health insurance

All the Way to the Bank

There has been a lot of discussion about excessive CMS payments to the privatized Medicare Advantage plans.  One area of special concern is the risk management adjustments that provide additional payments for the care of high risk patients. This leaves open a huge area for gaming the system by the insurance companies. Upcoding and adding new diagnoses (not those supplied by the attending physicians) seems to be on the increase. A recent article by Bob Herman in Modern Healthcare discusses this problem. Besides this chicanery of the insurance industry one of the most sordid aspects of the current debate is the overt buying of government by the same industry and the obvious bribery in the U.S. Senate. 53 Senators have sent a letter to CMS pressuring the agency to continue the overpayments. According to Open the two senators leading the pack have received more than $727,000 in campaign funds from the health insurance companies in the last 8 years; Mike Crapo $234,000, Charles Schumer $493,000. In the mind of Everyman this is unethical. But, then, we already know that our politicians are not answerable to Everyman.

Insurance Con Artists

Dr. James Binder recently wrote an article on one of the manipulations that health insurance companies use to circumvent the new insurance regulation that makes it illegal  to deny insurance coverage on the basis of pre-existing illness. So what do they do? They create multiple tiered drug benefits which generate high out of pocket expenses for people under treatment for serious illness such as cancer, rheumatoid arthritis and multiple sclerosis. This drives these patients away to find a different source of insurance, which means more expensive. The industry has found a way to discriminate on the basis of pre-existing illness.

It should be mentioned that the insurance companies have a similar ruse in developing narrow networks. This creates an automatic screening of patients with chronic illnesses. First, by excluding major referral centers (like Children’s Hospital in Seattle) they drive patients to other insurance or it forces them to pay large amounts out of pocket to continue to see their specialists who have been taking care of them. They also make their insurance policies unpalatable by excluding large percentages of all of the physicians practicing in the area. For those individuals who are basically healthy it does not present too big of a problem to choose a physician from the approved list. But for those patients who have multiple chronic illnesses and multiple specialists it becomes almost impossible to find all of their usual physicians on any one narrow plan. And, of course, the plans change providers every year. So, again, they look for more expensive broader networked plans, and they are back to the old problem of paying higher premiums because of pre-existing illnesses.

As Dr. Binder says, “It is well past the time to rid the health care system of these middlemen.” How? Improved, expanded (to everyone) Medicare. For more see…

Vermont not SIngle Payer

Gov.Shumlin of Vermont has announced that he has given up trying to create a single payer medical system in Vermont. This is not surprising. There is no way that single states can obtain the authority to pool the present health care funding of our present system. This amounts to over 65% of today’s costs mostly paid by Federal programs, V.A., military, Medicare, Fed Employees and Fed share of Medicaid and ACA along with Fed prison expenses. Employers, many of whom are national or international, pick up most of the remainder of the bills. And single states do not have the power to control pharmaceutical prices and provider payments. As Don McCanne wrote of Gov.Shumlin, “He has shown us that it is imperative that we continue with our efforts toward a goal of enactment of federal single payer legislation.”. The only affordable way to do this and offer comprehensive coverage for everybody is on a national level

Don’t Fight the Health Insurance Companies

The recent poll by the AP concerning health insurance deductibles with private policies only confirms what we knew was going to happen.  People cannot afford health care even when they are insured. The trend for policies to have higher deductibles is just making the matter worse. Most of the policies being sold in the insurance exchanges are high deductible. Supposedly the consumer is at fault for picking premium price instead of level of coverage. The insurance companies are happy.

If the deductible prevents people from seeking medical care for illness and injuries or following treatment recommendations then those people are underinsured.  As Obamacare increases the number of insured by 10-15 million people it is increasing the number of underinsured by many millions more. This problem will get noticeably worse year-by-year as the people who are use to good health develop an increasing number of medical problems that require them to pay $3,000 to $6,000 even before their insurance kicks in. And, of course, if the problem lasts into the next year then the out of pocket deductible starts all over again. And, God forbid, what if two people in the family get sick. For comments by Dr. McCanne see

For my Blog: Insurance Exchanges: The Fast Food of Health Care

And  We Are All Underinsured

There is no use complaining and talking about which insurance policy to buy, etc. Don’t fight the health insurance companies. It’s only going to get worse. The solution is single payer medicine, Improved Medicare for All.

Can Physician Performance Be Measured?

In response to Comments in Becker Hospital Review I received these questions:

“Dr. Dave – I’d be interested in what outcomes you’d measure that really matter in the care of patients. And, what you’d suggest for a delivery and payment model(s).”

I submit the following answer:

I don’t know what background you are coming from. I’m a retired family doc with 27 years in private practice, 10 years working in and running a (salaried) rural health clinic and 7 years (salaried) doing urgent care in a >200 docs physician owned medical clinic and 6 years part-time in a low income clinic.

When talking about “measuring outcomes” remember the old saying (falsely attributed to Einstein) “Not everything that counts can be counted, and not everything that can be counted counts.”  What are outcomes;  mortality rate, days of pain free existence, avoidance of bankruptcy, peace of mind, years of life lost due to premature mortality (YLLs), years lived with disability (YLDs), healthy life expectancy (HALE) ?  And to whom do we attribute increase and decrease; the patient, which doctor, an institution, the system, society?  And, again, can numbers represent compassionate, concerned, competent care?  So what does it mean to “measure”?

