24 February 2010

More on Anthem

I don't think I can say it any better than mcjoan:

Anthem Blue Cross is making the case all by itself for healthcare reform:
Anthem Blue Cross broke law more than 700 times, official says
California Insurance Commissioner Steve Poizner says the insurer failed to pay medical claims on time and misrepresented policies from 2006 to 2009. The firm faces up to $7 million in fines.
I'm shocked.  An insurance company failing to pay claims in a timely manner?  That's unpossible!

Actually, that's pretty much SOP for most insurers: deny and delay at will, and dare providers/consumers/regulators to punish them.  Fines (when there are any) just go back to the insureds as increased premiums, and any time the providers/consumers are fatigued out of demanding the insurers actually pay, that's pure profit for the insurance company.

Pass. The. Damn. Bill.


  1. Nice Ralph Wiggum quote.

  2. KUOW just had a show today featuring State Insurance Commissioner Mike Kreidler and Mary Childers from the state Insurance Commission discussing claim deninals.
    Link to show notes and audio>

  3. Another reason I'm glad I'm a hospital employee..much plus and minus to that, but at least I don't deal with this stuff. Good post.

  4. I am a hospital employee and our hsopital's insurance is an HSA that doesn't pay out until $6000. Recently my husband, also an RN and I spent the night in the ER parking lot waiting to see if our daughter's chest congestion would clear. We wanted to be close enough for emergency. Amazing though, what a little cool air and sleeping upright in Mom's arms will do.

  5. In all seriousness, I don't understand how any of the three bills currently on the table would fix this problem. We'd still have insurance companies and I don't see any reason to think they'd start acting any differently.

  6. Elise nails it.

    Passing the bill doesn't change this.

    Medicare issues a higher % of denials a year than private insurance. Medicare costs rise at a rate higher than private insurance.

    To think that any substantive changes with the passage of this bill is silly.

    Shadowfax, why don't you explain how this bill changes any of this since you are so eager to see it pass?

    Will this slow the rate of cost increase? No.

    Will this reduce the denial rate? No.

    Will this increase our longevity? No.

    Will this force insurers to serve high risk customers? Yes, but at increased costs on everyone else. And it's a good thing to do. But I'd rather just see the government write a check for anyone whos medical expenses exceed X% of incom e IF that person has paid premiums for X years.

  7. Anon 10:48,

    Um, you mean that this law won't keep someone from breaking another law? Yeah, I guess so, but that's not really a rational basis for criticism, especially when the other law apparently contains. you know, penalties and stuff. Unless you are advocating stronger regulation of the insurance industry or arguing for single payer?

    Will this slow the rate of cost increase? Yes, at least it does include a number of cost containment measures, which I have previously blogged about here. You simply assert that it won't contain costs but I don't see anything beyond the flat "no" to back that up.

    Will this increase our longevity?
    Again, you just say "no," with no rationale in support. If 40,000 people die annually due to lack of insurance, and the bill vastly increases access to insurance, then there should be resultant mortality reductions.

    Medicare issues a higher % of denials a year than private insurance. Medicare costs rise at a rate higher than private insurance.
    Both of these statements are false. Medicare costs rise slower than private insurance costs. And in my experience managing a large medical practice with 130,000 visits a year, our medicare denial rate is, of, somewhere around zero, whereas the privates are a huge pain in the ass.

    So the bill isn't perfect or my dream bill, but your criticisms of it are specious.

  8. I actually do believe that laying a set of Federal rules on top of a set of State rules is a good reason to oppose any type of legislation. If the State rules aren't working we need to understand why before we just pile the Feds on top. Laws about marijuana sort of spring to mind here.

    However, even if one doesn't think redundant Federal law is a reason to oppose the health care bills (and I agree that it may not be), I still don't think the fact that insurance companies deny claims is a reason to pass any of the three bills. I simply don't believe that whatever Federal involvement there is will make much difference in that area.

