By Elaine Hou
Taiwan Today, Feb. 11, 2011

Debate has raged for almost a decade over the design of Taiwan’s second-generation National Health Insurance System. The seemingly endless rounds of consultations and negotiations pushed the patience of private and public sector participants to the limit, but their efforts paid handsome dividends Jan. 4 after amendments to the NHI Act passed muster in the Legislature.

Despite some lingering concerns, experts believe the 2G NHI is a fairer, more efficient and financially healthier system.

Launched in 1995, NHI is compulsory social insurance covering more than 99 percent of the nation’s 23 million population. Premium payments are shared by the government, the insured and employers.

Under the amended act, the NHI premium rate for individuals is set at 4.91 percent of their monthly salaries, down from 5.17 percent. A new supplementary premium system will also be in place, charging 2 percent on additional earnings over NT$2,000 (US$69), including interest, professional practice income, rent, stock dividends and bonuses exceeding the equivalent of four months’ wages.

According to former Minister of Health Yaung Chih-liang, the altered premium system will enhance NHI’s finances via the expanded premium base. This approach will also reinforce the ability-to-pay principle and relieve the financial burden on salaried employees, who usually receive little additional income.

“Around 83 percent of the population will pay less,” Yaung said. “Only 17 percent will have increased premiums resulting from extra sources of income.”

“The new plan will generate NT$508.6 billion in health insurance premiums per year, balancing the financial shortfall of the current system in five years,” said Tai Kuei-ying, director-general of the Bureau of National Health Insurance. She added that supplementary payments are estimated to bring in NT$20.8 billion annually.

The system is now in the red for over NT$60 billion, according to the BNHI.

Fu Li-yeh, director of National Yang-Ming University’s Institute of Health and Welfare Policy, described the supplementary premiums as a positive change, though not a perfect solution.

The extra premiums will help realize the core objective of the system’s reform—that those who earn more also pay more, thus making the system fairer from a social standpoint, said Fu, a minister without portfolio from 2004 to 2006.

Responsible for the 2G plan originally submitted to the Legislature, Fu pointed out that as a result of economic development since NHI was implemented, people have more and more supplementary income beyond salaries and wages. “This is especially true for wealthier people.”

She also expressed approval of the integration of the NHI Supervisory Committee and Medical Expenditure Negotiation Committee to form the new NHI Supervisory Commission, a move designed to bring revenues and expenditures more in line.

This body, composed of representatives of the insured, employers, medical service providers, experts in related fields and health care authorities, will be tasked with reviewing issues such as premium rates, the scope of benefits and total yearly payments to contracted medical facilities, the BNHI said.

This change will improve NHI’s financial management, Fu said.

The amended act also stipulates that the commission’s meeting records be made available to the public, and that public opinion be consulted before the government decides on major policies.

“This is an encouraging initiative that will keep information transparent and expand citizen participation,” said Chiang Tung-liang, dean of National Taiwan University’s College of Public Health.

Another improvement with regard to information transparency is the requirement for the public release of NHI financial reports, medical quality ratings of contracted hospitals and major violations by medical facilities.

To ensure quality health care for the entire population, the 2G NHI protects the rights of the disadvantaged via continuous coverage and reduced co-payments, and incorporates convicts into the system.

Meanwhile, the government will cover at least 36 percent of annual premiums, up from 34 percent. “The 2-percent increase is expected to require roughly NT$30 billion in government contributions during the first year of implementing the new system,” the BNHI said.

To prevent abuse of the system, the penalty for fraudulent insurance claims and medical expenses will be increased to up to 20 times the amount illegally received. The current fine is set at twice the illicit gain.

These revisions have received a thumbs up from the Taiwan Healthcare Reform Foundation, an independent, nongovernmental organization promoting the country’s health care quality and patient rights. “We believe they are conducive to a sustainable system, and will unveil a new era for NHI,” the foundation said.

Moreover, the new program will adopt diversified methods of benefit payment to promote illness prevention and the efficient use of resources. These include equal payments for similar diseases or medical treatments, and a capitation fee system.

“Implementation of capitation payment will push physicians to become more proactive in helping people prevent illness, rather than just passively providing medical care to patients,” Fu commented.

Another major amendment to the act requires citizens living overseas for long periods to have been enrolled in NHI over the last two years or to have maintained legal household registration in Taiwan for at least six months before they can enjoy medical care covered by the insurance. In the past, immediate access was granted to those with previous NHI registration or four months of household registration.

“The stricter regulations aim to enhance the system’s fairness,” the BNHI said.

