Health insurance shoppers, be wise

By Bobby Caina Calvan
The Sacramento Bee
November 3, 2008
For those fortunate enough to have health insurance, let the head scratching begin (during open enrollment): Option 1 or Option 2? Routine, Choice or Select? PPO or HMO?
Experts say the year-end ritual is an oft-neglected process that deserves focused consideration from consumers, many of whom race through the insurance paperwork with utter terror.
Their decisions have far-reaching consequences.
“It can become a very expensive mistake if they go eenee, meenee, mynee, moe,” said Patricia Feathers, a customer service agent at Placer West Insurance Services in Lincoln. “Making the right choice means staving off bankruptcy and getting the right coverage.”
An ill-informed decision during open enrollment is usually locked in for a year, sometimes more.
But only one in 10 people express confidence in their understanding of their health coverage, according to another survey by the insurer CIGNA.
“When I talk to people, the problem over and over again is that people don’t have the knowledge they need to make an informed decision,” said Karen Kocher, CIGNA’s chief learning officer.
Employees often “default into their existing plans, opt for the cheapest plan, thinking they will save money in the long run.”
The better strategy, experts say, is to have a realistic assessment of health care needs, including an honest look at where health care dollars were spent in the previous year.
http://www.sacbee.com/101/story/1365091.html

What health insurance coverage will you need next year? Do you determine that by taking an honest look at where health care dollars were spent in the previous year? You are healthy, your health care spending has been negligible, so do you opt for the least expensive plan?
What about next year? Will you have a heart attack? Will you rupture an intracranial aneurysm and require prolonged rehabilitation services? Will you experience the onset of diabetes? Will an unpredictable accident result in extensive injuries, perhaps with permanent neurological impairment? Will you develop an autoimmune disease such as lupus? Multiple sclerosis? Will you develop cancer? If so, which cancer and how involved and protracted will the treatment program be?
Next year’s medical catastrophe, whether acute or chronic, can belong to any of us. That is why everyone of us requires a program that would enable us to access the health care that we need without having to face a financial catastrophe as well. That is a program that everyone would want, if they could afford it.
So why do 90 percent of people lack confidence in understanding their health coverage options? Well, they are confusing. None of the options offer full coverage for everything. All of them attempt to keep the premiums affordable by reducing what is covered. There are endless variations in lists of authorized providers, benefits covered, deductibles, co-payments, coinsurance, tiering, payment caps, and other features that are impossible to sort out when you don’t even know what your needs will be.
What they have in common is that they all decrease, to varying degrees, the security that your health care coverage will provide. You are asked to place a bet now. A larger wager will provide somewhat more security, but none of that wager can be recovered if you end up not needing medical care, which makes you pause before you select that option. (HSAs are not an exception since they are merely segregated savings accounts and not pooled-risk funds; someone else’s HSA would not pay your medical bills.) A smaller wager puts less of a crimp in your budget, but at the cost of losing the security of not being exposed to significant medical debt should the need for care arise.
When all of us want a plan that will provide us with the care that we need, when we need it, without having to face financial penalties for being sick or injured, we really need only one day of open enrollment: the day that we are born. That is the day that each of us would be enrolled in a single payer national health program that is open to all of us forever.

By Bobby Caina Calvan
The Sacramento Bee
November 3, 2008

For those fortunate enough to have health insurance, let the head scratching begin (during open enrollment): Option 1 or Option 2? Routine, Choice or Select? PPO or HMO?

Experts say the year-end ritual is an oft-neglected process that deserves focused consideration from consumers, many of whom race through the insurance paperwork with utter terror.

Their decisions have far-reaching consequences.

“It can become a very expensive mistake if they go eenee, meenee, mynee, moe,” said Patricia Feathers, a customer service agent at Placer West Insurance Services in Lincoln. “Making the right choice means staving off bankruptcy and getting the right coverage.”

An ill-informed decision during open enrollment is usually locked in for a year, sometimes more.

But only one in 10 people express confidence in their understanding of their health coverage, according to another survey by the insurer CIGNA.