There are numerous problems with current pay for performance problems. One of the biggest problems is thinking that any sense can made of the current Rube Goldberg system of Obamacare plus >2000 insurance carriers. Any real solutions need to benefit every single person in our country. Pretending to measure performance in medical care is a political diversion of both CMS and the insurance companies.

As far as I’m concerned putting all physicians on salary with reasonable negotiations is the only way to help gain control of medical costs and create the leverage for improving quality by eliminating incentives for cursory encounters and unnecessary medical procedures.

Pay-for-Performance is a poisonous concept whose unintended consequences are far greater that any conceivable benefits. System improvement and re-development of the culture of a medical “calling” and ethos of peer responsibility are essential. So-called P4P and quality improvement efforts cannot begin to deal with the multitude of problems that face us.

We can’t (and shouldn’t) go back to a Dr. Welby picture but we don’t have to keep going in the wrong direction.

I’m in favor of a single payer system (improved Medicare for All). I’m also in favor of starting that improvement now.  And I’m in favor of medical care reform in many areas (physician, hospitals, pharmaceuticals, medical appliances, costs, integrity, transparency, etc.)  A single-payer system would require a tremendous amount of work to create the needed reforms  but it’s the only system that can have the muscle to overcome the self-interest of the powerful stakeholders and ensure compassionate, competent, and cost-effective care for  everybody.

I invite you to visit my blog site (HC-Reform) and “Like” what you like. For our present discussion I would start with Pay-For-Performance (

Dr. Dave

Why Call It Insurance?

Marmor et al, in their recent book, do an excellent job of illuminating and analyzing “social insurance” in the United States.(1) This is a term that the authors used to refer to public policies that protect citizens against the six greatest risks that threaten personal and family well-being, one of those risks being ill health. But here, the term “insurance” is more of a metaphor and not a reference to private, personal insurance. These authors end up concluding that universal health care is “not unaffordable but could be in modern-day America, where a commitment to market-based solutions to rising health care costs may make unaffordability a self-fulfilling prophecy.” The health insurance game is one of those solutions that is preventing the creation of a sustainable, universal health care system in our country. 7% of U.S. health expenditures go to insurance administration. That’s $531.20 per capita per year. Countries like Japan, Finland, Australia, Austria, and Canada spend from $53.60 to $153.30 per capita.(2)
It is mind-numbing to listen to the cacophony that rises up from the health policy interests in the United States today. Moral hazard, cost-sharing, eligibility, co-pays, silver plan, risk-management, narrow networks, rating band, medical loss ratio, underwriting, the HIAA, exchanges, etc., etc. We have arguments, debates, laws, rules, complex computer programs (and glitches) all to continue the charade that the answers to our national health care problems lie in tweaking an insurance system. There is nothing inherent in paying for our basic health care that requires some sort of medical insurance. In fact, this particular mind-set is rather unique with the United States. Most developed countries defer to private insurance only for uncovered items such as private hospital rooms, cosmetic surgery, etc.
Traditionally, the term insurance referred to a contract by which regular payments were made to provide financial recovery in case of severe, unpredictable, emergencies (accidents, fire, death, etc.). For most of us the term insurance still carries that implication. But this meaning fails us when we try to apply it to all of the health care needs people have during a lifetime. Many of those needs are preventive, or routine, or comfort-driven, or for disease management as well as emergencies. We don’t talk about pre-school insurance, kindergarten insurance, K-12 insurance. We don’t talk about fire insurance to put out our fires or police insurance to respond to our 911 calls. We don’t buy highway insurance policies so that we can drive down the road to our family or jobs. We don’t buy National Guard insurance so that we can receive aid and protection in emergencies. The problem is that we keep trying to find ways to provide for our health needs within an insurance system, distorting and shape-shifting the elements of that system. It is not more or different insurance that we need; it is a different framework. Let’s stop talking about eligibility, copays, etc. Let’s talk about a real, comprehensive system that defines, guides, and finances adequate health care for everyone. This is the moral imperative. We must do it, not just because our economy requires it, or because every other developed nation has done it, or because we lag behind most developed nations in healthcare results, but because it’s the right thing to do.

As R. Paul Olson says: “To state this more generally, I am asserting that ensuring universal, equitable access is not merely an aim, it is an obligation; it is not merely a goal, it is also a duty; it is more than merely a noble ideal we might like to realize if only we could afford it; rather, it is a reality we must bring into being for the entire population our health care system is designed to serve. It is morally unacceptable to say that universal health care is desirable, but optional; rather, it is a goal we must achieve because it is grounded in a universal human need, not merely in what people want. Universal access must be ensured as a priority and prerequisite for a health care system to qualify as a morally justified system. Other factors being equal, a health care system that provides universal access is morally superior to a discriminatory system that limits, delays, or denies equitable access to portions of the population. Stated positively, the ethical arguments in favor of universal health care are so compelling as to make implementing it a moral mandate. It is also a practical necessity because to someone denied access, it simply does not matter that the system provides high quality and cost-effective care. Inaccessible care is ineffective care; indeed, inaccessible care is no care at all.”(3)

Suggested Reading:
(1) Marmor, TR, Mashaw,J, Pakutka,J. Social Insurance: America’s Neglected Heritage and Contested Future. California, CQPress, 2014, p 134.
(2) OECD (database). Version 06/2011 The Commonwealth Fund Commission on a High Performance Health System October 2011.
(3) Olson, RP. Moral Arguments for Universal Health Care: A Vision for Health Care Reform
Indiana, AuthorHouse, 2012 , p7-8.