Despite these improvements, the amended act still faces some criticisms, mostly over the new premium base and the unchanged separation of the insured into six categories by occupation, providing the basis for differential premium subsidies from the government.

“The supplementary premiums, which depend mostly on capital gains, seem a less stable source of NHI revenue,” Chiang said. “The amount will go up when the economy is heated and plummet during economic recessions.”

Chu Tzer-ming, former president and chief executive officer of the BNHI, said the six-category structure is a flawed, unfair policy that should be abandoned. “People with the same total income are charged different premiums because they are placed under different categories according to their jobs and vocational status.”

In addition, the policy is inefficient, Fu said. As the categories are based on occupations, when people change careers they may have to drop the insurance and then re-register under a different classification.

“This procedure is unnecessary since these people remain in the same insurance program,” she said.

Fu added that resolving these problems was the major reason for one of the initial 2G NHI proposals—calculating an individual’s insurance fee based on total household income. But this tax-like scheme was roundly rejected in the Legislature due to questions about the rates for the unemployed and those with no income.

Although the outcome is regrettable, Fu said she is still optimistic about the revised act.

“If the supplementary premium system works well, it will encourage future implementation of premium calculations based on household income,” she said.

Cheng Shou-hsia, former director-general of the BNHI, said although the amended bill is not 100-percent perfect, one thing for sure is that the 2G NHI is better than its predecessor. “This should be
acknowledged.”

Despite its problems, Taiwan’s NHI is highly regarded by international experts, Fu said. “I look forward to ongoing improvements to our system.” (THN)

Write to Elaine Hou at elainehou@mail.gio.gov.tw

Excerpted from Taiwan Today: http://www.taiwantoday.tw/ct.asp?xItem=150360&CtNode=428

By Wendell Potter
The Huffington Post, Feb. 12, 2011

The media had lots of health care news to obsess about last week. A federal judge ruled the health care reform law unconstitutional, and Senate Republicans tried in vain to repeal the law. But most of the press paid virtually no attention to a potentially much more important development — a multi-pronged effort by five major insurers to strip from the law key regulations and consumer protections that aren’t to their liking.

The insurers do not want the bill repealed or declared unconstitutional. Congress gave them exactly what they wanted by including in the legislation a requirement that all Americans not eligible for Medicare or Medicaid buy coverage from a private insurance company. That provision alone will result in hundreds of billions of dollars in revenue and profits the insurers otherwise would never see.

Officially, the insurers are maintaining neutrality on the court challenges to the law and the repeal efforts. They understand that Republican attorneys general who filed the lawsuits and the Congressional Republicans who voted to repeal the law — most of whom received campaign contributions from the insurers’ political action committees — must go through the motions to satisfy “the base.”

The court challenges and repeal efforts are, in reality, a useful smokescreen for the big insurers, whose real agenda is to gut the law while preserving the mandate. Expect a big lobbying and PR campaign — financed by our insurance premiums — to persuade us that the new regulations and consumer protections will make those premiums skyrocket.

The story much of the press missed was the revelation that the CEOs and lobbyists for the five biggest for-profits — UnitedHealth, WellPoint, Aetna, CIGNA and Humana — have been meeting frequently to plot their attack on the law.

Bloomberg’s Drew Armstrong reported that three committees formed by the group have been meeting almost weekly. While Armstrong didn’t indicate what those committees are doing, I can speculate from previous experience as an insurance company executive that the committees are developing strategies in these areas: lobbying, strategic communications the formation of alliances with other political and business groups and the creation of fake grassroots, or “Astroturf” organizations.

Bloomberg and the the National Journal also reported that the for-profits have solicited proposals from three big PR firms that have done extensive work for the industry: APCO WorldWide, Weber Shandwick and Public Strategies. It sounds familiar. While I was serving as head of corporation communications at CIGNA, I hired APCO and Weber Shandwick to help direct similar efforts and to enhance CIGNA’s reputation.

The for-profits reportedly formed the new coalition — as yet unnamed — because they were upset that America’s Health Insurance Plans (AHIP), their umbrella trade association, had been unsuccessful in keeping the new regulations and consumer protections out of the law in the first place.

So they’re going back to a familiar and successful playbook. Over the past two decades, the big insurers have formed such coalitions to defeat reform initiatives or to persuade the public and lawmakers to see things their way.