“When I talk to people, the problem over and over again is that people don’t have the knowledge they need to make an informed decision,” said Karen Kocher, CIGNA’s chief learning officer.

Employees often “default into their existing plans, opt for the cheapest plan, thinking they will save money in the long run.”

The better strategy, experts say, is to have a realistic assessment of health care needs, including an honest look at where health care dollars were spent in the previous year.

http://www.sacbee.com/101/story/1365091.html

Comment:

By Don McCanne, MD

What health insurance coverage will you need next year? Do you determine that by taking an honest look at where health care dollars were spent in the previous year? You are healthy, your health care spending has been negligible, so do you opt for the least expensive plan?

What about next year? Will you have a heart attack? Will you rupture an intracranial aneurysm and require prolonged rehabilitation services? Will you experience the onset of diabetes? Will an unpredictable accident result in extensive injuries, perhaps with permanent neurological impairment? Will you develop an autoimmune disease such as lupus? Multiple sclerosis? Will you develop cancer? If so, which cancer and how involved and protracted will the treatment program be?

Next year’s medical catastrophe, whether acute or chronic, can belong to any of us. That is why everyone of us requires a program that would enable us to access the health care that we need without having to face a financial catastrophe as well. That is a program that everyone would want, if they could afford it.

So why do 90 percent of people lack confidence in understanding their health coverage options? Well, they are confusing. None of the options offer full coverage for everything. All of them attempt to keep the premiums affordable by reducing what is covered. There are endless variations in lists of authorized providers, benefits covered, deductibles, co-payments, coinsurance, tiering, payment caps, and other features that are impossible to sort out when you don’t even know what your needs will be.

What they have in common is that they all decrease, to varying degrees, the security that your health care coverage will provide. You are asked to place a bet now. A larger wager will provide somewhat more security, but none of that wager can be recovered if you end up not needing medical care, which makes you pause before you select that option. (HSAs are not an exception since they are merely segregated savings accounts and not pooled-risk funds; someone else’s HSA would not pay your medical bills.) A smaller wager puts less of a crimp in your budget, but at the cost of losing the security of not being exposed to significant medical debt should the need for care arise.

When all of us want a plan that will provide us with the care that we need, when we need it, without having to face financial penalties for being sick or injured, we really need only one day of open enrollment: the day that we are born. That is the day that each of us would be enrolled in a single payer national health program that is open to all of us forever.

Frequently asked questions about the AMA proposal for reform

American Medical Association
October 2008
Q: What are the basic principles of the AMA proposal?
A: The American Medical Association (AMA) proposes that individuals and families receive financial assistance to purchase a health plan of their choice, with more generous assistance to those with lower incomes. The financial assistance could take the form of tax credits or vouchers and must be earmarked for health insurance coverage. Health insurance market regulations should be reformed to establish fair “rules of the game” that protect vulnerable individuals, without unduly driving up premiums for the rest of the population.
Q: How is the AMA proposal different or better than a single-payer system?
A: Both the AMA and the single-payer approaches emphasize the same goal of universal coverage, but they differ on how to implement it. The AMA does not believe that full government control is a workable model for the United States. Single-payer systems are plagued with an undersupply of medical personnel, long waiting periods and a lack of patient choice. Alternatively, the AMA proposal seeks to enhance patient choice and encourage patients to be conscious of health insurance costs, while also maintaining innovation in the private sector.
http://www.voicefortheuninsured.org/pdf/08-1103-FAQ-Proposal.pdf

