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Archive for Wednesday, February 24, 2010

WellPoint to go ahead with insurance rate hike

February 24, 2010

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A man dressed as “Captain America” joins a group of physical therapists and consumers affected by insurance premium increases, during a protest in Los Angeles on Tuesday. California lawmakers say they are astonished by a plan by Anthem Blue Cross to boost individual insurance premiums by as much as 39 percent.

A man dressed as “Captain America” joins a group of physical therapists and consumers affected by insurance premium increases, during a protest in Los Angeles on Tuesday. California lawmakers say they are astonished by a plan by Anthem Blue Cross to boost individual insurance premiums by as much as 39 percent.

— An executive for the parent company of Anthem Blue Cross told California officials Tuesday that the state’s largest health insurer will go forward with much-criticized individual-policy rate increases of as much as 39 percent once a two-month delay lapses May 1.

James Oatman, vice president of WellPoint Inc.’s consumer division, told the state Assembly’s health committee that the premium increases, and the profit they generate, are appropriate despite criticism from consumers, regulators, Congress and the Obama administration.

Oatman and Anthem’s president, Leslie Margolin, defended Anthem’s profit margin during an often-testy hearing, saying it was 2.5 percent to 5 percent, a figure that put it in line with other insurers, they said.

A Los Angeles Times analysis of Anthem’s financial reports to regulators showed Anthem has transferred more than $4.2 billion to WellPoint since 2004.

The two executives appeared in Sacramento a day before Angela F. Braly, WellPoint’s chief executive, is scheduled to testify before the House Subcommittee on Oversight and Investigations.

Los Angeles-based Anthem has 800,000 customers with individual policies in California.

Comments

just_another_bozo_on_this_bus 4 years, 10 months ago

Of course they'll go ahead with it-- they know that the vast majority of their customers have no true choice but to pay up in this supposedly "free market" system.

notajayhawk 4 years, 10 months ago

That's right, boohoohoozo, the poor proletariat has no choice but to accept the jack-booted heel of the corporations on their throats.

I know you don't like to bother your empty little head with things like facts, Herr Klowne, but if their profit margin doesn't increase with the rate increase, that pretty much says their costs have gone up. Which pretty much means the enrollees do indeed have a choice - they can pay the premium increase, or they can pay even more out of pocket. Because the problem isn't the cost of insurance, but the cost of health care delivery.

But you already knew that - nicht wahr, Herr 'Doktor' Klowne?

redmoonrising 4 years, 10 months ago

Maybe all their consumers can then become uninsured like me because the cost of the insurance drove them out of the market. And unfortunately, there isn't anything better out there than I can find so I do without.

a_flock_of_jayhawks 4 years, 10 months ago

notajayhawk (anonymous) says...

"but if their profit margin doesn't increase with the rate increase, that pretty much says their costs have gone up."

~40%? You're kidding. And do you really trust them to be honest with their profit margin? Even if you accept the lower number, 2.5%, do the math on that percent to $4.2b over 6 years. Then look at the result as the average amount of premiums per individual.

just_another_bozo_on_this_bus 4 years, 10 months ago

The "profit" figure that insurance companies throw out is a bald-faced lie. It's figured by pretending that the money they take in from their insured clients and held in reserve to pay claims is somehow a cost of doing business-- which it isn't. The expenses they incur in managing that money is a legitimate business expense, but the money itself is not.

So that means that their real profits are 4-5 times what they claim-- somewhere between 15% - 25%.

What they are doing is like if you hired a real estate management company to run your rental properties, and when figuring what their profits are, they claim that they own your property, and that said property is an "expense." This would obviously lower their profitability considerably.

jafs 4 years, 10 months ago

bozo,

Actually, it kinds of depends on whether they use that money to pay claims or not.

If they do, it is in fact money out (ie. expense). If not, if they simply retain it, then it is a strange creature indeed.

just_another_bozo_on_this_bus 4 years, 10 months ago

When I draw money out of my account at a bank, is that considered an expense by the bank?

barlowtl 4 years, 10 months ago

Would be interesting to know how much they paid for ads and congressional contributions to defeat health care plan. Could pay for a lot of insurance claims.

jafs 4 years, 10 months ago

bozo,

The difference is that insurance premiums are combined into a pool. Then claims are paid out of that pool. Your premiums are not simply held and then used to pay your personal claims.

Depending on your history/health/etc. you may have paid much more in than your claims or much less.

You don't think that claims paid are expenses for insurance companies? I would think any money spent in the operation of one's business is a legitimate expense.

If they're taking in much more than they're paying out, that will show up.

notajayhawk 4 years, 10 months ago

a_flock_of_jayhawks (anonymous) says...

"~40%? You're kidding. And do you really trust them to be honest with their profit margin?"

Hmmm, let's see. Do I trust a publicly traded corporation whose financial statements have to be filed with the SEC to be honest with their profit margin?

Um - yes.

"Even if you accept the lower number, 2.5%, do the math on that percent to $4.2b over 6 years."

Uh - what?

notajayhawk 4 years, 10 months ago

just_another_bozo_on_this_bus (anonymous) says...

"The "profit" figure that insurance companies throw out is a bald-faced lie."

Let's see - should I believe the accounting firm who prepared the SEC filings, or a whining Marxist moron posting to a small-town message board?

What to do, what to do ...

"It's figured by pretending that the money they take in from their insured clients and held in reserve to pay claims is somehow a cost of doing business-- which it isn't."

Why, you're right! Cash reserves are not costs of doing business!

That would probably be why they appear on the balance sheet as an asset rather than on the income statement as an expense, doofus.

But what a brilliant idea by Herr Klowne! Forget about cash reserves, and just pay out claims with revenue from future premiums! Why, in no time at all, they'd have the financial solvency of - Medicare! (And join Bernie Madoff in prison.)

And don't worry your empty little head about the fact that you can't pay claims with future revenues when you have a declining enrollee base.

Oh, wait - you can't just do away with reserves, since they're required by LAW. Or are you forgetting that was the excuse our dear former insurance commissioner (later governor current HHS secretary) used to defeat the conversion of BC/BS of Kansas to a shareholder-owned corporation? (Of course, public insurers - like Medicare - don't have to keep those reserves - which might explain why they're running out of money.) BTW, boohoohoozo, Wellpoint's cash & investments come up about $5B short of their total liabilities.

"So that means that their real profits are 4-5 times what they claim-- somewhere between 15% - 25%."

Ah, yes, I keep forgetting our deluded local communist equates 'wealth' with 'profit'. Even if the point you were sadly trying to make had any merit at all, boohoohoozo, it would only apply to an increase in cash reserves. Wellpoint's reserves did indeed increase in 2009 - due to a number of factors, including 1) restoring reserves to make up for a $4.8B drop in reserves the year before, 2) the sale of their pharma subsidiary. Excluding the after-tax proceeds of the PBM sale, their reserves are almost exactly what they were in 2005.

We all know you're completely anti-business, Herr Klowne - please stop pretending you understand it.

notajayhawk 4 years, 10 months ago

just_another_bozo_on_this_bus (anonymous) says...

"When I draw money out of my account at a bank, is that considered an expense by the bank?"

No.

It also wasn't INCOME for the bank when they accepted the deposit. It's still your money, and while it's in the bank it's both an asset and an account payable.

While YOUR money is in the bank, and after you draw it out and place it under your mattress, it's not an expense or a liability, it's an asset - until it leaves your possession, at which time it's an expense for YOU.

Please read a book or something, boohoohoozo - at least try to learn what goes on the income statement, what goes on the balance sheet, and what the difference is.

Corey Williams 4 years, 10 months ago

Sorry about your life, nota. Maybe someday you'll find someone who loves you for being you. Until then, just continue trolling away on these message boards. Even though they really don't, you know that everyone here secretly admires you for your ..."intelligence," and your...um..."wit."

Richard Heckler 4 years, 10 months ago

http://www.pbs.org/moyers/journal/blog/2009/10/bill_moyers_michael_winship_in.html#more

If you’ve been watching the Senate Finance Committee’s markup sessions, maybe you’ve noticed a woman sitting behind Committee Chairman Max Baucus. Her name is Liz Fowler.

Fowler used to work for WellPoint, the largest health insurer in the country. She was its vice president of public policy. Baucus’ office failed to mention this in the press release announcing her appointment as senior counsel in February 2008, even though it went on at length about her expertise in “health care policy.”

Now she’s working for the very committee with the most power to give her old company and the entire industry exactly what they want – higher profits – and no competition from alternative non-profit coverage that could lower costs and premiums.

