HealthLawProf Blog

Medicare Officials to Review Insurers' Commissions

The Washington Post reports that federal health officials, on Friday, said that they will soon address growing concerns about the lucrative commissions that some Medicare insurers plan to pay their agents and brokers this year.  Kevin Freking writes,

In Medicare, the elderly and disabled can enroll in private insurance plans that assume responsibility for covering a participant's health benefits. Those plans get a generous government subsidy and now serve roughly 10 million people. The program is called Medicare Advantage.

Documents obtained from some companies participating in Medicare Advantage show that their agents stand to make $500 to $550 this year for enrolling a beneficiary into one of their plans. In subsequent years, the agents could make another $500 for every year the beneficiary stays with the plan. After five years, an agent could have made more than $2,500, which is quite a jump from previous years.

Such a financial reward is raising concerns that agents and brokers will work too aggressively to enroll people into plans that don't meet their health needs.

"Medicare Advantage plans that have nearly quadrupled agent commissions are putting profits before patients and that's wrong," Sen. Max Baucus, D-Mont., said in a news release Friday. "We can't let seniors remain at risk of being targeted by predatory sales agents looking to make a quick buck."

The Centers for Medicare and Medicaid Services recently issued regulations designed to curb abusive sales tactics in the Medicare Advantage program. The regulations went into effect Oct. 1, the start of the new marketing season. Plans can't begin enrolling new beneficiaries for their 2009 coverage until Nov. 15.

Rep. Pete Stark, D-Calif., urged CMS to consider capping commissions.

"This issue needs to be resolved immediately, before open enrollment begins," Stark said.

Kerry Weems, the acting administrator for CMS, said the agency plans to take action soon.

"We will address the concern and expect to take regulatory action next week," Weems said. "CMS is strongly suggesting that plans keep this in mind as they contemplate making any final arrangements regarding commission structures."

Weems did not elaborate on what regulatory changes will be make. The trade group representing insurers encouraged CMS to take some action.

"We support CMS acting in this area and believe clear and consistent standards are necessary," said Karen Ignagni, president and CEO of America's Health Insurance Plans.

Continue reading "Medicare Officials to Review Insurers' Commissions"

Kennedy Focuses from Home on Health Care Overhaul

The Washington Post reports that Sen. Edward Kennedy is trying to lay the groundwork for a breakthrough on health care reform next year, though many believe the enormous undertaking has been made even more difficult by the troubled economy.  Kevin Freking writes,

Kennedy, aides say, has held several video conferences with lawmakers and staff in recent months as he fights from home to overcome brain cancer. His staff has held more than a dozen meetings in recent weeks with various advocacy and interest groups that will help influence the debate.

"We're carrying it out in his absence, but this is his doing," said an aide who was not identified because he was not authorized to speak publicly. "He's in constant touch with leaders in this effort. This is Senator Kennedy at the helm." The story was first reported by The Washington Times.

Kennedy doesn't want to repeat the steps that some say doomed health care reform under former President Clinton. That means acting quickly when Congress returns to Washington after the election and the holidays. Some say Clinton's political honeymoon was over by the time Congress took up his health care plan.

Kennedy is chairman of the Senate Committee on Health, Education, Labor and Pensions. Sen. Barack Obama's health care plan will be the starting point in Kennedy's efforts. That's a big assumption given that the presidential race is far from over. The Obama plan features many changes that Massachusetts enacted in 2006, such as greater use of government subsidies to help people afford coverage. However, Obama would not require adults to buy health insurance, as Massachusetts did. Obama does have a requirement that children be insured.

Aides would not say where there has been agreement and disagreement among the various interest groups participating in the meetings.

Sen. Max Baucus, D-Mont, said he spoke with Kennedy a few weeks ago. He said turf battles that occurred during past health care debates are a concern, so he will call a meeting of all relevant committee leaders once Congress is back in session. At the same time, Baucus made it clear he's got his own ideas for health care that he will pursue.

"I am quite confident I will introduce a bill at the first of the year on health care. And that would be the approach I think makes the most sense for our country," said Baucus, chairman of the Senate Finance Committee. "I imagine it will have some components of the Obama plan."

Baucus added that he had not spent a lot of time focusing on Obama's health plan, or that of Republican nominee John McCain.

"My major focus has been on what are the problems in our current health care system and what do I think the solutions are," he said in a conference call with Associated Press reporters.

Health care changes under both presidential candidates would be expensive, and the federal government is expected to generate an enormous deficit next year even without incorporating those changes. However, Kennedy is not letting economic woes deter him.

