are on the rise which means less flexibility for patients.  More emphasis on generic drugs means penalties for not using a generic.   In short, the promise of lower health care costs does not appear to extend to the average employee.  Workers costs are going up, driven in part by the changes caused by the PPACA.  

For a look at what a 9% trend in health care may mean for premiums, see Anatomy of a 30% Premium Increase

Here are some highlights from the report. 

This year’s Behind the numbers was especially challenging because of a high degree of uncertainty among health  plans and employers. Thanks to the worst recession in a quarter century, employers had less to spend on their workforces. Then came health reform with dozens of small-bore changes about how healthcare is financed, delivered, packaged and regulated. Some changes will drive the trend up, while others will push it down

Here’s what employers can expect to see in 2011:

• Growth in medical costs for 2011 is expected to be 9%, down 0.5% from 2010.

• Three primary deflators that will help hold down the medical trend.

Employers are moving network benefits toward pre-managed care benefit design by increasing deductibles and replacing co-pays with coinsurance. By requiring workers to spend more out-of-pocket at the point of care, employers believe they’re reining in utilization of services and drugs. The number of employers using coinsurance for physician visits has nearly doubled and one-third use coinsurance for brand-name drugs, according to PwC’s survey of 700 employers. In addition, high-deductible plans were the most prevalent plan for 13% of employers surveyed in 2010, up from 6% in 2008.

Generics continue to eat into brand-name drug market share. About $26 billion in drugs are expected to go off patent in 2011, including the world’s best-selling drug, Lipitor. Generics, which account for as much as 80% of all prescriptions in some plans, continue to erode the market share of brand name drugs, and remain a drag on medical cost trends.

COBRA costs are expected to return to more normal levels in 2011. COBRA subsidies passed by Congress in 2009 created a 1% upswing in the medical trend. Laid-off workers who continued their healthcare coverage typically incurred medical costs of two to four times higher than those of other workers. In 2010, the combination of higher unemployment and new government subsidies to pay for COBRA coverage led to a significant increase in COBRA coverage. A combination of declining unemployment and expiration of the COBRA subsidies is expected to lead to reduced enrollment in COBRA in 2011.

• The biggest inflators of the medical trend will be in provider costs, which make up 81% of the medical benefit.

Cost-shifting from Medicare is expected to increase as hospitals see their rates cut for the first time after seven years of increases that nearly matched or exceeded inflation increases. Some hospitals that benefitted from higher payments in 2008 and 2009 may be able to manage this type of cut by tapping their reserves. Yet, more are likely to renegotiate terms and shift more costs to commercial payers during their negotiations.

Provider consolidation is increasing, which is expected to increase their bargaining power. The number of physicians involved in mergers or acquisitions in 2009 was 2,910, nearly twice that of 2008. In addition, 2010 has seen record activity as well. Payment changes, embedded in the federal health reform law, also encourage models that align financial incentives among providers.

Spurred by stimulus funding that begins in 2011 and Medicare penalties that begin in 2015, hospitals will invest billions of dollars into certified electronic health record (EHR) systems. While many hospital systems were planning to implement EHRs in the near future, the government’s new regulations dramatically condensed their timelines to invest in technology, IT staff, training and process redesign. Healthcare CIOs surveyed by PwC said they will make their largest investments to meet the new EHR regulations in 2011.

An in-depth discussion PricewaterhouseCoopers’ Health Research Institute

Don’t become attached to your health benefit plan, PPACA is causing employers and insurers to rethink their strategy

21 Jul

The Sunday NYT July 18 includes a story about new health plans being developed that have small closed networks with no out of network benefits. The idea is simple, control costs through better discounts and tighter control over services provided – dare I say (again), just like the original HMOs attempted to do.

The premiums for such plans will be lower i.e. “affordable” but if you don’t use in network doctors you are on your own for all costs. For some people such plans are a good idea, but if an employer converts to such a limited benefit, the idea that ” if you like the plan you have, you can keep it” is out the window.

