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Monday, October 12, 2009

Time to Ditch Both Insurance Companies and Baucus Bill

As this diary from Huffington Post shows, the insurance industry's greed knows no bounds. Not content to cherry pick customers, deny claims for the flimsiest of reasons, and boot people off their coverage when they get sick and need it the most, now they have taken to turning on their own Senate lackeys. Yup, they've stuck a shiv in their own waterboy, Max Baucus' back (see below) 

Now I will admit that I don't feel particularly bad for Baucus for getting bit by fleas. He laid down with these dogs. But this should be an object lesson to the rest of us.

The insurance industry and Big Pharma are not our friends. They cannot be trusted to do the right thing, ever 

It's time to fight for honest to God health care reform with a public option. And if the overpaid insurance company CEOs kill that, it will be time to fight for single payer insurance and eliminate them for good!

BTW, if this post seems somewhat strange (for example, I didn't use links the way I normally would and there are no blockqoutes) it's because I am posting from my iPhone. Another of my experiments 

6 comments:

Tom White said...

For those that do not know how insurance works and are content to parrot lies from other sites, your post does not surprise me.

Government run Medicare is second only to Aetna in denials.

Virginia has the Bureau of Insurance that enforces Insurance Laws in the Commonwealth.

Insurance companies deny claims for things not covered by the contract. As does Medicare. Not to "maximize" profits. Claims adjusters only look at the facts. If a company is unjustly denying claims, the Bureau has a lot of power in dealing with them including non admittance in the state.

One common thread the left exhibits in this argument is the claim of denied claims, without any specifics. The number one reason for claims being denied is the policy canceled due to non payment.

Pre existing is another. These can be hard to take, but it is like trying to get insurance on a car you already totaled.

And insurance companies don't "cherry pick" customers. They assess risk and charge accordingly. That is how insurance works. If you are in poor health, old or have problems, you will be charged more. Insurance Companies are not in business to lose money. And neither is a properly run government option. With a government plan, you not only have to pay all claims from the premiums, you must also pay the bureaucracy that administers it.

Insurance companies invest a portion of premiums. They make money off of what you pay. Many end up with an underwriting loss (pay out more than the premiums collected), yet still make money for the year by wise investing. So, their investments actually subsidize their premiums.

The government will NEVER invest or make a profit. And they will spend far more money for less coverage. Name one Government program that has not.

Tort reform, stopping defensive medicine and excessive tests that are not needed is the only way to control costs.

Drug companies use Government Grants along with their own money to find new drugs. Then they sell the drugs to Canada for far less than to the US, where many are based. And charge much higher prices to US customers. We need to stop that.

But your belief that the government can somehow take over health care and make it cheap and better is a fantasy. It will never happen.

Obama's own Post Office v. FedEx and UPS is the perfect example. Even when government rules give the Post Office an advantage over private business, the Post Office is going broke. For example, did you know that it is (or was, not sure if the rule is still in place) illegal to stuff a FedEx envelope full of inter office mail? If caught, you can be fined and charged first class postage for every envelope you have sent. The government is inefficient even when they give themselves a competitive advantage.

AnonymousIsAWoman said...

Tom, you are obviously knowledgeable about the subject, but I disagree with much that you said.

Let's start with the canard that the government is always inefficient. It's the old Reaganesque "the government is always the problem." Not true!

Take your example of the Post Office. Unlike UPS and Fed Ex,it delivers mail to thousands more customers a day than those private companies do. Fed Ex and UPS don't deliver most first class or bulk mail letters, magazine subscriptions, etc. They special deliver packages and have a niche market, usually with business customers needing next day service and holiday customers sending gifts. So, your comparison is measuring apples and oranges.

But a better example of efficient government service is the NIH and CDC. As you, yourself, pointed out, drug companies use government grants for their research and development of drugs. But guess what?

Most of the pure research into new diseases, such as HIV-AIDs or new strains of flu, are not done by private companies. It would be prohibitively expensive and there would be no return on the initial investment in that research.

The CDC tracks new diseases and NIH studies new strains of bacteria and viruses. They then share that research. Once the new virus or bacteria can be understood, private researchers at drug companies can create new medicines and vaccines. That's where the private pharmaceutical companies come in. But there absolutely must be a public-private partnership to bring life saving drugs to market.

I can give you other examples of government efficiency. Every time you get on a plane, your safety is ensured by the FAA and air traffic controllers. And by TSA, which has done a far better job than the private baggage inspectors that contractor Argenbrite provided to airports before 9-11.

So, the government is not the problem. It is part of the solution. Sometimes a big part.

Now, on to the question of insurance companies. You talk a good game about how well they operate.

In fact, though, insurance companies have always and continue to cherry pick their customers, choosing the healthiest ones to insure. There are simply too many reports of this to deny it. People with pre-existing conditions are turned down for coverage all the time. And people's claims are denied for reasons that have nothing to do with failure to pay their premiums. Indeed, people who have faithfully paid their premiums have had their policies canceled when they got sick.

