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Hospital executives rank United HealthCare and WellPoint/Anthem as worst

Hospital executives rank United HealthCare and WellPoint/Anthem as worst

Fourth Annual National Survey of Hospital Executives Reveals “Best” and “Worst” Among the Nation’s Insurance companies

Revive Public Relations
March 31, 2010
Revive, a national public relations firm specializing in Health Care and Healthy Living, today released the results of its fourth annual National Payor Survey of hospital executives. The only one of its kind in the country, the survey targeted hospital leaders in the industry who negotiate managed care contracts with national health insurance companies – CEOs, CFOs, and directors of managed care.
The survey gathered data on hospital leaders’ opinions on seven of the largest health insurers or insurer groups in the nation: United HealthCare, CIGNA, Aetna, Coventry, Humana, Wellpoint/Anthem, and the local state or regional independent non-profit Blue Cross or Blue Shield plan.
While all respondents tend to regard insurance companies as equally negative when it comes to business practices, each year’s survey has revealed United HealthCare as the clear outlier. For four years, United HealthCare has been consistently ranked as the worst among respondents in all survey categories and a clear trend has emerged. This year, WellPoint/Anthem saw declines that brought the company down to levels near United HealthCare.
http://www.revivepublicrelations.com/downloads/2010PayorSurveyPressRelease.pdf
Words hospitals used to describe United HealthCare:
17% – Bad/Negative
15% – Inflexible/Rigid/Unreasonable
13% – Challenging
13% – Deceptive/Dishonest/Unethical
8% – Aggressive/Bully
and
11% – Good/Fine
2% – Prompt
2% – Convenient/Easy
1% – Professional
(Similar terms were used to describe other insurers, including WellPoint/Anthem)
http://www.revivepublicrelations.com/downloads/2010PayorSurveyResults.pdf

From the perspective of hospital executives, the two worst insurers in the nation happen to be the largest – United HealthCare and WellPoint/Anthem, even though “all respondents tend to regard insurance companies as equally negative when it comes to business practices.”
And now we have reform that not only locks us into this industry, but expands it further!? It can be changed.

Gaming the individual mandate

Short-term customers boosting health costs

By Kay Lazar
The Boston Globe
April 4, 2010

Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses.

In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan. Their medical spending while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion, according to data the state’s largest private insurer provided the Globe.

The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month.

The problem is, it is less expensive for consumers — especially young and healthy people — to pay the monthly penalty of as much as $93 imposed under the state law for not having insurance, than to buy the coverage year-round. This is also the case under the federal health care overhaul legislation signed by the president, insurers say.

http://www.boston.com/news/health/articles/2010/04/04/short_term_customers_boosting_health_costs/?page=full

Comment: 

By Don McCanne, MD

Health policy science told us ahead of time that a mandate for individuals to buy private health insurance would not work if the penalties for not doing so were quite modest. Yet Massachusetts enacted such a plan, and now very similar policies have been enacted into federal law.

The Massachusetts experience has demonstrated that health care consumers will act in their own financial interest. Individuals who perceive themselves to be in good health will elect to pay the much lower penalty for being uninsured. If they then develop expensive medical problems, they will sign up for a health plan, but then will drop their coverage after their medical needs are met. It means little to them that this drives up premiums for those who remain in the insurance pools.

There are legitimate reasons that state and federal legislators have been reluctant to assign greater penalties for not being insured. The most important is that insurance premiums are simply not affordable for moderate income individuals who do not receive adequate public or employer assistance. Even the modest penalties create a financial hardship for some. Pushing the penalties higher would compound the financial stresses that too many middle income families are already experiencing.

There are policy interventions available, but those under consideration are based on leaving the private insurance industry in charge. One suggestion is to close enrollment except for a short period of open enrollment once or twice a year. This would leave already financially strapped individuals without a safety valve should problems arise during closed enrollment periods. Another suggestion would be to reinstitute (Massachusetts) or expand (federal) the waiting period before preexisting disorders are covered, even if of very recent onset, again preventing coverage for more urgent, serious problems.

