"Now, maybe I have a simplistic mind, but frankly I don't understand why health care and insurance companies keep appearing in the same sentences." (Fisher, W. Truthout 10/25/09)
Here’s the bureaucratic process at its “best”
Howard Back’s wife was diagnosed as terminally ill in 2007 when she was “insured” by Medicare and receiving hospice services from the Visiting Nurse Association (VNA). They are a hospice provider covered by Medicare. Know that the Medicare Act includes hospice care designed to provide terminally ill patients with palliative care. Regardless, while she was at the VNA, Mrs. Back suffered intractably from pain despite the meds that the VNA provided. In February 2008, her doctor prescribed another medication, Actiq, but VNA refused to cover it, so Mr. Back paid $5940 for his wife’s prescriptions out of his own pocket until his wife died a month later. Half a year later, Mr. Back learned the VNA categorically refused to reimburse him even though Back stated that Actiq was part of his wife’s care plan, which had been signed by the hospice’s interdisciplinary team.
Interpretation from a medical-legal expert:
In 2007 a Hospice refused to pay for doctor ordered meds, and the patient's husband paid $5940 out of pocket.
After his wife died, he asked for reimbursement, but the hospice refused.
The hospice gave him the wrong gov't agency to appeal to (NGS).
NGS forwarded the letter to the right agency (CMS), but the wrong Department, the one that handles Provider appeals, not Beneficiary appeals.
So that CMS department wrongly told the husband that he couldn't file an appeal only the hospice provider could. Apparently they had no idea that Beneficiaries could appeal too!
So he hired a lawyer (who also didn't know) to sue the US Dept. of Health Services for failing to provide a mechanism for beneficiaries to appeal.
DHS admitted that CMS was wrong, and there WAS INDEED a procedure for beneficiary appeals, and the beneficiary hadn't used them, so the case was dismissed (in spite of the fact that it was CMS itself that led him to not file it).
So then the lawyer appealed the case to the 9th Circuit. The Director of DHS said they'd accept the now late appeal, and the court awarded the plaintiff legal fees for the appeal (but not for the fees in the court below).
This decision was announced today, July 5, 2012 - 4years after the original request for reimbursement, and the husband can NOW finally START the appeal process! It's not over Yet!
In "A Simpleton Tries to Understand the Health Care Debate" William Fisher, PhD (81 years young) offers a sage and effortless observation—that the healthcare debate is less about health and more about the process by which legislation is crafted and adopted. It is also mostly "about money - money headed for so-called health insurance companies."
After all, the priorities, the modus operandi, if you will, of the health care and 'health insurance' industries are different: In fact, "insurance companies are not in the health care business at all; their business is the management of risk business" and they "don't do a thing to make you well if you're sick. That's the work that's done by physicians, nurses, hospitals and clinics. And these two groups - health care professionals and health insurance companies - are far from buddies. In fact, they're pretty intense enemies [because they, the insurance companies] do whatever they can to reduce their risk" [emphasis added – jgk]—denials (especially for preexisting conditions like having been a victim of domestic violence, having had a C-section, having a baby that's too fat or too thin), rescission, bureaucratic hurdles, waiting periods, etc.
The main loyalties of these insurance companies are "to their shareholders…. who've seen a run of great profits, based on ever-rising premiums, based in turn on generous government subsidies and an almost total lack of competition among all these companies. Furthermore, Congress has given them an antitrust exemption that means they can fix prices (even as insurance premiums escalate). Despite these advantages, it's like a fixed deck—we are spending more than most other countries and "our health has gotten steadily worse."
Example: We rank 19th among industrialized countries in preventable deaths in such conditions as diabetes, epilepsy, stroke, influenza, ulcers, pneumonia, infant mortality and appendicitis.
Original Source: Nolte E, McKee CM. "Measuring The Health Of Nations: Updating An Earlier Analysis." Health Affairs, 27 , no. 1 (2008): 58-71 (World Health Organization)
In addition our health care costs more than other countries with more waste and less return on investment:
- That's 1/3 of the nation's healthcare bill
- "Unnecessary care such as the overuse of antibiotics and lab tests to protect against malpractice exposure makes up 37 percent of healthcare waste or $200 to $300 billion a year.
- Fraud makes up 22% of healthcare waste, or up to $200 billion a year in fraudulent Medicare claims, kickbacks for referrals for unnecessary services and other scams.