"It's not a question of arithmetic or accounting, it's a question of priorities," an aide said. "When AIG needs the money, somehow the money is found. When Freddie and Fannie need it, somehow the money is found. The theory is they're too big to fail. It can certainly be argued that the health care system is too big to fail, but it's failing for millions of people every day."

Kennedy, 76, underwent a risky, 3 1/2-hour surgery in June to remove as much of a tumor as possible. He has been steadily increasing his public activity since undergoing six weeks of chemotherapy and radiation treatment.

On Health Plans, the Numbers Fly

The New York Times questions whether the statistics and forecasts cited by both presidential candidates in their proposals will carry any weight in the future.  Kevin Sack writes,

Economics, it is said, is the dismal science. Anyone paying close attention to the campaign debate over the economics of health care might wonder about the science part.

As Senators Barack Obama and John McCain battle over how best to control spending and cover the uninsured, they are both filling their speeches, advertisements and debating points with authoritative-sounding statistics about the money they would save and the millions of Americans they would cover.

But the figures they cite are invariably the roughest of estimates, often derived by health economists with ideological leanings or financial conflicts. Over time, these forecasts have become so disparate and contradictory as to be almost meaningless.

How many of the country’s 45 million uninsured would gain coverage under Mr. McCain’s plan to reconfigure the tax treatment of health benefits?

Consultants paid by Mr. McCain concluded that his plan would cover 27.5 million of the uninsured. But four health economists who looked into the McCain plan at the urging of David Cutler, a health care adviser to Mr. Obama, reached a far different conclusion. They estimated in a peer-reviewed article in the journal Health Affairs that the number of uninsured would grow by 5 million after five years.

How much would it cost for Mr. Obama to offer subsidized health insurance to those with low incomes?

Last week, the Lewin Group, a consulting firm, projected the cost to taxpayers at $1.17 trillion over 10 years. That was about 27 percent lower than the $1.6 trillion estimated by the Tax Policy Center, a joint project of the Urban Institute and Brookings Institution. And it bore little similarity to a $6 trillion estimate — using a broader measurement — put forth by HSI Network, a Minnesota consulting group that was paid $50,000 by the McCain campaign to assess both plans.

The campaigns acknowledge that the numbers are “all over the map,” in the words of Jay Khosla, a McCain adviser. But that does not keep them from selectively highlighting the most favorable ones (as when Mr. Obama says his plan will cut insurance premiums by $2,500 per family, or when Mr. McCain says his tax changes will leave 95 percent of Americans with more money).

Even the economists behind the forecasts say it makes them uncomfortable to hear candidates assert their numbers as indisputable fact, as if stating Derek Jeter’s batting average. What they are modeling, they emphasize, is ultimately unknowable. And the transformational nature of both candidates’ health care plans means that they can only guess at the future behavior of consumers, employers and insurers.

“Every candidate should say that these numbers were produced by my experts and they’re my best estimates but they’re not exact,” said Roger D. Feldman, a health economist at the University of Minnesota who directed the HSI studies. “But the campaign trail is not the time for ‘on the one hand, on the other hand.’ It’s a system where you paint things in black and white.”

Dr. Feldman and other economists said politics and relationships did not sway their science. But they said estimates could vary widely because of the assumptions they must factor into their formulas. Often they are flying blind because the campaigns, aware that details make the fiercest enemies, do not provide critical variables. Mr. Obama, for instance, has steadfastly declined to say how he would penalize employers who do not offer health coverage, an important component of his plan.

The economists are often left to use small-scale studies to predict how the candidates’ policies might affect the cost of coverage or the willingness of employers to provide it.

“The uncertainty surrounding what will happen under these policies is huge,” said John F. Sheils, senior vice president of the Lewin Group.

Sherry A. Glied, a Columbia economist and a co-author of the Health Affairs article about the McCain plan, said, “We are estimating what would happen in a world we’ve never seen.”

The more radical the restructuring, the economists said, the more they must assume. And the more they must assume, the greater the chance that ideology may drive methodology.

“It’s garbage in, garbage out,” said Uwe E. Reinhardt, a health economist at Princeton. “Every econometric study is an effort in persuasion. I have to persuade the other guy that my assumptions are responsible. Depending on what I feed into the model, I get totally different answers.”

Katherine Baicker, a health economist at Harvard, said economists’ views about the mechanics of markets were often shaped by their politics, or vice versa. “Certainly people who work for the campaigns have a strong motivation to see things one way or another,” she said, “but even those not involved in campaigns still come to the table with their own prior beliefs.”

Both candidates are surrounded by advisers with extensive backgrounds in health economics, many of whom could be in line for administration jobs.