A veteran of the revolving door, Fowler had a previous stint working for Senator Baucus – before her time at WellPoint. But wait, there’s more. The person who was Baucus top health advisor before he brought back Liz Fowler? Her name is Michelle Easton. And why did she leave the staff of the committee? To go to work – surprise – at a firm representing the same company for which Liz Fowler worked – WellPoint. As a lobbyist.

You can’t tell the players without a scorecard in the old Washington shell game. Lobbyist out, lobbyist in. It’s why they always win. They’ve been plowing this ground for years, but with the broad legislative agenda of the Obama White House – health care, energy, financial reform, the Employee Free Choice Act and more – the soil has never been so fertile.

The health care industry alone has six lobbyists for every member of Congress and more than 500 of them are former Congressional staff members, according to the Public Accountability Initiative’s LittleSis database.

Just to be certain Congress sticks with the program, the industry has been showering megabucks all over Capitol Hill. From the beginning, they wanted to make sure that whatever bill comes out of the Finance Committee puts for-profit insurance companies first -- by forcing the uninsured to buy medical policies from them. Money not only talks, it writes the prescriptions.

In just the last few months, the health care industry has spent $380 million on lobbying, advertising and campaign contributions. And -- don’t bother holding onto your socks -- a million and a half of it went to Finance Committee Chairman Baucus, the man who said he saw “a lot to like” in the two public option amendments proposed by Senators Rockefeller and Schumer, but voted no anyway.

The people in favor of a public alternative can’t scrape up the millions of dollars Baucus has received from the health sector during his political career. In fact, over the last two decades, the current members of the entire finance committee have collected nearly $50 million from the health sector, a long-term investment that’s now paying off like a busted slot machine.

just_another_bozo_on_this_bus 4 years, 10 months ago

"The difference is that insurance premiums are combined into a pool. Then claims are paid out of that pool. Your premiums are not simply held and then used to pay your personal claims."

Whether or not the amount of premiums held to pay for claims is an expense, and therefore can be used as a basis to calculate what these companies rates of profits are, is largely semantic.

But it really does get to the heart of the matter of what's wrong with the healthcare system-- What's the purpose of health insurance?

Clearly, the "conservative/free-market" answer to that question is to provide profits and income to insurance companies-- paying claims for healthcare is merely an expense, and it's a fiduciary responsibility of any corporation and its officers and management to limit expenses in order to maximize profits. The way they calculate profits, which considers payouts on claims as "expenses" demonstrates that fact quite conclusively, as do the daily experiences of insured clients throughout the country of being denied coverage for medical care that quite often translates to serious untreated illness or even death.

This is, of course, a very blatant conflict of interest, but those whose only interest in this issue is the maintenance of "market purity," that conflict of interest is something that we just need to live, or die, with.

notajayhawk 4 years, 10 months ago

mancityfooty (Corey Williams) says...

"Sorry about your life, nota. Maybe someday you'll find someone who loves you for being you. Until then, just continue trolling away on these message boards. Even though they really don't, you know that everyone here secretly admires you for your ..."intelligence," and your...um..."wit.""

So you stopped by not to comment on the story, or even on the content of my posts, but rather to express your opinion about another member.

Wanna' look up the definition of troll, footie?

Not that your opinin is one I give two @#%&*!'s about, foot, but I'm curious as to with which part of my posts you thought I was trying make myself appear 'intelligent'. The content of my posts was pretty basic high school level accounting - it's really not my fault if neither boohoozo or you have a clue as to understanding financial statements.


just_another_bozo_on_this_bus (anonymous) says...

"But it really does get to the heart of the matter of what's wrong with the healthcare system-- What's the purpose of health insurance?"

An excellent question. Too bad you don't know the answer. The purpose of ANY insurance is to, for a fee, protect the policy holder from large financial losses incurred through some form of loss. The purpose of health insurance is NOT to provide health CARE any more than the purpose of homeowners' insurance is to provide shelter or car insurance is to provide transportation.

"The heart of the matter of what's wrong with the healthcare system" is that 1) people use insurance for routine, foreseeable, and sometimes even easily affordable services or procedures, which would be like using your homeowner's insurance to pay for lawn care or your car insurance to buy gas; and 2) that people even NEED insurance in the first place, since health CARE costs too much. Nicht wahr, Herr 'Doktor' Klowne?

jafs 4 years, 10 months ago

bozo,

So if the insurance companies pay out 95% of the premiums in claims, and spend the other 5% on administration, they in fact will make no profits.

I don't think the problem is the accounting question.

The rest of your post I quite agree with - if the goal is to provide decent quality health care at an affordable price, health insurance doesn't seem to be meeting that goal. And, there is clearly a conflict of some sort between the average American's need/desire for good health care at a reasonable price and an insurance company's need/desire to make a profit by reducing expenses (ie. claims) or raising rates.

just_another_bozo_on_this_bus 4 years, 10 months ago

"The purpose of ANY insurance is to, for a fee, protect the policy holder from large financial losses incurred through some form of loss."

So if I make a bad investment in the stock market, I should make a claim on my health insurance policy?

"The purpose of health insurance is NOT to provide health CARE any more than the purpose of homeowners' insurance is to provide shelter or car insurance is to provide transportation."

Apples and oranges-- the only reason anyone ever buys health insurance is to pay for medical treatment should it ever be necessary. And anyone who ever buys medical insurance does so with the expectation that the money they pay in in premiums, when pooled with the premiums of all other policy holders, is what will allow the insurance company to pay for the claims of anyone unlucky enough to need it.

Are there some hypochondriacs out there that suck up too much medical care? Sure, but that's no justification for the screwed up system we currently have.

just_another_bozo_on_this_bus 4 years, 10 months ago

"So if the insurance companies pay out 95% of the premiums in claims, and spend the other 5% on administration, they in fact will make no profits."

I think, currently, the industry average is somewhere around 80% of premiums getting paid for healthcare, and 20% goes for everything else.

"I don't think the problem is the accounting question."

My biggest complaint is the dishonesty involved in the calculation of their "profits." Insurance companies aren't the same type of business that a manufacturing concern is. The 80% of premiums they take in that gets paid out for claims really isn't "their" money-- it's given to them in trust, and they are paid quite well for managing that trust-- but over the last 40 years or so, they've come to increasingly betray that trust.

notajayhawk 4 years, 10 months ago

just_another_bozo_on_this_bus (anonymous) says...

"So if I make a bad investment in the stock market, I should make a claim on my health insurance policy?"

No more than you'd make a claim for your lobotomy on your car insurance. But you probably could obtain a policy for losses in the market - did you ever see those advertisements from Best Buy and so forth that say 'Buy a big-screen TV before the Super Bowl and it's free if the opening kickoff is run back for a touchdown?' Those offers are paid by insurance. Insurance companies will write a policy for almost anything - the space shuttle Challenger was insured by Lloyds - who had predicted a catastrophic loss by the 28th or 29th mission, incidentally. The nature of the loss is irrelevant, since insurance is purely a financial product. If you could get a policy written for market losses, then yes, you could file a claim to cover your bad investments.

"Apples and oranges-- the only reason anyone ever buys health insurance is to pay for medical treatment should it ever be necessary."

Exactly why they have homeowners' and auto insurance, also. People don't generally plan to have car accidents and house fires. What sets health insurance apart is the way we've bstrdized it. The entire concept of insurance is defeated when it's used to cover routine predictable expenses. By its very nature, insurance is risk management - how does paying for an annual check-up that you know you're going to have every year qualify as risk management?

"I think, currently, the industry average is somewhere around 80% of premiums getting paid for healthcare, and 20% goes for everything else.:"

Wellpoint's actual was over 82% last year, which is low for them - they're usually closer to 85%, as are most insurance companies.


vertigo (Jesse Crittenden) says...

"Enron ring a bell?"

Why, yes - and you wouldn't believe how much I was hoping that would be your reply.

Where is former Enron CEO Jeffrey Skilling right now?

That's the point - as with any rules/regulations/guidelines/laws, some people will always break them. And Enron is the perfect example of what happens when you do.

Do some people make false financial claims? Yes. It would be stupid to assume otherwise, which is why it would certainly be in your best interests to know how to read financial statements instead of summaries - as I'm sure the institutional investors who make up more than 80% of Wellpoint's stockholders can do. Guess what - some police officers break the law, some judges aren't fair, some clergy are immoral, etc. But if you're going to take the handful of cases you mentioned - and the very fact you could mention them indicates they didn't get away with it - as some kind of evidence that everyone does it is ludicrous. Or should I ask how long you've been cheating on your taxes? After all, we all know some people do it, so that must mean everyone does?

just_another_bozo_on_this_bus 4 years, 10 months ago

"Exactly why they have homeowners' and auto insurance, also."

