It would seem that there are pros and cons to both sides, and the position you take might have a lot to do with whether you are a patient or a doctor.

Obviously, patients should never be denied access to their medical records if they request them.  Some patients don’t want to know all the nitty gritty details, while others thrive on having as much information as possible.  Medical Resident makes a good point in stating that physicians should be able to make their notes and use them as a sorting tool for sifting through possible diagnoses without worrying about someone else dissecting those notes later on.  A simple charting software could allow docs to make notes to themselves on one side of the screen, and write “official” notes on the other side after thinking about the patient’s specific situation.  It’s not fair to expect a doctors to allow us access to every detail that passes through their heads, but it’s also not fair to keep any pertinent data from patients.  Patients who don’t want to know the details probably won’t ask for their chart notes.  Those that do ask, deserve to know what is being written about their health.

In general, I’m a fan of as much transparency as possible in health care.  I think that patients, doctors, and payers (both public and private health insurance) should have access to information related to treatment, diagnoses, and cost – as quickly as possible and as clearly as possible.  Open source medical records is one step towards transparency, and I like that.  Chances are, patients who don’t want to know all the details wouldn’t be the ones accessing their open source notes anyway.  And the doctors who aren’t in favor of open source notes won’t likely be among the first to implement them.  But eventually, I imagine such a system will be commonplace.

I’ve arranged the cavalcade roughly by topic, but I wanted to start off with an article from Jon Coppelman of Workers Comp Insider.  It’s the story of flight data recorders, invented by David Warren, who lost his own father in a plane crash when he was a child.  Warren never profited financially from his invention, but it’s safe to say that all of us who travel by air are better off because of his work.

Healthcare

The Healthcare Economist, Jason Shafrin, shares some interesting data about healthcare utilization in conjunction with Medicare Part D.  Not surprisingly, the availability of Part D has resulted in an increased demand for prescription drugs.  Although that increased utilization is partially offset by a decreased usage of other non-pharmaceutical medical services.  But the most intriguing aspect is that “gaining prescription drug coverage was associated with worsening health.”

Evidence based medicine has had plenty of air time recently, and is often touted as a way to reduce health care costs and improve the quality of care.  But Jaan Sidorov of the Disease Management Care Blog reminds us that succession – the idea that an observable outcome must have been caused by a specific intervention – isn’t always accurate in a system as complex as health care delivery.  There are many factors that have to be accounted for, and it’s difficult to point to any single intervention as the cause of a particular outcome.

Health Business Blog’s David Williams explains a new technology that allows hospitals to create an online patient portal that is linked to the patient’s medical information.  Once the patient signs in, the website generates ads and content based on the patient’s specific medical information, much the way Amazon makes recommendations based on your previous purchases.  As David points out, there is some room for problems here.  Not to mention the increased utilization that could result from specifically targeted pharmaceutical and medical device advertising.

Brian from Business Risk Management tells us about the actuaries who discovered the mistake in Anthem Blue Cross Blue Shield’s initial CA rate increase request, and how correcting the problem lowered the rate increases from an average of 25% to an average of 14%.

InsureBlog’s Bob Vineyard gives us his take on health insurance for children starting this fall:  scarce and expensive.  There is no way that it’s going to be a simple or cheap process for all children to gain access to guaranteed issue health insurance (especially in the absence of any mandate requiring all children to have coverage).  There has been confusion around this part of the law for months, and it’s reasonable to assume that other states will follow suit in terms of setting up new plans for children or ceasing to offer child-only coverage for the time being.

The Notwithstanding Blog addresses President Obama’s alleged hostility towards consumer directed health plans.  It’s true that consumers tend to want the latest and greatest in health care, which leads to over-utilization.  We here at the Colorado Health Insurance Insider are big fans of HSA qualified policies and consumer directed health care in general, but we recognize that it has it’s limitations.