Though some might suggest that these individuals would be getting what they deserve for not being insured, the real fault is with policies inherent in the design of a financing system based on private insurance plans. Individuals are forced to choose between private insurance coverage that they may not be able to afford, or exposing themselves to the potential of greater financial insecurity by remaining uninsured. If solving problems in a system creates new problems, then we should question the system itself.

We can do this far better. We can separate the financing from the delivery of health care. With a single payer, improved Medicare for all, everyone would be automatically covered, for life. The financing of the system would not be through premiums tagged to private plans, but rather would be through progressive tax policies in which each person would pay an equitable share, and no one would face a financial hardship.

Gaming the individual mandate is not a very fun game. Let’s shut it down, and change to a system that works for everyone.

The hype behind the healthcare reform bill

By Dr. James C. Mitchiner
Guest column
AnnArbor.com, April 4, 2010

In the weeks and months ahead, Americans will learn the true details about the health care reform bill passed by the U.S. House on March 21 and signed into law by President Obama two days later. They may not like what they see. If ever there was March Madness, this surely must be it.

Lost in all the hype and self-congratulatory rhetoric repeated by Speaker Nancy Pelosi and her Democratic colleagues are the facts that brought us to the passage of this flawed legislation.

Here are a few:

• Of the 32 million Americans who will gain coverage under this law, about 16 million will be covered by Medicaid. Here in financially strapped Michigan, with the recent 8 percent reduction in Medicaid reimbursement to doctors and the looming possibility of an additional 11 percent cut, the already dwindling Medicaid participation rate among physicians will decrease further. The result will confirm what we have learned from health reform in Massachusetts: access to health insurance in no way guarantees access to actual health care. Waits to see a physician will increase, and emergency rooms will become jammed more than they already are.

• Millions of middle-income citizens will be herded into buying private health insurance policies costing up to 9.5 percent of their annual income while covering on average only 70 percent of their medical expenses, leaving them responsible for high co-pays and deductibles. Such a “benefit” will not provide them with the necessary financial security should they fall victim to a catastrophic illness or injury.

• Health insurance firms are likely to garner over $400 billion in federal assistance, courtesy of American taxpayers, to subsidize the purchase of their defective products. Moreover, since the newly insured are likely to be young and healthy, and therefore less risky to insure, private insurers will be guaranteed continued profits which will be used to extend their political clout and inhibit future reforms.

• Workers who currently receive coverage from their employer will be restricted to using their plan’s limited network of providers. As the cost of their insurance climbs, many will eventually be taxed on the value of their benefits.

• Optimistic projections that the reform law will reduce the federal deficit are based on wishful thinking and untested theories. As the experience with the Massachusetts reform plan (the model for this bill) has amply demonstrated, health care costs will continue to escalate.

• The much-ballyhooed regulatory reforms in commercial insurance, such as prohibiting denials on the basis of pre-existing conditions, were crafted with the assistance of the insurers themselves, casting doubt on their true effectiveness. Older people, for example, can be charged up to three times more than their younger counterparts, and female employees can be charged higher rates at least until 2017.

This bill’s passage is grounded on base political pragmatism rather than sound health care policy. It leaves intact the fragmented and unsustainable system that is wreaking havoc on our health and economy today, a system that generates up to $400 billion annually in wasteful administrative costs. According to Physicians for a National Health Program, an organization representing over 17,000 single-payer physician advocates, that’s enough to cover all the uninsured and to upgrade everyone else’s coverage without having to increase overall U.S. health spending by one dollar.

So, in the coming years, we will be forced to muddle through the dysfunctional mess that epitomizes American health care. But it is only a matter of time before future legislators will survey the damage done and conclude that only the adoption of a single-payer national health insurance program – an expanded and improved Medicare-for-All – will guarantee coverage for Americans that is universal, portable, affordable, and equitable for all.

Dr. James Mitchiner is an Ann Arbor emergency physician and is the former president of the Washtenaw County Medical Society.

http://www.annarbor.com/news/opinion/the-hype-behind-the-healthcare-reform-bill/

Retail politics' could offer better health plan

By Joseph Jarvis
Salt Lake City Tribune, April 2, 2010

Sen. Bob Bennett commented recently in The New York Times that he was expecting to play “retail politics” from now until the Utah Republican Convention on May 8. Well, Sen. Bennett, I am an uncommitted state delegate and I’m waiting for you and your competitors to sell me on your candidacy.