For Mr. McCain, there are Douglas Holtz-Eakin, a former Congressional Budget Office director; Stephen T. Parente of the University of Minnesota; Thomas P. Miller of the American Enterprise Institute; Gail Wilensky, a health adviser to the first President Bush; Grace-Marie Turner, president of the Galen Institute; and Mr. Khosla, a former Congressional aide.

Mr. Obama receives advice from Mr. Cutler, David Blumenthal and Jeffrey Liebman, all of Harvard; Stuart Altman of Brandeis; Austan Goolsby of the University of Chicago; Jeanne M. Lambrew of the University of Texas; three campaign aides, Heather Higginbottom, Jason Furman and Neera Tanden; and a Senate office staff member, Dora Hughes. Campaign insiders suspect that if Mr. Obama is elected, a significant health-related position may go to Tom Daschle, the former Senate majority leader and an early Obama endorser who recently published a book on the subject with help from Ms. Lambrew.

The conflicts that devalue economic estimates can be both political and financial.

Mr. Obama, for example, has been claiming in speeches and advertisements that Mr. McCain would cut $882 billion in Medicare benefits to pay for his health plan. The number came from the Center for American Progress Action Fund, a Democratic-leaning group with close ties to the Obama campaign (Ms. Lambrew is a fellow).

“Consider the source,” Mr. Holtz-Eakin urged reporters last Friday.

A week earlier, Mr. Holtz-Eakin issued a news release trumpeting the HSI Network analysis of the McCain plan as “an independent assessment.” He did not mention that the campaign had paid for it (an Aug. 27 payment for $50,000 shows up in Mr. McCain’s disclosure filings) or that Mr. Parente is one of the firm’s owners.

Dr. Feldman, whose work is highly regarded, described himself as an Obama supporter and contributor, but he said he preferred Mr. McCain’s health plan. Though he acknowledged that the McCain campaign’s sponsorship was “certainly a potential conflict,” he said he hoped the study might advance a worthy proposal. “I wouldn’t sign off on these things if I didn’t support them,” he said.

A number of economists said voters would be wise to simply tune out all of the competing numbers and focus instead on the philosophical underpinnings of the candidates’ plans. Indeed, Dr. Reinhardt offered voters the same instruction he delivers to his students, that economics as practiced in the political arena is often “just ideology marketed in the guise of science.”

“I give a lecture on whether you can trust economists, and I tell them no,” Dr. Reinhardt said. “I tell them that if at the end of the year I tell you the time of day and you trust me, I have failed.”

Prescription Drug Injuries and Deaths Reach Record Levels

The Los Angeles Times reports that a watchdog group reports that 4,825 deaths and nearly 21,000 injuries occurred in the first three months of 2008. The drugs heparin and varenicline are cited as the most dangerous.  Thomas H. Maugh II writes,

The number of deaths and serious injuries associated with prescription drug use rose to record levels in the first quarter of this year, with 4,825 deaths and nearly 21,000 injuries, a watchdog group said Wednesday.

Those numbers represent a nearly threefold increase in deaths from the previous quarter and a 38% increase in injuries from last year's quarterly average, according to the Horsham, Pa.-based Institute for Safe Medication Practices.

The most dangerous medications were the anti-smoking drug varenicline, which was linked to 1,001 injuries and 50 deaths in the three-month period ending in March, and the blood thinner heparin, which was associated with 779 injuries and 102 deaths.

The data came from voluntary reports of adverse effects to the Food and Drug Administration, which made the data public after stripping information that identified victims. Because the reporting is voluntary, researchers have speculated that fewer than 10% of adverse events actually make it into the system.

The heparin cases were associated with contaminated lots of the drug imported from China. The FDA has reported 238 deaths linked to the blood thinner since January, but the number dwindled once the problem was recognized and addressed.

Varenicline remains a problem, however, according to institute officials. Since the drug -- sold in the United States by Pfizer Inc. under the brand name Chantix -- was approved in 2006, it has been linked to 3,325 serious injuries and 112 deaths.

Some reports were linked to people attempting suicide or causing injury to themselves after using the drug, which can evoke serious psychiatric problems. Others were linked to blackouts, seizures or loss of consciousness, perhaps tied to sudden disturbances in heart rhythm.

Earlier reports by the institute stating that varenicline could lead to lapses in alertness or motor control led the Federal Aviation Administration in May to ban use of the drug by airline pilots and traffic controllers. The Department of Transportation has limited its use by truck drivers, and the Department of Defense has prohibited its use by aircraft and missile crews.

One possible explanation for the link might have been the success of the drug and the large number of people using it, the report said. But investigation showed that, during the quarter, varenicline accounted for more reports of serious injury than the 10 bestselling prescription drugs combined.