    Insurance business models will remain insurance business models even for good insurance companies. Bad insurance companies will remain bad insurance companies. It would be great to figure out a way to change this but I simply don't see how any of the health care bills means denials will stop happening.

  9. Elise and Anon: Join my world(I'm an Internist) where patients cannot get affordable insurance because they have had conjunctivitis (pink eye) in the past. You should pray your genes are good and you don't have anything that can be called "high risk". Patients are paying thousands of dollars a month for minimal and lousy coverage. It is truly unaffordable.

    Most people don't want to get old...except when it comes to health insurance. My patients can't wait to hit 65 and get on Medicare and breathe a sigh of relief.

    Anthem does this BECAUSE IT CAN. They are holding consumers hostage to their profits and the health of the nation is suffering because of it. They say costs have risen. They still pay 1980 rates to doctors and have cut physical therapist pay to below cost of doing business. Investigation shows they have not "lost business" as they claimed.

    As Shadowfax says...the health bill isn't perfect but it does prevent this type of extortion and allow patients to say "goodbye Anthem" and get affordable care elsewhere. That can't happen now.

    I met with a doctor group from Denmark yesterday. They are far more innovative and advanced than we are. They chuckle at our obsession over reform. It is truly holding us back in the world.

  10. Okay. If your argument is that forbidding insurance companies to exclude pre-existing conditions and requiring reporting of claim handling information like delay times will make it easier for consumers to leave insurance companies that behave badly and take their business to insurance companies that behave well, then I think that's valid.

    I can, however, think of a problem with that. Let's say Company A has a lousy payment record but their premiums are very low. Company B has a great payment record but their premiums are very high. If I'm healthy, I'll sign up with Company A and just switch to Company B if I get sick. In particular, if I'm a healthy young person forced to buy health insurance, I'm going to pick the cheapest policy regardless of the company's track record.

    Unless something has changed radically since 2002, the Danish system is nothing like what the health care bills propose.

    You should pray your genes are good and you don't have anything that can be called "high risk".

    Not everyone who is unenthusiastic about the health care bills is one of those lucky people who are disgustingly healthy and have no clue how horrible it is to be truly ill. For example, I have multiple high-cost conditions that are well beyond the risk stage and into actuality. I have been extremely well-served by the existing private health care system, thanks largely to competent regulation by my State of New Jersey. I support providing health insurance for the uninsured but I think the proposed health care bills are doubly bad: we will have the worst of private insurance companies combined with the worst of government-run health care.

  11. Elise: I respect your views. That said, the opponents of health care reform have little in the way of statistics or data to reinforce the claims that "we will have the worst of private and the worst of government run." Why would it be the worst? It doesn't worsen the government system at all. I agree that improvement is needed there but we will never get to work on improvement if we are stalled like this.

    HC reform can IMPROVE the private system (by protecting consumers finally). The status-quo is no longer possible. The bill is not as radical as many would like...it is piecemeal to comply with all the special interest groups and has features that the republicans designed themselves and now oppose just for the heck of it.

    Lets not kid ourselves into thinking what we have now works well. The execs at Anthem are doing fine. The politicos in Washington (both sides) are doing fine. America is losing. I do not understand why the public (you and me) are not standing together and demanding this.

  12. Shadowfax,

    The savings the CBO shows are due to the fact that we pay for 10 years into a system that will only treat us for the last six. As Paul Ryan noted yesterday, if we take out all the BS accounting, the CBO would score this as $2.3T in the hole over 10 years.

    Obama didn't refute that at all yesterday.

    Your data from HHS shows that growth of public has outpaced private over the last decade handily, making my point.

    Ryan's comments:

  13. Toni, any medical framework that we put into place that does not hold the patient accountable for smartly spending the first few thousand $ will fail.