When the Clinton reform plan was being debated in 1993 and 1994, Aetna, CIGNA, Prudential and United formed the Alliance for Managed Care (AMC) to argue for a “market-based” solution — managed competition, as it came to be called — as an alternative to broader government involvement in health care. The AMC described itself as “a private-sector approach to health care system reform that uses the marketplace and the power of informed consumer choices to achieve better coverage, while improving quality and cutting costs.”

The AMC later joined a broader coalition that included the U.S. Chamber of Commerce and the National Association of Manufacturers to defeat the Clinton plan.

A few years later, within weeks of being named as defendants in two massive class-action lawsuits, the for-profits formed a new group, America’s Health Insurers (AHI), designed to redirect scrutiny away from them and toward the trial lawyers behind the suits. Attorney Richard “Dickie” Scruggs alone cost the companies billions of dollars in market capitalization when the Wall Street Journal reported on Sept. 31, 1999, that Scruggs was planning to file charges against the insurance firms. On that day, stock prices of Aetna and United alone had plunged nearly 20 percent by the time the closing bell rang at the New York Stock Exchange.

I was CIGNA’s main representative to America’s Health Insurers. My counterparts from other big insurers and I met secretly in hotel conference rooms in Washington and elsewhere with APCO to plan the PR strategy. The idea was to “reframe the debate” — shift attention away from the reasons the insurers were being sued — onerous policies and cheating doctors out of payments — and toward those trial lawyers who were getting filthy rich filing “frivolous” lawsuits. The lawyers — not the insurers — were the real villains. APCO reactivated the front group it had created for the tobacco industry — the Coalition Against Lawsuit Abuse — to generate letters-to-the editor and op-ed pieces in cities where the lawsuits had been filed – particularly Miami, where suits were eventually consolidated. The intent was to influence both the federal judges and potential jurors. (The suits were ultimately settled, with the defendants agreeing to change many of their practices and to pay the plaintiffs hundreds of millions of dollars.)

I was also CIGNA’s representative to yet another organization — the Coalition for Affordable Quality Healthcare (CAQH) — that the big insurers created later. We mounted a huge PR and advertising campaign designed to restore Americans’ faith in managed care, which had taken a beating in the press for such well-publicized practices as “drive-through mastectomies” and “drive-though deliveries.”

So this new grouping is just the latest variant on an oft-used tactic to influence public opinion and public policy. This time, however, the stakes are even higher, for both the insurers and for consumers.

What don’t the companies like? Well, for starters, the rules that now require insurance firms to devote at least 80 percent of what we pay in premiums for actual medical care.

But their sights are also on other provisions of the law that might impair profits. AHIP spokesman Robert Zirklebach provided a glimpse of what insurers really want when he told a reporter last week that industry lobbyists have embarked on a campaign to “educate” members of Congress about ‘flaws’ in the law. For instance, the industry will be trying to persuade lawmakers that young people, many of whom are being charged too much already, will see their premiums go sky high. How do you fix that? The insurers, of course, have an answer: get rid of the requirement that insurers can only sell policies that meet minimum benefit requirements and jettison the prohibition against charging older Americans any more than three times as much as young people. They want to charge them five to ten times as much.

If the latest coalition of big for-profit insurance firms meets its objectives, many of us will eventually be convinced — through sophisticated, behind-the-scenes PR campaigns — that those protections are not in our best interests after all. If those campaigns help the big insurers eliminate such protections, that would be ideal for their bottom lines — but devastating for consumers.

This also appeared on the Center for Public Integrity’s website.

Follow Wendell Potter on Twitter: www.twitter.com/wendellpotter

http://www.
huffingtonpost.com/wendell-potter/the-insurers-real-agenda_b_822356.html

The SocialistWorker
February 10, 2011

Wendell Potter is the former head of public relations for insurance giant Cigna. In 2009, he became a whistleblower, describing with an insider’s knowledge the behavior of the health insurance industry. His book Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans documents those revelations.

Potter spoke to Helen Redmond during a Chicago stop on his national book tour in January.

Helen Redmond: Can you talk about how insurance companies make profits?

Wendell Potter: They make profits in ways that other companies don’t. It’s a unique way of doing business.

McDonald’s, when it sells hamburgers or French fries, doesn’t care whether you are old or young, whether you are sick or not, whether you are male or female. They don’t care about that, but insurance companies care a lot about that. And they don’t want to sell you their product if you have been sick in the past, they don’t want to sell you the product if you are older. If they do, they want to charge you a lot more.

McDonald’s doesn’t charge an older person three times as much for a hamburger as they charge a teenager. Insurance companies can do that. So it’s an entirely different kind of business that way, in order to make Wall Street happy. And I say Wall Street because the industry is controlled by big for-profit corporations these days, and they’re all listed on the New York Stock Exchange, so they have to meet Wall Street’s expectations.

