Monday, December 29, 2014

US Health Insurance Giants to Battle for Supremacy in the 2015 Crony Awards

So Congress went ahead and passed the "Affordable" Care Act that we could find out what's in it....and now that we know, it's pretty clear that it's not so great at making health care "affordable" . It's pretty bad, actually - and soon to get worse - for doctors . In fact, it's even worse for patients

So who is it good for? Richard Lenzner gave us a pretty good clue back in late 2013 here

So far in 2013 the value of the S& P health insurance index has gained 43%. Thats  more than double the gains made in the broad stock market index, the S & P 500.  The shares of CIGNA are up 63%, Wellpoint 47% and United Healthcare 28%. And if you go back to the  early 2010 passage of ObamaCare, you will find that Obama’s sellout of the public interest has allowed the public companies the ability to raise their premiums, especially on small business, dramatically multiply their profits and send the value of their common stocks  up  by 200 % - 300 %...

We warned you back on December 4, 2009 in my blog ” The Horrendous Truth About Health Care Reform” that the Obama White House was handing a “ free ride for the health insurance industry” that would allow premium hikes of 8%-10% a year by CIGNA, Humana HUM -0.41%Aetna AET -0.1%UnitedHealth Group UNH -0.21% and Wellpoint, and as well  a $500 billion taxpayer subsidy, a half trillion dollars without any requirement that the health insurers had to spend the subsidy on medical care...
At the time I wrote, Goldman Sachs  research operation  estimated that the 5 giants would increase profits by 10% a year from 2010 to 2019, sending their shares up an average of 59%. In truth,  the shares of CIGNA and some others are up a multiple of several times since the  contest was resolved by a very tight vote in early 2010...." ( it should be noted that the current stock price of each of the above companies is well above *100%* of what it was is 2013... )
And so, in 2015, with insurance companies flush with cash, perhaps there will be a precipitous drop in health care premiums as companies pass their windfall profits along to their customers? Not according to the below NY Times article:
"The Obama administration on Friday unveiled data showing that many Americans with health insurance bought under the Affordable Care Act could face substantial price increases next year — in some cases as much as 20 percent — unless they switch plans.

The data became available just hours before the health insurance marketplace was to open to buyers seeking insurance for 2015..."
To what do US health insurance companies owe their extraordinary profits? To life-saving discoveries? Productivity- enhancing innovation? Exemplary, competition -crushing customer service and satisfaction?  No, in a word, to "cronyism".  

For a look at the sordid face of on-going health insurance cronyism since the run-up to ObamaCare :

"Our story begins just days after Obama’s landslide victory over Sen. John McCain (R-AZ) in 2008. Sensing an opportunity to increase profits at taxpayer expense, Karen Ignagni, the president of America’s Health Insurance Plans (the trade association that represents the health insurance industry in Washington), quickly signaled that she was ready to do business with the new occupant of the White House.
“No one should fall through the cracks of our health care system,” Ignagni’s November 11, 2008 statement read. “Universal coverage is within reach and can be achieved by building on the current system.”
That last phrase, “and can be achieved by building on the current system” was the health insurance industry’s top priority in the beginning of the Obama administration. And they spent furiously to make sure Obama would protect them. Despite the worst recession since World War II, businesses spent more than $1 billion lobbying on health reform in 2009, a sharp increase from 2008.
Blue Cross/Blue Shield led the league in lobbyist spending, shelling out $15.13 million in 2009, up more than 25 percent from 2008. AHIP shelled out another $8.85 million, while United Health Group added $4.86 million, and Aetna Inc. spent $2.84 million.
These millions turned out to be very wise investments. Health industry lobbyists secured dozens of meetings in the White House throughout 2009 and 2010. They not only met with Obama’s top advisers, but also Obama himself.
These meetings had a very clear impact on the policy that Obama would eventually produce. During a June 24, 2009 ABC News town hall meeting on health care, Obama assured the CEO of Aetna: “Aetna is a well-managed company and I am confident that your shareholders are going to do well.”
And Aetna has done more than “well” under Obamacare. Its stock price has more than doubled, and almost tripled, since Obama publicly promised the company it would “do well” under Obamacare.
And when you look at the basic outline of Obamacare, you can see exactly why. The program forces every American to buy the health insurance industry’s products and also subsidizes those purchases to the tune of more than $1 trillion over just the next decade alone. No wonder health insurance industry stocks are booming.
But the relationship between the health insurance industry and the Obama administration did not end on March 23, 2010, the day Obamacare was signed into law. If anything, it was just beginning...."
The good news is that now, you can potentially win $1000 and help your health insurance executive and/or elected representative get the recognition he or she deserves- by nominating him for the 2015 Atlas Shrugged Crony Awards
"Crony capitalism is not true capitalism. What we have today is a system in which government intervenes in every sector of the economy, through subsidies and regulations, creating opportunities for businesses to profit from government favors. 

No business today can avoid dealing with government. Still, there’s a difference between those who aim to create goods or services and succeed through market competition, for whom the struggle to navigate the shoals of regulations and permissions is a sideline; and those for whom deals with politicians and bureaucrats are the essence of what they do. Not always an easy distinction to draw. But the Atlas Shrugged Crony Awards are intended to spotlight the clearest and most egregious cases of these “political” entrepreneurs.

