Shoe, Meet Other Foot...

I’ve had the privilege of interviewing some interesting people here at IB. Recently, though, I was asked to be interviewed, by a very nice fellow with Health-Leaders. Seems they’ve been following our items on some insurance agent shenanigans, which dovetailed with their own investigations of same. The H-L folks got to wondering how the agent community was reacting to the story, and to the ethical ramifications of the situation itself.

Briefly, several agents (and agencies) agreed to help local school districts shop for their group insurance. They were paid a fee by these public entities, and charged with finding the best plans at the most attractive rates. Unbeknownst to the school districts, the agents were also paid commissions (and apparently bonuses) by the carriers, essentially getting paid twice for the same work. When the districts found out, they cried foul, and the agents now face disciplinary action (if not firing squads) by the State of Ohio.

The folks at Health-Leaders have been avidly following the money trail, and the legal one. Apparently, we’re one of a very few blogs that’s been paying much attention to this story, so they thought we’d be a good resource. They wanted to know how the agent community felt about how the Insurance Department handled the disciplinary aspect, and what we thought about the ethical ramifications of the process.

The first question was simple to answer: (sound of crickets chirping). That is, for the most part, this whole sordid mess has been under the radar, and/or ignored. There’s a reason for this: by and large, insurance agents are surprisingly good at avoiding reality, even when said reality threatens to directly impact our own wallets (and this story didn’t meet even that threshold).

The second question gets a little tougher: what, exactly, are the ethical (as opposed to the legal) issues in play here? Not being a lawyer, I’ll pass on the legal aspects; since I teach a Continuing Education course on insurance ethics (not an oxymoron, really!), I believe I’m qualified to weigh in on the ethical ones, at least from the agents’ perspective:

There really aren’t any.

In all of the brouhaha, I have not read that any school district or DOI representative have claimed that the agents did not do their job, or did an inadequate one. In fact, it appears that the districts were quite pleased with the results. Yes, the agents apparently “double-dipped,” which strikes me as incredibly stupid (not to mention, greedy), because it invites close inspection and engenders doubt. But stupid is not the same as unethical, as least insofar as the school districts were concerned.

Now, there is one item that, if true, seems to me to fit the criteria of “unethical:” allegedly, one of the agents demanded extra compensation from the carrier, and requested “that the payments not be called commissions (his contract with the district prohibited commissions) but rather be an "override, or some other form, like consulting." This would be deliberately hiding the fact that he was being paid the additional compensation. Fine line? You bet.

One thing I’d like to make perfectly clear is that I hold no brief for the agents or their actions. Frankly, I find what they appeared to have done to be reprehensible, greedy and obnoxious. It bothers me that we’re even in the same industry. If the facts, once they are exposed in court, corroborate the media accounts, I hope that they are punished to the fullest extent of the law.

But it’s also important for folks to understand that ethics are something not to be taken lightly, nor interpreted “on the fly.” There are specific, identifiable principles at work, and I want to make sure that IB readers understand that most agents do take our positions of trust seriously.

I’ll let you know when the article gets published (forgot this was about my interview, didn’t ya?).

BS 840 and the Canadian Auto

I don’t have a dog in this fight, so what happens in CA makes no difference to me. What does amaze me is the number of folks who have no clue about the dynamics of health insurance, and have been sucked in by the propaganda of those in favor of BS 840.

Here is an editorial comment from one such individual.

Annual health-care expenditures in California from all sources now exceed $184 billion, with 19 percent consumed by administrative costs. By slashing these costs and utilizing the state's purchasing power to buy prescription drugs and medical equipment at reasonable prices, studies conducted by the Lewin Group, a health-care management consulting firm, project the system would provide high-quality care and result in savings of nearly $8 billion in the first year alone, and $345 billion between 2006 and 2015.

While I have always challenged the reputed admin figures, let’s assume for a moment they actually CAN save 19% in admin costs. What happens in 2 years when medical inflation wipes out those savings?

And for anyone who is keeping track, saving $8B “the first year alone” is only 4% of the $184B reportedly spent by Californians on health care.