The institute called for a stronger risk warning on the Chantix label.

A Pfizer statement released Wednesday speculated that the large number of reports might be linked to the high level of adverse publicity associated with the drug. It noted also that nicotine withdrawal could cause irritability, depressed mood and other changes in behavior.

"Based on the [the] totality of data, we stand by the efficacy and safety profile of Chantix when used as directed," the statement said. "Chantix labeling accurately reflects its efficacy and safety event reports and clinical trial data."

Figures released Tuesday by Pfizer showed U.S. sales of Chantix at $96 million in the third quarter, down 49% from the same period last year.

The increase in deaths during the first quarter was not dominated by any one drug. Instead, 10 drugs each caused more than 100 deaths, compared with an average of one to three drugs in previous quarters.

Many of the reports were linked to powerful painkillers or narcotics such as oxycodone, fentanyl, morphine, methadone and hydrocodone, all of which have a high potential for abuse.

Acetaminophen and ibuprofen were among the top 10 drugs causing both injuries and deaths. The drugs are often used in suicide attempts because they are easily accessible. Overdosing or prolonged usage of either of the over-the-counter medications can cause side effects including gastrointestinal damage and heart attacks.

Big Issue: Voters Look for Answers on Health Care

The Washington Post reports on a survey that shows that 78% of voters say health care is a very important or extremely important issue.  Both presidential candidates have proposed significant changes to the way Americans purchase health insurance.  Julie Pace writes,

Even if the issue doesn't often get star billing on the campaign trail, health care remains a huge issue for voters. It seems like everyone's got a story to tell about their medical challenges and how they do, or don't, get insurance coverage.

An Associated Press-Yahoo News survey taken last month shows that 78 percent of voters say health care is a very important or extremely important issue.

Both presidential candidates have promised that, if elected, they'll propose significant changes to the way Americans purchase health insurance, a process that is often cumbersome, confusing, and that has left 47 million people in the Unites States uninsured.

Republican presidential nominee John McCain is proposing a tax credit of up to $2,500 for individuals and $5,000 for families so people can buy the insurance of their choice. That credit would replace the tax break that people currently get when they obtain health coverage through their employer.

Democrat Barack Obama's plan calls for the government to subsidize health coverage for millions of Americans who otherwise could not afford it. He has also proposed a government-run plan that couldn't turn away people with certain pre-existing health problems.

A look at how three American households grapple with finding and paying for health care:

KRISTOPHER YGLESIAS, 34, Keller, Texas.

Ygelesias doesn't consider himself a gambler, but he knows he's taking a risk by going without health insurance.

The father of three used to pay about $1,000 a month to buy coverage through his employer, but concluded it wasn't worth it.

"I decided I simply can't afford to put that much money out when I don't use it," Yglesias said.

Yglesias now pays for everything from routine doctor's visits to prescriptions in cash. When his third child was born, he arranged a payment plan with the hospital and doctors.

Continue reading "Big Issue: Voters Look for Answers on Health Care"

The Battle of the Medical Bills

The Los Angeles Times reports that doctors and insurers blame each other for an administrative headache that is driving up the nation's healthcare costs.  Daniel J. Costello, Lisa Girion and Michael A. Hiltzik write,

In late 2007, Centinela Hospital in Inglewood was losing nearly $1 million a month and had piled up $15 million in debt. Among the causes of the crisis: $25 million in overdue bills.

Collecting that money would have given Centinela a measure of relief. But the bills went unpaid, and the century-old medical center was sold. The new owners slashed services, closed half the operating rooms and laid off a third of the employees.

Who owed Centinela that elusive $25 million? According to hospital officials, it was health insurance companies.

"Insurers have found a very creative way of denying, delaying or slowing payments in a way that is having a real impact on patient care and some of our survival," said Von Crockett, Centinela's chief executive. "Every single doctor and hospital is writing off money they are legally owed but don't collect. It's an insane situation."

Doctors and hospital executives say collecting payments from insurers has become an expensive headache that is driving up the nation's healthcare costs.

Billing disputes and protracted payment delays are one consequence of a massive consolidation among health insurers that has created de facto monopolies in much of the country, the Los Angeles Times found.

Two decades ago, the top 10 insurers covered about 27% of all insured Americans. Today, four companies -- WellPoint Inc., UnitedHealth Group, Aetna Inc. and Cigna Corp. -- cover more than 85 million people, almost half of all those with private insurance.