That's not the only reason people buy house or car insurance. If you have a mortgage on your house, you're likely required to have insurance, and it's commonly paid for out of your mortgage payment. Most policies also have a liability policy for someone who might get injured on your property. If you have a driver's license and/or a car, you're required by the state to have a liability policy-- but this covers only damage to someone else or their property, not yours.

In the case of both house and car insurance, not having insurance puts someone else at risk of suffering a loss. While the whole of society does pick up some of the tab for the uninsured, by and large, if you don't have health insurance, it's only you who will suffer, along with any dependents you may have.

But you're only considering one model for healthcare and health insurance-- the one we have, whose purpose you readily admit has nothing to do with delivering healthcare. There are other models around the world, models whose only purpose is to deliver healthcare, and they do it at least as well as ours does, for considerably less money, and without excluding 15-30% of the population.

notajayhawk 4 years, 10 months ago

I wasn't talking about liability insurance. My numerous objections to the people who compare the Democrats' plan for mandated insurance to mandatory car insurance are based on that distinction. Not everyone chooses to carry personal loss insurance on their home or vehicle, just as some people choose not to carry health insurance. Again, this only emphasizes the similarities, it does not make it a case of apples to oranges. Especially as the goal is exactly the same - to prevent a catastrophic loss from causing a person to file for bankruptcy, sell their house, or take on years of expensive debt.

"There are other models around the world, models whose only purpose is to deliver healthcare, and they do it at least as well as ours does, for considerably less money, and without excluding 15-30% of the population."

First - that's not "insurance". If you're required to pay into the pool, and all expenses for everyone are paid out of that pool, catastrophic or minor, unexpected or routine, then that's not "insurance". Call it what you want - a prepaid co-op plan, call it communism (I'm sure you'd have no objection to calling it that), but it's not "insurance".

If people used health insurance for its intended purpose, to protect themselves financially against an unexpected and major financial loss, and for no other reason, it would be affordable. If they paid for their annual checkups, the routine office visits for a case of the sniffles, etc., out of their pockets, and only carried insurance for the infrequent, unforeseeable, big-dollar expenses, their premiums would be affordable. And paying for all those other things out-of-pocket would keep them affordable, too, through normal market forces. Imagine what the price of prescription drugs would be like if people had to pay out of pocket - you wouldn't see a lot of prescribing of the latest $400/mo, $600/mo, $800/mo 'wonder' drug the pharmaco rep is pushing this week, nor would you have people going in to 'ask your doctor' about the latest-greatest drug advertised on TV. There would be a lot more people questioning the need for, or even outright declining, the estimated 40% of expensive diagnostic and other procedures that do absolutely nothing to improve health.

Insurance company profits, no matter how much the anti-business loons like to suggest, are not the problem. The fact that the system we have stopped being anything remotely resembling "insurance" a long time ago is.

just_another_bozo_on_this_bus 4 years, 10 months ago

" My numerous objections to the people who compare the Democrats' plan for mandated insurance to mandatory car insurance are based on that distinction."

I'm not for mandated insurance, either, especially if it means people have to buy from private insurance companies whose sole purpose for existence is to turn a profit for investors, not provide coverage for healthcare claims.

"First - that's not "insurance". If you're required to pay into the pool, and all expenses for everyone are paid out of that pool, catastrophic or minor, unexpected or routine, then that's not "insurance"."

So exactly what do you think we should do? Insurance companies want to pretend that premiums paid in are not "pooled" because they consider it all "their" money, and claims are merely expenses that are to be avoided in any way possible. To me, that's a clear indication of their moral depravity- it's not an accurate depiction of the financial relationship and obligation that their insured customers believe they have, but it pumps up their bottom line quite nicely.

"Insurance company profits, no matter how much the anti-business loons like to suggest, are not the problem."

No one suggests that it's the only problem-- but when compared to other systems in other countries, the add-on expenses and profits of insurance companies is a significant, and very probably needless part of the overall problem.

notajayhawk 4 years, 10 months ago

"To me, that's a clear indication of their moral depravity-"

Well, of course - to you, anyone making money on anything is a clear indication of moral depravity. Although I notice you never complain about hospitals who make about the same profit margin as health care plans.

"No one suggests that it's the only problem-- but when compared to other systems in other countries, the add-on expenses and profits of insurance companies is a significant, and very probably needless part of the overall problem."

And yet it's about the same as the effect of malpractice suits, which you often call an insignificant part of the problem.

just_another_bozo_on_this_bus 4 years, 10 months ago

"Well, of course - to you, anyone making money on anything is a clear indication of moral depravity."

No, just when profits are maximized by screwing people in about any way conceivable, which, unfortunately, in the corporate world, means just about everybody pretty much all the time.

"Although I notice you never complain about hospitals who make about the same profit margin as health care plans."

Blatant profiteering is a problem in every aspect of the healthcare delivery system (let's call it Big Health,) but private insurers are the gateway to that system, and they know that rising costs mean rising profits for them.

"And yet it's about the same as the effect of malpractice suits, which you often call an insignificant part of the problem."

Malpractice suits are a problem-- but that's because malpractice is a serious problem. And insurance companies have been raising rates despite an significant decrease in overall payouts.

http://www.citizen.org/pressroom/release.cfm?ID=2351

"Public Citizen reviewed publicly available information from 1990 to 2005 from the federal government’s National Practitioner Data Bank (NPDB), which contains data on malpractice payments made on behalf of doctors as well as disciplinary actions taken against them by state medical boards or hospitals. According to the analysis, the total number of malpractice payments paid on behalf of doctors, with judgments and settlements, declined 15.4 percent between 1991 and 2005, and the number of payments per 100,000 people in the country declined more than 10 percent. In addition, the average payment for a medical malpractice verdict, adjusted for inflation, dropped eight percent in the same period.

The numbers show that patients do not win large jury awards for less serious claims but that payments usually correspond to the severity of injury. In 2005, less than three percent of all payments were for million-dollar verdicts and more than 64 percent of payments involved death or significant injury – while less than one-third of one percent were for “insignificant injury.”

“Despite assertions by the medical and business lobbies that physicians are leaving practice because of burdensome malpractice lawsuits, the number of doctors is increasing faster than the population,” said Laura MacCleery, director of Public Citizen’s Congress Watch group. “In recent years, medical malpractice insurers have been reaping huge profits, not paying out excessive jury awards. The false claims of a malpractice lawsuit crisis are really about putting profits ahead of patients. They distract from real health care reform designed to improve patient safety, enhance efficiency and cut costs.”"

a_flock_of_jayhawks 4 years, 10 months ago

notajayhawk (anonymous) says...

"Hmmm, let's see. Do I trust a publicly traded corporation whose financial statements have to be filed with the SEC to be honest with their profit margin?

Um - yes."

Well, then, you just got suckered by them. Their actuary noted that one of the primary goals of their increase is to bump their profit margin from 5% (current) to 7%. So the 2.5% number they threw out there was bogus to begin with and they knew it.

"Uh - what?"

I thought what I was pointing out was pretty clear. It had to do with profit margin - see above.

Bottom line, the proof is out there. In a harsh economic time, when the health care costs overall are in fact going down slightly (yes, we are experiencing slight deflation at the moment and the numbers from health care confirm that they are experiencing this, too), the HC insurers are seeking to increase their profit margin. They testified that their profit margin was 2.5% to 5% and we now know from their own financial analyst that it was 5%.

jafs 4 years, 10 months ago

bozo,

I still don't agree with, or perhaps don't understand, your point about calculation of profit.

If an insurance company collects premiums, that's income, right? If they pay claims with some of that money, that's an expense, isn't it?

Their business is in fact collecting premiums and paying claims - that's all they do.

Seems to me that profit is correctly calculated as income-expenses.

Why do you think this is incorrect?

notajayhawk 4 years, 10 months ago

just_another_bozo_on_this_bus (anonymous) says...

"Public Citizen reviewed publicly available information from 1990 to 2005 from the federal government’s National Practitioner Data Bank (NPDB), which contains data on malpractice payments made on behalf of doctors as well as disciplinary actions taken against them by state medical boards or hospitals ..."

Did they review the cost of payments made to avoid going to court in the first place?

Did they review the cost of legal fees?