The AMA is trying. During this presidential election season, the AMA has initiated an intensive “Voice for the Uninsured” campaign in support of their model of reform. Unfortunately, the policies behind their version of reform would fall far short of achieving the goal of affordable, comprehensive health care for everyone. Their feeble and deceptive effort to explain why their proposal is better than single payer reveals the fact that that the AMA is still controlled by those ideologically opposed to a national health program.
One of their basic principles is that “insurance market regulations should be reformed to establish fair ‘rules of the game’ that protect vulnerable individuals, without unduly driving up premiums for the rest of the population.” Presumably insurance market regulations that protect vulnerable individuals would mean that plans must prevent financial hardship for those who need health care. Even the average employer-sponsored family plan (at $12,600) may not be adequate because of deductibles and other cost sharing requirements. To be effective in protecting personal finances, these plans must be quite comprehensive and will require very high premiums.
Yet the AMA states that these plans must not unduly drive up premiums for the rest of the population. That is an impossibility. The only way you can keep premiums low is to segregate the healthy in isolated risk pools (but then these pools wouldn’t work for those who end up needing medical care because of the high cost sharing used to keep the premiums low). If you were to isolate those with high medical expenses in pools providing comprehensive coverage, the premiums would be so high that the many who are healthy would have to finance most of the costs.
Of course that is why the AMA has recommended taxpayer financed subsidies to help pay those premiums. But how could you ever make that equitable? Imagine the complexities of setting premiums in a fragmented system of unstable and inequitable risk pools, and then providing tax subsidies (credits or vouchers) that would vary with ever changing income levels. And for that we would continue to accept private insurance plans that burn up hundreds of billions of dollars in administrative waste, while remaining incapable of directing our health care dollars to where they would do the most good. Supporting a model with excess costs and greater inefficiency doesn’t make sense.
Regarding single payer, the AMA labels that as “full government control.” It is hard to know what that means when the health care delivery system remains private. About sixty percent of our health care is already financed through taxes. Single payer systems typically finance about seventy percent (though more would improve efficiency). “Full government control” is merely intended as a pejorative label that has little policy application. That label could backfire on the AMA since many Americans are now concerned that the government has not been doing enough.
The AMA states that single payer systems are “plagued with an undersupply of medical personnel.” Massachusetts has a program not unlike that supported by the AMA. Tell the people of Massachusetts that the primary care physicians that they can’t find are really there in great supply. Tell the patients behind the curtains in the upstairs hallways that we don’t have an undersupply of safety-net beds. Tell the patients on Medicaid or in Community Health Centers that we don’t have an undersupply of willing specialists. Tell the ambulance drivers who are waved past full emergency departments that we don’t have an undersupply of emergency facilities. The fact is that publicly administered programs are more capable of identifying needs and redirecting resources to where they would do the most good.
The AMA says that single payer systems cause long waiting periods. Tell that to the tens of millions of individuals in the United States who are not even allowed a place in the queue. Tell that to insured patients who may have to wait months for an appointment with a specialist. Tell that to the authors of the OECD report which demonstrated that many nations with public systems have been successful in reducing and even preventing excessive queues.
The AMA says that single payer systems cause a lack of patient choice. What does that mean? Most private insurance plans have restricted lists that take away our choice of hospitals, physicians, and other health care professionals. A single payer system gives you this free choice within the health care delivery system. Does the AMA mean a lack of choice of health plans? The only plan that you really want is a plan that allows you to access health care without being assessed a financial penalty for having health problems. Most private health plans do not do that, but a single payer system does.
The AMA states that their proposal, unlike single payer, encourages patients to be “conscious of health insurance costs.” If you look at our individual insurance market where people select their plans based on the amount of the premium, it’s easy to understand what a flawed concept this is. We have had an explosion in innovative underinsurance plans that have left patients with major medical debt, home foreclosures, and even personal bankruptcy. These people are certainly “conscious” of the financial hardship that the private plans exposed them to.
I’m the first to admit that the “Voice for the Uninsured” campaign offers real hope that the AMA has had an epiphany. But that hope will be dashed once again unless the AMA backs up their campaign with sound health policy science.

American Medical Association
October 2008

Q: What are the basic principles of the AMA proposal?

A: The American Medical Association (AMA) proposes that individuals and families receive financial assistance to purchase a health plan of their choice, with more generous assistance to those with lower incomes. The financial assistance could take the form of tax credits or vouchers and must be earmarked for health insurance coverage. Health insurance market regulations should be reformed to establish fair “rules of the game” that protect vulnerable individuals, without unduly driving up premiums for the rest of the population.

