The HMO in Your Future

I have not been able to determine how you pronounce the acronym for Accountable Care Organization (ACO). Is it ā´ ko? Or ā´ so? Or ăh so´, as in Charlie Chan movies? What about ĕ´ ko, as in a canyon? Or simply ick, with a silent o?

Anyway, this is not a trivial matter because you are likely to be in an ACO at some point in the future and it’s probably going to happen sooner than you think.

In Massachusetts, stakeholders are already meeting to develop a plan to push everyone with commercial insurance into an ACO. [Can you guess who doesn’t count as a “stakeholder?" If you live in Massachusetts and you weren’t invited to the meeting, that’s a clue.] Nationwide, Medicare will start paying fees to ACOs, beginning next year. Eventually, the Obama administration would like to see everyone in an ACO.

But if no one had any previous interest in forming ACOs, let alone joining them, what is going to cause us all to change our minds? Money. Insurers won’t be able to get premium increases unless they adopt ACO plans. Doctors and hospitals will be paid less if they don’t join. Eventually doctors will find they are ineligible to treat Medicare patients or patients insured in the newly-created health insurance exchanges if they are not practicing in ACOs. As for the patients, there won’t be any plans to join other than ACO plans.

Say a Little Prayer for You

Oh, and did I forget to mention it? Eventually ACOs will almost certainly have global budgets — a fixed sum of money, used to meet enrollees’ medical needs. If all needs can’t be met with that sum, they will have to be prioritized. At this blog we don’t shy away from the “R” word (rationing). We do tend to avoid the “D_____ P_____” term, however. We call it “end-of-life counseling.”

I don’t know any advocates of ACOs who are not also advocates of global budgets. See if your experience is the same as mine. Why is that important to know? Because that is the most important thing ACOs are about.

ACOs are sometimes said to be the brain child of Elliott Fisher, who heads the Dartmouth Atlas Project. But as Uwe Reinhardt pointed out the other day, the idea is actually an old idea. It’s called Kaiser Permanente.

ACOs have been called “HMOs on steroids.” They will have capitated payments and, like the traditional HMO, the ACO will get to keep any money it doesn’t spend. But the organization will also incorporate all the latest fads in health policy: electronic medical records (EMRs), pay-for-performance (P4P) incentives, quality report cards, etc.

The results from the few demonstration projects with ACOs are lackluster and mixed. But that doesn’t seem to matter to the Obama administration. Medicare will start contracting with ACOs beginning next year.

If that doesn’t strike you as strange, you need to know that “evidence-based medicine” is one of the buzz words among policy wonks these days and is supposed to be the foundation for ACO management. But if that’s a good idea for doctors, isn’t it equally good for policymakers? If we abided by evidence-based policy, would we put all of our marbles in the ACO basket? Basically no.

The latest comprehensive review of all the studies of report cards and other quality-measuring-and-reporting techniques finds they don’t work and may do more harm than good. Just as teachers will “teach to the test” if test results are how they are graded and rewarded, doctors will tend to “practice medicine to the test” if that is how they are paid. If you’re the patient, that may not be good for you. The latest comprehensive review of all the studies of electronic medical records finds they do not live up to their promises. And the most recent study of pay-for-performance from Britain finds that it doesn’t work either.

What about Kaiser? Its integrated medical records system is impressive and Kaiser is also promoting e-mail and telephone consultations. On the other hand, Harvard Business School professor Regina Herzlinger has taken the organization to task for letting people die.

But let’s give Kaiser the benefit of the doubt for the moment. The real question is not: how well does Kaiser perform? There are lots of centers of excellence around the country: Cleveland Clinic, Mayo Clinic, Intermountain Healthcare. The real question is: can the performance be replicated?

There is no law against ACOs (other than Stark restrictions that limit flexibility). So if ACOs can reduce costs and raise quality, why don’t we see them everywhere?

As it turns out, when Kaiser tried to replicate in Dallas what it does in Palo Alto, it failed. This isn’t surprising. If high-quality, low-cost medicine were easy to replicate we wouldn’t be having all the problems we are having.

When health policy experts associated with the Brookings Institution studied the “best” hospital regions around the country, they found few objective (replicable) characteristics. Some had doctors on staff. Some paid fee-for-service. Some had electronic medical records. Some did not. A separate study of high-performing doctor groups found much the same thing.

Evidence-based policy would admit ignorance about what works and why, and would let a thousand flowers bloom. It would pay more for low-cost, high-quality care, regardless of how it is achieved. We have previously suggested ways of doing that.

By contrast, the non-evidence based approach of the Obama administration will force everybody into the same model. As Scott Gottlieb has pointed out, this approach not only will stifle innovation and entrepreneurship, it is already causing venture capital to leave the health care market completely.