Offshore Drilling And Risk Management

Claire from the Insurance Industry Blog discusses the potential for litigation surrounding the health of workers who are involved in the Deepwater rig disaster clean-up efforts.  If we recall the health problems that arose for rescuers and demolition crews after 9/11, it makes sense that something similar could happen this time too.  Hopefully all possible precautions will be taken to protect the thousands of people who are working to save the Gulf.

In keeping with the oil rig theme, and with a fascinating discussion of managing unthinkable risk , we have an article from Actuary Info called “the LORD and Risk Management”.  Check it out.  I know you’re curious.

Life And Long Term Care Insurance

Miranda from Budget Life reminds us that funeral costs can be a burden on loved ones when you die, and that they are one more reason to have at least some life insurance in place, or a reserve of funds to pay for the funeral.  She also gives us a look at some of the most expensive funeral options out there… want to be made into a diamond?  For 25 grand, you can do just that.

Free Money Finance explains four scenarios that increase the chances you’ll eventually need long term care (and thus long term care insurance unless you’ve got some other way of paying the often very steep bill that can go along with long term care).

Liability, Auto, And Business Risk Management

If you’re an uninsured motorist in the UK, you better get some insurance soon.  Car Insurance Blogger tells us about a new system in the UK that is linking the Motor Insurance Database with the Driver and Vehicle Licensing Agency, automatic plate recognition systems, and police national computers to track down uninsured motorists.  I wonder how feasible such a system would be here?  Probably a bit more complex, given that we have 50 states, all with their own laws concerning auto insurance, and their own licensing system.

Attorney Nina Kallen takes her daughter’s camp to task for not having liability insurance.  It sounds like the camp is covering it’s legal bases by having the parents sign a waiver releasing the camp from liability if something happens to one of the kids, but I’d say that Nina’s right in this situation… liability insurance is a good idea.

Being in the health insurance industry, we tend to think of pre-existing conditions in terms of medical issues.  But an article by Tred R. Eyerly about a flawed construction project illustrates how pre-existing conditions can cause nasty litigation between P&C carriers as well.

Nancy Germond writes about the various insurance policies that you may need if you’re starting a new business.  The example she uses is a roofing business, but a thorough discussion with an experienced insurance agent is a must when starting any kind of business.

Risk Management In Investing

Should you buy gold as a means of diversifying your assets?  The Silicon Valley Blogger explains how adding gold to your portfolio can be helpful as a risk management tool, and also provides several avenues people can use to buy gold.

Obviously this wouldn’t work for all seniors.  People who are living on social security without any other income would be hard pressed to come up with $375 to be seen by a doctor who doesn’t take Medicare.  And others might balk at the idea of seeing a doctor who doesn’t take Medicare, regardless of whether they could afford the care.  But for those who are open to the idea and able to afford the services, Dr. Dappen does make it sound like a good deal.  No hassle, no waiting, and the doctors will visit your home if you can’t go to them.

I’m curious what a procedure like this would have cost if the patient had opted to see an in-network Medicare provider in an office setting?  As Dr. Dappen pointed out, an ambulance with a stretcher and paramedics might have been needed to transport her to the doctor depending on the severity of her osteoarthritis.  That alone would have been more expensive than the procedure itself.

House calls are definitely still rare these days, but they are gaining in popularity as our population ages.  The Independence At Home Act of 2009 created a test program to see if money can be saved and outcomes improved for 10,000 of the sickest Medicare patients – people with multiple medical conditions, who have needed high cost health care in the previous year.  Time will tell how it works, but the idea is promising.  Keeping people in their homes helps to make them comfortable, reduces stressful transportation issues, and also avoids possible infections that spread easily in medical offices and hospitals.  Obviously for serious situations hospitalization would still be necessary, but for dealing with more minor illnesses and injuries, and especially preventive care, home visits make a lot of sense.

Private health insurance companies tend to take some of their cues from Medicare in terms of what they cover, so if Medicare eventually makes home visits more available, it stands to reason that people with private health insurance might also have access to house calls from doctors, even if they can’t afford to pay full price to a non-network provider.