Q: How is the AMA proposal different or better than a single-payer system?

A: Both the AMA and the single-payer approaches emphasize the same goal of universal coverage, but they differ on how to implement it. The AMA does not believe that full government control is a workable model for the United States. Single-payer systems are plagued with an undersupply of medical personnel, long waiting periods and a lack of patient choice. Alternatively, the AMA proposal seeks to enhance patient choice and encourage patients to be conscious of health insurance costs, while also maintaining innovation in the private sector.

http://www.voicefortheuninsured.org/pdf/08-1103-FAQ-Proposal.pdf

Comment:

By Don McCanne, MD

The AMA is trying. During this presidential election season, the AMA has initiated an intensive “Voice for the Uninsured” campaign in support of their model of reform. Unfortunately, the policies behind their version of reform would fall far short of achieving the goal of affordable, comprehensive health care for everyone. Their feeble and deceptive effort to explain why their proposal is better than single payer reveals the fact that that the AMA is still controlled by those ideologically opposed to a national health program.

One of their basic principles is that “insurance market regulations should be reformed to establish fair ‘rules of the game’ that protect vulnerable individuals, without unduly driving up premiums for the rest of the population.” Presumably insurance market regulations that protect vulnerable individuals would mean that plans must prevent financial hardship for those who need health care. Even the average employer-sponsored family plan (at $12,600) may not be adequate because of deductibles and other cost sharing requirements. To be effective in protecting personal finances, these plans must be quite comprehensive and will require very high premiums.

Yet the AMA states that these plans must not unduly drive up premiums for the rest of the population. That is an impossibility. The only way you can keep premiums low is to segregate the healthy in isolated risk pools (but then these pools wouldn’t work for those who end up needing medical care because of the high cost sharing used to keep the premiums low). If you were to isolate those with high medical expenses in pools providing comprehensive coverage, the premiums would be so high that the many who are healthy would have to finance most of the costs.

Of course that is why the AMA has recommended taxpayer financed subsidies to help pay those premiums. But how could you ever make that equitable? Imagine the complexities of setting premiums in a fragmented system of unstable and inequitable risk pools, and then providing tax subsidies (credits or vouchers) that would vary with ever changing income levels. And for that we would continue to accept private insurance plans that burn up hundreds of billions of dollars in administrative waste, while remaining incapable of directing our health care dollars to where they would do the most good. Supporting a model with excess costs and greater inefficiency doesn’t make sense.

Regarding single payer, the AMA labels that as “full government control.” It is hard to know what that means when the health care delivery system remains private. About sixty percent of our health care is already financed through taxes. Single payer systems typically finance about seventy percent (though more would improve efficiency). “Full government control” is merely intended as a pejorative label that has little policy application. That label could backfire on the AMA since many Americans are now concerned that the government has not been doing enough.

The AMA states that single payer systems are “plagued with an undersupply of medical personnel.” Massachusetts has a program not unlike that supported by the AMA. Tell the people of Massachusetts that the primary care physicians that they can’t find are really there in great supply. Tell the patients behind the curtains in the upstairs hallways that we don’t have an undersupply of safety-net beds. Tell the patients on Medicaid or in Community Health Centers that we don’t have an undersupply of willing specialists. Tell the ambulance drivers who are waved past full emergency departments that we don’t have an undersupply of emergency facilities. The fact is that publicly administered programs are more capable of identifying needs and redirecting resources to where they would do the most good.

The AMA says that single payer systems cause long waiting periods. Tell that to the tens of millions of individuals in the United States who are not even allowed a place in the queue. Tell that to insured patients who may have to wait months for an appointment with a specialist. Tell that to the authors of the OECD report which demonstrated that many nations with public systems have been successful in reducing and even preventing excessive queues.