Did they review the cost of malpractice insurance?

(From your own citation - "In recent years, medical malpractice insurers have been reaping huge profits, not paying out excessive jury awards. " Guess what - whether that money went to plaintiffs in lawsuits or not, medical providers - and ultimately patients - still paid it out.)

Did they review the cost of unnecessary tests and procedures performed solely for the purpose of covering the provider's rear-end in the case of litigation?

Can you think for yourself instead of swallowing the pabulum the 'Public Citizen' feeds you?

notajayhawk 4 years, 10 months ago

a_flock_of_jayhawks (anonymous) says...

notajayhawk (anonymous) says...

"Well, then, you just got suckered by them. Their actuary noted that one of the primary goals of their increase is to bump their profit margin from 5% (current) to 7%. So the 2.5% number they threw out there was bogus to begin with and they knew it."

First off, they never said 2.5%, I did - that was the figure for net income excluding the sale of their PBM division (the proceeds of which are clearly documented in the financial statements). Second, 7%, while above the industry average, is not completely out of line, there are other large companies who make that much. So what? It's the same as any other product - you have the choice of purchasing it or not, according to whether or not it makes financial sense to you to do so. If you're willing to take the gamble that you might have to sell your home or work two jobs for the next 20 years to pay off a major unexpected medical bill, don't pay it; if you prefer to pay what the insurance company asks to assume that risk for you, then pay it. It's pretty simple, actually.

"when the health care costs overall are in fact going down slightly"

Uh, yeah. Because just like any other product or service, despite the claims that healthcare is inelastic, when times are hard people utilize it less. Which would pretty much explain why Wellpoint's enrollment was down what, 4%?

I'm curious about something, though. One area of the financial statements that's pretty hard to mess with is the loss (benefit payout) ratio. If you're going to cook the books, that's not where you do it. There's just too much of a paper trail outside your own organization. For every dollar you take in, there's a corresponding one-dollar deposit in one of your bank accounts, plus someone else has a record of a one-dollar payment, and their bank has a record of that, too. So the loss ratio is pretty hard to fake. If Wellpoint's is about 82.6%, with a 7% profit, that only leaves about 10% for administrative costs. (Or, you could use numbers being thrown around by folks like bozo, who claims the loss ratio is about 80% and profits are 15-15%, which leaves nothing in administrative costs.)

What happened to all this wasteful, inefficient administrative costs and egregious executive salaries and bonuses that we keep hearing about?

(BTW, if you look at the numbers, that 5% profit margin you mentioned isn't all from operations, is it?)

notajayhawk 4 years, 10 months ago

Oops, meant to say 15-25% (which was bozo's claim up above).

just_another_bozo_on_this_bus 4 years, 10 months ago

jafs--"I still don't agree with, or perhaps don't understand, your point about calculation of profit."

As I said, it's largely a matter of semantics. But it's also a matter of apples and oranges. Health insurance isn't the same sort of beast that a manufacturing concern is. If I buy a car, I get immediate satisfaction once the money has changed hands. The company who manufactured it gets reimbursed for all of their expenditures, which include major manufacturing facilities, raw materials, lots of engineering and product development, and lots of highly paid workers on the factory floor. Their level of profit is calculated against all of these very tangible expenses.

However, when I pay an insurance premium, I get absolutely nothing for that until I need to make a claim. And what does that insurance company have to do in the meantime? Not much, really. All they really have to do is have a staff of actuaries (whose salaries are a very clear "expense") making sure that when I (and other premium payers) need to draw on the money I've paid in, money the insurance company is required to hold in reserve, it's there.

So as a practical matter, the money that's been paid and held in reserve still belongs to the premium payers, because most of it will be used for one purpose-- to pay claims-- the only reason anyone buys insurance in the first place. That doesn't mean that insurance companies don't try to limit their payouts, and pocket as much of that money as possible-- they have large staffs whose sole job is to do that (and their salaries are also true "expenses" although they often make morally questionable decisions)

As I've said previously, this is why the profit-model really doesn't work in a healthcare system. These companies really do look at premiums paid in as "their" money, and covering their insureds' medical costs is just another expense to be avoided or reduced in any way they can.

just_another_bozo_on_this_bus 4 years, 10 months ago

"Did they review the cost of payments made to avoid going to court in the first place?

Did they review the cost of legal fees?

Did they review the cost of malpractice insurance?"

Yes, yes and yes.

Try reading it again, nota.

jafs 4 years, 10 months ago

bozo,

I think you're way off on this one, although I generally agree with most of your comments.

Profit = Income-expenses.

Premiums are income, and claims are expenses.

Your contention that premiums are in fact our money is wrong - once we pay them to insurance companies, they become their money.

The problem is not the definition of expenses - it's the built-in conflict between our need/desire for health care and the insurance industry's need/desire for profits, which can only be acheived by raising income or reducing expenses.

That problem would be solved by requiring that insurance companies operate as non-profits, which is what Switzerland does.

jafs 4 years, 10 months ago

Your version would be a correct assesment of a HSA, wherein you put your own money into a bank until you need it, and then spend it on health care.

just_another_bozo_on_this_bus 4 years, 10 months ago

"Profit = Income-expenses.

Premiums are income, and claims are expenses."'

This is where semantics come in. Insurance companies are really more like a bank than most other businesses. Deposits in a bank (or and HSA) are not considered the property of that bank, and withdrawals are not expenses.

I have no problem with insurance companies calculating their profits in any way they want-- just so long as they don't try to compare them with the profit levels of other industries to support the lie that their profits are somehow miniscule in comparison, when there really is no direct comparison possible

just_another_bozo_on_this_bus 4 years, 10 months ago

And many insurance companies are indeed becoming (or attempting to become) banks.

"4 insurers seek thrift status, gaining bailout access"

http://money.cnn.com/2008/11/14/news/companies/hartford_financial/

jafs 4 years, 10 months ago

You're wrong on this one.

At a bank, you deposit your money, and then you can withdraw it.

Insurance companies pool premiums and pay claims from the pool - it is not "your" money that pays your claims.

As long as the premiums are not spent, they are income. When they are spent, they become expenses.

Thus the calculation is not fraudulent - if they pay fewer claims, then their profits will be higher.

If they are claiming that the premium pool is an expense when it is not in fact being spent, that's a different story.

just_another_bozo_on_this_bus 4 years, 10 months ago

You think I'm wrong, and I think you're wrong-- at least to the extent that you don't recognize these particular expenses as a very different beast from the expenses of companies that the insurance companies want to compare themselves to (on the basis of profit.)

I still say it's apples and oranges, you say it's apples and apples. I guess we'll just leave it at that.

a_flock_of_jayhawks 4 years, 10 months ago

notajayhawk (anonymous) says...

"First off, they never said 2.5%, I did"

You can also own it, if you wish, but they did actually say it. It is in their Congressional testimony a couple of days ago.

"Second, 7%, while above the industry average, is not completely out of line, there are other large companies who make that much. So what? It's the same as any other product."

Unless you consider the McCarran-Ferguson Act and U S v South-Eastern Underwriters Association . Then, it is distinctly different than any other product and reveals a history in that industry of the practices we see today in a somewhat different form.

Jimo 4 years, 10 months ago

You hardly have to have a deep understanding of business to understand how bizarre the insurance companies justifications are. Basically, Wellpoint is saying that since so many people have abandoned them and aren't buying any insurance, the insurance pool has shrunk and rates have to be raised on everyone left to cover the difference. And that's true - IF overhead and profit aren't to be reduced.

But what other industry exists in bad economic times that loses customers hand over fist but retains and BOOSTS its profits by raising prices (only to further drive away more customers)? Answer: NONE that exists in a market system of competition.

Even the industry spokesman for the health insurance industry admitted publicly that the system was "broken."

All businesses would love to pass on higher costs to their customers (keeping their own profits high). Few, in a competitive market system, are able to do so consistently, and rarely if ever during a recession.

That the health insurers can is proof positive that the free market doesn't operate at present (because the insurers can conspire to share price information and set up a cartel that divides up territory where little or no effort is made to compete, and visa versa). Luckily, Congress just voted overwhelmingly to void this legalized conspiracy that would otherwise land anyone else in jail. (And in an excellent example of the hypocrisy here, 8 GOP Senators voted to filibuster the bill but when the filibuster failed immediately turned around and voted FOR the bill!)

a_flock_of_jayhawks 4 years, 10 months ago

Jimo (anonymous) says...

"And that's true - IF overhead and profit aren't to be reduced."