Dr. Dappen’s article was included in Grand Rounds this week, hosted by Bongi at Other Things Amanzi.

Jared included numerous examples of provisions in the Patient Protection And Affordable Care Act that will make things a little more challenging for health insurance companies, but he didn’t mention anything about the mandate that would require everyone to buy into the health insurance system.  If that mandate is successful in this regard, there should be millions more people paying into the system in a few years, and those premiums can be used to offset some of the increased costs that will go along with things like guaranteed availability.  If the mandate isn’t successful, it’s reasonable to expect that premiums will have to increase to cover costs, but the fact that the mandate exists ought to be included alongside the list of things that will increase costs for the health insurance industry.

Jared mentioned that

He [President Obama] should know that insurance is a brilliant financial invention and a win-win arrangement when both sides are free to act voluntarily in the context of a free market.

I agree.  Insurance is an excellent product that is beneficial to both the insured and the insurer in most situations.  The insured gets peace of mind and is protected from catastrophic financial loss in the event of an unforeseen circumstance, and the insurer makes a profit by providing this very necessary service.  But underwritten insurance doesn’t fall completely in the realm of the free market, and there are some people who can’t purchase health insurance, no matter how much money they bring to the table.  The idea that health insurance should be strictly a free market, unregulated product is popular among people who are healthy and able to select from numerous options when shopping for health insurance.  It’s also popular among people who have great health insurance provided by an employer, and are thus relatively insulated from the process that is required if a person needs to qualify medically for individual health insurance.  But a free market system ultimately leaves unhealthy people with no options for health insurance.  This in turn means that the cost of healthcare for those individuals is eventually passed on to the rest of the population in the form of higher healthcare costs.  Clothing and houses and cars… the free market works great for those things, because people can choose to buy less expensive options, or not to purchase them at all.  But if you’re having a heart attack, there aren’t really any viable alternatives other than standard medical care in an emergency room.  And without health insurance, paying for that care will be extremely difficult for all but the wealthiest among us.

We definitely needed a solution to make health insurance available for everyone, and there’s no way to do that without taking away some of the freedoms from both sides (including the ability for insurance companies to decline applicants, and the ability for people to choose to not have health insurance).  The legislation isn’t perfect, and it won’t please everyone, but hopefully a decade from now, the problem of millions of Americans living without health insurance will be a memory.

I like the compromise that the revised bill would create.  It will definitely expand access to maternity care for women in Colorado.  Right now, there are three health insurance companies here that offer maternity care:  Assurant, United HealthOne, and Rocky Mountain Health Plans.  The RMHP maternity option is very expensive.  The United HealthOne option isn’t terribly pricey, but the benefits are low for the first couple years after the policy goes into effect.  The Assurant policy is the most popular among our clients, but it requires that the client meet a separate maternity deductible before benefits begin.

For a woman in Colorado who does not have an option for group health insurance and is contemplating pregnancy, the choice is either to opt for paying for the pregnancy out of pocket (complications are covered on all policies), or to switch to one of those three health insurance companies that offers maternity benefits.  Most of the big-name health insurance companies – Anthem Blue Cross Blue Shield, Aetna, Cigna, Humana, Kaiser, etc. – wouldn’t be an option for her at all if she wants to have maternity benefits.  Right now, if a woman has her heart set on using a particular health insurance company and also on having maternity coverage, she’s likely going to have to pick one or the other.  If HB 1021 requires each insurance company to offer at least one policy with maternity benefits, the number of options available to women seeking maternity coverage would increase dramatically.  I have to assume that the increased competition would help to lower costs for this coverage.  It also  makes sense that if women had more options for coverage, more women would likely elect to add maternity to their policies, thus increasing the pool of insureds with maternity coverage, further driving down costs.

It would be nice to see more options available for our clients who are looking for maternity coverage.  My preference would be if clients could select their health insurance policy based on all of the other features of the plan, and then add maternity benefits after they had settled on a policy, rather than choosing a policy by default simply because it is one of a very few options that offer maternity benefits.

