Two News Stories that Help to Make It Clear Why We Need Comprehensive Health Care Reform

Big insurers spend much less on medical care than previously reported

Dow Jones Newswire reports that a US Senate Commerce Committee investigation found that the six largest US health insurers spent less on medical care than what industry officials estimated. Of the total amount received in premiums by the companies in the individual insurance market, 74 cents of every dollar were spent on medical care, according to a review of publicly available of data on industry earnings. Meanwhile, America's Health Insurance Plans estimated that the industry spent an average of 87 cents of every premium dollar on medical care. Click Here for Complete Story

HMOs planning large 2010 premium increases despite strong 3Q earnings.

Forbes Magazine notes that although "most of the major managed-care companies" have announced strong 3Q results, the message "during this earnings season is that HMOs are focused on rebuilding margins, even if it makes insurance even less affordable." Goldman Sachs analyst Matthew Borsch "calls it 'the highest pricing trend in years.' The premium increases he's seeing are in the neighborhood of 13 to 15 percent for next year." Analysts say HMOs are concentrating on making up for operating profit margins, which "reached zero last year for the industry as whole." Moreover, the companies not only want recompense for the "higher costs" they incurred this year from COBRA, they must "cover rising ordinary medical costs that show no signs of slowing down." Barclays analyst Joshua Raskin predicts overall health spending in 2010 will "climb 9 percent."

Click here for the complete story

Is there a Health Plan proposal that stands out in the Presidential Race? I think so!

On October 23, 2007 , Democratic Presidential Candidate Sen. Joseph R. Biden Jr. of Delaware unveiled a health care plan that would provide health insurance for all children, provide more coverage options for adults, and focus on disease prevention and modernizing the nation's health care system.

Biden's plan would permit uninsured Americans to buy into an insurance program similar to the one that provides health care benefits to federal employees and members of Congress. People would pay on a sliding scale based on income. Biden's proposal would continue the Medicare program, and inaddition, allow people between the ages of 55 and 64 to buy into the Medicare program, with the federal government providing a subsidy to low-income individuals.

The State Children's Health Insurance Program (SCHIP) would be expanded to children in families with incomes of 300 percent of the federal poverty level or below. This equates to $61,950 for a family of four, and coverage to children in the family would be extended to at least age 21. Biden's plan also would have the federal government "reinsure" 75 percent of the cost of catastrophic health costs for cases exceeding $50,000 per individual, in order to help keep the cost of the commercial plans low.

Senator Biden has said that if he is elected, he would convene a meeting, within the first 90 days of his administration, with all players involved in health care, in hopes of making coverage both universal and affordable. "Getting this done will require the kind of experience and leadership that comes from years of success corralling bipartisan support for numerous issues," he said. "I have that experience and it will prove invaluable when I am president."

Here are some other important elements of Biden's plan:

• Eliminate co-payments for physicals, vaccinations, vision and hearing screenings, and preventative dental checkups for children of all income levels.
• Prohibit employers and insurers from collecting or using genetic discrimination when making decisions about hiring or providing health care coverage, including the cost of a policy.
• Invest at least $1 billion yearly to help hospitals, physicians, and other health care providers move to electronic health records systems.
• Add 100,000 new nurses to the workforce in the next five years and establish scholarship and loan repayment programs to encourage people to join the public health workforce.

After reviewing all of the plan proposals from the Democratic and Republican candidates for president that have so far been released, this plan seems like the best to me! It combines the strengths of our private insurance system with intelligent government subsidy for those who need it. It also encourages access to needed types of primary care in order to improve quality and decrease cost. It addresses a growing problem of older adults not yet able to join Medicare, ensures treatment for children, and covers the large group of younger adults who are ignored by most other proposals. Most importantly, this plan avoids the "false choice" between pouring more money into our dysfunctional current system, or going to a government take over of health care. It is an intelligent middle way, that includes important reforms along with intelligent funding.

One of my adult daughters has given money to the Biden campaign based on her support of this proposal, and I hope this plan receives a great deal of attention and debate!

Click here to read more from the Biden Campaign

Why Doesn't My Doctor's Office Take My New Insurance Plan?

Many people who get medical insurance through their employer have had the experience of the plan being changed by their employer from year to year. Usually the employer does this to save money on the premiums that they pay on behalf of the employee, and any other considerations are of a very secondary importance. This can be frustrating to employees, however, who may find that their personal physician either does not accept the new insurance, or is not a "preferred provider", which means that they will have to pay more for their care. Why don't doctors take every insurance? Here is a recent story that I am familiar with here in the Northwest.

A prominent employer was recently purchased by a new parent company, which made the decision to change the employee medical plan as part of cost savings measures. This medical plan they chose was not very active in the area, and so the plan gave the employer a very inexpensive price to try and "buy their business" and get a foothold in the community. Trouble was, very few doctors in the community had signed up with that plan. The local doctors were not consulted as to why they did not participate, and the employees of the company were not involved in the decision. It probably never even occurred to the company officials that their action might affect others in the community. Either that, or they did not care.

Suddenly, doctors were confronted with hundreds of their long time clients who presented their plan and asked for the office to sign a contract with their new insurance. It turns out that the doctors offices had not signed up with this company on purpose, due to the way the plan did business. Anxious to learn if things might have changed, one doctors group undertook a survey of medical practices in other areas that were already working with the plan. They learned that working with this plan was a disaster. Here are some of the specific problems they uncovered:

• Doctors offices were forced to call customer service lines that were almost always busy, making it difficult to ask questions and get assistance
  
• Customer service would frequently "transfer" calls which then became disconnected, starting the cycle of trying to get through again.
• Customer service would frequently say they are going to reprocess a claim that was "lost" but then it would not happen
  
• Most customer service calls are handled from India or Jamaica, by individuals who could not make a decision or really help. Often there is a lack of understanding from the person due to language barriers.
• Payments for doctors services were artificially low, and grouped services together, only paying for one of them
  
• Large, multispecialty clinics that could profit from expensive tests and procedures signed up and could afford the losses in primary care because they were able to make it up on their high ticket items, but the primary care clinics could not make it pay
  
• The company's corporate practices often drove a wedge between the patient and the physician on several levels such as:
• Inefficient claims process that loses claims but insists they were never billed and then blames the doctors office to the patient who complains
  
• Requirements for multiple pre-authorization requests from the doctors office, even for routine care, but then hours are wasted trying to get through. An example is the requirement that the doctors office call them when a patient is in the hospital or is diagnosed as being pregnant. If this is not done "right away" then the later claim for care will not be paid
  
• The plan created a business climate in the area that reduced medical insurance plan availability, since the other plans could not compete with the artificially low prices
  
• Some states have already enacted legislation against this company because of some of their "predatory" business practices

The particular group in question decided once again not to participate with the plan, because to do so would jeopardize their own business and encourage employers to choose the plan. They do try to help their patients, however, by submitting a bill to the insurance company on behalf of the patient. If the claim is not paid, they then transfer it to the patient who gets to deal with their company directly to try and work things out.

Behavior like this from insurance companies is one reason why we have 50% less medical school graduates choosing to go into family medicine than we had when I made that choice in 1975. I believe that employers and citizens need to be more aware of how their choices affect the health care delivery system that they depend on for their care. Our health care "system' is a mess, precisely because of nonsense like this.