To do that, they have to do things that are often not in the best interest of the people in this country. Their practices result directly in people going without insurance, not being able to buy it at any price. We have too many people in this country who don’t have insurance, largely because of the practices of the insurance companies.

These companies want to avoid risk. They want to avoid paying out medical claims. They try to avoid insuring people who need insurance.

HR: What are some of the “tricks of the trade” that you witnessed?

WP: Canceling insurance when people get sick, a practice called recission. The companies will cancel someone’s policy when they’re in the midst of cancer treatment. They’ll have someone look at the application the person filled out, looking for some justification to cancel the policy.

Often, they’ll find something–some omission that’s usually inadvertent, like one woman who testified before Congress. She was in the midst of treatment for breast cancer, and her policy was cancelled because she forgot to disclose that she had been treated for acne.

Purging small businesses from the rolls is another industry practice that is prevalent. It’s the reason why half of small businesses can’t offer health care to their employees. When one employee gets sick and has high medical claims, the insurance company will raise the rates so much that the employer will have to drop coverage for everyone. Refusing to pay for treatment that a doctor has recommended is another example.

HR: Denial of care.

WP: The industry calls it “denial of coverage.” They use that term because the lawyers insisted. We would always say “denial of coverage.” It’s semantics, because when you deny coverage to someone, you essentially deny care.

Most people in this country don’t have the financial resources to pay for a liver transplant, for example, or for cancer care. They don’t have the financial means to do it, and it’s why a lot of people go bankrupt. They think their insurance will cover them, they have to have the treatments but they find they can’t afford it. Others forego treatment and die. Many die.

HR: You were the public relations person for Cigna. What was your job, in terms of the overall picture?

WP: My job description said my responsibility was to protect and enhance the company’s reputation. It’s very broad, and it encompasses a lot of things–handling crisis communications, situations.

In that category, I was the person who handled what we called “high-profile” cases, when someone was denied coverage for care, and it became a media event. I would be the person, along with my staff, who would deal with the reporters. We tried to explain the company’s point of view.

I dealt with financial matters, particularly with litigation. I dealt with reporters from the Wall Street Journal and other financial media when they announced earnings. So I had to know how these companies make money and how they met or didn’t meet Wall Street’s expectations.

I represented the company at the industry level. I worked with my peers at other insurance companies to plan PR strategy to defeat health care reform. Or try to shape reform to benefit industry.

HR: Did you ever think in the course of your work that you were hurting people?

WP: I didn’t. I wouldn’t let myself think that. On the contrary, I thought some of the things I was doing might actually benefit people.

For example, I would explain the p.r. consequences to the CEO of not overturning a denial when the media was involved. I would say, “If you don’t reconsider this, then this will become a significant p.r. problem.” From time to time, the company would say they’d reconsider, and agreed to pay. I would pat myself on the back and say I played some role in this person getting a life-saving procedure.

That’s rationalization. I think all of us rationalize, and I know I certainly did, and a lot of my fellow employees did. You look at what you do individually, and you think that maybe you contribute to someone getting the care they need, and acknowledge that your company does provide insurance benefits to a lot people, and hopefully those people who are insured get the coverage they need when they need it.

You don’t really think about the other practices of the industry. I didn’t think about it until I rose up the corporate ladder and was able to see things that these companies do to satisfy Wall Street’s expectations. It became abundantly clear to me that what I was doing was contributing to the number of people who don’t have insurance. It was only in the latter part of my career that I came to terms with that.

HR: One of the most interesting parts of your book was your reaction to Michael Moore’s movie Sicko. Can you talk about what you had to do to spin that? It must have been a huge task.

WP: It was. When I finally saw the movie I was affected by it. I think he did an exceptionally good job of knowing how to handle people who were wronged by insurance companies in a way that connected with us emotionally.

It really was a movie that explained in an effective way the problems we have with our health care system in this country–and also, the benefits of other systems. Other countries have been able to achieve universal coverage for their citizens.

Moore knows how to elicit emotional responses, and that happened to me. He was depicting something that few people really understood. I knew from my own personal experience that what he was writing about was true–from my own handling of a lot of these high-profile cases. And they’re not just occasional cases. These things happen all the time. It’s just the fact that most of them aren’t known.

HR: When I saw Sicko,
people in the audience were crying.