Not to mention the fact that the risk pool just went down for them, likely reducing benefit payouts significantly.

If that's how their business model operates, then they should hope and pray for sustained economic downturns.

Richard Heckler 4 years, 10 months ago

"If you’ve been watching the Senate Finance Committee’s markup sessions, maybe you’ve noticed a woman sitting behind Committee Chairman Max Baucus. Her name is Liz Fowler.

Fowler used to work for WellPoint, the largest health insurer in the country. She was its vice president of public policy. Baucus’ office failed to mention this in the press release announcing her appointment as senior counsel in February 2008, even though it went on at length about her expertise in “health care policy.”

Now she’s working for the very committee with the most power to give her old company and the entire industry exactly what they want – higher profits – and no competition from alternative non-profit coverage that could lower costs and premiums.

A veteran of the revolving door, Fowler had a previous stint working for Senator Baucus – before her time at WellPoint. But wait, there’s more. The person who was Baucus top health advisor before he brought back Liz Fowler? Her name is Michelle Easton. And why did she leave the staff of the committee? To go to work – surprise – at a firm representing the same company for which Liz Fowler worked – WellPoint. As a lobbyist."

notajayhawk 4 years, 10 months ago

just_another_bozo_on_this_bus (anonymous) says...

"Yes, yes and yes.

"Try reading it again, nota."

Try again, boohoozo. Maybe you should have someone read it to you again. I'm familiar with that "study" (and how 'objective' a study it is - the title being "The Great Medical Malpractice Hoax"). I have a copy. The study looked at nothing other than litigated payouts. The purpose of the study was not even to determine the cost of malpractice, but to evaluate whether the claims were justified. Or maybe, since you answered "Yes, yes, and yes," you'd be kind enough to cite the passages where it evaluates the three items I mentioned?

"You think I'm wrong, and I think you're wrong-- at least to the extent that you don't recognize these particular expenses as a very different beast from the expenses of companies that the insurance companies want to compare themselves to (on the basis of profit.)"

You are failing to recognize two flaws in your comparisons to banks, boohoozo. With a bank, the money collected is still yours; it's a liability account for the bank, a debt owed to you, that eventually will be returned - to YOU. But with insurance, at least health insurance, 1) in almost all cases the money is not returned to YOU, it's paid to a medical provider; and 2) you won't ever get the money back. It's not a demand account where you deposited your money. Your premiums are not a savings account, they're payment for a service (the service being the assumption of financial risk). If you have no medical claims for which the insurance company has assumed the risk, they keep the money. That's why insurance is a whole different animal than banking, and why premiums are indeed revenues, while claim payouts are indeed expenses.

notajayhawk 4 years, 10 months ago

a_flock_of_jayhawks (anonymous) says...

"You can also own it, if you wish, but they did actually say it. It is in their Congressional testimony a couple of days ago."

And one more time - the 2.5% is their net income excluding the proceeds from the sale of PBM. Including that sale, their profit was a little over 4.7%. The fact that one executive cited one figure and another cited another is hardly unusual.

"Unless you consider the McCarran-Ferguson Act and U S v South-Eastern Underwriters Association . "

The McCarran-Ferguson Act and U S v South-Eastern Underwriters Association notwithstanding, I was talking about the level of profit, not their business model or practices.

"Not to mention the fact that the risk pool just went down for them, likely reducing benefit payouts significantly."

Except for the little detail that the sickest people aren't the ones dropping their insurance, the healthy ones are.


Jimo (anonymous) says...

"But what other industry exists in bad economic times that loses customers hand over fist but retains and BOOSTS its profits by raising prices (only to further drive away more customers)? Answer: NONE that exists in a market system of competition."

...

"All businesses would love to pass on higher costs to their customers (keeping their own profits high). Few, in a competitive market system, are able to do so consistently, and rarely if ever during a recession."

The same argument is often used for gasoline. It's not valid there, either.

The very fact that Wellpoint's enrollment is down demonstrates that there is a price point where people will stop buying their product. For the majority of Wellpoint's customers, that point hasn't been reached yet. It probably wouldn't have been reached if they raised their premiums 100%, or even 200%, because enough of the people buying their policies believe the alternative - taking the risk of paying for a potential major medical expense - is even more costly. That is exactly how the free market works.

Of course, after Obamacare mandates that people have insurance, they can raise their premiums as high as they want and people will have no choice but to keep on paying, will they?

tomatogrower 4 years, 10 months ago

The very fact that Wellpoint's enrollment is down demonstrates that there is a price point where people will stop buying their product. For the majority of Wellpoint's customers, that point hasn't been reached yet. It probably wouldn't have been reached if they raised their premiums 100%, or even 200%, because enough of the people buying their policies believe the alternative - taking the risk of paying for a potential major medical expense - is even more costly. That is exactly how the free market works.

No, the people who are staying in the plan are paying, because they are trapped. More healthy people will drop out, because of the hike. As for the argument about profits, they claim they made a record profit of over 2 billion dollars last quarter. Maybe some of the people who dropped them just got tired of making the company super rich. It would be interesting how many of their former customers have just gone to a different company. It would be nice to see them go out of business before the end of the year, except that will leave sick people without insurance. And you can be sure the companies executives will leave with plenty of money for being failures. It used to be that only success made you rich. Now you can run a company into the ground and come out filthy rich.

just_another_bozo_on_this_bus 4 years, 10 months ago

"Try again, boohoozo."

You were doing so good-- and I thought maybe you had gotten to a point where you could actually have a mature discussion.

"I'm familiar with that "study" (and how 'objective' a study it is - the title being "The Great Medical Malpractice Hoax"). I have a copy. The study looked at nothing other than litigated payouts."

If there was a major omission in the study by omitting non-litigated payouts, whatever that means, then I'm sure you can fill us in on the pertinent details. But to this point, it's nothing but unsupported assertion. Are you going to put up, or...?

" But with insurance, at least health insurance, 1) in almost all cases the money is not returned to YOU, it's paid to a medical provider; and 2) you won't ever get the money back."

The only reason insurance premiums are collected in the first place is so that it can be paid to medical providers, as necessary. The only reason for insurance and the companies that provide it is to service a large enough pool of insured parties that actuaries can more easily determine likely medical risks in order to cover anticipated provider payouts.

Insurance companies' treatment of premiums as nothing more than income, and claims as nothing more than expenses to be minimized or avoided in any way possible is nothing but pure fraud.

a_flock_of_jayhawks 4 years, 10 months ago

notajayhawk (anonymous) says... "The fact that one executive cited one figure and another cited another is hardly unusual."

It was the CEO (one person) and she said "2.5% to 5%". So you obviously haven't reviewed her sworn testimony. When one quotes a range in that manner, but the actual number (and they know it - they are paid to know it) is actually the higher number, that is clearly damage control. It's commonly referred to as a "white lie".

"I was talking about the level of profit, not their business model or practices."

No, and I cited your quote, you made the claim that "it's the same as any other product." It clearly is not. Your quote (again):

"So what? It's the same as any other product"

"Except for the little detail that the sickest people aren't the ones dropping their insurance, the healthy ones are."

Sorry, but that little detail that those that dropped likely have some benefit payouts, too, so, with them no longer insured, payouts decreased and their actuary noted a projected a 2% increase in profit through the premium increase. Most were individuals or small business owners. While one would suspect that a number of those who dropped are healthy, I would invite you to furnish some specific info to back that claim. Consider that, some being small business owners that closed their businesses, the lack of financial resources forced them to drop insurance.

I've laid out many facts for you on this topic in several threads, but you still defend the indefensible. I gotta admire you for your zeal and enthusiasm. The substance of your position is lacking as many have pointed out. HC professionals can't be thrilled with the current system. While they deserve to make a fair sum of money for what they do, and it is obviously very important, they are in that profession to care for patients. Think about that. The health care pinch combined with an economic crisis has given us a glimpse of the consequences now and moving forward if nothing changes. With no change, it will certainly get worse. To treat what is a necessity, not a luxury, as just any other business wholly ignores the need and importance of health care in our society. Through your posts, you indicate that health care is a matter of choice. I disagree in that there are many medical situations in which the patient - citizen, if you will - has no choice. I doubt that anyone would choose to have a medical disorder and there are many who had no choice. By your logic, we as a society just throw them out there to deal with it and count our blessings in the dollars saved that we haven't been afflicted, yet, all the while ignoring that there is a cost, a hidden tax, that we already pay and where the profits don't yield any real benefit.