These limited benefit plans could also run up against the Administration’s ideas for expanding benefits, and limiting out of pocket costs – to zero in some cases.

Take note…this is just the first of many changes in health benefits that are in the way. Insurers and employers must react to PPACA and to not only ongoing higher health care costs, but the additional costs created by PPACA. Many employer plans, especially large employer plans have a long way to go before lower benefits bump against the 60% value level called for in PPACA.

Change baby, change

If you think that health care reform will not adversely affect your current benefits, you are wrong.

Some of the choices you now have will go away, new options will provide lower benefits, benefits will gradually migrate to the lowest level permissible and your premiums and the portion of the premium you pay will accelerate.

All this is true because health reform does nothing to control health care costs and at the same times adds to the costs of existing plans through benefit mandates and cost shifting.

The Administration’s goals of expanding coverage, mandating coverage levels and limiting cost sharing are simply inconsistent with affordability for employers or employees.

Stimulate the economy, make health care “free” It’s the Affordable Care Act isn’t it?

20 Jul

In the realm of politics today and especially within the context of health care two words dominate, free and affordable.  Apparently, if it is not free, it is not affordable.  Moreover, it is only made affordable by having government subsidize the unaffordable, but actual price.  

Immunizations for children will be provided “free” within a health benefits plan, that is, free to the person obtaining the service except that the cost of that free service is borne by everyone through their premiums, include the person obtaining the service.  Outside of the world of politics that is not free.  

On the other hand, the cost of immunization may well be affordable in total and certainly, when one is paying only 20% of the cost, except in the world of politics.  Twenty percent of something is more affordable if the total cost is more affordable, but our attention is directed elsewhere because making the total cost affordable involves too many people and that would be too obvious. 


My new house is more affordable because Americans have contributed to the cost, my new car is more affordable because Americans have contributed to the cost, and my new air conditioning is more affordable because Americans have contributed to the cost.  The truth is that the Americans who have contributed to the cost of these things have yet to be born so to the rest of us this stuff really is affordable. 

If we make houses, cars and air conditioning more affordable to stimulate purchases and in turn stimulate the economy – get people to spend more – how is it that making health care more affordable or “free” does not stimulate purchases of health care and stimulate that segment of the economy – thereby driving up prices, yikes and premiums? 

However, here is the dirty little secret, no health care is affordable if you have to pay anything for it, ask anyone who has had his co-pay increased by $5.00 or coinsurance applied to a charge. This leads us to the obvious conclusion that health care must be “free.” 

I have taken the following definitions from several online dictionaries so you can decide for yourself if “free” and “affordable” apply to health care reform.  As you see, the secret to our logic is buried among the definitions of “free.”  One source includes something publicly supported as free. 

There you go, it will not be long before everything is “free.”  That leaves us only with the task of making it “affordable.” 

My health insurance premium just went up $285 per month, now that is unaffordable. Oh wait; it was my property taxes that just went up $285 per month, who cares…………..exactly! 


provided without, or not subject to, a charge or payment, given without consideration of a return or reward, not costing or charging anything, costing nothing, gratuitous, publicly supported 


that can be afforded, believed to be within one’s financial means, to manage to bear without serious detriment, to be able to bear the cost of, that you have the financial means for, inexpensive, fair, cheap, reasonable, moderate, modest, low-price, low-cost, economical

Preventive services required under PPACA-great expectations, higher premiums, less personal responsibility

19 Jul

The Department of Health and Human Services has released regulations regarding required preventive services under PPACA, beginning next year a large number of such services will be covered without any cost to plan participants on the assumption that cost is a main barrier to obtaining such services.  These requirements do not apply to grandfathered plans, but such plans already cover many preventive services with (in most cases) a deductible and/or coinsurance.  According to HHS.  In addition, because of the onerous requirements and resulting  inability to manage costs going forward, it is unlikely that grandfathered plans will hold that status for very long – another bate and switch contained in PPACA.