So how do we explain the administration’s commitment to ACOs? Whether they raise or lower costs, whether they raise or lower quality, there is one thing that ACOs will indisputably accomplish. They will drive doctors into organizations where their behavior can be controlled. For the first time in our history, both the practice of medicine and the way money is spent on medical care will fall under federal control.

ACOs are the portal through which we will all march toward a truly nationalized health care system.

Comments (54)

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  1. John Seater says:

    Would someone please provide a concise, tight definition of the term “stakeholder?” I know the meaning of “owner,” “employee,”, “creditor,” and the like, but I do not know the meaning of “stakeholder.” As far as I can tell, the term was invented fairly recently as a way to give people who have no actual stake in an enterprise a way of butting in so they can either mind other people’s business or plunder other people’s wealth, but maybe I’m mistaken.

  2. Brant S Mittler MD JD says:

    Great post, John. You see the future clearly.
    Kaiser failed in Dallas in part due to several HMO death cases. All were settled. I was an expert witness in several of those cases. The discovery in those cases showed a lot about how the managed care process works. For some interesting details about how managed care worked then — and the new ACOs will work – see the video and transcript of Nightline February 13, 1998.

    As for Mayo, will any ACO patient even be allowed to get to Mayo?
    Apart from Medicare considerations, Mayo is very expensive and uses a lot of imaging. Will any ACO or HMO pay for that? Probably not. Even if your insurance is “in network” at Mayo, you still have to pay what the insurance does not pay. And that adds up to a lot.
    Recently, Mayo kicked out of its Scottsdale. AZ practice all Medicare outpatients in primary care.

    Finally, in hostpial run ACOs, doctors will be subject to the peer review process that will let hospitals define economic credentialling as a peer review process with the full power – virtually unchallengeable in the courts – to boot doctor off the staff if they advocate too much for their patients. Here’s the choice – advocate for a coronary bypass for your 85 yo patient vs. get kicked off the staff, lose your medical license, lose your home, have your children not be able to afford college,and get divorced. What will the doctor choose?

  3. Pat Reed says:

    Have you been able to scan Dr. Richard Reece’s new book: Obama, Doctors and Health Reform? On his Blog he has written extensively against ACOs. A Chapter entitled “Views of Consumer-Driven Care and HSA’s – Skeptics and Believers” could be informative!

  4. Vicki says:

    You need to say many big prayers for us. Not one little one.

  5. Ron Bachman says:

    If you’ve seen one ACO, you’ve seen one ACO. Patient may not even know they have been “assigned” by HHS to an ACO. The following is from a CRS report on ACOs:

    “As noted earlier, some proponents and some critics have suggested that Medicare beneficiaries
    should be informed of their physician’s participation in an ACO, and some suggest that Medicare
    beneficiaries should have the right to either opt-in or opt-out of their physician’s ACO panel.
    Prior notice to a beneficiary implies that assignment to an ACO is prospective rather than
    retrospective. As a practical matter prospective enrollment, where Medicare beneficiaries are
    informed of their assignment ahead of time, may be somewhat problematic.”

    “Problematic” in deed! It is scary that the government may assign Medicare beneficiaries to an ACO without their knowledge.

  6. artk says:

    Well John, that you don’t know the term stakeholder is just proof of your ignorance. It’s a management concept that started in 1990s.

  7. Don McCanne says:

    Will accountable care organizations (ACOs) provide the portal that will lead us to a nationalized health care system?

    There is a sharp contrast between ACOs as defined under the Medicare Shared Savings Program in the Affordable Care Act (ACA) and the commercial ACOs that already exist or are being formed throughout the nation.

    Commercial ACOs are primarily an extension of private sector managed care models of health care financing and delivery, except with the hope of less regulatory oversight of the market concentration that they hope to gain. These organizations are largely entrepreneurial in nature (even if non-profit) with the primary goal of making money. Since virtually all stakeholders are driven by profits, these will be the predominant models of ACOs.

    The government version of Medicare shared savings ACOs is merely a model to discount Medicare services and then split the savings between the providers and the government (i.e., half of a discount). Who in their right mind would want to corner that market? The government version will be a dud.

    It is not the federal government through the Affordable Car Act that is going to bring us ACOS. It is the private sector. This is hardly a portal to nationalized health care, but it is a reincarnation – on steroids – of the models from the age of managed care that caused us so much distress in the fairly recent past. Any hope of cost containment will vanish as these organizations drive prices ever higher.