When we see headlines like this, it only underscores the fact that the system is broken. Even the health care insurance companies admit that while winking and smiling about their fortunes directly and on the stock market.

a_flock_of_jayhawks 4 years, 10 months ago

Bozo observes... "The only reason for insurance and the companies that provide it is to service a large enough pool of insured parties that actuaries can more easily determine likely medical risks in order to cover anticipated provider payouts."

And we have an entity that manages a large pool - the US and state governments. As much as many distrust it to manage efficiently, they have even greater resource to meet the challenge of providing basic level and catastrophic medical benefits. And the HC insurance industry will likely continue to play a large part as they do now in the government-sponsored delivery of medical benefits. This problem didn't appear overnight, so there will be adjustments necessary moving forward. The current legislation is not a magic wand, but it's a good step. Big pharma, AMA, and other industry players are due to implement positive changes and the insurers spent millions attacking change.

notajayhawk 4 years, 10 months ago

just_another_bozo_on_this_bus (anonymous) says...

"You were doing so good-- and I thought maybe you had gotten to a point where you could actually have a mature discussion."

Funny, I was thinking the same thing about you - until your "Yes, yes, and yes" answer. I didn't know mature discussions included making things up.

"If there was a major omission in the study by omitting non-litigated payouts, whatever that means, then I'm sure you can fill us in on the pertinent details. But to this point, it's nothing but unsupported assertion. Are you going to put up, or...?"

Nice attempt at a diversion, bozo. I never made any claims as to the size of the unconsidered expenses. I asked you a specific question as to whether the so-called study you cited took into account three specific items: the cost of payments made to avoid going to court in the first place, the cost of legal fees, and the cost of malpractice insurance. Your answer, in case you've forgotten, was "Yes, yes, and yes," which is patently untrue. If I'm wrong, bozo, if they DID mention those things, then feel free to cite the parts of the study where they were mentioned. Here - this is their full report:

http://www.citizen.org/documents/NPDB%20Report_Final.pdf

Now - are you going to put up, or ...?

Incidentally, bozo, you're seriously saying that it's an "unsupported assertion" that physicians pay for malpractice insurance, that insurance companies routinely pay 'nuisance fees' to make a lawsuit go away, of that attorneys charge for their services? Seriously?

"The only reason insurance premiums are collected in the first place is so that it can be paid to medical providers, as necessary. The only reason for insurance and the companies that provide it is to service a large enough pool of insured parties that actuaries can more easily determine likely medical risks in order to cover anticipated provider payouts.

"Insurance companies' treatment of premiums as nothing more than income, and claims as nothing more than expenses to be minimized or avoided in any way possible is nothing but pure fraud."

You have a fundamental lack of understanding of how insurance works. If you think it's some kind of health savings account where you pay your premiums in order to cover your medical bills, well, we actually have something similar to that - it's not insurance, it's called, strangely enough, a Health Savings Account. If that was the case, then you'd get back what wasn't spent, and insurance companies would only be obligated to pay out what you paid in. But that's not the case. You have no ownership rights to that money once you've paid your premium.

[continued]

notajayhawk 4 years, 10 months ago

[continued]

Suppose you live in a condominium. You pay common fees so that the management company will take care of those things you'd have to do yourself, or pay someone to do, if you owned a freestanding house (e.g. snow removal, lawn care, changing the light bulbs in the hallways and staircases, maybe the maintenance of the swimming pool, etc.). Once you've paid that money, it's no longer yours, it belongs to the management company. If it's a mild winter and they don't have to pay for much shoveling or plowing, they keep the difference. If it's a bad winter and they go over budget, they still have to pay for it. If they can negotiate a substantially lower fee with the guy plowing the parking lot than an individual homeowner can, again, that's their money. What you paid in is revenue for the management company. While the money sits there it's an asset of the management company - it does not belong to you. What they pay out for lawn mowing, sidewalk shoveling, light bulbs, and pool chemicals, are expenses. The difference between what they take in less what they pay out is income.

It would be in error, however, to state that what you're paying for is maintenance of the property. What you're paying for is convenience - you're paying for not having to worry about such things. You might not ever use the pool, or the management company might choose to close it. It might not snow the entire winter. What you're paying for has nothing to do with those things - what you're paying for is the peace of mind that you never have to worry about those things, which is why people choose to move into condos insyead of houses in the first place.

notajayhawk 4 years, 10 months ago

a_flock_of_jayhawks (anonymous) says...

"It was the CEO (one person) and she said "2.5% to 5%". So you obviously haven't reviewed her sworn testimony."

And I said I did, when, again? I really could care less what Ms. Braly said in front of the witch hunt commission. I thought I was pretty clear about the fact that I was looking at the SEC filings. Perhaps if you reviewed those filings for yourself you'd get over this obsession with her mentioning two numbers. One MORE time, since you don't seem to be very good at comprehension, the 2.5% is their net income exclusive of the proceeds from the PBM sale, and the 5% includes that sale. Not only is it typical to report both numbers, it would be a violation of GAAP not to do so. You evidently aren't very familiar with financial reporting documents if you see this as a "white lie"; the people who routinely read those documents understand the difference.

"No, and I cited your quote, you made the claim that "it's the same as any other product." It clearly is not. Your quote (again):

""So what? It's the same as any other product""

And yet somehow managed to omit the sentence that preceded that quote, and most of the sentence you did quote. Here, flock let's see what the whole quote was:

"Second, 7%, while above the industry average, is not completely out of line, there are other large companies who make that much. So what? It's the same as any other product - you have the choice of purchasing it or not, according to whether or not it makes financial sense to you to do so." http://www2.ljworld.com/news/2010/feb/24/wellpoint-go-ahead-insurance-rate-hike/#c1161852

If you weren't deliberately taking the quote out of context in a blatantly dishonest attempt to mislead (pretty funny coming from the guy who just complained about the "white lies" of the insurance companies), you might (and this is a leap of faith) have been bright enough to see that my statement saying "the same as any other product" referred to your having a choice to purchasing the product or not if you don't like what they're charging.

"Sorry, but that little detail that those that dropped likely have some benefit payouts, too, so, with them no longer insured, payouts decreased and their actuary noted a projected a 2% increase in profit through the premium increase."

Do you even read what you're posting before you click on the button?

Yes, they expect a 2% increase in profits - from the INCREASE. They did not realize a 2% increase in profits from the drop in enrollment. Not that I think you have much, flock, but maybe if you used a little common sense - who do YOU think was more likely to drop their insurance, the enrollees whose claims were less than their premiums, or those whose claims were more than their premiums? Seriously?

[continued]

notajayhawk 4 years, 10 months ago

[continued]

"I've laid out many facts for you on this topic in several threads, but you still defend the indefensible."

Well, first, the facts that I provided come from the company's financial statements. Of course, I'm sure those aren't as convincing as the 'facts' you get from soundbites on MSNBC.

Indefensible? That a multi-billion dollar corporation responsible to its shareholders tries to make money? Only in the Peoples' Demokratik Republik of Larryville. Even if they can get their profit margin up to 7%, that's still almost 2% lower than packaged foods.

"To treat what is a necessity, not a luxury, as just any other business wholly ignores the need and importance of health care in our society. Through your posts, you indicate that health care is a matter of choice. I disagree in that there are many medical situations in which the patient - citizen, if you will - has no choice."

And - once again - this is the fault in your argument. Wellpoint does not provide healthcare. Get it? Insurance companies do not provide healthcare. While having health CARE might be a matter of necessity, having health INSURANCE is not. We don't have health insurance, and we still get healthcare.

It's pretty simple, flock. If you don't like what your insurance company charges, don't buy it. The insurance company is not holding you at gunpoint. They only raise premiums at renewal time - if you don't like the increase, don't renew. If it makes financial sense to you to assume the risk yourself, feel free. If it doesn't, sign the renewal.

You have an unbelievably monumental sense of entitlement - just what gives you the idea that insurance companies - or any other supplier of goods or services - is under some sort of obligation to provide their services to you at a price you approve of, or even at one you can afford? You're not even arguing that you should have healthcare available - you're arguing that someone else should pay your bills for you. THAT mindset is what's indefensible, flock.

a_flock_of_jayhawks 4 years, 10 months ago

First off, you should can it with the condescending attacks, notajayhawk. You seem to always fall into juvenile behavior like this. I realize you don't agree with my points, but you don't have to be a jerk about it with me or anyone else. Conversing with you on this issue is like trying to teach a rock. It doesn't understand, listen, but at least it doesn't have problems making sense or take itself out of context like you. One LAST time, just for you:

"Even if they can get their profit margin up to 7%, that's still almost 2% lower than packaged foods."