Since former Gov. Jon Huntsman introduced me to Sen. John McCain, then running for the presidency, as Utah’s foremost authority on health system reform (thanks, Jon, flattery is nice, even if cheap), I’m particularly interested in hearing about how Utah’s future congressional representatives (I’ll include the Republican candidates vying to replace Rep. Jim Matheson) will respond to the passage of Obamacare.

I’m not interested in sound bites. Ideological nonsense from both sides of the political aisle is what made the passage of Obamacare happen. Republicans made virtually no effort to bring substance into the debates about health care reform, so let’s not continue pretending that selling health insurance across state lines will fix our health system. Yes, we need malpractice reform. The question is, should Congress be involved? If so, how?

Not so long ago, a number of Democratic members of the U.S. House were running a bill entitled “The States’ Right to Innovate in Healthcare Act.” I loved that bill. It laid out mechanisms for any state to negotiate its way out of federal rules and regulations en route to formulating its own comprehensive reform of health care delivery and financing. Now that Obamacare is the law of the land, states that can do better need the right more than ever to innovate in health care.

The only trouble with that bill was (and is) that no Republican ever signed on as a sponsor. What I want from congressional candidates is a commitment to spend time and political capital resurrecting that bill with a bipartisan coalition backing it.

Many Democrat members of Congress are just as unhappy with the recently passed health legislation as am I. In expressing their frustration, they have stated their support for empowering states to take on health system reform. To be sure, their support for this concept originates from their desire to see some state pass a form of government-based single-payer health care.

I want Republican candidates for Congress in Utah who will support the bill even if it makes single-payer legislation possible in California (where it passed the state legislature twice already). If the bill empowers California to try a government-sponsored version of single-payer health financing, it will empower Utah to try something else.

I’m also interested in finding Republican congressional candidates in Utah who are true fiscal conservatives when it comes to health care.

The entitlements in health care that are killing the federal budget are not those given to senior citizens on Medicare or poorer members of society on Medicaid, but those granted repeatedly to Big Pharma and the health insurance industry, who sell their products to our government programs at a ridiculous profit.

Why is it that the manufacturers of motorized wheelchairs can advertise on TV that they can automatically qualify any person on Medicare for their product? I want someone in Congress with the backbone to say no to corporate welfare in our health care system.

Any other uncommitted Republican state delegates who want to join me in retail politics can e-mail their questions for candidates to jqjarvis@gmail.com.

Joseph Jarvis is a member of the Republican State Central Committee and chairman of legislative District 24. He was twice a Republican nominee for the Legislature. He founded and chairs the Utah Healthcare Initiative, a political issue committee, which exists to bring comprehensive health system reform to Utah by ballot initiative.

http://www.sltrib.com/opinion/ci_14809557

Retail politics’ could offer better health plan

By Joseph Jarvis
Salt Lake City Tribune, April 2, 2010

Sen. Bob Bennett commented recently in The New York Times that he was expecting to play “retail politics” from now until the Utah Republican Convention on May 8. Well, Sen. Bennett, I am an uncommitted state delegate and I’m waiting for you and your competitors to sell me on your candidacy.

Since former Gov. Jon Huntsman introduced me to Sen. John McCain, then running for the presidency, as Utah’s foremost authority on health system reform (thanks, Jon, flattery is nice, even if cheap), I’m particularly interested in hearing about how Utah’s future congressional representatives (I’ll include the Republican candidates vying to replace Rep. Jim Matheson) will respond to the passage of Obamacare.

I’m not interested in sound bites. Ideological nonsense from both sides of the political aisle is what made the passage of Obamacare happen. Republicans made virtually no effort to bring substance into the debates about health care reform, so let’s not continue pretending that selling health insurance across state lines will fix our health system. Yes, we need malpractice reform. The question is, should Congress be involved? If so, how?

Not so long ago, a number of Democratic members of the U.S. House were running a bill entitled “The States’ Right to Innovate in Healthcare Act.” I loved that bill. It laid out mechanisms for any state to negotiate its way out of federal rules and regulations en route to formulating its own comprehensive reform of health care delivery and financing. Now that Obamacare is the law of the land, states that can do better need the right more than ever to innovate in health care.