    Our only hope to slow our outrageous health care cost escalation is to do what all other industrialized nations have done. We need to establish some form of a public monopsony through the application of a universal social insurance program. A publicly-financed and publicly-administered single payer system would be the most efficient and equitable model.

  8. Joe S. says:

    Here is the Center for American Progress defending ACOs:

    http://www.americanprogress.org/issues/2011/02/pdf/aco_competition_execsumm.pdf

    They concede that ACO s will require huge “integration,” which means monopoly. What to do about that problem?

    They suggest anti-trust law.

  9. Ken says:

    Get ready to have your health care rationed.

  10. John Goodman says:

    @ John Seater

    You are a stakeholder if you care about the issue and have enough money or votes to influence the next election.

    @ Brandt Mittler

    Sounds like there is history there that needs to be uncovered.

    @ Pat Reed

    Thanks for the reference.

    @ Ron Bachman

    These guys are under no obligation to tell me I am in an ACO? They must think there is something there to hide.

    @ artk

    Your cheeriness is infectious.

    @ Don McCanne

    We need more government control to over come all the problems created by the last round of controls? No thanks.

  11. foxy says:

    Ken, our health care is rationed already; we have the worst rationing of any developed country. Did you not know that? We ration on ability to pay, which is the cruelest, most ineffective, and most unjust of all.

    “We need more government control to over come all the problems created by the last round of controls? No thanks.” John Goodman, we have had too little government control, which has allowed the private health insurance industry to ride roughshod over us for many decades. The sorry result of this has been “corporatized medicine” and “insurance companies coming between you and your doctor.”

    Don McCanne’s comments make the most sense of all. The profit motive needs to be taken out of the health care transaction.

  12. HD Carroll says:

    There is no real distinction between what is proposed for ACOs and types of HMOs, except for the addition of all the bells and whistles and buzz words touted in health policy circles, as John as so readily pointed out. Why they think it will work any differently this time around I just can’t figure. The only thing I can assure you of, however, is that the concept of “fee for service” will still be used in its pure form, which is tracking cost per unit provided/used, on the back side if not on the “front” side to the original payer. How else will you determine if the global payment was enough? And then the same problem that exists in the current environment will raise its ugly head – we have no way of valuing health care services because there is no free market mechanism for providing an equilibrium point of supply and demand because of the distortion of government price fixing. ACOs, HMOs, PPOs – they’re all just ho, ho, hos for vested interests of the current mess, which of course includes the government.

  13. Les Keepper Jr. says:

    John,

    Your informative thoughts are timely and accurate. Many thanks for sharing your wisdom and intellectual understanding of our Republic and the future needs of our Health Care as an industry.

    -Les

  14. Frank Timmins says:

    Foxy states “…we have had too little government control, which has allowed the private health insurance industry to ride roughshod over us for many decades. The sorry result of this has been “corporatized medicine” and “insurance companies coming between you and your doctor.”

    Gee, I don’t know exactly what to say. Maybe you could explain a bit. Could you be a bit more specific over how the health insurance industry has ridden roughshod over us for many decades? Perhaps you could explain exactly what “corporatized” medicine has done and more to the point how that would be remedied by the bureaucracy. And most imporatantly, please please tell us exactly how single payer would restore the patient doctor relationship.

    Either you or Mr. McCanne sound qualified to enlighten all of us on this theory.

  15. George says:

    John: I understand the new rubric to be “Comparative Effectiveness Research” (in distrinction to Evidence-Based Medicine). Taking medicine out of the research is possibly purposeful; but the results will be the same…rationing, panels, etc… and the simple tools will be surgically applied.
    foxy: taking the profit out of the ” health care transactions” mean the only thing being transacted–through the “exchanges”– is the coercion (power); should be way better…
    artk: I always pictured a “stakeholder” to be a person holding a pointed stick, demanding some form of tribute; but maybe it is only a shameless play on the word “stockholder.” Nice to know when someone made it up though.

  16. Ken says:

    Foxy,you are wrong. We do not ration based on the ability to pay. In fact I believe that the percent of medical spending done out-of-pocket in the US is lower than the OECD average. Most of the time we are spending other peoples’s money when we consume health care — just like most people in the deveolpoed world.

  17. Robert Kramer says:

    John,

    For all the years I was in practice, I thought I was providing accountable care. But the greed and outright wrong things that my colleagues were doing is what is responsible for this mess. If physicians were providing the care they were taught, then the current administration would not have to legislate for it. Lets put the blame where it belongs.

    Dr. Bob Kramer

  18. Virginia says:

    The future for ACO’s doesn’t look very bright.

