It’s always an honor to host the Cavalcade of Risk.  I always learn something (or lots of somethings), and find myself pondering angles that I hadn’t considered before.  Since health care reform is the topic du jour lately, I’ll start things off with three excellent articles pertaining to various aspects of health care reform and cost control.

Tom Lynch of Workers’ Comp Insider gives us his take on the Atul Gawande article that we’ve all been discussing for the last few weeks.  Tom’s reaction to the Cost Conundrum is similar to mine – that Gawande has hit the nail on the head.  His view also comes from the workers’ comp perspective, and he notes that workers’ comp costs have increased twice as fast as group health insurance costs over the last ten years.  That is astounding, considering how much health insurance costs have risen.  I know that anecdotes aren’t data, but I have three friends who are currently in the middle of protracted treatments for soft tissue injuries attributed to repetitive motion.  Care for all three of them is being paid for by workers’ comp, and has been going on for several months, with multiple weekly visits to physical therapists.  Is this overuse of the medical system?  Judging that is definitely beyond my pay grade, but it looks like this is the trend in workers’ comp these days.

Jaan Sidorov of the Disease Management Care Blog examines the merits of the Health Care Affordability Model – less for its (non)ability to control costs but more for what it teaches us about the current limits of health plans.  They’re defanged risk pools.  If the fangs come back, Dr. Sidorov asks us to contrast their use by a large public plan vs. smaller not-for-profit insurers.  Bob Laszewski’s Affordability Model for health care reform has generated quite a bit of internet buzz.  Jaan homes in on the notion Bob puts forth that health insurance carriers are responsible for health care costs spiraling out of control, and should thus be held accountable for keeping those costs in check.  I agree with Jaan here – health insurance companies are already highly regulated entities, and don’t have as much say when it comes to costs as a lot of the public would like to believe.

Jason Shafrin, the Healthcare Economist, gives us a question to ponder: to test, or not to test?  He presents the dilemma from a strictly economic perspective, and it’s a question that needs to be addressed throughout our healthcare system.  In Mcallen, they apparently tend to err on the side of testing, and their cost structure is hardly something we want to emulate.  But at the same time, I think most patients would want to know whether they have a serious illness, even if it is not treatable.  Where I think this question should really come into play is in the case of non-serious ailments that tend to be self-remitting.  Moral hazard is most definitely an issue here, as people with great health insurance tend to be much more likely to have tests done (without any concern about the cost) than people with HSAs, lower benefit health insurance plans, or no insurance at all.  Good food for thought.

Although lately it seems that healthcare reform is all we ever talk about, there are other things going on in the political arena.  Read on, for the latest from David Williams and Hank Stern:

The Health Business Blog’s David Williams delves into the issue of whether Obama is taking a risk by nominating Sotomayor – a type I diabetic – to the supreme court.  He presents both sides of the issue quite well, and it is indeed a complicated issue.  On one hand, we live in a politically correct world, where people are hesitant to come out and say that someone’s disease or disability is a factor at all.  But on the other hand, it’s hard to imagine that someone who has lived with diabetes for nearly half a century doesn’t have some health scars to show for it.  I’ll take it for what it is: Obama sees Sotomayor as the best choice for the job.  He trusts her abilities as a judge, and obviously feels comfortable with her health status.  Perhaps she won’t live long enough to hang out on the bench for the next four decades, but maybe that’s not his ultimate goal.

InsureBlog’s Hank Stern has an article that includes a guest post from the Global Head of Business Intelligence at Guy Carpenter, discussing how governments provide reinsurance for acts of terrorism.  The US got involved in this after 9/11, and several other developed countries have gotten on board over the last few years.  In answer to Hank’s question, I have to say that I do not know whether our homeowner’s policy covers us against acts of terrorism.  I guess a little light reading is in order…

No Cavalcade would be complete without some strictly insurance-related articles, and a few on risk management in general:

Russell at Chatswood Consulting writes about how critical illness insurance can be used together with disability insurance and health insurance to help mitigate overall risk, and he presents several reasons why it’s not a superfluous coverage.

Five Cent Nickel gives us an overview of the health and life insurance needs of a couple with no children.  She makes a good point about the huge risk a person takes on by choosing to gamble and go without health insurance.  She also notes that health insurance premiums are less expensive if you can get coverage through your job… but that is not always the case.  Health insurance premiums for group coverage are higher than individual premiums, but the employer often pays a chunk of the group premiums, making the expense for the employee less.  Most employers still cover a good chunk of their employees’ premiums, but as costs have gone up over the years, more and more employers are passing on to employees the cost of covering dependents.  So if it seems that your own premiums are pretty reasonable, but that the cost to cover your family through your job is huge, it might be time to shop around for individual health insurance for your dependents.

Charles Green, from Trusted Advisor, gives us a piece about trust as a risk management tool.  At first glance, trust might seem like a bit of a warm fuzzy in the business world, but Charles makes some very good points.  From a health insurance perspective, I can see how this strategy could be a powerful marketing tool for health insurance carriers.  Gaining the trust of the general public would be a hugely effective strategy.  We always send prospective clients a link the Colorado Division of Insurance complaint ratio page before they settle on a carrier.  The primary goal there is to allow consumers to pick a company that they can trust.  And as Charles points out, trust is a lot less expensive than legal shenanigans.

Insurance Writer Nancy Germond brings us an article about enterprise risk management (ERM) and how it can be used by companies to strategically manage risk, information, and opportunities.

Silicon Valley Blogger at The Digerati Life writes about entrepreneurs and the spirit that drives them.  Yes, they take risks, but only calculated risks.  And some of that entrepreneurial spirit is probably innate.

And in case you needed a little something else to worry about, Robert Siciliano gives us an article about how researchers at Carnegie Mellon University have figured out how to pretty accurately guess someone’s social security number just by knowing some basic public information about the person (where and when they were born, for instance).  When I was in college, social security numbers were used as school id numbers.  I had never heard of identity theft back then, and the most any of us worried about with our student id cards was that we’d lose them and someone else would be able to swipe our free bus access and football game tickets.  My id card never worked on the scanner in the dorm cafeteria.  By about the middle of my first semester, the cafeteria lady had memorized my ssn (she had to type it into her keypad three times a day) and would just punch it in when she saw me coming.  I suppose times have changed a bit in the last 15 years.