A 2007 survey by the American Medical Assn. found that in two-thirds of metropolitan areas, one health insurer controlled at least 50% of the market. In the Los Angeles area, two companies dominate -- Kaiser Permanente and WellPoint's Anthem Blue Cross.

As a result, doctors and hospitals have little negotiating power and few options when an insurer rejects a bill. Some physicians are dropping out of insurance networks or turning away new patients. Others have moved to cash-only practices. Some smaller hospitals and solo-practice physicians say they are being driven out of business entirely.

The insurance industry lays much of the blame for billing problems on doctors and hospitals. Insurers question or reject claims "when we don't get full information or when we get duplicate bills," said Karen Ignagni, president of America's Health Insurance Plans, the industry's lobbying arm in Washington. "Efficiency is a two-way street."

In some cases, she said, insurers are simply trying to ensure that doctors treat patients consistently and in accordance with the highest medical standards -- that they're not wasting premium dollars by overusing costly treatments or ordering unnecessary tests.

"Utilization review is coming back," she said, referring to heightened scrutiny of doctors and hospitals. "You can't run a health plan today without using some of these tools and techniques" to control costs.

But Ignagni acknowledged that billing processes were inordinately complex. She said insurers were aware of providers' complaints and were trying to streamline billing systems.

"No question that administrative simplicity has to be job one," she said.

Reading the fine print in policies

Arcane and ever-changing coverage rules are a leading cause of fee disputes. Patients and physicians are compelled to pay special attention to the fine print in healthcare policies.

Dotti Smith, office manager for a group of surgeons affiliated with St. Mary's Hospital in Long Beach, recently billed a major insurance company for a gallbladder operation. The insurer had preauthorized the surgery and the surgeon was a member of the insurer's network of preferred physicians, Smith said. But the company refused to pay the $3,100 bill.

Why? The patient was enrolled in a subcategory of coverage with a smaller network of doctors that did not include the Long Beach surgeon.

The surgeon's office contacted the patient, who replied that the bill should be her insurer's responsibility.

Continue reading "The Battle of the Medical Bills"

FDA: Incontinence Surgery Linked to Complications

The Washington Post reports that federal officials say a type of mesh used in surgeries to treat severe incontinence, cases of prolapsed uterus and other women's health problems has been linked to serious but infrequent complications.  The Washington Post writes,

The Food and Drug Administration said this week it has received more than 1,000 reports in the last three years of problems with surgical mesh used to repair pelvic organ prolapse and stress urinary incontinence. The mesh is inserted through the vagina, using minimally invasive surgical techniques.

The complications include erosion of the mesh through vaginal tissue, infection, pain and urinary problems. Some patients have experienced a recurrence of the original condition that the surgery was supposed to resolve. Others have had to undergo repeat surgeries to remove the mesh. Some suffered significant loss of quality of life, including pain during sexual intercourse.

The FDA said it has received reports of complications from nine different manufacturers. It is investigating the cause of the problems, which could include the patient's age and overall health, the mesh material and its size and shape, as well as specific techniques used by surgeons.

In the meantime, federal health officials are advising doctors to:

-Get special training for each mesh placement technique, and be aware of risks.

-Follow patients closely for infection and erosion of tissue.

-Watch for complications that could result from instruments used in surgery.

-Fully inform patients about the possible complications.

Health Insurers Reinvent Themselves as Money Managers

The Los Angeles Times reports that many people rush to open banks as more Americans open health savings accounts, a tax-sheltered way to pay medical bills. Managing that money is more profitable than offering health insurance.  Michael A Hiltzik writes,

WellPoint Inc., the nation's largest health insurance company, ran into a snag last year while pursuing an important new business initiative.

Federal banking regulators insisted on classifying WellPoint as a healthcare company. And that was interfering with its efforts to open a bank.

The Federal Reserve Board eventually agreed that the company's core insurance business could be considered financial services. But what about its mail-order pharmacy and its program for managing chronic diseases, which was overseen by WellPoint doctors and nurses? Wasn't that healthcare?

WellPoint finally convinced the Fed that those activities were merely "complementary" to its main business -- financial services. It pledged to limit them to less than 5% of total revenue.

That a medical insurer would agree to keep a lid on healthcare expenditures so it could get approval to open a bank illustrates a fundamental change in the industry: Insurers are moving away from their traditional role of pooling health risks and are reinventing themselves as money managers -- providers of financial vehicles through which consumers pay for their own healthcare.

Like home and auto insurance, traditional health coverage is based on shared risks within broad populations of customers: a small proportion with big medical expenses and a large majority with few or none. Premiums paid by the latter help pay the costs incurred by the others and provide a margin of profit. In theory, this system serves everyone's interests, because people generally can't know in advance which group they'll fall into.