  19. Annie Kelleher says:

    One cannot know that health care is rationed in the USA if he/she exists in a world of privilege. For anyone without clout and connections here is a common rationing scenario:
    1. The whole family works hard
    2. Education is a priority
    3. Unless already wealthy, must borrow for Education
    4. Wall Street goes bust due to its own crimes
    5. Savings wiped out for avg citizens
    6. Profoundly weak economy
    7. No jobs with decent pay and benefits
    8. No way to pay off college debt
    9. No affordable health insurance
    10. No health insurance = no health care
    11. Visit an ER for legit reason: the bill is $12k
    12. Can’t pay the bill, can’t pay college debt
    13. Huge disincentive to use health care in future
    14. Why so reluctant to obtain health care? Sounds like VERY clever rationing to me…

    Epilogue: corporations are doing just fine. Investment banks and bankers are doing just fine. We’ve subsidized them all ’till there is nothing left but us fool middle class new grads believing there was once “An American Dream.” Rationing health care is real, and it’s only part of what our Plutocracy has planned for plebes.

    Does this clarify Rationing ?

    Got Jobs? From a student in the wings

  20. foxy says:

    Frank Timmins: Gee, let me count the ways. The private health insurance industry has deliberately used every trick in the book to take people’s money and deny them the very thing they thought they were paying for. Some of these are rescission (rescinding someone’s policy when they become ill after they had paid on it for many years while in good health. The government should have made it illegal to do that after a certain time limit after issuing a new policy, say 90 days), refusal to cover for pre-existing conditions, using a third of our premium money for every other kind of expense except for medical. And on and on.

    “Corporatized medicine” resulting in “insurance companies coming between you and your doctor” is exactly what I mean. The private health insurance industry has intruded upon practically every function of the practice of medicine. Doctors are not free to diagnose, treat, or prescribe as they see fit. The insurance company’s non-medical personnel are dictating what they do at every step. They also force medical practices to hire many more billing personnel than they should have to, and make it difficult for them to get paid in a timely fashion or at all. We don’t need a private industry to come between us and our doctors like this; they are a completely redundant middleman and add absolutely nothing to medical care but instead hinder it. We could deal with our providers directly much more simply if they were removed from the transaction. This would be possible with single payer.

    Ken, I am not wrong. There are millions of people in the US who need health care and are just plain not getting it. And don’t give me the old saw that they can go into any ER and be treated. That is so much baloney for a number of reasons. That means, pure and simple, that they have been rationed out of the health care system. I honestly don’t know how you could put a better face on it than that. They are both uninsured and underinsured, the majority of them working, and they are often forced into financial ruin because of it.

  21. John Goodman says:

    Annie: Sounds like you should read the “Characteristics of an Ideal health Care System,” pointing to the solution to all these problems:

    http://www.ncpa.org/pub/st242/

  22. Frank Timmins says:

    Foxy, I have never heard of an insurance company “rescinding” an insurance policy for any reason other than fraud on the part of the insured (lying on the application). If you know of a specific instance please share it with us. Otherwise you are simply sloganeering.

    You are right that insurance companies through their “managed care” products are guilty of coming between doctors and their patients. The basic structure of the new healthcare law is based upon managed care concepts and is designed to continue that process in spades. That means even more separation. This is simply an obvious fact. But you seem to think it is preferable for government to dictate terms to both doctors and patients. How can you justify this position?

    You are correct in identifying the problem as a deterioration of the relationship between the provider of service and the purchaser of that service. Have you considered any other alternatives to correct that other than government single payer?

  23. artk says:

    Well Frank, if you’ve ever applied for individual insurance in a non community rating state you would know that the insurance company requires you to complete an 50 pages of forms. If you get seriously ill, they start an extensive investigation to discover the smallest misstatement. That’s the “fraud” you describe. You should read the op ed from the co founder of Palm Computing (remember the Palm Pilot). Even they find individual insurance almost impossible to purchase and afford, they they are multimillionaires. The only people who can defend the health insurance companies are those with company or government provided insurance. Anyone who has contact with them thinks different.

    http://www.nytimes.com/2011/02/20/opinion/20Dubinsky.html?ref=contributors

  24. Frank Timmins says:

    Well no Artk, you are very wrong. There are no 50 page health insurance applications, but they are very clear about the need for answering the questions honestly. And they will most definitely turn down coverage if they don’t like the risk, but they do it up front. People stretch the truth frequently on applications and much of the time they get away with it (because whatever they lied about may not lead to a large claim). But when it does they may well have a problem.

    Perhaps your haste to demonize the insurance company and simple solution default to “let the government take care of it” prevents any real thoughtful discussion how these types of problems can be addressed.

    You might find there are solutions that work and also allow you and your fellow citizens to retain some freedoms that government entitlements don’t allow.