Cases of cronyism involve a business on one side, government on the other (often with a lobbyist or other middle-man). The Contest is open to both sides of that equation. To qualify for the contest, nominees should meet the following criteria:
     Business: The business lobbies to create and benefit from a special government subsidies, tax breaks, or other privilege or regulation limiting competitors. And the business promotes and benefits from favoritism with government officials.
     Government: The politician or other official uses discretionary power to confer a benefit on a business in expectation of personal benefit, or in a manner that is covert and based on a special relationship with the business.
In short, Crony Capitalism is an effort to seek gain through government rather than the market."

The person who first submits the entry that becomes the final winner will receive $1000 and free admission to the 2015 Atlas Summit in Nashua NH.

Saturday, August 30, 2014

Happy Labor Day- and a Warning from Francisco d'Anconia

In honor of Labor Day, I took the personal license to make a few editorial modifications to Francisco d'Anconia's warning from Atlas Shrugged by Ayn Rand. In light of the rapidly progressing bureaucratic mess, suffocating regulation and skyrocketing costs foisted on the American public and medical community by the dishonestly named "Affordable Care Act", the below seems particularly timely and applicable.

 If you haven't read the book yet, I highly recommend it - especially if you are a doctor (or other health care provider), a current patient, or a future patient. (Please take note: if you haven't noticed, the last category includes everyone). 

Don' t content yourself with the upcoming movie - the book is far superior and comprehensive. If you undertake the challenge (definitely far more rewarding than dumping a bucket of ice on your head- as well as more eye opening, mind opening, and mentally invigorating), I promise you will be richly rewarded with many, many valuable insights such as provided below:

"When you see that (patient care) is done, not by consent, but by compulsion - when you see that in order to (practice medicine), a doctor needs to obtain permission from men who produce nothing - when you see money flowing to those who deal, not in (medical services) but in favors - when you see that men get richer by graft and pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption ( and bureaucracy) being rewarded and honesty (
and patient care) becoming a self-sacrifice - you may know that your (own personal health and health care system) are doomed."

"Atlas Shrugged"
- by Ayn Rand
( with personal editorial modifications) 

Tuesday, April 29, 2014

Guest post: book review of The Self-Pay Patient |

"The discussions about the new health care law are endless.

To the person on the street, everything seems to be changing on an almost daily basis. How can the ordinary person begin to understand all the ramifications of the Affordable Care Act? What is a person to do when, even though they have health insurance, they are potentially facing high medical bills that are not addressed by their plan?
Where can the person on the street go for help?
The Self-Pay Patient: Affordable Healthcare Choices in the Age of Obamacare by Sean Parnell is a great resource for those who want/ need to pay directly for their own healthcare.
Some people with a high deductible plan end up having to pay thousands of dollars in co-pays and deductibles. Are there other options for them or ways they can get discounted services? Or maybe they have seen a doctor out-of-network, or for some reason their condition is not addressed by their health insurance. What are they to do?
The Self Pay Patient also explains some of the self-pay alternatives that are offered outside of the conventional insurance model. Although most people are unaware of them, these alternatives comply with the law in such a way that those who use them are exempt from the penalties of the Affordable Care Act..."

Friday, April 18, 2014

Quality Adjusted Life Years- "When the government takes over health care and bans private health insurance, expect rationing of medical care."

Quality Adjusted Life Year

by Rober Tracinski, editor, The Intellectual Activist

A voice from the past- from 2009

"When the government takes over health care and bans private health insurance, what can we expect? We can expect rationing of medical care.

In fact, in the New York Times article below, leftist utilitarian philosopher Peter Singer openly advocates rationing. He does it by arguing that health care is already "rationed" in the free market, it is just "rationing by price."

This is an inexcusable abuse of the language. "Rationing by price" is a contradiction in terms, because prices are the opposite of rationing.

The essence of a price is voluntary exchange. A price is the result of a negotiation between a willing buyer and a willing seller, with each party acting on his own judgment about his best interests.

So if you decide to pay lower premiums for less extensive insurance coverage, or to forgo an extremely expensive treatment that will only extend your life by a few months, so that you can leave more of your savings to your loved ones, these vital decisions are under your control and are directed according to your judgment of the risks and of the relative values involved.

You are never denied care-if you are actually willing to do what is necessary to obtain it.

Prices are implicitly based on an ethics of individualism-the idea that it is the individual's right to make his own decisions and his responsibility to support himself.

Rationing, by contrast, is an artificial shortage created by coercion.

It consists of the government telling you that you cannot have certain kinds of medical care because some board of bureaucrats has decided that it is not "cost-effective."

Rationing is implicitly-and explicitly-based on an ethics of collectivism.

I don't recommend reading the whole article below, because reading a contemporary philosopher is like sticking your head in a cotton candy machine. But if you do choose to read it, you may notice that it never looks at medical care from the perspective of the individual making rational decisions about costs and benefits for his own life.