For several decades, health insurance has been retreating from this paradigm.

A sea change occurred in the 1970s, when large employers began self-insuring medical costs, in part because a new federal law exempted self-insured plans from state regulation.

Insurance companies began remaking themselves as administrators, providing employers with expert help in processing claims and negotiating rates with doctor groups and hospitals. Profit margins on these services are high because the companies can charge fees without assuming the cost of underwriting customers' medical needs.

A similar change is now rippling through the rest of the health insurance market, driven by federal tax breaks for individuals who pay for their own routine medical care.

"This is a turning point," said Jacob Hacker, a professor of political science at UC Berkeley who has written extensively on healthcare reform. "It's a fundamental shift away from the idea of broadly shared risk. It's going to lead to a complete transformation of the health insurer, which will be increasingly focused on providing management of money."

Wealth in health savings accounts

Among the signs of the change is the growth in health savings accounts, which allow individuals and families to pay out-of-pocket medical expenses from tax-exempt savings. As with individual retirement accounts and 401(k) plans, the money in HSAs tends to sit for long periods and can be invested in mutual funds and securities.

HSAs are different from flexible spending accounts, which allow employees to set aside tax-free dollars to pay deductibles and other medical expenses. At the end of the year, any unspent money in a flexible spending account is lost. In contrast, money in an HSA can carry over year after year indefinitely.

Federal tax rules for HSAs were liberalized in 2003, making them very attractive to well-heeled taxpayers. Commercial banks such as Bank of America and Mellon Bank, seeing the opportunity to collect management fees on the accounts, jumped into the business.

"Every bank wants to increase its share of HSAs," said John Casillas, director of the Medical Banking Project, a Franklin, Tenn., organization that helps medical administrators develop financial service systems.

"There's fees for managing the account, transaction fees, fees for investing the funds," Casillas said. "You're going to see many billions of dollars moving from premium payments to professionally managed investment funds under HSA rules. Some people think that banks are going to threaten health plans by replacing them in the marketplace."

Hence the rush by medical insurers to open their own banks.

"This is an offshoot of what's going on in the market," said Kelvin Anderson, chief executive of OptumHealthBank, founded in 2005 by UnitedHealth Group, owner of PacifiCare and other health insurance plans.

Continue reading "Health Insurers Reinvent Themselves as Money Managers"

An Eroding Model for Health Insurance

The Los Angeles Times reports that working Americans once could rely on employer-based benefits. But more people are now being forced into the individual market, where coverage is costly, bare-bones and precarious.  Lisa Girion and Michael A. Hiltzik write,

Jennifer and Greg Danylyshyn of Pasadena are conscientious parents. They keep proper car seats in their used BMW, organic vegetables in the family diet and the pediatrician's number by the phone.

They don't have access to the group medical insurance offered by many employers. She's a stay-at-home mom. He's a self-employed music supervisor in the TV and film industry. So they buy individual policies for each family member.

As careful consumers, they shopped for the best deals, weighed premium costs against benefits and always assumed they could keep their family covered.

Then last spring Blue Shield of California stunned them with a rejection notice. Baby Ava, their happy, healthy 7-pounder, was born with a minor hip joint misalignment. Her pediatrician said it was nothing serious and probably temporary.

Still, Blue Shield declared the infant uninsurable. The company foresaw extra doctor visits, "the need for monitoring and an X-ray." Ava's slight imperfection "exceeds . . . eligibility criteria for acceptance," Blue Shield said.

"I was enraged, baffled; I just could not understand," recalled Jennifer, 36.

The family's experience is symptomatic of the nation's healthcare crisis. Ineligible for group insurance, millions of Americans are paying more for individual policies that offer less coverage and expose them to seemingly arbitrary exclusions and denials.

The health insurance system has become increasingly expensive and inaccessible. It leaves patients responsible for bills they understood would be covered, squeezes doctors and hospitals, and tries to avoid even minuscule risks, such as providing coverage to a newborn with no serious illness.

At the heart of the problem is the clash between the cost of medical care and insurers' need to turn a profit.

Today, four publicly traded corporations -- WellPoint Inc., UnitedHealth Group, Aetna Inc. and Cigna Corp. -- dominate the market, covering more than 85 million people, or almost half of all Americans with private insurance.

On Wall Street, they showcase their efforts to hold down expenses and maximize shareholder returns by excluding customers likely to need expensive care, including those with chronic diseases such as asthma and diabetes. The companies lobby governments to take over responsibility for their sickest customers so they can reserve the healthiest (and most profitable) for themselves.