The only trouble with that bill was (and is) that no Republican ever signed on as a sponsor. What I want from congressional candidates is a commitment to spend time and political capital resurrecting that bill with a bipartisan coalition backing it.

Many Democrat members of Congress are just as unhappy with the recently passed health legislation as am I. In expressing their frustration, they have stated their support for empowering states to take on health system reform. To be sure, their support for this concept originates from their desire to see some state pass a form of government-based single-payer health care.

I want Republican candidates for Congress in Utah who will support the bill even if it makes single-payer legislation possible in California (where it passed the state legislature twice already). If the bill empowers California to try a government-sponsored version of single-payer health financing, it will empower Utah to try something else.

I’m also interested in finding Republican congressional candidates in Utah who are true fiscal conservatives when it comes to health care.

The entitlements in health care that are killing the federal budget are not those given to senior citizens on Medicare or poorer members of society on Medicaid, but those granted repeatedly to Big Pharma and the health insurance industry, who sell their products to our government programs at a ridiculous profit.

Why is it that the manufacturers of motorized wheelchairs can advertise on TV that they can automatically qualify any person on Medicare for their product? I want someone in Congress with the backbone to say no to corporate welfare in our health care system.

Any other uncommitted Republican state delegates who want to join me in retail politics can e-mail their questions for candidates to jqjarvis@gmail.com.

Joseph Jarvis is a member of the Republican State Central Committee and chairman of legislative District 24. He was twice a Republican nominee for the Legislature. He founded and chairs the Utah Healthcare Initiative, a political issue committee, which exists to bring comprehensive health system reform to Utah by ballot initiative.

http://www.sltrib.com/opinion/ci_14809557

Gaming the individual mandate

Short-term customers boosting health costs

By Kay Lazar
The Boston Globe
April 4, 2010
Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses.
In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan. Their medical spending while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion, according to data the state’s largest private insurer provided the Globe.
The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month.
The problem is, it is less expensive for consumers — especially young and healthy people — to pay the monthly penalty of as much as $93 imposed under the state law for not having insurance, than to buy the coverage year-round. This is also the case under the federal health care overhaul legislation signed by the president, insurers say.
http://www.boston.com/news/health/articles/2010/04/04/short_term_customers_boosting_health_costs/?page=full

Health policy science told us ahead of time that a mandate for individuals to buy private health insurance would not work if the penalties for not doing so were quite modest. Yet Massachusetts enacted such a plan, and now very similar policies have been enacted into federal law.
The Massachusetts experience has demonstrated that health care consumers will act in their own financial interest. Individuals who perceive themselves to be in good health will elect to pay the much lower penalty for being uninsured. If they then develop expensive medical problems, they will sign up for a health plan, but then will drop their coverage after their medical needs are met. It means little to them that this drives up premiums for those who remain in the insurance pools.
There are legitimate reasons that state and federal legislators have been reluctant to assign greater penalties for not being insured. The most important is that insurance premiums are simply not affordable for moderate income individuals who do not receive adequate public or employer assistance. Even the modest penalties create a financial hardship for some. Pushing the penalties higher would compound the financial stresses that too many middle income families are already experiencing.
There are policy interventions available, but those under consideration are based on leaving the private insurance industry in charge. One suggestion is to close enrollment except for a short period of open enrollment once or twice a year. This would leave already financially strapped individuals without a safety valve should problems arise during closed enrollment periods. Another suggestion would be to reinstitute (Massachusetts) or expand (federal) the waiting period before preexisting disorders are covered, even if of very recent onset, again preventing coverage for more urgent, serious problems.
Though some might suggest that these individuals would be getting what they deserve for not being insured, the real fault is with policies inherent in the design of a financing system based on private insurance plans. Individuals are forced to choose between private insurance coverage that they may not be able to afford, or exposing themselves to the potential of greater financial insecurity by remaining uninsured. If solving problems in a system creates new problems, then we should question the system itself.
We can do this far better. We can separate the financing from the delivery of health care. With a single payer, improved Medicare for all, everyone would be automatically covered, for life. The financing of the system would not be through premiums tagged to private plans, but rather would be through progressive tax policies in which each person would pay an equitable share, and no one would face a financial hardship.
Gaming the individual mandate is not a very fun game. Let’s shut it down, and change to a system that works for everyone.