WP: It was as if you were sitting across from some of those people and hearing their stories. I’ve heard these stories face-to-face from people as I’ve traveled around, and you want to do something for them. I know that by making Sicko, Moore hoped to change the system so people don’t suffer like that anymore.

HR: So how did you handle the p.r. for Sicko?

WP: I had an obligation to understand the situations that he had in the movie that pertained to Cigna. There were two or three people who were covered by Cigna in the film. I had to figure out a way to explain why we did what we did to those folks in a very general way. I would always say, “I can’t talk about a particular individual or case because of federal privacy laws.”

My role was to say that we provide care for millions of people, and we have an effective way for people to appeal denials. So I more or less talked about process–about how we had a process to keep these things from happening.

HR: Can you discuss the influence of America’s Health Insurance Plans (AHIP) on the new health care legislation passed last year? How much influence did they have on the crafting of the law?

WP: An enormous amount of influence. AHIP made sure one of their CEOs was visiting the White House on a regular basis. Ron Willams of Aetna was there at least half a dozen times during the debate, meeting with the president.

HR: Behind closed doors?

WP: Yes, absolutely behind closed doors–at least, not public meetings. They weren’t all necessarily private meetings with the president, but they were with him and/or staff out of public view. They also have lobbyists who were responsible for crafting the legislation and making sure the industry’s points of view were in the bill.

Karen Ignagni, the head of AHIP, testified before Congress many times. They spent a lot of time on Capitol Hill, both testifying and lobbying.

HR: Is there any concern among AHIP members about the suffering their industry causes?

WP: If there is, it’s never discussed. I’ll speak for myself. I was in a lot of meetings. I never heard any acknowledgement that the industry played a role in the suffering.

There is a great deal of denial. The finger was pointed elsewhere. We’d say, “We’re not the reason why health care costs are so high.”

Also, we’d try to find other reasons why the number of uninsured was so high, other than the practices of the insurance industry. You spend an enormous amount of time looking at other potential reasons for people’s suffering.

HR: Like the pharmaceutical industry and the prices they charge for medication?

WP: Oh yes. Consolidation among providers was another one. As my former CEO would call it, “the real drivers of health care costs.”

HR: And the real drivers of health care costs are?

WP: Driven by other parts of the health care system. And by us.

If you believe the health care executives, all Americans are largely responsible for high health care costs, because we demand the best. We demand drugs we see advertised, we demand the latest technology, so we demand all these things without having any understanding of how much they cost. Or we don’t care how much they cost.

HR: What do you think about PPACA? Will it solve the health care crisis?

WP: It will not solve the health care crisis. It will begin to make a dent in it.

I’ve said the legislation is worth passing. There are a lot of flaws. Much of it was written by the health insurance industry to benefit health insurance companies–like the individual mandate, the requirement that we buy their product.

But it also makes some of their practices illegal. It does have consumer protections in there. It begins to close the “donut hole” for Medicare Part D. Parents can keep their kids on their policies until the age of 26. It will prohibit the industry from using pre-existing conditions [to bar people from insurance].

It does a lot of good things–but it doesn’t bring all of us into coverage and it does not do enough to end these egregious practices. It doesn’t do enough to reduce or control costs. In my view, the enactment of this reform is the “end of the beginning “of health care reform.

HR: They’ll still be able to deny coverage for medical treatment.

WP: Yes, they will. This legislation doesn’t affect that. For most people, it’s a “benefit decision.” The law doesn’t require these companies to cover everything the doctor recommends.

HR: Are you a supporter of single payer as proposed by Physicians for a National Health Program (PNHP)?

WP: I don’t talk about that too much. I try to stick to what I know. And I know a lot about what the insurance industry has done. I don’t pretend to know the ideal solution for the health care crisis. What I have said is it’s outrageous that Congress didn’t give single-payer a fair hearing. It never was debated. And it seems to work quite well for Canadians. They like it a lot.

Why don’t we look at how France has been able to achieve universal coverage? Why did we have a debate just looking at what we’ve got? Why don’t we look at something that’s more far reaching–I hate to use the word “radical”–but something that is different from system that is broken right now?

HR: It would mean the abolition of the insurance industry as we know it. Can you see that happening?

WP: I can see that happening. I can say I’d be in favor of that happening.

HR: What do you hope your book will do?

WP: I hope it will make people think. I hope it will open eyes. I hope people will see that it pulls the curtains back on how corporations behave, what they do to win, and why frankly it’s so hard to get meaningful reform. Why has it taken 100 years to get this far?

http://socialistworker.org/2011/02/10/liar-for-the-insurance-industry