Here are some quotes from

Next year, an estimated 31 million people in new employer plans and 10 million people in new individual plans will benefit from the new prevention provisions under the Affordable Care Act. The number of individuals in employer plans who will benefit from the prevention provisions is expected to rise to 78 million by 2013, for a total potential of 88 million Americans whose prevention coverage will improve due to the new policy.  Many of the 98 million people in group health plans that are expected to be “grandfathered” and thus not subject to these regulations already have preventive services coverage.

One must wonder why or how employers will set up new plans covering 31 million Americans given that the total uninsured in America is around 45 million. 

“Free” Covered Services

Depending on your age and health plan type, you may gain easier access to such services as:

  • Blood pressure, diabetes, and cholesterol tests;
  • Many cancer screenings;
  • Counseling from your health care provider on such topics as quitting smoking, losing weight, eating better, treating depression, and reducing alcohol use;
  • Routine vaccines for diseases such as measles, polio, or meningitis;
  • Flu and pneumonia shots;
  • Counseling, screening and vaccines for healthy pregnancies; and
  • Regular well-baby and well-child visits, from birth to age 21.


Nationally, Americans use preventive services at about half the recommended rate.[3]  An estimated 11 million children and 59 million adults have private insurance that does not cover adequately cover immunization, for instance.[4]  Cost-sharing (including deductibles, co-insurance, or co-payments) reduces the likelihood that preventive services will be used.  One study found that the rate of women getting a mammogram went up as much as 9 % when cost-sharing was removed.

Perhaps more spent on health care would leave less for food

Coverage of these services at 100% of the cost will add 1.5% to premiums according to HHS.  That is in addition to the 1% that will be added as a result of coverage for adult children. On the other hand, as noted above the rate of utilization in the example goes up by only 9% which seems to indicate that the lack of utilization of such services is not solely or even primarily because of out of pocket cost.

While the estimated effect on premiums of this policy is roughly 1.5 % on average, there are significant out-of-pocket savings for Americans who currently have no or limited coverage of preventive services.  The new rules could provide significant savings for Americans in greatest need of important, potentially life-saving preventive services.  For example, guidelines suggest that a 58-year old woman who is at risk for heart disease should receive a mammogram, a colon cancer screening, a Pap test, a diabetes test, a cholesterol test, and an annual flu shot; under a typical insurance plan, these tests could cost more than $300 out of her own pocket. (This assumes 25% co-insurance for a $1,000 colonoscopy, $80 for a mammogram, and $50 for the Pap smear.  In addition, it assumes $10 each for the cholesterol test, diabetes test, and flu shot.)

You expect me to pay for a blood test, pass the soda will ya.

 As noted in the example above, an array of preventive tests (a bit of a misnomer, but no matter) will cost this person $300 a year (or less given some test are not annual).  That’s barely one trip to McDonald’s  a week (Americans get one quarter of all their meals at restaurants) or four cartons of cigarettes in many states and considerably less than a couple going to the movies twice a month or one trip to the ball game for a family of four.  So, can Americans afford preventive services with a reasonable co-payment or coinsurance?  Of course they can, it is simply they choose not to spend their money that way. 

One of the most dangerous aspects of the current version of health care reform is promotion of the myth that all health care is unaffordable and that Americans cannot afford reasonable cost sharing for that care.  It is not only the wealthy who spend their money on other than the necessities of life.  We are again setting the stage for growing costs because of the lack of personal involvement or concern, we undermine the very concept and purpose of insurance and we are embedding an entitlement mentality that we cannot afford and best serves no one.

Here are all the recommended preventive services to be covered in full.


On the job or not, conflicting points of view

18 Jul

There are many jobs where it may be difficult to determine if real work is being done and there are jobs where the worker is needed at a critical time.

It is nice to know that the worker and the job are in sync especially when your life may depend on it.

Let’s get coordinated here, breaks over!