Fighting Illini: Because Illinois Wants More Than Insurance for All

Undaunted: Movement for Improved Medicare for All Grows in Illinois and Across the Nation

By Donna Smith
Guaranteed Healthcare Blog
March 29, 2010

Just blocks from President Obama’s Hyde Park home south of the Loop in Chicago, more than 70 activists gathered on Saturday, March 27, 2010, to plan strategy for advancing an improved and expanded Medicare for all system as the law of the land.  Activists across the nation are undaunted by the passage of the current health reform bill as they know that mandating the purchase of private insurance is not the same as providing access to healthcare.

Joining the activists from throughout Illinois was Illinois State Representative Mary Flowers, chief sponsor of Illinois’ single-payer health reform bill HB311, seen in the photo on the left.

By sharing their successes in advancing the Medicare for all, single-payer position, the activists spent eight hours together, broke into issue panels and came away with the formation of four task forces to explore the most effective and strategic ways to move the movement in Illinois both in terms of state legislative energy and as part of a larger national movement.

Among the engaged activists were nurses from various practice settings and locations throughout the state.  Many have seen drastic cuts to programs and services in their communities, and as patient advocates remain firmly committed to restoring not only those programs and services cut but also improving and enhancing patient access and care until a single standard of high quality care is the law of the Land of Lincoln and the Land of Obama.  HB311, The Health Illinois Act, would assure RNs in Illinois that no patient would be turned away because they lacked insurance, lacked adequate cash to self-pay or had been denied treatment by an insurance company.

Nurses will serve on each of the four task forces created:  legislative, media, labor and direct action.  The legislative task force will assess the work necessary on Illinois’ elected officials — both state and federal — to help advise other single-payer reform supporting groups how best to motivate those in office to support and defend HB311 and national improved and expanded Medicare for all and how to select and target campaigns of those wishing to be elected in Illinois to make sure those candidates are single-payer solid.  The media task force plans to do outreach to local and regional media to develop better lines of communication and enhance chances for coverage of single-payer issues and also make good use of the members within the Illinois Single Payer Coalition who create media on the web and beyond.  The labor task force will work with local labor bodies to enhance advancement of the AFL-CIO’s Resolution 34 supporting single-payer reform and will research becoming a part of the national Labor Campaign for Single-Payer.  And the direct action task force will continue seeking effective settings in which to challenge the power of the profit engine — private insurance, big Pharma, corporate healthcare providers, etc — with those actions which will advance the cause of single-payer reform.

Also on hand for the day was Dr. Quentin Young of Physicians for a National Health Program.  Dr. Young is a long time resident of Hyde Park, and PNHP has its national office in Chicago.  Katie Robbins of Healthcare-Now was also in from Philadelphia and New York and facilitated the meeting.  Several members of Progressive Democrats of America’s Chicago chapter helped plan the meeting, as did members of the local and state Green Party along with members of CHI-SPAN, the Chicago Single Payer Action Network, a wonderful group of people from Access Living in Chicago, Health Care for All Illinois (HCAI) members, the Champaign County Health Care Consumers, and a strong contingent of activists from Springfield and from East St. Louis, IL.  Every group worked cooperatively and with purpose to celebrate the path forward for all who believe that healthcare as a basic human right applies to every person — not just those with money or influence or both.

The event was hosted by the Illinois Single Payer Coalition with tremendous support offered by Dr. Anne Sheetz, who always lends her intelligence and humanity to the effort to transform healthcare for all in her state.

My participation was complete joy in seeing a movement that has been insistently advancing for the past several months firmly plan next steps and remain undaunted by whatever the political turmoil and tumult in DC.

My home state — and my beloved Chicago — can do so much to entrench common Midwestern values about right and wrong and human decency into a healthcare discussion that all too often is focused on revenues and denials and everything but good health for all.