So what happened to the massive savings that have been touted by promoters of BS 840?

But the plan is vulnerable to conservative counterattacks, including cheap shots from the health-care industry, which has been predicting a calamity if universal health care is adopted

Cheap shots, huh? Using your own figures to call in to question the validity of the plan is a cheap shot?

Many troubled companies in California need single-payer health insurance because their biggest foreign competitors have some form of national health insurance -- plans that cover all of their citizens at costs far below what Americans and the companies they work for are now forced to pay.

So, having a single payor health system, with 4% projected savings, will offset the $3 per hour wages being paid by foreign competitors.

Sure. I believe that.

Ford and Daimler-Chrysler's Canadian units, for example, have found that Canada's single-payer health insurance system covering their workers significantly reduces total labor costs by at least $1,700 per car, according to Ford CEO William Clay Ford.

That must be why there are so many Canadian cars on the roads now.

I sure am glad this is starting to make sense. For a moment, I thought it was just me . . .

Would You Like Fries With That?

Half of the people Dr. Charles Hickey sees at his Columbus ophthalmology practice are Medicare patients. He makes little money on them, he says, because Medicare pays at or below his costs. Hickey, however, makes a profit when he performs surgery and sells eyeglasses. He plans on increasing this side of his practice. The Centers for Medicare and Medicaid Services have proposed cutting payments to doctors next year by 5.1 percent. Hickey and other physicians have done the math. Right now, many have quit adding Medicare patients or are cutting them. More are planning to do the same.

And many are turning to moneymaking procedures, such as cosmetic surgery, or are selling products, including beauty aids.

"I really didn’t spend 12 years in school to sell glasses, but that’s half our income right now," he said.

Medicare is 40 years old and showing signs of aging. What was once considered an alternative to high-priced health insurance from carriers is now coming apart at the seams. Not only is Medicare charging beneficiaries more and covering less, many providers are scaling back on the number of patients they will treat who have Medicare.

Others are hawking wares on the side to make up for the losses associated with treating Medicare patients.

Dr. Mary Beth Mudd, a family physician in Westerville, added a separate practice a couple of years ago to provide "nonsurgical beauty medicine," including Botox injections, laser skin-resurfacing and hair removal.

She said she spends 20 hours a week being a doctor — delivering babies, treating sick and chronically ill patients — and spends the rest of her time devoted to the cash-generating side of her practice.

Patients pay $200 for a 15-minute laser session to remove spider veins and $2,000 for six treatments of mesotherapy — injections to remove fat and cellulite.

Mudd said the beauty side of her practice is lucrative.

"If I saw a lot of patients in the … (beauty) practice, I got paid," she said.

Many docs have not only expanded the products & services offered on premises, but have moved in to other, non-related industries. One pediatrician who is a family friend started importing & selling oriental rugs (although that may not be the policitcally correct term any more) and did so well he abandoned his practice altogether.

The times are a-changin'

Cavalcade #8 - Submissions Due

Just a reminder that submissions for the next C of R are due on Monday (the 11th). Jay at Insurance Shoppers would love to see your work. You can submit entries:

■ via email

■ at Blog Carnival

or

■ at Ferdy's

PS: We're still looking for hosts. If you'd like to host a future edition, just drop us an email.

News From Up North

Alberta's ban on buying private health insurance for medically necessary procedures is being challenged by a constitutional watchdog group.

The privately funded Canadian Constitution Foundation said Wednesday it is funding a class-action lawsuit and a statement of claim will be filed in Calgary on Friday.

So what? The taxpayer funded, government run system isn't good enough?

The lawsuit will argue that Murray and other Albertans have a charter right to buy private insurance that could be used for things such as high-quality hip replacements.

Do I dare ask what a "low quality" hip looks like?

"Albertans don't want a system where rich people can buy their way to the front of the line while the rest of us sit and suffer."

Of course not. Then it would be too much like the U. S. system.

Health Insurance Garage Sale

Blue Cross and Blue Shield of Minnesota wants the state to make health insurance a legal requirement for all Minnesotans.