I can see both sides of this issue, but with all of the technological advances we’ve made over the last decade, it seems that something as simple as communication between hospitals and health insurance companies regarding patient admissions should be a simple, electronic process by now, with no clerical errors or staffing issues involved.  If astronauts can update their status on Twitter from the space station in real time, we should be able to devise a system that allows for instantaneous notification for health insurance carriers when an insured is treated or admitted to a hospital.

What if our health insurance ID cards came with barcodes that could be scanned in the doctor’s office or hospital, immediately allowing the office staff to see our benefits, how much of our deductible still needs to be met, and any exclusions on our policy?  Then admission and treatment data could be transmitted directly to the health insurance carrier, without the need for phone calls or extra staff.  Rather than having different scanners and transmittal systems for each insurance carrier, it would make sense for this to be a standardized system, with one system that would be able to transmit data to all of the  major health insurance carriers.  This isn’t a far-fetched idea – think of credit card processing systems.  Visa, MasterCard, American Express and Discover are privately-owned companies that are fiercely competitive with each other.  Yet a store owner does not need a separate processing system for each card.  When you pay at the gas pump with a credit card, the processing system can identify what type of card you’re using, transmit the data to the correct company, check to make sure you have available credit on your card, and authorize the transaction, all within a few seconds.  Visa doesn’t have to wait around for 24 hours before they find out that I bought some groceries today.

There has been a lot of talk about bringing our medical information system into the 21st century lately, and this battle over notifications is a perfect example of how the health care industry is lagging behind a lot of other sectors in terms of electronic data storage and transmission.

Another issue in this debate is how much health insurance premiums can vary from one employee to the next, working at the same company, and with the exact same coverage.  To get an idea of the discrepancies, I calculated a quote for a small group policy with Anthem Blue Cross Blue Shield (which has very competitive premiums in the Colorado market) for a hypothetical company based in Denver with six employees.  I looked at premiums for single employees as well as employees with families, and used a wide range of ages for the employees.  While Anthem has a wide range of plan designs available, I specifically looked at premiums for a policy with a $500 deductible and 30% coinsurance, with an out of pocket maximum of $3500 in addition to the deductible ($4000 in out of pocket exposure each year).  The policy I looked at only covered generic prescriptions, and did not include any dental, vision, life insurance, or disability coverage.  In other words, it had no bells and whistles and wasn’t even close to what most people would consider a “Cadillac” plan.

For a single, 21 year old employee, this policy would cost $3144/year, well below the threshold for the Cadillac tax.  But a 60 year old single employee with the same policy would be paying $15528/year (the employer would likely be paying a good portion of each employee’s premium, but the tax is calculated based on the total premium, not the portion that is paid by the employee).  This would mean that $7028 of the 60 year old’s premium would be taxed – at 40%.

For families, the disparity in premiums is similar.  Family coverage for a 24 year old at our hypothetical company would cost $13860/year – quite a bit under the threshold for the tax.  But family coverage for a 62 year old would be $34,056/year, and $11056 of that would be taxed (the portion that is over the $23,000 premium limit).

Taxing expensive health insurance policies is an idea with its heart in the right place.  Making individuals and employers more aware of the cost and value of their health insurance policies is a good start towards real comparison shopping.  But setting a flat dollar amount above which a plan will be taxed seems ill-advised.  It doesn’t really do a good job of weeding out health insurance plans that truly have too many bells and whistles, and it wrongly penalizes people who live in areas where health care costs are higher than average, or companies with a disproportionate number of older workers.

Joe Paduda’s article was included in the Health Wonk Review, hosted this week by Jaan Sidorov of the Disease Management Care Blog.

Dr. Austin’s dental practice is offering the HIV testing for free, but she pointed out that if a dentist isn’t offering the test for free, patients would have to pay out of pocket, as dentists cannot currently bill health insurance companies.  There is a medical code for HIV testing, but it isn’t recognized if it’s submitted by a dentist.  This doesn’t make much sense, but I’m sure that there’s a combination of inertia and turf wars between dentists and primary care physicians blocking the way for dentists to be able to bill a patient’s health insurance company for an HIV test.