Onward, Illinois.  Onward. 

http://www.guaranteedhealthcare.org/blog/donna-smith-sicko-patient/2010/03/29/undaunted-movement-improved-medicare-all-grows-illinois-an

WellPoint/Empire drops four non-profit hospitals

WellPoint Unit Drops Stellaris From Network

By Avery Johnson and Suzanne Sataline
The Wall Street Journal
April 2, 2010

A unit of WellPoint Inc. dropped Stellaris Health Network, a four-hospital chain in Westchester, N.Y., from its network after Stellaris asked for a 15% increase in reimbursement payments from the health insurer.

Stellaris says it merely wanted the insurer to pay rates consistent with what it receives from other health plans in the market. “Our non-profit community hospitals can no longer subsidize the record profits of a health-insurance conglomerate,” said Arthur A. Nizza, Stellaris’s president and chief executive, in a statement. Empire asserts charges of overall profitability aren’t relevant to this particular situation.

The decision will affect thousands of members of Empire BlueCross BlueShield, a WellPoint unit in New York, who use the hospital system. Empire has six million members in New York, and Stellaris has been one of its top 10 hospital systems in the state based on size and member utilization.

The failure to reach an agreement, which resulted in the contract being terminated late Wednesday, is the latest in a string of negotiations between hospitals and insurers that have gone hostile.

http://online.wsj.com/article/SB10001424052702303960604575158042406727102.html

Comment: 

By Don McCanne, MD

It is common to hear hospital administrators complain about low reimbursement rates from Medicare, yet how many terminate their participation in the Medicare program? And of course Medicare never unilaterally terminates a provider except when appropriate in cases of criminal fraud or incompetency that constitutes a hazard to patients.

Yet what happens when a private insurer is the payer? The decision to terminate a contract is strictly a business decision made based on market conditions, having much less to do with the value, quality or necessity of the services being provided, but much more to do with the oligopolistic leverage that the insurer has in the market. The private insurer, based purely on a business decision, is quite willing to disrupt the continuity of health care services for its own customers. And WellPoint/Empire says that their profitability isn’t relevant when it makes these decisions!?

And what will the new reform legislation do to correct these blatant injustices? It will pour more taxpayer funds into the coffers of these intrusive middleman, providing them with even greater leverage in their negotiations with the health care delivery system.

Do we want a health care financing system that is designed to benefit the money managers, or do we want a financing system designed to be sure that health care is there when patients need it? If we favor the latter, then we need to dump the private insurers and adopt an improved Medicare program that takes care of everyone.

WellPoint/Empire drops four non-profit hospitals

WellPoint Unit Drops Stellaris From Network

By Avery Johnson and Suzanne Sataline
The Wall Street Journal
April 2, 2010
A unit of WellPoint Inc. dropped Stellaris Health Network, a four-hospital chain in Westchester, N.Y., from its network after Stellaris asked for a 15% increase in reimbursement payments from the health insurer.
Stellaris says it merely wanted the insurer to pay rates consistent with what it receives from other health plans in the market. “Our non-profit community hospitals can no longer subsidize the record profits of a health-insurance conglomerate,” said Arthur A. Nizza, Stellaris’s president and chief executive, in a statement. Empire asserts charges of overall profitability aren’t relevant to this particular situation.
The decision will affect thousands of members of Empire BlueCross BlueShield, a WellPoint unit in New York, who use the hospital system. Empire has six million members in New York, and Stellaris has been one of its top 10 hospital systems in the state based on size and member utilization.
The failure to reach an agreement, which resulted in the contract being terminated late Wednesday, is the latest in a string of negotiations between hospitals and insurers that have gone hostile.
http://online.wsj.com/article/SB10001424052702303960604575158042406727102.html

It is common to hear hospital administrators complain about low reimbursement rates from Medicare, yet how many terminate their participation in the Medicare program? And of course Medicare never unilaterally terminates a provider except when appropriate in cases of criminal fraud or incompetency that constitutes a hazard to patients.
Yet what happens when a private insurer is the payer? The decision to terminate a contract is strictly a business decision made based on market conditions, having much less to do with the value, quality or necessity of the services being provided, but much more to do with the oligopolistic leverage that the insurer has in the market. The private insurer, based purely on a business decision, is quite willing to disrupt the continuity of health care services for its own customers. And WellPoint/Empire says that their profitability isn’t relevant when it makes these decisions!?
And what will the new reform legislation do to correct these blatant injustices? It will pour more taxpayer funds into the coffers of these intrusive middleman, providing them with even greater leverage in their negotiations with the health care delivery system.
Do we want a health care financing system that is designed to benefit the money managers, or do we want a financing system designed to be sure that health care is there when patients need it? If we favor the latter, then we need to dump the private insurers and adopt an improved Medicare program that takes care of everyone.