Wealthy cut spending- oops

17 Jul

Here is a headline from the New York Times: Wealthy Reduce Buying in a Blow to the Recovery

The report defines upper income consumers as those earning $90,000 a year or more.

“One of the reasons that the recovery has lost momentum is that high-end consumers have become more jittery and more cautious,” said Mark Zandi, chief economist for Moody’s Analytics.”

“But the Top 5 percent in income earners — those households earning $210,000 or more — account for about one-third of consumer outlays, including spending on goods and services, interest payments on consumer debt and cash gifts, according to an analysis of Federal Reserve data by Moody’s Analytics. That means the purchasing decisions of the rich have an outsize effect on economic data. According to Gallup, spending by upper-income consumers — defined as those earning $90,000 or more — surged to an average of $145 a day in May, up 33 percent from a year earlier.”

The solution to this problem is clear, raise taxes on these folks and further inhibit their spending power.  Hey, if they aren’t paying their “fair share” of taxes, they better be spending their fair share for the sake of the economy.
                                                                                                                                                                                                     How do I define fair share?  Could you rephrase that questions?

Do you think Barney Frank and the House leaders will take me seriously? Is spending by government more important to a lasting economic recovery then spending by consumers, apparently many in Congress think so.

Early retiree reinsurance, get your claims filed

16 Jul

If you plan to file for payments under the PPACA early retiree reinsurance program, the key to getting paid is getting your claim filed with HHS ASAP.

Previously, your chance of getting paid was based on submitting your application ahead of somebody else, no more. HHS says the first to be paid will be based on the order of actual claims submitted.

Time to get cracking.

Health care reform for who? I bet you thought the Patient Protection Affordable Care Act was the same for all Americans

16 Jul

We all know that the White House and the Administration are going out of their way to promote health care reform, especially all the benefits for individuals and the things that help them “save money.”  But I was amazed to see that health care reform and the PPACA is not one piece of legislation as we thought but rather several forms of health care reform aimed at every segment of American society, or at least that appears to be the view of the White House.  On the White House website you will find the following information sheets designed to pander to the hot bottoms of each and every group of Americans.  Interestingly each sheet promotes different things.  For example, take a look at the first paragraph difference between the information sheet Health Reform for African Americans and Health Reform to Latinos.  Is there any reason except purely political for there to be a different explanation of the same legislation for African Americans, Latinos (not sure why not Latino Americans) or Asian Americans and Pacific Islanders or LGBTs?

For the Lesbian, Gay, Bi and Transgender (LGBT) community (OK, it took me a while to figure that out) we start our saving money scenario with an explanation of the expansion of Medicaid including more coverage of HUV/Aids expenses.  Apparently the Gay community is more interested in the early retiree reinsurance program because it is not even mentioned in the summary for Latinos or African Americans, but they all duly talk about ending insurance company “discrimination.”

You will find a generous sprinkling of such phrases as:

Insurance Industry Reforms that Save Money

Unfortunately, it is left to the imagination where all this money saved from limits on deductibles, co-payments, and elimination of annual limits on benefits will come from. The goal is purely to reinforce the “what’s in it for me?” mentality without regard to the consequences and that is a real shame. From the White House website:

Health Reform & Your Community – Fact Sheets

In addition to the interactive “What Health Reform Means for You Feature” above, those who want to distribute information in their communities off-line may find these downloadable and printable PDFs useful.

Each and every American can find something he or she likes about PPACA, every American will save money if they have a health care experience (except when it comes to their premiums), many Americans will have subsidized benefits (subsidize by other Americans) and there is the rub.  We are all the beneficiaries of the grandest earmark in history and nobody is asking how we are going to pay for this now or more importantly in the years ahead.  It will n0t be too long before this group or that seeks to expand one benefit or the other and our politicians will never say no, just witness the disappearance of the cut in physician fees under Medicare or the fact that groups are already pushing to have oral contraceptives covered at 100% as “preventive services.”

What’s that they are doing in the UK to keep the NHS afloat?