The CDC webpage about the OraQuick (OraSure) test doesn’t specify a cost; it simply states that the fee will be determined by the manufacturer and the lab that performs the test.  I imagine it’s relatively inexpensive, otherwise dental offices wouldn’t be able to offer it for free.  But anytime a test is covered by health insurance, more people are likely to get the test (think of mammograms and paps).  Even if the cost of the test is only counted towards a patient’s deductible (as might be the case if the patient has an HSA qualified plan, for example), just knowing that it will be billed to the health insurance company might make a patient more likely to get the test.  In addition, billing the test to a health insurance company is likely to result in a lowered final price for the patient based on network negotiated rates.  All around, it makes sense for dental offices that provide HIV screening to be able to bill a patient’s health insurance company for the test.

David Williams’ article was included in Grand Rounds last week.

In reality, I imagine that such a scenario would actually make our health insurance industry look a lot like our credit card industry.  Where does your credit card payment go? Chances are, it’s not to the state where you live.  In 1978, the Supreme Court ruled that nationally chartered banks only have to abide by the laws in the state where they are incorporated, not in all the states where they conduct business.  This made states without caps on interest rates a favorite incorporation spot for credit card companies – and of course the increased tax revenue meant that the states in question had little motivation to limit the amount of interest a bank could charge.

Most individual state insurance commissioners have fought hard to win consumer protections and regulate how insurance companies do business, but the extent of those protections varies tremendously from one state to another.  Health insurance companies – like most businesses – are focused on the bottom line (as publicly traded companies, they have to be).  If the opportunity arises for them to set up shop in one state and do business in all states, it would be financially foolish of them to pass on that opportunity.  And chances are, the states with the most lenient regulations and the fewest consumer protections would be the favored incorporation spots for health insurance carriers.  States that don’t have high risk pools (and thus don’t charge their insurance carriers a fee to maintain the risk pool) would likely be popular, as would states that have few benefit mandates.

I’m not opposed to the idea of health insurance companies that could operate on a national basis, allowing people to keep their health insurance if they move to another state.  As an example, there are Blue Cross Blue Shield plans in all 50 states, but if one of our Anthem clients moves out of Colorado, she must apply for a new plan in her new state under current regulations.  That is frustrating for the insured, especially if she likes her current plan design or if she has developed a health condition that will make going through new underwriting a difficult process.   It does make sense to allow people to keep their health insurance plans if they move out of state but to an area where they still have good network coverage.  But such a plan would have to be overseen by federal – rather than state – regulations.  Simply opening things up to allowing health insurance companies to base themselves in any state they choose, operate under that state’s laws, and sell health insurance in all states, would take us to the lowest common denominator in terms of consumer protections.

As of November 18th, 2009, Imerica has been placed in Rehabilitation, and is no longer issuing new policies.  During this process, the Arkansas Insurance Commission will be overseeing the day to day operations of Imerica, and for now, claims will continue to be paid.  If it is determined that Imerica can be rehabilitated, they will continue to do business under the rehabilitation plan.  If not, Imerica would be liquidated, and policyholder claims not paid by Imerica would become the responsibility of the life and health insurance guaranty funds in the states where Imerica was licensed.  In Colorado, this group is known as the Life and Health Insurance Protection Assocation (LHIPA).  LHIPA has a maximum benefit of $500,000 for major medical insurance, which is significantly lower than most of the benefit maximums offered on private health insurance policies in Colorado (including Imerica, which offered policies with lifetime maximums ranging from $2 million to $8 million).

If you currently have a policy with Imerica and are in reasonably good health, you may be able to qualify for a policy with another carrier.  This will involve medical underwriting, but we can help you determine whether there is a company that would work for you, based on your medical history.  If you are in very good health, changing to another carrier will be a relatively easy process.  Please contact us if you have questions about switching to a new carrier, or if you would like to compare other options that are available in Colorado.