Correction (another) - the manufacturer of packaged foods. Insurers would be more equivalent to the grocery store in that scenario, and 7% would be about 7x the profit margin. You can't even seem to get a grasp on economics of market segments right, so it's obvious that you can't see the HC problem.

"You have an unbelievably monumental sense of entitlement - just what gives you the idea that insurance companies - or any other supplier of goods or services - is under some sort of obligation to provide their services to you at a price you approve of, or even at one you can afford?"

See, that's where you have a big problem - and several have pointed it out to you - that you feel medical care is a privilege. Nothing I or anyone else has tried to get through to you will change your mind. Good luck with that mindset. Let's hope you never find yourself or your family in such an untenable position, one that you can't seem to fathom. Again, health care is not merely a commodity or service and cannot treat it like "any other supplier of goods or services" Whoops, maybe I quoted you out of context again.

"You're not even arguing that you should have healthcare available - you're arguing that someone else should pay your bills for you. THAT mindset is what's indefensible, flock."

Look, I already pay the bill, have good healthcare available and have for almost 30 years. I have never asserted that anyone pay the bills for me. I am arguing that others should have reasonable healthcare available - that's exactly what I've been arguing! And we already pay those bills whether you realize it or not! So much for an indefensible mindset.

You have seriously failed at putting forth a cogent or even consistent position. It sounds like you just want to attack people, not learn.

a_flock_of_jayhawks 4 years, 10 months ago

I should point out, since you want to make a comparison to foods, that people, including you, need food. Maybe you didn't realize that there are price controls in that market.

notajayhawk 4 years, 10 months ago

a_flock_of_jayhawks (anonymous) says...

"First off, you should can it with the condescending attacks, notajayhawk."

Oh, flock, with you I stopped being condescending long ago. Openly disdainful would be more accurate.

"Correction (another) - the manufacturer of packaged foods. Insurers would be more equivalent to the grocery store in that scenario, and 7% would be about 7x the profit margin. You can't even seem to get a grasp on economics of market segments right, so it's obvious that you can't see the HC problem."

Correction (again) - no, insurance would not be closer to grocers (had I meant to say grocery stores I would have done so). The medical providers themselves would have been closer to grocers. And, um, for the umpteenth time, flock - we're not talking about health CARE here, but about health insurance. You can't see the difference between the two, and you question MY ability to see the problem?

"See, that's where you have a big problem - and several have pointed it out to you - that you feel medical care is a privilege."

Yes, I'm aware that there are many people besides yourself who can't understand the difference between health CARE and health INSURANCE. Hey, flock - where, again, did I say health care was a privilege? Oh, must have been here: "While having health CARE might be a matter of necessity, having health INSURANCE is not." Yep, that sounds exactly like I said health CARE was a privilege.

"Let's hope you never find yourself or your family in such an untenable position, one that you can't seem to fathom."

And, as I've said (perhaps if you read my posts before attempting to respond to them) my family doesn't have health insurance, but we still have health care. Maybe if you were in that position you'd be capable of understanding it's not untenable at all.

"Again, health care is not merely a commodity or service and cannot treat it like "any other supplier of goods or services" Whoops, maybe I quoted you out of context again."

Nope, this one wasn't out of context - it was a complete falsehood (but you knew that, didn't you). Why is it that when you cut-and-paste you only manage to catch the portion of the sentence that you believe supports your position, flock? Do you have so little control over your mouse you can't grab the whole sentence? Here, let me help (again):

'You have an unbelievably monumental sense of entitlement - just what gives you the idea that insurance companies - or any other supplier of goods or services - is under some sort of obligation to provide their services to you at a price you approve of, or even at one you can afford?'

See, flock? "Insurance companies", not "health care" as you alleged. Let me ask you a simple question - do you really think you're winning an argument by trying to lie about what I said? Has it occurred to you that my post was still there?

[continued]

notajayhawk 4 years, 10 months ago

[continued]

"Look, I already pay the bill, have good healthcare available and have for almost 30 years. I have never asserted that anyone pay the bills for me. I am arguing that others should have reasonable healthcare available - that's exactly what I've been arguing!"

Do you pay for your health CARE, flock - or your health insurance? Because this is really the crux of the problem, that people have no idea what health CARE costs. They think their healthcare costs consist of their insurance premiums, co-pays, and deductibles. They scream bloody murder about paying $12,000/yr for health insurance without having the faintest idea that a single emergency room visit can cost that much. They scream about the profits made by health plans when the hospital that provided their services makes almost as much. Big, bad, evil, corporate insurance is the problem, not the cost of health CARE. Doctors are revered as some kind of benevolent gods, not people that are making money off your misfortune - the latter is only applied to those who operate a business to help you pay for the ministrations of the former. Doctors and hospitals are providing a needed service and entitled to their profits. And there's nothing even slightly duplicitous about claiming insurance is a necessary component of the healthcare system, yet somehow they're not entitled to make any money from it.

"You have seriously failed at putting forth a cogent or even consistent position. It sounds like you just want to attack people, not learn."

Right. And I'M the one being condescending. It's not my fault you aren't capable of understanding the arguments against your point of view, that you dismiss the facts, that you resort to lies, and that you eventually fall back on the typical, liberal-elitist position: 'If you disagree with me, then you must not have all the facts." I do have the facts, flock. I'm intimately acquainted with the issues related to both health CARE and health insurance, as both a consumer and a provider. And from my time on these message boards, I'm all too acquainted with folks like you that think they have the answers that others just can't see.

a_flock_of_jayhawks 4 years, 10 months ago

Well, since you claim to have all the answers here and are so intimate with the process, maybe you could help all of those people out and outline some healthcare alternatives for those on a budget. It won't help all of those who have already gone through bankruptcy over it, but might help those facing that scenario. While you're at it, see if you can lay all of those options before our elected officials so they can make sure everyone that needs treatment get it and the single largest expenditure in the federal budget can move down a few positions as well as provide some relief for wrecked state budgets.

You've already claimed it's like all other products - if you don't need it, don't buy it. But if you do need it, what are your options, notajayhawk? We'd like to know before the next budget.

notajayhawk 4 years, 10 months ago

Well, let's see - I'm not the one who said I have all the answers; as a matter of fact, when you make comments suggesting I need to "learn", it kinda' implies you believe you know a lot more about it than I do.

And - one MORE time - I never said health CARE is like any other product, that you shouldn't buy it if you don't need it - I was (again) talking about health insurance. I really can not understand why you're incapable of separating the two. But, since you brought it up ...

Why, exactly, would you pay for something you don't need, including health CARE? Because that's what a lot of people are doing. Obviously, people need healthcare - but not as much as we pay for. For instance, we don't need that $450/month prescription for the latest, greatest wonder drug when there are tried and true, completely effective older meds that have generics available on Wal-mart's $4 formulary (for some people, yes, the newer drugs will have an added benefit - but the cheaper ones should be tried first). And maybe more people should stop being in awe of their practitioners as if they're some kind of omnipotent gods, and question the need for some of the expensive tests and procedures that are all-too-routinely ordered. I've posted the links to the studies before and don't feel like looking them back up just now, find them yourself if you really want to learn - but some studies have shown that as much as 40% of the healthcare we pay for does absolutely nothing to improve our health. Now, first, I question some of the methodology in those studies, just as I do the stidies touted by the other side about 30% of our healthcare dollars going to administration, the majority of bankruptcies being "caused" by medical bills, etc. And there are a lot of reasons why physicians routinely order redundant or just plain unnecessary tests, procedures, or referrals to specialists that have nothing to do with heading off litigation. But there is, unquestionably, a large chunk of healthcare spending that's completely unnecessary.

And that would be a good place to start. See, flock, one thing you said above was correct - we all pay for it. The problem is that it costs too darned much. It doesn't matter whether it's in premiums, taxes, or out-of-pocket, it costs too darned much. It is completely ridiculous that an emergency room visit costs as much as a car, that even a fairly minor surgery and hospital stay can cost well over a year's salary. We don't need to keep finding new ways to pay for it, we need to bring down the costs - and the more responsible and objective advocacy groups and organizations (of which PNHP is not one) have made that clear. No matter how we come up with a way to pay for it, unless we find a way to bring costs under control, we're just spinning our wheels.