The fact that insurance companies must deny them coverage in order to make a profit, as you claim, actually strengthens my argument that the free market system, when it comes to health care, may be inadequate without a government partnership.

In the U.S., we like to believe that we have the best system for everything. But by some measures we are far from the best in the industrialized West when it comes to providing adequate health care.

The U.S. ranks 43th for lowest infant mortality, which puts us behind the entire industrialized West as well as many developing third world nations including Hong, Kong, Slovenia and Cuba.

Singapore has the lowest rates, with 2.3 deaths per 1,000 live births. Our rate is 6.3 deaths per 1,000 live births. In 1960, we ranked 12th and in 1990 we ranked 21st.

Our life expectancy is 78.14 years, which ranks 47th in highest life expectancy compared to other countries. All these figures were taken from the CIA Factbook (2008).

Despite these poor rankings, we pay far more for our health care coverage than all of the industrialized West and Japan. We simply are not getting the bang for our buck.

While no system is perfect, we simply can and must do better. And that will only happen with health care reform that includes a public option.

Va Moderate said...

A couple of points for you to chew on, AIAW.

There are some serious structural deficiencies in using life expectancy and infant mortality to measure the effectiveness of a health care delivery system. Foremost is the difficulty of measurement consistancy across a transnational structure. This is actually quite complicated. Different countries use wildly divergent definitions of health metrics. Some nations even exclude entire population segments from statistic collection, as I'll explain below. Secondly, you need to assume actual interaction with the health care system. For example, if we examine cancer rates we realize that there's very little a health care delivery system can do to keep one from getting cancer, as it's mostly determined by genetics, diet, lifestyle etc. Finally, it has to measure something that health care delivery can reasonably affect. America's a pretty violent and opulent place, which is a nice way of saying that a lot of people die from gunshot wounds and head on collisions with monsterous SUV's neither of which can be affected by health care delivery but which are counted in mortality statistics nonetheless. There's no statistically significant relationship between health care spending and life expectancy. Greece spends the least per capita on health care, and has a higher life expectancy than many other European countries and the US. Spain spends the second least, and has higher life expectancy than 10 others that spend more. I don't know how to link articles in this, but if you search back issues of the European Journal of Epidemiology for life expectancy it will reveal that robust statistical analysis revealed that life expectancy was much more closely associated with culture, diet and income.

In fact, one of the more frustrating aspects of the health care debate is the fixation on the public option. Personally, I'd rather see 900B spent on discouraging tobacco and alcohol use, dietary issues, obesity control and more spending on physical education programs and youth athletics. We have to think about this problem holistically, and if we're trying to extend life expectancy there are more significant things we could focus on.

On infant mortality, the comparison is a bit more valid since it satisfies two of the criteria but fails miserably on consistency of collection across nations. For example, a country such as Switzerland does not count infants under 30cm in length as live births. You can see how this would eliminate almost every single preemie from their infant mortality sample. This isn't an isolated case either, Italy has three different definitions for infant death depending on what region of the country you happen to be in. There's a report a while back commissioned by the United Nations Statistics Division if you're interested in other variances.

In sum, it's fashionable to point to life expectancy and infant mortality as evidence that we don't get the bank for the bucks we spend on health care, but you need to remember that correlation does not necessarily equal causation.

life insurance in Canada said...

Hello. I am form Canada where we have single payer system and I must say that I am more than happy with it. There is 100% insurance coverage in Canada and it costs less then 10% of its GDP. In the US there is still more than 15% of Americans who aren't covered at all and it costs more than 15% of the American GDP.
Take care,
Lorne

Tom White said...

Private businesses depend on efficiency to make a profit, no matter if we are talking insurance or parcel delivery. The government simply increases postage, taxes or prices. And you are stuck.

A public health care option is simply a single payer embryo. Government imposed mandates and rules will be imposed on insurance companies to make a public option competitive by forcing the private insurers to raise prices. Any public option will be heavily subsidized and as such will under sell the private insurers. At some point, private insurance will cease to exist, and the government plan will begin rationing and massive tax increases to feed the growing monster.

Britain's NIH is the world's second largest employer - second only to the Chinese Army.

There are about 60 million people in the UK and over 300 million in the US.

It is absolute madness to believe that a president that can't figure out how to financially administer a cash for clunkers program will operate a health care system 5 times the size of the UK.

And again, the spurious claims of coverage denied and claims denied unjustly are simply not true.

I own an Auto Insurance agency and I hear this every day. I have seen only a single case of a claim being denied improperly. I advised the client to complain to the Bureau and the claim was paid. And the adjuster was fired.

Claims adjusters simply apply underwriting guidelines. If the claim is within the rules, it is paid. If not, it is denied. By some adjuster that does not have a financial interest in the decision.