It always implicitly looks at health care from a collectivist perspective: the perspective of bureaucrats making decisions about the cost of your medical care "to society."

The term that sums up this collectivist outlook is the "quality adjusted life year"-the pseudo-mathematical term for a government bureaucrat's decision concerning whether your life is worth continuing or not, based upon your age, your prognosis, and some bureaucratic formula that quantifies your "quality of life."

"Quality adjusted life year" is the term that tells you that the most profound decisions concerning your own life have been taken out of your hands. Get ready to hear it a lot- and to live and die by it- if Obama and the Democratic leaders in Congress get their way.

"Why We Must Ration Health Care," Peter Singer, New York Times, July 15

"You have advanced kidney cancer. It will kill you, probably in the next year or two. A drug called Sutent slows the spread of the cancer and may give you an extra six months, but at a cost of $54,000. Is a few more months worth that much? 
If you can afford it, you probably would pay that much, or more, to live longer, even if your quality of life wasn't going to be good. But suppose it's not you with the cancer but a stranger covered by your health-insurance fund. If the insurer provides this man-and everyone else like him-with Sutent, your premiums will increase.

Do you still think the drug is a good value? Suppose the treatment cost a million dollars. Would it be worth it then? Ten million? Is there any limit to how much you would want your insurer to pay for a drug that adds six months to someone's life?

If there is any point at which you say, "No, an extra six months isn't worth that much," then you think that health care should be rationed.

In the current US debate over health care reform, "rationing" has become a dirty word….

Health care is a scarce resource, and all scarce resources are rationed in one way or another. In the United States, most health care is privately financed, and so most rationing is by price: you get what you, or your employer, can afford to insure you for.

But our current system of employer-financed health insurance exists only because the federal government encouraged it by making the premiums tax deductible. That is, in effect, a more than $200 billion government subsidy for health care. In the public sector, primarily Medicare, Medicaid and hospital emergency rooms, health care is rationed by long waits, high patient copayment requirements, low payments to doctors that discourage some from serving public patients and limits on payments to hospitals.

The case for explicit health care rationing in the United States starts with the difficulty of thinking of any other way in which we can continue to provide adequate health care to people on Medicaid and Medicare, let alone extend coverage to those who do not now have it. Health-insurance premiums have more than doubled in a decade, rising four times faster than wages.

In May, Medicare's trustees warned that the program's biggest fund is heading for insolvency in just eight years. Health care now absorbs about one dollar in every six the nation spends, a figure that far exceeds the share spent by any other nation….

Rationing health care means getting value for the billions we are spending by setting limits on which treatments should be paid for from the public purse. If we ration we won't be writing blank checks to pharmaceutical companies for their patented drugs, nor paying for whatever procedures doctors choose to recommend. When public funds subsidize health care or provide it directly, it is crazy not to try to get value for money.

The debate over health care reform in the United States should start from the premise that some form of health care rationing is both inescapable and desirable. Then we can ask, What is the best way to do it?...

This is the basis of the quality-adjusted life-year, or QALY, a unit designed to enable us to compare the benefits achieved by different forms of health care.

The QALY has been used by economists working in health care for more than 30 years to compare the cost-effectiveness of a wide variety of medical procedures and, in some countries, as part of the process of deciding which medical treatments will be paid for with public money.

If a reformed US health care system explicitly accepted rationing, as I have argued it should, QALYs could play a similar role in the US..

The Tracinski Letter

Thursday, April 10, 2014

Medicare Data Release Counterproductive, Misleading- The War on Doctors

“Medicare’s release of data on physician payments serves no purpose except to further the federal government’s war on doctors. Doctors are the scapegoats for the program’s bankruptcy....

What Medicare does not tell the public is that hospitals are paid much more than physicians for the very same drugs or treatments. This is driving independent doctors out of practice, and patients into hospitals that are likely to care much more about their bottom line than about giving the best treatment to individual patients."

Medicare Data Release Counterproductive, Misleading

Monday, January 13, 2014

 NYC Debate: Is ObamaCare Beyond Rescue?

On Wednesday 1/15/2015, Intelligence Squared will host a debate on the topic, "Obamacare Is Now Beyond Rescue":

    With the disastrous launch of the website, critics of the Affordable Care Act, or “Obamacare,” were given more fuel for the fire. Is this political hot potato's inevitability once again at stake? And is the medical community really on board with the law, or resisting (rewriting?) it from the sidelines?

Panelists taking the "For" side include:

  Dr. Scott Gottlieb,  Practicing Physician & Former Deputy Commissioner, FDA
   Megan McArdle, Writer and Columnist, Bloomberg View   

On the "Against" side:

   JonathanChait, Political Commentator and Columnist, New York Magazine
   Dr. Douglas Kamerow, Family Physician & Former Assistant Surgeon General

The debate starts at 6:45 PM and will be moderated by John Donvan, Author & Correspondent for ABC News

The website includes a "LiveStreaming" tab for folks to watch online.

    We are organizing a Tweet chat on Twitter at UPenn in the hopes of making it more interactive and engaging. We are promoting it on twitter to the general public and to radiology groups, other doctors groups and health policy groups...

    The hashtag will be : #IQChat.