[continued]

notajayhawk 4 years, 10 months ago

[continued]

And the Democrats' plans do nothing about that. Nothing. There was an article I came across from a couple of years back comparing the various Democratic presidential candidates' plans during the primaries, and it noted that none of them reform health CARE at all, they were all trying to find new ways to pay for it. Unfortunately, the most likely outcome is for overall healthcare - not insurance, but CARE - costs to go up. None of the Democrats' plans do anything to reduce costs, and they put in place a dynamic that is much more likely to inflate overall costs at a rate that will make the current situation look like the good old days. The Democrats' plan to install a loss-ratio mandate, for example - has it occurred to anyone that the only way insurance companies can increase their profits under such a system is for healthcare costs to go up - and all they have to do to make that happen is to increase their reimbursement rates?

Nobody is saying our system isn't in need of fixing. But one of my biggest objections to the Democrats' plan is it tries to fix too much at once. If you know anything at all about principles of research (and make no mistake, the Democrats' plan IS an experiment), you know you don't manipulate more than one variable at a time. If you do, whether you get the results you want or not, you have no idea why. What we need is a set of smaller, targeted fixes for the specific problems, not a 2400+ piece of gobbledyg**k (believe it or not the LJW’s filters objected to that) that costs a trillion dollars and makes the problem worse.

Two areas need to be targeted first - the COST of healthcare delivery (not insurance), and getting everyone access to health CARE (again, not insurance).

As to costs: A good place to start would be eliminating as much of the 40% of our healthcare dollars that are unneeded as possible. There are a couple of things that will help there. One is tort reform. No, that won't solve the problem - but it's at least as big a chunk of change as insurance company profits, why not start there (other than, of course, the fact that the trial lawyers are such big contributors to the Democrats). It will not completely eliminate the unnecessary services we pay for, there are other reasons for those orders/referrals - doctors like to be on the 'cutting edge'. But it will help. How many billions do we need to be able to save before it becomes worth looking at?

[continued]

notajayhawk 4 years, 10 months ago

[continued]

Another thing - and this would be harder to implement - is that we start using insurance only for the intended purpose of insurance. That is, we only use insurance for those unexpected major expenses, not for the routine week-to-week medical bills that we all know we're going to have and can easily budget for. Believe it or not, catastrophic-only insurance would be much, much cheaper. You seem to be old enough to remember a time when there was much more variance in premium rates - most significantly, women used to be charged a lot more than men. Why? Because women were much more likely to go to the doctor's for every little thing. I keep hearing the argument that if insurance paid for more preventative measures, they'd catch a lot of things before they became major problems. If that's the case, why did women get charged more before? The fact is that all those minor procedures do add up to more than the major ones, because there are a heck of a lot more of them. Most people could afford insurance if it worked the way it's supposed to.

As for all the things that would not be covered any more? We let the market take care of that. I hear the argument all the time that healthcare is a necessity and therefore inelastic. But that's not true, and it displays a fundamental lack of understanding of the forces of supply and demand. You don't have to stop buying a product or service entirely to affect the price - you just have to buy less of it. People use the same argument for gasoline all the time, and it's no more valid there. SOME gas is necessary, but not as much as we use. And when gas hit $4/gal, did we stop buying it altogether? No, but we bought less - and that drove the price back down. The same thing would happen with healthcare. Would we still have to go to the doctor and the ER? Of course. But we'd be much, much more likely to ask for a generic medicine, and to question whether that expensive diagnostic test, or referral to that specialist, was absolutely essential (and as I said, quite often the answer is that it's not). And we'd be much more likely to shop around. Do you mean to tell me that, faced with a non-life-threatening emergency (say, a cut that required stitches but you weren't going to bleed to death from), you wouldn't drive to a hospital in Topeka rather than LMH is they charged half as much?

[continued]

notajayhawk 4 years, 10 months ago

[continued]

Now, as to everyone having access: A good place to start would be to quit scrwing around with peoples' disability. For all the complaints about how private insurers routinely deny insurance to people for spurious reasons, Social Security (and the VA) turn down approximately 80% or more of claims on application - despite the fact that more than half of those denials are eventually reversed - YEARS later. Even more would eventually be approved if so many people didn't just give up - or die - somewhere along the process. If those claims were approved in a more timely fashion, those people, at least, would have access to Medicare and Medicaid. I think there should also be some kind of expansion to cover less permanent disabilities; someone who's going to be out of work while undergoing recovery from major back surgery or cancer treatment, for example, but for less than a year, should still have some* access to those benefits while they're disabled.

See, I have no objection to expanding Medicare, Medicaid, and/or some form of subsidized risk pool for those with pre-existing conditions. For those who NEED those things. Believe it or not, I personally believe that as a society we have an obligation to help those who NEED the help. But that's not an excuse to involve the government in every nook and cranny of the system, nor is it the place of government to legislate what is, essentially, a moral value.

The bottom line - doing less rather than more is a better way to go. To pass such a massive and unwieldy, and mostly irreversible, plan as the Democrats propose is ridiculous. I understand the urgency. But over the years I've learned that, in the long run, you waste less time doing something right the first time, rather than doing something just for the sake of doing something, then having to fix it - over and over and over - down the road.

liar 4 years, 10 months ago

Would it be possible to have a so called public option that provided competition to ensure that private insurers made some sort of effort to contain costs. I don't see any way that costs will be reigned in until we have true competition. Meanwhile more and more people will simply find that they can't afford premiums and go down the route of bankruptcy. Why do we pay twice as much as other countries and can't even provide universal coverage. Perhaps we should put aside our arrogant assumptions that the American way is the best way as clearly it ain't. When people talk about a government take over of health care they are talking through a hole in their head. If Medicare and Medicaid are what they are talking about then I guess you could say that's a government administered insurance scheme but a take over?

Seems like nobody wins under the current system apart from insurance companies. The American people have a prime opportunity to take back health care for themselves via the process of government . Instead, here we are listening to opponents wanting the market to rule. The notion that the market knows best was broken years ago. That's why we have these boom and bust cycles. A rational society would realize that government can actually be a good thing that helps all citizens get a shot at happiness and a share in the American dream.

Time to get real and realize that some things are just too important to leave to business interests. Forget about using terms like socialism and communism. They add nothing. Democracy can co-exist with public options. Canada, UK, Australia, NZ and others do well enough in the democracy stakes with single-payer systems. It just means they can contain costs a lot better and ensure universal coverage and isn't that what Americans want as well?

Ask the people of those countries if they would prefer the current American system and the answer is a resounding NO!

notajayhawk 4 years, 10 months ago

liar (anonymous) says...

"Would it be possible to have a so called public option that provided competition to ensure that private insurers made some sort of effort to contain costs."

I have two problems with that. First, just on principle, it isn't the business of government to compete in the private marketplace. What business are you in? Because someone probably thinks YOUR product or service is too expensive. Should the government open a shop across the street to bring down YOUR prices?

But more importantly, it's the cost of health CARE that needs to be addressed, not the cost of insurance. You could take out the 3.4% health plan profit and you still have a couple of trillion dollars in healthcare costs that we just can't afford to pay for. And as long as people use third-party payers, they have absolutely no incentive to exercise normal free-market forces (including competition) to bring down costs where it really matters.

"Why do we pay twice as much as other countries and can't even provide universal coverage."

For one thing, despite assertions to the contrary, the quality of care in this country is much higher. For another, as I mentioned in my earlier post, a lot of the care we receive is unnecessary.

"The American people have a prime opportunity to take back health care for themselves via the process of government . Instead, here we are listening to opponents wanting the market to rule."

So the people should take back control, but we should not allow the market to rule? When the market works, without government intervention, the people are, by definition, ruling. Just out of curiosity, what do you think will happen to the cost of insurance premiums if the government mandates that you HAVE to buy it?

"Canada, UK, Australia, NZ and others do well enough in the democracy stakes with single-payer systems. It just means they can contain costs a lot better and ensure universal coverage and isn't that what Americans want as well?"

Apparently not. Polls have been pretty consistent that the American people do NOT want a single-payer system. And for good reason. People don't want longer waiting times, lower cancer survival rates, or insufficent resources to meet demand. Given the choice between having the best possible care available and having to work harder to be able to afford it, or having it cheaper but of lower quality, thanks, I'll take the former.

"Ask the people of those countries if they would prefer the current American system and the answer is a resounding NO!"

Ask them if they think their system is so hot. You'll pretty much get the same answer. Most people in Canada think there are major problems with their system, too.

In any event, it's simply naive to assume that because a different system works in Europe it would work here. It is also naive to believe that trying to convert an existing system to copy one that was purpose-built or evolved that way will result in similar savings.

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