Taiwan to move towards more equitable financing

Talk of the day -- Health insurance overhaul nearly ready

By Sofia Wu
Focus Taiwan News Channel
March 30, 2010

The health insurance premium rate will be raised from the current 4.55 percent to 5.17 percent April 1, but Department of Health (DOH) Minister Yaung Chih-liang said Monday the public could end up paying less in premiums when a second-generation health care system is adopted in two years.

Earlier Monday, Yaung briefed Premier Wu Den-yih on draft amendments to the National Health Insurance Act that will pave the way for the introduction of a new generation of health care insurance.

After listening to Yaung’s briefing, Wu said the executive branch will lobby lawmakers to pass the draft package during its current session to allow for an early implementation of the second-generation system.

Under the new system, premiums will be paid by the insured, employers and the central government. At present, the government’s contribution is financed by both central and local governments.

The new system will calculate premiums based on total household income (including wages, stock dividends, rental income and other unearned income) instead of the current model that considers only the insureds’ salaries or earned income.

Yaung said the new system will be more equitable, as wealthy households whose income does not mainly rely on earned income will have to pay higher premiums.

http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aALL&ID=201003300010

Comment: 

By Don McCanne, MD

Taiwan’s single payer system has been phenomenally successful, though they, like all other nations, have had to confront increases in health care costs. Under the current financing system it has become necessary to increase the percent of income paid as insurance premiums, to the displeasure of the citizens of Taiwan. That has prompted recommendations to improve the financing system.

The most important change is to shift from a premium based on a percentage of earned income to a percentage of all household income, including wages, stock dividends, rental income and other unearned income. The obvious impact of this is to make the contribution more equitable by increasing the progressive nature of the health care tax. This acknowledges the necessity of instituting a transfer not only from the healthy to the sick, but also from the wealthy to those with more modest incomes. Costs are too high to do otherwise.

Another change is to eliminate the contribution of local governments, which frequently struggle with their budgets, and to shift the full responsibility for the government contribution to the central government.

When you think about, we’ve already adopted these principles for our Medicare program. The program was established as a federally funded program, unlike Medicaid which depends on state funding as well. Also, the reconciliation bill just signed by President Obama includes a Medicare tax on the unearned income of wealthier individuals.

But there is one glaring difference between the approaches of Taiwan and the United States. Taiwan uses an exceptionally efficient single payer system that covers everyone, whereas we lose almost all of the advantages of the single payer model by limiting our Medicare program to less than 15 percent of our population.

It’s great that we’ve accepted the principle of equitable financing of health care, but wouldn’t you think that our government stewards would be smart enough to know that we also need a stable, efficient financing infrastructure, if for no other reason than to ensure that everyone benefits from equitable financing? The Taiwanese stewards have already figured that one out.

Taiwan to move towards more equitable financing

Talk of the day — Health insurance overhaul nearly ready

By Sofia Wu
Focus Taiwan News Channel
March 30, 2010
The health insurance premium rate will be raised from the current 4.55 percent to 5.17 percent April 1, but Department of Health (DOH) Minister Yaung Chih-liang said Monday the public could end up paying less in premiums when a second-generation health care system is adopted in two years.
Earlier Monday, Yaung briefed Premier Wu Den-yih on draft amendments to the National Health Insurance Act that will pave the way for the introduction of a new generation of health care insurance.
After listening to Yaung’s briefing, Wu said the executive branch will lobby lawmakers to pass the draft package during its current session to allow for an early implementation of the second-generation system.
Under the new system, premiums will be paid by the insured, employers and the central government. At present, the government’s contribution is financed by both central and local governments.
The new system will calculate premiums based on total household income (including wages, stock dividends, rental income and other unearned income) instead of the current model that considers only the insureds’ salaries or earned income.
Yaung said the new system will be more equitable, as wealthy households whose income does not mainly rely on earned income will have to pay higher premiums.
http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aALL&ID=201003300010