- Administrative inefficiency and redundant paperwork account for 18 percent of healthcare waste.
- Medical mistakes account for $50-100 billion in unnecessary spending each year, or 11 percent of the total.
- Preventable conditions such as uncontrolled diabetes cost $30-50 billion a year.
- The average U.S. hospital spends 1/4 of its budget on billing and administration, nearly twice the average in Canada."
- [Note: I could not confirm the next and final quote or verify its assumptions. Indeed, others have stated that Dr. Steffie Woolhandler's figures and assertions represent overestimation and, moreover, Canada squeezes the salaries of its doctors to reduce costs. See: "The Costs of Health Care in the United States and Canada--Questionable Answers to Questionable Question" by Henry J. Aaron, PhD (economist)]. Nevertheless, here's what Dr. Woolhandler is attributed as inferring: "American physicians spend nearly eight hours per week on paperwork and employ 1.66 clerical workers per doctor, far more than in Canada.'' [Ref.: New England Journal of Medicine (2003) paper, which I assume to be "Costs of Health Care Administration in the United States and Canada "by S. Woolhandler, T. Campbell and D.U. Himmelstein.]
From: Fredrick (MD, PhD, JD)
Date: Oct 26, 2009 2:03 PM
And they didn't even mention the 25-30% of healthcare premiums that goes to insurance company profit and mismanagement. If the cream-skimming by these so called "Health" Insurers and the obfuscation by the meddling medical managers go away with a public outcry and a public option, that would be a fortuitous lagniappe, wouldn't it?
A Utility Company Model for Health Insurance
Absent from much of the discussion of health reform’s impact on physicians is that the companies that are going to be providing health coverage are becoming very different. Under health reform, profit is controlled and limited by regulation. For instance, take the medical loss ratio: that is, plans are required to spend 80% on medical services for small groups, and 85% on large. If they come below those regulatory limits, refunds are due the premium payers. If they come above, insurers can increase the premium you or your employer pays. Were medical costs to go up, so does profits (actual dollars as opposed to percentages), but enrollment may be adversely affected.
Administrative costs have to be kept under tight control. The costs for administering the plan, including marketing and a reasonable profit can be 15% - 20% of premium. With investors expecting health plans to provide a better return than banks enjoy, the health insurance industry now averages 3–4 % the profit margin (in 2009, it was 2.2%).
The ability for health plans to control utilization is very limited with virtually every attempt carrying a risk of pushback from patients who can easily can get caught between their physician who they inherently trust and their insurer who they don’t.
Controlling administrative costs means expending as little as possible on claims processing (think high speed, little or no human involvement) and as little as possible on managing networks, and servicing physicians. (Think doing everything with a payer online). An implication is that to engage in ACOs or other contracting structures in bundled payments and the like, inevitably increase administrative costs, reducing the profit margin and a payer’s willingness to get too creative with bonuses or reimbursement remodeling.
- United saw this trend and built OptumInsight (formerly Ingenix) to create revenue outside of insurance. The bulk of United’s health business is ASO (Administrative Services Only) meaning no risk on medical loss as they administer ERISA plans. [United is leaving the risk of being an insurer to its acquisition, Oxford.]
- Aetna is a ‘Johnny come lately’ to the game. They have dropped about 80% of their small group products, cutting their risk while they have diversified by getting into the information exchange business.
- Empire has also cut small group products from its portfolio, but, so far, does not have a non-insurance revenue stream. Other Blue plans are always purchasing health related companies)
- Cigna, a global health service company, has gone in the other direction—after avoiding the Medicare business for years, it has now purchased a Medicare product company.
The health benefit business is not what it was.
Robert E. Goff Executive Director, University Physician’s network, NYC
And, yet ....
Americans remain very concerned that changes in our health care system will "limit their choices" of physicians, hospitals, insurance plans, and/or diagnostic testing or treatments. However, in a recent JAMA commentary, we learn (and I agree): "there is arguably more choice" in Canada as compared to the U.S. [emphasis added].
Ross JS, Detsky AS. "Health Care Choices and Decisions in the United States and Canada," JAMA. October 28th, 2009;302(16):1803-1804.
How does one attain maximal value or benefit? Can we, administratively-speaking, provide access and assure that people (patients) are treated fairly and that they have reasonable choice? Personally, I cannot stand what I have been caling the insurance companies' shell games, and their focus on "who," rather than "what," and/or how to squeeze me, the practitioner, especially at the risk of my pateints' health.