    Oh, and I didn’t realize that being an electronics executive carries any particular qualification as expertise in health insurance underwriting.

  25. John Seater says:

    @ artk
    Yes, indeed, I am ignorant of many things. We all are, I believe. Aren’t you? I am not ashamed to admit my ignorance or ask people who know more than I to enlighten me. That’s something you did not do, by the way. I asked for a concise, tight definition of “stakeholder.” Your rudely-stated response merely asserted that it was a management concept from the 1990s (so it is fairly recent, as I had guessed), but you did not say what it was. I suggest you do two things henceforth: (1) Learn some manners and then use them. (2) Post substantive, factually accurate remarks, not vacuous and uncalled-for insults, such as your reply to me, or sweeping overstatements and misstatements, such as your exchange today with Frank Timmins.

  26. dianne says:

    Frank Timmons: Sounds like you are an insurance company schill or an infiltrator of some sort.

    Health insurance companies are leeches of the worst kind – actually along with politicians. If you haven’t heard of policies being rescinded b/c a person’s medical expenses were about to affect the insurer’s bottom line, you haven’t been paying attention. And that’s just one way they commit murder.

  27. artk says:

    Well Frank, Dianne may be overstating the case by calling Health insurance companies “leaches of the worst kind”, but it is true that the company officers have a fiduciary obligation to maximizing return for the shareholders. That means collecting the highest premiums possible and paying the smallest percent of those premiums for medical care as possible. Given a choice between lifesaving care and profits, profits win out.

  28. Ken says:

    artk, dianne also said politicians are leeches of the worst kind. Who is worse? Private insurers or the people who run Medicaid? There has been lots of evidence at this site and elsewhere that Medicaid mistreats people far worse than any private insurer.

  29. foxy says:

    Artk, that is the very reason why the private health insurance industry has no place in the delivery of health care and must be eliminated. It is pure greed and deceit on its part to think otherwise. Dianne has a real point that Frank must have an axe to grind.

    Frank, why should we be considering anything other than single payer, because that is the one thing that would work. Government would not be dictating terms to both doctors and patients, certainly not the way the private health insurance industry does now. They don’t in traditional Medicare. Rescission after a time limit like 90 days is an inhumane, cruel practice that the government should have put a stop to. And who should be determining whether fraud was committed or not? Most of the time it wasn’t? Letting the private health insurance industry be the judge of that was like letting the fox watch the henhouse. Either you are very naïve about this, or are just pretending to be.

    Ken, how do you mean that Medicaid mistreats people? I assume you mean because of the callous, arbitrary, wasteful, humiliating way people have to submit to means testing, in which deserving people are denied. Still another reason to go to single payer, where this bureaucratic apparatus will become a relic of the past, and all people will get the health care they need.

  30. Frank Timmins says:

    Foxy, yes I do have an ax to grind. I am interested in future generations being able to grow and prosper in a free society like you, I and the rest of us commenting here have enjoyed. Collectivist concepts directly threaten that interest.

    I would like to give you the benefit of the doubt regarding your comments on “single payer” insofar as accepting that you really actually believe what you are saying. That is relevant because many of the proponents of similar philosophy use its simple (but flawed) logic as a stalking horse for gaining power.

    More to the point, you seem to be terribly concerned about rescission for some reason. The fact is it very rarely occurs, and it is even more rare that it has proven to be an unfair infringement on a policyholder. Surely you know that individual health insurance (which I assume is what you reference) comprises only a small percentage of healthcare coverage in this country.

    Consequently health underwriting is not even relevant the majority of the time. And you ask who determines if “it” is fraud? Usually it is self evident through medical records not previously disclosed. In any case these types of decisions can be challenged through the state boards of insurance. There are clear paths of recourse in this regard. So even now ultimately it is the government insurance regulator who has control. Why is that not good enough for you?
    Why do you seek to resort to a government run system that has historically failed whenever tried?

    With regard to what kind of fox is “watching the hen house”, I would much prefer that “profit motivated” fox who has to answer not only to his customers but his stockholders and government regulators as well. The alternative fox would be a bureaucrat who answers to no one but the political power at any given moment. Why don’t you think about that?

  31. Frank Timmins says:

    Foxy, I completely understand your decision to avoid debate on this subject. Facts are very hard to overcome, even for “educated” people.

  32. foxy says:

    Frank, I really believe in single payer as do many health professionals and other educated people; see http://www.pnhp.org. Quite honestly, it is not even worth my time to go through your lengthy message and answer your points one by one. Let’s just say they all show a lack of logic, common sense, and above all compassion and humanity.

  33. foxy says:

    Frank, you still don’t understand. Do as I suggest and go to http://www.pnhp.org to get the real facts. What you have been saying all along is definitely not factual.