You or your Insurance Agent can read the same underwriting guidelines the company uses. They are filed and approved by the state. Insurance companies are audited constantly. If they accept a claim that should have been denied, or vice versa, the adjuster is in trouble. The fact is, the company MUST live up to the rules that they filed and that were approved by the state. Plain and simple.

That is not to say that there are not bad adjusters that hate their job and want to take it out on everyone else. I have personally had at least a dozen fired or reassigned. When I get complaints on the same adjuster over and over, I go to the executive level.

And again, Insurance Companies do not "cherry pick" customers. They base their rates on certain risks.

To explain, I will use auto insurance, since that is easier to explain. I have had many, many drivers that are upstanding citizens, married, home owners, great credit and experienced drivers. Then they have one too many glasses of wine at a wedding reception and get a DUI. I have had grown men and women in tears expecting a huge increase in their premium after their insurer for 30 years dropped them for 1 DUI. And I ended up finding a lower rate than they were paying before for the same coverage.

How?

Simple. The trick to insurance is placing the insured with the company that wants them. Geico, State Farm and Allstate may drop you for a DUI because their acceptable risk is people with clean records. Drunk Drivers are not welcome. Other companies know that statistically, a person with one DUI who is over 25 is far less likely to drink and drive again than someone with no DUI's. So they welcome that customer. Some forgive a first DUI for 25+ drivers. These folks are put through hell. Jail, AA, ASAP, etc.

So, while United Health Care might either offer rates so high that you go elsewhere, or deny coverage for your health, there are other companies that welcome that market.

I would not be opposed to a Health Care equivalent to the VAIP - The Virginia Auto Insurance Plan, also called "Assigned Risk". While the competition in the open market has made this a seldom used plan, Virginia does require you to have liability insurance, or assume the risk yourself and pay $500 per year per vehicle. So, they have to make insurance available. If I can't find a company to take a driver, I send in an application to the VAIP and they assign the risk to one of the insurance companies. The rates are high, but not totally unreasonable.

AnonymousIsAWoman said...

Tom, I figured you were in the industry because of your knowledge of it. But with all due respect, the auto insurance industry is not exactly the same as the health insurance industry. Like the proverbial apples and oranges, where both are fruit, they are still different for purposes of comparison. So car insurance and health insurance may both be insurance and share certain similarities. But they also have some significant differences.

So, when you say you have only seen one case of an improper denial of a claim, I won't dispute your personal experience.

But there have been so many instances of people whose health insurance companies have denied their claims that you would have to either live in a cave or deliberately ignore these stories to deny it. And my husband was a perfect example.

I've written about this before. His insurance company denied his insurance claim at the 11th hour when he was already in the hospital scheduled for a bone marrow transplant to treat non-Hodgkins lymphoma. Fortunately, my insurance company had already agreed to cover the cost of the bone marrow transplant.

Additionally, my husband's boss threatened to pull a very lucrative contract for his entire company. But that was because my husband worked for the president of the company. Not everybody is that lucky.

Since I experienced this personally, my example is as valid as yours is. More valid because yours is in a different subset of the insurance industry. And there simply are too many other cases like mine out there. We are not all lying and we are not all outliers.

BTW, I find it ironic that in the auto insurance industry you already have universal coverage because every car owner must have car insurance. Yet you oppose universal coverage for health insurance.

And the car insurance industry is more heavily regulated than the health insurance industry where the states don't have the same leverage. Again, apples and oranges.

Now, on to VA Moderate. You have a point about statistics sometimes being misleading. It is important to make sure that you are making accurate comparisons and that your metrics are consistent. All I can tell you is that the U.S. ranks low in several of these studies. And people in the medical field know that we have worse outcomes than most other Western industrialized countries and that is because they have better access to health care.

BTW, the belief that lifestyle factors are more important than access to health care is a comforting myth.

For example, you state that better access to health care can't prevent cancers because genetics and lifestyle are the major causes of cancers.

That's partly correct. Good medical care can't prevent cancers from occurring. But any doctor or nurse will tell you that early detection is the major factor in survival rates. A signficant reason we have seen consistently more people surviving once deadly cancers is that we catch them so much earlier when treatment works better. And people who don't have health coverage don't get those lifesaving screenings.

A reason we are seeing improvement in heart attack rates is because of better drug interventions including the use of statins. Once again, they are making a significant improvement in death rates from heart disease but only for those with access to health care.

So, your argument about lifestyle just doesn't completely hold up. But I would be the last to encourage people to ignore diet and exercise. A healthy lifestyle is vastly superior to medical intervention after you get sick.

And finally, Loren, thank you for speaking up for the Canadian system. I also know many British people who like their system. But I was trying to point out to critics that there are as many varieties as there are countries who all have some form of universal health coverage that works better than our sytem.