Meanwhile, insurance premiums are becoming a heavier burden on employers, many of which say that rising healthcare costs cut into their ability to compete and, in some cases, to survive.

As a result, the percentage of Americans covered by traditional group health insurance has steadily declined. Nearly 46 million have no insurance at all. Medical debt has become a leading cause of personal bankruptcy and a growth business for collection agencies.

Even some top insurance executives agree the system is inefficient and sometimes inhumane.

Bruce Bodaken, chief executive of Blue Shield of California, says that universal coverage is the answer.

Bodaken says government should mandate that everyone obtain health insurance and that insurers sell to all comers regardless of their health -- similar to a plan proposed by Gov. Arnold Schwarzenegger and defeated in the state Legislature last year.

The rationale of universal coverage, the norm in other industrialized countries, is that costs are manageable when everyone is covered because the risk pool includes the young and healthy to offset the older and sicker.

"One of the basic goals of universal coverage should be to change the health coverage business from avoiding risk to balancing health risks and focusing primarily on quality, service and cost-effective delivery," Bodaken wrote recently in the policy journal Health Affairs.

In the absence of such a system, and with group coverage increasingly unavailable, more and more Americans are left to rely on individual health policies. They are more expensive for all but the young and healthy and often provide fewer benefits.

Continue reading "An Eroding Model for Health Insurance"

Many Holes in Disclosure of Nominees’ Health

The New York Times reports that fifteen days before the election, serious gaps remain in the public’s knowledge about the health of the presidential and vice-presidential nominees. The limited information provided by the candidates is a striking departure from recent campaigns, in which many candidates and their doctors were more forthcoming.  Lawrence K. Altman writes,

In past elections, the decisions of some candidates for the nation’s top elected offices to withhold health information turned out to have a significant impact after the information came to light. This year, the health issue carries extraordinary significance because two of the four nominees have survived potentially fatal medical problems that could recur.

If elected, Senator John McCain of Arizona, 72, the Republican nominee, would be the oldest man to be sworn in to a first term as president and the first cancer survivor to win the office. The scars on his puffy left cheek are cosmetic reminders of the extensive surgery he underwent in 2000 to remove a malignant melanoma.

Last May, his campaign and his doctors released nearly 1,200 pages of medical information, far more than the three other nominees. But the documents were released in a restricted way that leaves questions, even confusion, about his cancer.

A critical question concerns inconsistencies in medical opinions about the severity of his melanoma; if the classification of his melanoma is more severe, it would increase the statistical likelihood of death from a recurrence of the cancer.

Senator Joseph R. Biden Jr. of Delaware, 65, the Democratic vice-presidential nominee, had emergency surgery in 1988 for an aneurysm in an artery in his brain and elective surgery for a second one. His campaign released 49 pages of medical records to The New York Times late last week showing that he was healthy, but the documents did not indicate whether he had had a test in recent years to detect any new aneurysm.

The two other nominees are younger and apparently in good health, but less is known about their medical history. Senator Barack Obama of Illinois, 47, the Democratic presidential nominee, released a one-page, undated letter from his personal physician in May stating that he was in “excellent” health. Late last week, his campaign released the results of standard laboratory tests and electrocardiograms from his checkups in June 2001, November 2004 and January 2007. The findings were normal.

Gov. Sarah Palin of Alaska, 44, Mr. McCain’s running mate, has released no medical information.

There may be no serious problems with the health of any of the nominees. But absent fuller disclosure, there is no way for the electorate to know.

The health of the four nominees is a matter of concern because in the past a number of candidates, and in some cases their doctors and aides, have distorted, kept secret or spoken about the facts only at the last minute when medical events forced the issue. Examples include Senator Thomas F. Eagleton (depression), Senator Paul E. Tsongas (cancer), Senator Bill Bradley (heart rhythm abnormality) and, as a vice-presidential nominee, Dick Cheney (heart disease).

I am a physician who has covered the health of presidential candidates for 36 years. Since 1980, The Times has made it a practice to question nominees for president and other high political offices and, with their permission, their doctors about their health.

The Times has requested such interviews with Mr. Obama since last spring and with Mr. McCain and his doctors since March 2007. None were granted. More recently, The Times sent letters to all four nominees requesting interviews about their health with them and their doctors. None agreed.

The candidates’ health has drawn little attention for most of this long campaign season despite the importance of the issue. But since Mr. McCain selected Ms. Palin as his running mate in August, questions about his health have intensified. In recent weeks, more than 2,700 physicians have signed a petition that ran as an advertisement demanding that Mr. McCain fully release his health records; the petition is sponsored by Brave New Films, the company led by Robert Greenwald, a Hollywood filmmaker who has contributed $2,250 to Democratic candidates and has made a number of anti-McCain videos. Beyond the advertisement, Mr. McCain’s health has become the subject of both speculation and distortion on the Internet and other media.