  34. artk says:

    Well Frank, I realize that since you were raised in a log cabin that you built with your own hands you would dislike “Collectivist concepts”. The rest of us have a more rational view of the role of government. Over history government investments enabled projects that have enabled the economic success of the US. You can look back as far as the Erie Canal, the Transcontinental Railway, the Interstate Highway System, Rural Electrification, the Land Grant Colleges. The majority of the Nobel Prizes won by Americans in Physics, Chemistry and Medicine were given for research done at universities and funded by government grants.

    Oh, your comments about rescission are both correct and meaningless. It is true that over the population of people covered by private health insurance the number of people who find their coverage withdrawn when they need it the most is a small percentage. If you come down with a serious illness and you’re not covered as part of a large group, the chance of being subject to rescission is significant.

  35. John Goodman says:

    artk, your last statement is just not true. The odds of rescission are extremely small, as reported here before, and illegal unless you have lied or misstated material facts on your insurance application form.

    Cancelling a person’s health insurance just because he gets sick has been illegal under federal law since 1996!!

  36. Frank Timmins says:

    Foxy, one more time – please give us a (that’s one) real life example of a catastrophic rescission case that you think provides the motivation for the government take over of healthcare.

    It’s like talking about “what to do about” man made global warming when there is no real evidence that it exists. How do you accuse someone of being “inhuman” about an event that occurs only in your mind? Show us all an example where an insured’s policy was wrongfully rescinded and there was no successful appeal. If you can’t do that you will never be able to convince anyone of your viewpoint.

  37. foxy says:

    John, whether someone has lied or misstated facts is very subjective and hard to prove. The private health insurance industry has been getting away with performing this function, so of course which side are they going to come down on? Three guesses, the first two don’t count. Besides, they should be made to prove the person had a definite intention to commit fraud. This should be very difficult, but the industry has been given carte blanche to declare a large number of cases fraudulent. If you had been right that it was illegal since 1996, there would be no reason for PPACA to have a provision outlawing it now!

    The odds of rescinding a policy years after it was taken out may be what you call very small, but it should be zero. Your attempt to minimize the impact of it falls flat. I don’t know why this is so hard for a couple of you on this list to understand. This shows how inhumane and callous our system is.

    There is no excuse for an insurance company to take advantage of the fact that a subscriber has all of a sudden started to submit larger claims after paying in for years and not really using their insurance at all. After all, this kind of catastrophic event is the very thing a person buys insurance for. For them, it is a significant negative life-changing event to be thrown into financial ruin on top of illness! This does not happen in any other developed country.

    The answer to eliminating the problem of willful rescission on the part of the private health insurance industry is to move to a fair system in which everyone is in the same risk pool and the cost of catastrophic claims is spread among them. This is what insurance is supposed to be.

  38. Jennie Fiedler says:

    My boyfriend heard some guy on Coast to Coast the other night say we could expect to lose about 60% of the world’s population in the next few years. I wonder if our medical care is going to play a role in that, should it acutally come to pass. Maybe we’ll go back to herbalists and midwives and shamans, because it’s starting to sound like becoming a doctor is just a losing proposition. Scary.

  39. foxy says:

    Look up the example of Natalie Sarkisian, a 17-year-old who needed an urgent liver transplant to save her life and CIGNA refused it. There was such a public outcry that they EVENTUALLY relented, but it was too late; the very day they made that public the poor girl died. Search online for Wendell Potter. At the time, he was the top PR guy at CIGNA. His eyes were opened by seeing an outfit named Remote Area Medical in action and he knew he could not continue working in such a callous, inhumane industry. He is now spreading the word about what really goes on in the insurance industry.

    Watch the movie Sicko. That whole movie is about people who HAD insurance and were denied by their insurance carriers, all true stories. There are so many cases that the movie didn’t even have time to talk about the UNinsured. A woman physician was shown testifying with tears in her eyes to Congress how she, as medical officer at a large well-known insurer, denied someone else a lifesaving operation and got a bonus because of all the money she saved them. That person died as a result.

    I could go on but I really don’t need to. These are well documented.

  40. Don McCanne says:

    Wrongful rescissions by private insurers have been commonplace in California. These were not instances of fraudulent insurance applications, but rather “insurers have purposely used confusing applications and minor discrepancies to abuse the rescission process and avoid costs.”

    If we had a decent health care financing system everyone would be included automatically, and there would be no need for wasteful and inequitable processes such as medical underwriting generally, and rescissions more specifically.

    We really do need an improved Medicare program that covers everyone automatically.