    The government could offer everyone in this country a catastrophic care policy covering all expenses over $10K annual for about $1K/year. And if we allowed people to set up tax free health savings accounts to cover the first $2000 or so, and then permitted them to recoup part of the "hole" between $2000 and $10K directly from the government based on need/income, then we'd have a system that ensured nobody lost their house to cancer, and everyone got the care they needed IF they are willing to pay $2000 per year. Those making less that $40K would still get medicaid, and those over 65 would still get medicare.

    But if someone making $50K/year opts to prioritize a cellphone, cable, xbox and internet and a lot of dining out ahead of medical care, why on earth should I pay for that decision?

  14. Shadowfax writes: "Again, you just say "no," with no rationale in support. If 40,000 people die annually due to lack of insurance, and the bill vastly increases access to insurance, then there should be resultant mortality reductions."

    Well, almost 4M people per year die for some reason or another, so assuming insurance saved half of those 40K people, the improvement would be below the noise floor--immeasurable. In other words, our purportedly crappy lifetimes that folks like to chalk up to no insurance would remain unchanged.

    You do know that "40K" study relied on extrapolating 4 deaths in a small study... Not a very good sample size and very risky to be extrapolating.

  15. Toni - Polls show most people have health insurance and most people who have insurance are happy with it. I'm not arguing this means we don't need reform; I am arguing we should think about what we're trying to accomplish.

    To me, we should be focusing on insuring the uninsured first, not trying to do cost control while treating extending coverage like a red-headed step-child. That doesn't require 2000+ pages. Just let whoever wants to buy into FEHBP (the proposed exchanges just re-create the FEHBP system) or Medicaid (Shadowfax has pointed out the rates need to go up). Subsidize those who need help. This also gives us competition for any bad insurance companies. Don't like Anthem? Get your insurance via FEHBP. If the Democrats had done this a year ago, I would have cheered them on. If either side did it now, I'd cheer them on.

    As for why the bills on the table (I think at this point we can essentially just talk about the Senate bill) are twice as bad. First, they put more government oversight on top of insurance companies. At a minimum that increases costs: we're paying for administrative overhead at the insurance companies; administrative overhead at the State level; and now administrative overhead at the government level.

    Second, it pretty much destroys accountability: the government will always say problems are the fault of the insurance companies; the insurance companies will throw up their hands and say they're just doing what the government tells them to do.

    I've got other problems with this layer cake that is neither fish nor fowl but I'm going to do something I hope is not out of line and simply say I've written about this (and the idea of catastrophic coverage) interminably at my blog. You're more than welcome to take a look and, of course, to disagree.

  16. Toni writes: "That said, the opponents of health care reform have little in the way of statistics or data to reinforce the claims that "we will have the worst of private and the worst of government run." Why would it be the worst?"

    Medicare denial rates exceed private care:


    Medicare cost growth rates outpace private in the last decade:


    Medicare compensation rates to doctors are 85% that of private insurance


    Medicare compensation rates to specialists are about 40% that of private insurance


    See how the government does cost control?

    Elise makes another good point about the eternal blame folks will continue to heap on the insurance compnaies. At the end of the day, the profit the insurance companies make is very small in all this. If we mandated they do their job for free, costs would fall a few %--less than a year of cost growth. And then what?

    Everyone I ask believes that insurance "profit" is 30-50% of the total expenditure. What does that say about the drumbeat of the current administration?

  17. Anthem processes between 50 - 60 million claims for Californians each year. So, thats 200 million claims -- 717 errors would constitute an error rate of approximately .00036%, or four ten thousandths of a percent.

  18. Jon,

    It's cute that you think that a)these were "errors" rather than deliberate efforts to avoid payment and b) that these events represent the totality of the payer's misbehavior.


  19. I am simply stating the facts. People think that insurance companies act as one malevolent entity but that’s not the case. Insurance companies are comprised of thousands of workers and those workers make mistakes. The insurance company didn’t willfully omit payment for their own enrichment. Instead, it was most likely a paper claim or grievance that got lost in the bowels of the company. Here is the link to the specific findings by the CDI CDI info

  20. The link isn't cooperating, so here is the text link instead.



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