Do wellness programs work? Are employers getting their money worth? Will free preventive services improve health or simply add to costs?

15 Jul

Do wellness programs work?  The answer depends how “work” and “wellness” are defined. 

There is also the fundamental question of whether the employer has the obligation or the incentive to invest in such activities.  Some would argue that wellness on the job pays dividends in terms of lower health care costs, and improved productivity and presenteeism.  The PPACA puts new emphasis on wellness by requiring new plans to provide 100% coverage for many preventive services, tests and screenings.   Cancer screenings, including mammograms and colonoscopies, as well as obesity prevention services, immunizations, blood pressure screenings and tobacco cessation services are among those that will be available to consumers without a copayment or other direct costs for consumers on new health plans after Sept. 23  On the other hand, PPACA also spells the gradual demise of the employer-sponsored health benefits plan meaning that Americans will be more and more on their own to evaluate, obtain and utilize their health benefits…the 170 million with employer coverage today in any case.

Here is the standard case for employer-based wellness programs:

Given what we know about the negative impact of unhealthy behavior, for both employees and businesses, it is not enough to focus solely on insurance premiums when we have an opportunity to do so much more. Employees represent a company’s most valuable asset, and creating a healthy workforce is a business strategy that can lead to cost savings and increased productivity — as well as improved employee satisfaction.

In fact, employers are likely to see a productivity impact long before they see an impact on their claims experience. So there is a tremendous advantage in helping healthy employees to stay that way — and in motivating those with existing conditions to take a more active role in managing their health.

Workforce health initiatives, such as programs that promote healthy eating, exercise, or disease management, can do a lot to support this effort. A great way to start is by encouraging employees to take advantage of the rich resources already available to them. For example, all Kaiser Permanente members enjoy access to self-care tools, health education classes, coaching, and more. And employers can supplement their employees’ self-care by bringing programs to their workplace, where employees normally spend the majority of their days.

Workforce health programs can change the lives of employees and can also have a real impact on their job performance. Imagine for a moment how much better employees feel when they exercise regularly and eat healthy meals — and when they can manage and control their symptoms of asthma or depression. Consider what effect their positive outlook can have on their work, as well as on the cost of their health care.

Kaiser’s Christine Paige, on designing a wellness program that works

Clearly encouraging wellness is never a bad thing and many large employers have invested heavily in such activities, but few, if any, can provide empirical data to quantify the benefits.  Keep in mind that most such programs primarily focus on the employee, but about 60% of all health care costs for a group plan are incurred by the dependents enrolled in the plan.  These folks (and their health care costs) are largely unaffected by employer based wellness programs except for educational communication.

Then there is the question of participation, when programs are offered do a sufficient number of employees participate to make a real difference on the entire workforce?  When annual screenings are held or the employee completes a health risk assessment, is there sufficient follow up to make a difference?  There is also some evidence that in the short run routine screenings actually increase health care costs.

Employee turnover is another issue for employers.  If an employer invests in wellness, will the employee still be employed when the long term benefits are achieved?  With the average person holding six to eight jobs in a career, it is hard to see how any one employer will benefit.

Finally there is the question of incentive.  One would think that better health and quality of life on their own would be sufficient incentive for an individual to take care of himself or herself.  Sadly, we know that not to be the case, but should the employer pay the cost to get people to change behavior, is it just a good and nice thing to do or a wise investment?  Under PPACA many employers will have little choice in providing some preventive services.  The rules to maintain grandfathering for existing plans are so onerous that it is unlikely many plans will keep that status for long and thus will become subject to the requirement to provide 100% coverage for many preventive services.

Covering a new array of services with no cost sharing by patients may increase demand, probably will drive up prices because of that demand and will definitely add significant cost to all health benefit plans.  Whether there is a return on that new investment remains to be seen.  We may be prolonging or saving lives, but there is no guarantee that any of this will help control health care costs.  People are people and unless we change attitudes and behaviors all the free stuff from their employer or the government will not matter.

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