  41. Frank Timmins says:

    Foxy, this exchange is going nowhere but I just simply have to comment on your last post. The only example you an cite of “policy rescission” is the famous Sarkisian/Cigna case which had absolutely nothing to do with “rescission”. Cigna did not terminate this person’s coverage. Rather it made a decision that the liver transplant was experimental, and under the contract “experimental” surgery was specifically not covered. Whether that decision was correct or not has nothing to do with your arguement here.

    Moreover, if you would try to understand the nature of government managed healthcare you would understand there is no way in the world this surgery would be allowed under a single payer national healthcare program (unless the family had political connections).

    The sad fact in this case is the teenager was terminal and your advocate for the new healthcare law (Mr. Obama) has made it clear that healthcare dollars should not be spent on lost causes.

    Further, referencing the movie “Sicko” both explains your point of view while completely discrediting same. Thanks for clearing that up.

  42. artk says:

    Well Frank, here are the statistics on rescission. WellPoint admitted to rescission on .1% of policies over a four month period. One in 1000 may sound like a low number, but remember that only one or two percent of policy holders come down with a serious illness. Only policy holders with serious illnesses are investigated and have their policies revoked. So, if you come down with a serious illness, you have a 10% chance of finding your insurance coverage is revoked. Of course, if your policy is part of a large group, which are essentially guaranteed issue community rated, that never occurs. Who cover your policy Frank, the government or a big company?

  43. artk says:

    One more point Frank. I managed to do some research on you. Your strident support of the current system is based on the fact that your entire career has been based on profiting from the current system. There’s no problem with talking your own book, but you should admit as you did in that fake medical association article you authored in 2006 that “Frank Timmons has worked in the insurance industry for 34 years, primarily with employer-based benefits. He is founder and former president of Group Administrators, Inc., and a founding partner of Medcon Benefit Systems”. You’re part of the problem.

  44. foxy says:

    No, Frank, it has everything to do with it. You are grasping at straws about secondary details. The thing is that CIGNA’s ability to make a completely arbitrary, capricious decision about a liver transplant, which is NOT an experimental procedure (they had been done for years!) or about rescinding a policy are pretty much the same thing. How could she be said to have a policy anymore when it didn’t cover the very thing she needed? Her policy was at that moment effectively rescinded. To argue the trivialities of that point just shows how flawed your position is. The end effect is the same; her insurance turned out to be a sham.

    What more is there to understand about “the nature of government managed health care” that you don’t think I understand? The fact of government managed health care is that everyone gets covered, we don’t have for-profit companies whose only fiduciary duty is to their stockholders, siphoning off fully a third of what we pay in the vain hope that it will provide us health care when we need it, and nobody has to fear bankruptcy and financial ruin at the moment when they are the most vulnerable. We can’t vote out company CEOs; we can vote out our elected officials.

    I have lived in two European countries for about five years each and so I reserve the right to comment on nationalized systems. Other countries actually do a creditable job, especially considering how little money they have to work with, half or less per capita than we do.

    How could you possibly know whether such a surgery would or would not be covered under a nationalized program? At least poor Natalie would have had a fighting chance under such a system; CIGNA completely let her down.

    And just to let you know, Obama is not my advocate for health care. He let us down badly with his mongrel PPACA, which the private health insurance industry is craftily working overtime to overturn. He knew single payer was the way to go but he sold out.

    You have completely discredited yourself in my opinion by that sneering comment about Sicko. That movie alone had numerous examples of people WITH so-called insurance getting the shaft, whether by rescission or outright denials. I am assuming you are one of those insurance company yes-men who has not yet seen the light, like Wendell Potter has. One day you will realize how misguided you have been.

  45. Jared says:

    This article is featured in the March 3rd edition of the Health Wonk Review. Thanks for your submission!

    http://lucidicus.org/editorials.php?nav=20110303a

  46. Michael says:

    single payer healthcare is the wrong prescription for this country and I have yet to hear a convincing reason why we should adopt such a scheme that also rations healthcare and denies/limits coverage like our socialized system does. All you’re doing under such a scheme is exchanging middlemen: an insurance company for bureaucratic management (not that that isn’t already happening in some aspects but the solution is not more of it). Foxy would have me believe that government bureaucrats will do a better job of rationing than individuals will do for themselves. There is no evidence of such a thing. Also this exact system was tried in Massachusetts and failed and pnhp’s suggestion was a bigger dose of the same failure.

    As it stands today, the US health-care system is very much immoral: it is immoral in forcing one person to provide, or pay to provide, another’s medical care (as in government health insurance or hospitals); it is immoral in forcing patients to abstain from experimental procedures or drugs they wish to try (as in FDA regulations); it is immoral in forcing doctors to not prescribe drugs they and their patients deem useful (as with narcotics and their levels that government officials don’t approve of), and on and on. So much coercive, non-capitalistic, rights-violating intervention in what could otherwise be a peaceful, productive, rights-respecting arena.