The proposal could cost the state up to 911 (m) million dollars per year to extend coverage to its nearly 400-thousand uninsured residents.

$911M to cover 400k uninsured = $2277 per person per year.

What MN needs to do is buy the insurance from CA. The folks who are pushing BS 840 are counting on covering 7M uninsured for $8B . . . about $1142 per person per year.

Health Wonk Review: 15th Edition

Greetings fellow wonks (and wonkettes), and welcome to InsureBlog. Along with my (thus far) unindicted co-conspirator, Bob Vineyard, we try to make insurance understandable, or at least bearable, to our fellow denizens of these tubes.

Regular readers know of my food fetish; what most folks may not know is that I have my own personal food “guru.” And so, I’ve decided to merge these two seemingly disparate phenom’s into a smorgasbord of possibilities (click the "■" buttons for a treat).

HWR is served:

■ ESI at HR Web Café writes that in the anniversary aftermath of the public health debacle that was Katrina, Human Resource managers learned some important disaster planning lessons, including the need to be alert to workers suffering Post Traumatic Stress Disorder.

■ HR heavyweight Peter Rousmaniere, writing at Working Immigrants, discusses how Wal-Mart is becoming the banking intermediary of choice for Mexicans living and working in the U.S. Scary and timely.

■ Over at Worker’s Comp Insider, Jon Coppelman offers some management lessons, Ghengis Khan style. Incredibly, there are lessons to be learned from the man who led the Mongol hordes.

■ Our friend Joe Paduda, posting at Managed Care Matters, questions the criteria used by some industry groups for assessing quality. He notes that doing too many procedures on relatively healthy patients can greatly improve outcomes, resulting in fancy awards and big bucks for the procedure-doers.

■ Associate Professor Dr Roy M. Poses blogs at Health Care Renewal. In a post that seems related to Joe’s, Dr Poses tells us that primary care doctors are now under the gun to submit to various pay for performance programs. Noting that a particular pharma company recently pled guilty to a criminal offense, he asks if the new slogan for our health care system ought to be "pay for malfeasance?"

■ Meanwhile, over at the Health Business Blog, David Williams argues that bias isn’t always a bad thing. Citing a recent article on FDA Advisory Panels, David posits that consumers have a bias toward cost control, and that’s a healthy attitude.

■ InsureBlog’s own Bob Vineyard avers that taxing smokers is one way to help pay for health care, but wonders if that’s a good thing. He asks if targeting one lifestyle choice for special taxation might not lead down a slippery slope.

■ Dr R Craig Lefebvre blogs On Social Marketing and Social Change, which is providential, as he takes a look at mobile technologies, their current use and promise in public health and health behavior change programs.

■ Another PhD, Adam J. Fein, hosts the Drug Channels blog. His post examines the "demand side" problem of drug counterfeiting, asking how we stop pharmacy buyers and consumers from purchasing outside of a theoretically secure supply chain?

■ This post, from Carol Kirshner at Driving In Traffic, discusses recent news that Wellpoint (one of the nation's largest insurers) has announced that they will be providing a wide range of consumer-driven health plans, from the individual to the large corporation.

■ Medblogosphere biggie Matthew Holt, host of The Health Care Blog, alerts us to a recent study by David Cutler, which suggests that increased spending on health care is “reasonable value.” Matthew believes that the report was destined to be used as propaganda, and wonders whether Cutler intended just that.

■ In what may be a harbinger of things to come, we have PhD student Jason Shafrin on board. Jason helms the Healthcare Economist blog, and wonders why some employers hesitate to offer generous health insurance benefits. He hypothesizes that when a firm offers a generous insurance package, it may attract sicker workers, driving up the cost of the firm's health insurance.

■ Last, but certainly not least, Medical Blog Network founder Dmitriy Kruglyak brings us exciting news about a new Medical Blog “Widget” program, and also updates us on the Healthcare Blogger Survey.

I’ve certainly enjoyed hosting duties this time around, and encourage you to catch the next episode, on the 21st, over at The Century Foundation.

B'tayavon!