Taiwan’s single payer system has been phenomenally successful, though they, like all other nations, have had to confront increases in health care costs. Under the current financing system it has become necessary to increase the percent of income paid as insurance premiums, to the displeasure of the citizens of Taiwan. That has prompted recommendations to improve the financing system.
The most important change is to shift from a premium based on a percentage of earned income to a percentage of all household income, including wages, stock dividends, rental income and other unearned income. The obvious impact of this is to make the contribution more equitable by increasing the progressive nature of the health care tax. This acknowledges the necessity of instituting a transfer not only from the healthy to the sick, but also from the wealthy to those with more modest incomes. Costs are too high to do otherwise.
Another change is to eliminate the contribution of local governments, which frequently struggle with their budgets, and to shift the full responsibility for the government contribution to the central government.
When you think about, we’ve already adopted these principles for our Medicare program. The program was established as a federally funded program, unlike Medicaid which depends on state funding as well. Also, the reconciliation bill just signed by President Obama includes a Medicare tax on the unearned income of wealthier individuals.
But there is one glaring difference between the approaches of Taiwan and the United States. Taiwan uses an exceptionally efficient single payer system that covers everyone, whereas we lose almost all of the advantages of the single payer model by limiting our Medicare program to less than 15 percent of our population.
It’s great that we’ve accepted the principle of equitable financing of health care, but wouldn’t you think that our government stewards would be smart enough to know that we also need a stable, efficient financing infrastructure, if for no other reason than to ensure that everyone benefits from equitable financing? The Taiwanese stewards have already figured that one out.

Cerberus Capital provides another Massachusetts lesson for U.S.

Seeking lower-cost care

By Steven Syre and Robert Gavin
The Boston Globe
March 30, 2010

The New York private equity firm that last week struck a deal to buy Caritas Christi Health Care could build the chain of six Catholic community hospitals into a competitive lower-cost provider of medical services in Massachusetts, touting it as a profitable national business model in the age of health care reform, analysts say.

Caritas, which also includes a physicians network, could become a new cost-conscious option for more patients under such a system.

Cerberus Capital Management plans to invest $830 million to acquire Caritas Christi and turn the charity into a for-profit venture. The investment, which includes money to reduce debt and invest in renovations and upgrades, would appear to be a steep price for the Caritas business as it exists today.

But the hospitals could emerge as an attractive lower-cost alternative to Boston’s big teaching hospitals as health care reform moves forward soon in Massachusetts and later across the country. And, as reforms aimed at controlling costs take effect, an increasing number of health insurance policies may well offer patients a choice: Go to a famous teaching hospital and pay more or go elsewhere and spend less.

If the ambitious plan works, it could eventually mean a sizable payoff for Cerberus and its investors, said Howard Anderson, senior lecturer at MIT’s Sloan School of Management. With a successful health care business, Cerberus could cash out by taking the company public and selling stock to investors, or by selling the chain to another for-profit health care firm.

http://www.boston.com/business/healthcare/articles/2010/03/30/caritas_christi_could_carve_out_a_lower_cost_niche_under_new_owner/

Comment: 

By Don McCanne, MD

Massachusetts has been held up as a model on which our new federal health financing program is based. The purchase of Caritas Christi Health Care by Cerberus Capital Management may give us a hint as to what efforts under such a reform model might be made to slow the growth in health care costs.

Cerberus Capital Management plans to convert Caritas Christi into “an attractive lower-cost alternative” to Boston’s expensive teaching hospitals.

Their concept of lowering costs is right out of the book on the promised rewards of free markets. They are going to take a chain of low-cost charity hospitals and convert it into a for-profit venture. Then they are going to reap a “sizable payoff” by cashing out, either by taking the company public and selling stock to investors, or by selling the chain to another for-profit health care firm.

The model of reform that has just been enacted expands the lucrative health care marketplace for opportunists such as these venture capitalists. These entities will be crawling out of the woodwork to try to glom on to a share of the massive infusion of tax dollars to be redistributed by the private insurance companies. Should we really have expected anything else?

It’s not too late to regroup and do it right.