Are insurers to blame for rising costs?
The San Francisco Chronicle’s Carolyn Lochhead and Victoria Colliver use the recent furor over insurer Anthem’s rate hikes to explore just how much of the blame for rising health care costs should be shouldered by insurers. The reporters find that, in the end, insurers are just another one of the cartels (others include device makers and providers) and operate inside the opaque world of medical pricing and snag hefty cuts for themselves. Lochead and Colliver put it thus:
While the Anthem case has raised a political storm, the underlying surge in costs gets far less scrutiny. But each sector of the health industry points fingers at the other for driving up prices, and all are raking in money.
Insurers blame hospitals and doctors, doctors blame insurers, and hospitals blame doctors and medical devicemakers in what academics call an inscrutable medical-industrial complex that rivals anything the defense industry ever invented. All these groups are combining into what many experts describe as cartels.
The reporters write that, despite their best efforts, they weren’t able to get many folks on the record. When they did find someone who was willing to talk, it was often a source we’ve seen before in other cost stories. It’s a tough theme to get quotes on, as nobody wants to burn bridges with their professional suppliers and everybody’s got some sort of skin in the game. They did, however, manage to find a local source who offered an original and illuminating anecdote:
Christina Bernstein, a medical-device engineer and independent sales representative based in San Francisco, sells disposable surgical tools made mostly out of plastic that she estimates are manufactured for about $40 each. These are marked up and sold to hospitals for as much as $350, she said, for a single use in a surgery on a patient.
“But if you were to get a detailed bill of what the hospital was charging the insurance company for the insured patient, those things get marked up to something like $1,200,” Bernstein said. “It’s ridiculous. There’s no open competition.”
(Hat tip to AHCJ Immediate Past President Trudy Lieberman, who wrote a column on CJR.org praising the Chronicle’s story.)
Employers, insurers, consumers agree on COBRA
The Miami Herald’s John Dorschner looked into just how much of a hassle it is for laid-off employees to retain health coverage through the federal COBRA program. Along the way, he also noted that the program’s not popular with employers or insurers either.
Dorschner opens with an anecdote that shows just how broken the system is and illustrates the frustrations many are facing.
The Rosens’ case is an extreme example of something that’s happening frequently throughout South Florida: Laid-off workers are struggling through a difficult maze to keep health insurance while insurers and former employers have no interest in helping them beyond what federal and state laws require.
For employers, COBRA means unwanted paperwork and bureaucracy. For insurers, it means unwanted risk.
A key problem for insurers is that young and healthy employees who are laid off tend to reject COBRA, while older and sicker workers grab it. “Typically those who take COBRA coverage cost two to five times [[more] in benefits than a normal employee costs,” LeCompte says.
Despite its flaws, COBRA is seen to provide an important safety net, and the 65 percent federal subsidy for COBRA coverage has been extended to cover those workers laid off before March 1, 2010. Furthermore, the House version of the reform package, at least, has a provision saying that folks could retain their COBRA coverage at least until federal insurance exchanges begin sometime around 2013.
Bloggers try to connect Baucus plan, WellPoint
Filed under: Conflicts of interest, Health policy, Hot Health Headline
An analysis by blogger Kevin Conner over at LittleSis seems to point to connections between Montana Sen. Max Baucus’ plan for health reform and insurance heavyweight WellPoint. While nothing has been set in stone, they are the sort of sprawling connections that should be explored and accounted for as the Baucus plan is evaluated, especially in light of the Senator’s well-documented financial connections to the health industry (Hat tip to NPR Health Blog’s Scott Hensley).
Sen. Max Baucus
A glance at the proposal’s Microsoft Word Metadata shows the name of Liz Fowler, a former WellPoint VP who now works for Baucus on the Senate Finance Committee. Furthermore, Wyoming Republican Sen. Mike Enzi’s former chief health adviser, Stephen Northrup, is now WellPoint’s top reform lobbyist. Enzi is a member of Baucus’ bipartisan “Gang of Six,” a group that helped shape the Healthy Future Act. It’s also interesting that, according to Conner, “key provisions in the Baucus plan apparently draw on industry-inspired legislation first introduced by Enzi in 2006, while Northrup was still his chief health aide.”
According to their Web site, “LittleSis is a project of Public Accountability Initiative, a nonprofit nonpartisan research and educational organization focused on government and corporate accountability.”
Doctor’s offices consumed by insurance hassles
Filed under: Health care reform, Hot Health Headline
Tamara Keith of the public radio program “Marketplace” went into a doctor’s office to find out where the money’s being spent at the point where the rubber meets the road.
Keith found a whole lot of wrangling with insurance companies, wrangling that consumed the time of assistants, physicians and patients alike. The practice Keith looked at was far from unique, she reports: “A recent Cornell study found nationwide it costs doctors $31 billion a year to deal with insurance companies. That’s about 7 percent of all spending on physician and clinical services.”
The story is the first of an occasional series called “The Cure: Remaking Health Care in America.”
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