    Insurance is supposed to be an arrangement for risk pooling. If you have extraordinarily high risks, and are going to cost the insurance company huge amounts of money there is no justification for their passing those costs on to other people. In a system where people are free to choose, an insurance company that tries to do that would go out of business. It seems clear to me that the welfare-state perversion of insurance is what is currently failing.

    At this stage I am quite interested in free market reforms if anybody has some policies that can help us move away from the rife government meddling in the healthcare industry

  47. Simple answer:
    Primary care Docs Working for their patients (concierge). All have money to contribute.
    Take 50,000 Uninsured. If they each paid $2/day that would generate $100,000/day
    …$3,000.000/month…$36,000,000/year….
    Seeing that direct practice docs take care of 80-85% of your needs
    And decrease hospitalizations by 60%, it’s where true savings occur.
    You would only need 83 family Docs to take care of 50,000 people
    (600 patients/doc)
    It’s all about the overhead in running a practice.
    More importantly, it’s all about you, the patient.

  48. medical blog says:

    Congratulations John on being a medal winner at Grand Rounds this week. Thanks for the submission. Dr. P

  49. Original investigation,”Kaiser Permanente Plunders Patients’ Piece of the Pie,” is posted on YouTube at http://www.youtube.com/watch?v=v0h7tUymj2Y and http://www.hmohardball.com.

  50. foxy says:

    Michael: No, the exact system was not tried in Massachusetts. That model is largely the same as Obamacare, and neither of them works. The problem with them is that they are still based on the for-profit private health insurance industry.

    You are wrong that “free-market reforms” are the answer. We have had decades of the free market at work, and that is what has gotten us into the mess we are in today, with callous, inhumane private health insurance companies rationing, denying, and limiting coverage. The very fact that they refer to any expenses they actually have to pay for a subscriber’s medical care as a “medical loss” just shows right there where they are coming from. They are constantly scheming to NOT pay such costs. There is plenty of evidence that governments do a better job of rationing, as can be seen in every other developed country. But no, America is always touted as the biggest and the best, and we cannot learn a thing from another country. America needs to wake up before it is too late.

    In your second paragraph you state that we are “very much immoral”. That is correct, but not for the reason you state. What is truly immoral is having the most resources and wealth of any country and still letting people sink into financial ruin over medical bills. Other developed countries do not let this happen. It is outrageous that this continues. We in America are being immoral, inhumane, and downright cruel to our fellow man.

    It is the insurance companies that are being immoral in preventing patients from getting drugs and procedures that may be helpful because they are “experimental.” It is not the government. You need to get your facts straight. You are arguing against the very point you are trying to make in your ignorance.

    Risk pooling is not coercion, it is simply including everyone. You are contradicting yourself. If one has high expenses, the large risk pool that includes every citizen will cover it. It is the very definition of risk pooling. God forbid that you, Michael, come down with a catastrophic illness. You will be singing a different tune and crying, why isn’t the risk pool paying for me???

    I for one am sick to death of the rife meddling of the corporatized health care the private health insurance industry, coming between us and our doctors, has forced on us. You are certainly not putting forward any kind of meaningful suggestions for improving our health care system.

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  52. foxy says:

    We need your “truly nationalized health care system”, which I am glad you are finally realizing. But we do not need ACOs to get us there, nor do we need HSAs. Both are harmful diversions from the task of making sure everyone gets proper health care.

    The way to get to good nationalized health care is to get rid of the private health insurance industry; see http://www.healthcare-now.org/divestment for information about the campaign to divest from the industry to call attention to the harms it causes and to starve it out of existence.

    No functioning health care system which does not bankrupt a country can be based on a market model. Here are at least three reasons why it is not possible.

    #1 We do not choose the illnesses or injuries we suffer as we choose an item available on the open market, a “market good”. They choose us.

    #2 Medical costs can rapidly escalate to such high amounts that a person with an average income could not reasonably be expected to pay for them. Other kinds of insurance cover catastrophic costs most individuals could not cover on their own, sharing losses and preventing financial calamity. Private health insurance in the US does neither and should not be called insurance. It is very revealing that we call it “health” insurance; it is just for the healthy. In German it is called Krankenversicherung, sickness insurance. Insurance should be for the sick.

    #3 You cannot realistically negotiate for health care costs the way you can with real market goods, even if you could get the information. And you need the care at the very time you are most vulnerable and least able to negotiate.

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