The following is a summary of the publicly known medical information about all four nominees and the outstanding questions about each.

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Gaps Seen in Maryland Drug Treatment

The Washington Post reports on a recent report commissioned by the Maryland General Assembly has concluded that state services for drug addicts and alcoholics falls far short of the need, a problem it says is most profound in Prince George's County.  Rosalind S. Helderman writes,

The report comes as new figures show that several counties, including Prince George's, regularly return hundreds of thousands of dollars in unspent substance abuse treatment funds to the state.

According to the report, which was compiled by University of Maryland researchers working in conjunction with a Harvard Medical School professor, the state would have to admit 14,423 more people into public or private drug treatment programs each year to meet the need. In Prince George's alone, 4,606 more people each year need treatment than receive it. A gap exists in other area counties too -- Montgomery needs 2,950 more treatment admissions annually, and Anne Arundel needs 755.

Researchers examined indicators of drug use, including drug arrests, mortality rates and hospital discharges, to produce an estimate of need in each county. They then compared those rates with the number of treatment admissions each year.

The gap in Prince George's occurred not because researchers found more drug use there -- the county ranked third from the bottom in the researcher's analysis of total need. Instead, they found that Prince George's admits the fewest people for substance abuse treatment per 100,000 residents of any Maryland county, treating far fewer people than they estimated need help.

Their analysis showed that 1,078 substance abuse admissions were needed each year per 100,000 residents in the county; instead, Prince George's had 524.

"We don't have enough trained drug counselors," said Del. Justin D. Ross (D-Prince George's), one sponsor of legislation that produced the report. "We don't have enough treatment beds. When people finally hit their knees and want to go get help, you can't tell them there's a waiting list."

Donald Shell, health officer for Prince George's, said the county has 29 inpatient beds that treat 280 substance abusers each year.

It pays for 14 more beds for 150 county patients in surrounding counties, but he acknowledged that the number is below need.

"It's ridiculously low," Shell said. "We've got work to do."

He noted that Prince George's has far fewer doctors than other counties, which means fewer referrals to treatment facilities, shrinking the market for such services. The county has plans to build a facility with 40 beds, but the project is not funded.

"We've just got to find the dollars for it, and it would help alleviate the problem," he said.

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Parents Press States for Autism Insurance Laws

The Washington Post reports that parents and an advocacy group, Autism speaks, are encouraging the passing of laws requiring health insurers to cover intensive and costly behavior therapy for autism.  Carla K. Johnson writes,

In Washington state, Reza and Arzu Forough pay more than $1,000 a week for behavior therapy for their 12-year-old autistic son.

In Indiana, Sean and Michele Trivedi get the same type of therapy for their 11-year-old daughter. But they pay $3,000 a year and their health insurance covers the rest.

Two families. Two states. Big difference in out-of-pocket costs.

If autism advocates get their way, more states will follow Indiana's lead by requiring health insurers to cover intensive and costly behavior therapy for autism.

In the past two years, six states, Texas, Pennsylvania, Arizona, Florida, South Carolina, Louisiana,  passed laws requiring such coverage, costing in some cases up to $50,000 a year per child.

The powerful advocacy group Autism Speaks has endorsed bills in New Jersey, Virginia and Michigan and is targeting at least 10 more states in 2009, including New York, California and Ohio.

Other states, including Illinois, have similar bills in the works but aren't working directly with Autism Speaks.

"This is the hottest trend in mandates we've seen in a long time," said J.P. Wieske, a lobbyist for an insurance coalition that argues that these state requirements drive up insurance costs for everyone. "It is hard to fight them."

For lawmakers, voting against these measures means voting against parents who are struggling to do the best for their children.

Parents tell moving stories about how behavior therapy works better than anything they've tried. In two states, bills got nicknames like "Steven's Law" and "Ryan's Law," so voting against them was tough.

Arzu Forough of Kirkland, Wash., who is pushing a bill in her state, credits behavior therapy for teaching her son Shayan, at age 3, to make a sound to ask for a drink of water. Now 12, he is learning to converse about his favorite food and music, and to talk about his frustrations rather than throw tantrums.

Trained therapists, using principles of applied behavior analysis (ABA), created a system of rewards to teach Shayan these skills. As a preschooler, he got a piece of cheese when he said "bubba" for water. Now a therapist rewards him with tokens when he responds in conversation. He uses the tokens to "buy" privileges like going for a car ride.

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