The AMA says that single payer systems cause a lack of patient choice. What does that mean? Most private insurance plans have restricted lists that take away our choice of hospitals, physicians, and other health care professionals. A single payer system gives you this free choice within the health care delivery system. Does the AMA mean a lack of choice of health plans? The only plan that you really want is a plan that allows you to access health care without being assessed a financial penalty for having health problems. Most private health plans do not do that, but a single payer system does.

The AMA states that their proposal, unlike single payer, encourages patients to be “conscious of health insurance costs.” If you look at our individual insurance market where people select their plans based on the amount of the premium, it’s easy to understand what a flawed concept this is. We have had an explosion in innovative underinsurance plans that have left patients with major medical debt, home foreclosures, and even personal bankruptcy. These people are certainly “conscious” of the financial hardship that the private plans exposed them to.

I’m the first to admit that the “Voice for the Uninsured” campaign offers real hope that the AMA has had an epiphany. But that hope will be dashed once again unless the AMA backs up their campaign with sound health policy science.

Medical Tourism Causes Complications

By Christina L. Madden
Carnegie Council
Policy Innovations
October 27, 2008
Approximately 750,000 Americans traveled overseas for medical treatment in 2007, and the number of so-called medical tourists could increase to more than 15 million in 2017.
Overall the effects of medical tourism are mixed. On the one hand, the industry can boost a developing country’s gross domestic product and investment in health facilities. Upgrades in a country’s hospitals also tend to decrease external brain drain, as top physicians find local jobs instead of leaving for employment in developed nations.
In many cases, however, medical tourism threatens to exacerbate unequal access to quality health care in developing countries. Although relatively cheap by most Western standards, the private hospitals that treat foreigners are out of reach for the majority of people, and the revenue they bring in rarely makes its way to the public sector.
External brain drain is often replaced by internal brain drain, as doctors leave public health care centers to work in private hospitals.
Medical tourism is not an alternative to significant reform of the U.S. health care industry. Aside from the negative effects on public health overseas… medical tourism is not predicted to reduce the country’s health spending by more than 1 to 2 percent.
By introducing global competition to an industry that’s long been considered immune to outsourcing, medical tourism may up the ante on reforming coverage, cost, and quality at home.
http://www.policyinnovations.org/ideas/briefings/data/000083

Previous studies have shown that one of the reasons that health care is so expensive in the United States is that, quite simply, our prices are very high. Since other nations have been demonstrated to be capable of selectively providing high quality care at much lower prices, it is not surprising that medical tourism has become an attractive option for those paying the bills, including cash-paying patients, some insurers and some employers.
For those who believe that health care financing should be a function of markets, medical tourism would have a prominent place in the menu of options. For those who believe that health care systems should provide everyone with the best options available in an egalitarian system, both for us in the United States and for the people of other nations, medical tourism is a troublesome development.
As this article describes, medical tourism is further impairing public health programs in developing nations. In our quest for a high performance system in the United States, we must be very careful to avoid the unintended consequence of inflicting damage on the health systems of other nations.

By Christina L. Madden
Carnegie Council
Policy Innovations
October 27, 2008

Approximately 750,000 Americans traveled overseas for medical treatment in 2007, and the number of so-called medical tourists could increase to more than 15 million in 2017.

Overall the effects of medical tourism are mixed. On the one hand, the industry can boost a developing country’s gross domestic product and investment in health facilities. Upgrades in a country’s hospitals also tend to decrease external brain drain, as top physicians find local jobs instead of leaving for employment in developed nations.

In many cases, however, medical tourism threatens to exacerbate unequal access to quality health care in developing countries. Although relatively cheap by most Western standards, the private hospitals that treat foreigners are out of reach for the majority of people, and the revenue they bring in rarely makes its way to the public sector.

External brain drain is often replaced by internal brain drain, as doctors leave public health care centers to work in private hospitals.

Medical tourism is not an alternative to significant reform of the U.S. health care industry. Aside from the negative effects on public health overseas… medical tourism is not predicted to reduce the country’s health spending by more than 1 to 2 percent.

By introducing global competition to an industry that’s long been considered immune to outsourcing, medical tourism may up the ante on reforming coverage, cost, and quality at home.

http://www.policyinnovations.org/ideas/briefings/data/000083

Comment:

By Don McCanne, MD

Previous studies have shown that one of the reasons that health care is so expensive in the United States is that, quite simply, our prices are very high. Since other nations have been demonstrated to be capable of selectively providing high quality care at much lower prices, it is not surprising that medical tourism has become an attractive option for those paying the bills, including cash-paying patients, some insurers and some employers.

For those who believe that health care financing should be a function of markets, medical tourism would have a prominent place in the menu of options. For those who believe that health care systems should provide everyone with the best options available in an egalitarian system, both for us in the United States and for the people of other nations, medical tourism is a troublesome development.

As this article describes, medical tourism is further impairing public health programs in developing nations. In our quest for a high performance system in the United States, we must be very careful to avoid the unintended consequence of inflicting damage on the health systems of other nations.

Primary Health Care – Now More Than Ever

World Health Organization
October 14, 2008
The World Health Report 2008 critically assesses the way that health care is organized, financed, and delivered in rich and poor countries around the world. The WHO report documents a number of failures and shortcomings that have left the health status of different populations, both within and between countries, dangerously out of balance.
Inequities in access to care and in health outcomes are usually greatest in cases where health is treated as a commodity and care is driven by profitability. The results are predictable: unnecessary tests and procedures, more frequent and longer hospital stays, higher overall costs, and exclusion of people who cannot pay.
To steer health systems towards better performance, the report calls for a return to primary health care (PHC), a holistic approach to health care formally launched 30 years ago. When countries at the same level of economic development are compared, those where health care is organized around the tenets of primary health care produce a higher level of heath for the same investment.
This report structures the PHC reforms in four groups that reflect the convergence between the evidence on what is needed for an effective response to the health challenges of today’s world, the values of equity, solidarity and social justice that drive the PHC movement, and the growing expectations of the population in modernizing societies: reforms that ensure

• that health systems contribute to health equity, social justice and the end of exclusion, primarily by moving towards universal access and social health protection — UNIVERSAL COVERAGE REFORMS;
• reforms that reorganize health services as primary care, i.e. around people’s needs and expectations, so as to make them more socially relevant and more responsive to the changing world while producing better outcomes — SERVICE DELIVERY REFORMS;
• reforms that secure healthier communities, by integrating public health actions with primary care and by pursuing healthy public policies across sectors — PUBLIC POLICY REFORMS;
• reforms that replace disproportionate reliance on command and control on one hand, and laissez-faire disengagement of the state on the other, by the inclusive, participatory, negotiation-based leadership required by the complexity of contemporary health systems — LEADERSHIP REFORMS.

In high-expenditure health economies, which is the case of most high-income countries, there is ample financial room to accelerate the shift from tertiary to primary care, create a healthier policy environment and complement a well-established universal coverage system with targeted measures to reduce exclusion.
Even in the United States, its exceptionalism stems not from lower public expenditure… but from its singularly high additional private expenditure. The persistent under-performance of the United States health sector across domains of health outcomes, quality, access, efficiency and equity, explains opinion polls that show increasing consensus of the notion of government intervention to secure more equitable access to essential health care.
http://www.who.int/mediacentre/news/releases/2008/pr38/en/index.html
Primary Health Care – Now More Than Ever (148 page PDF):
http://www.who.int/whr/2008/whr08_en.pdf

The World Health Report 2008 provides a critical assessment of health care systems throughout the world. It describes how all nations, regardless of national wealth, can benefit by enacting reforms organized around primary health care.
In reading the various experiences of other nations, it is almost shocking to see how infrequently the most expensive health system of all, that of the United States, is mentioned as an example of how reform can work. But then it is understandable when other nations single our system out for its exceptionalism – a system with “singularly high additional private expenditure” that persistently underperforms “across domains of health outcomes, quality, access, efficiency and equity.”
For a proper perspective of what we do have and what we could have, this report should be required reading.