Wellpoint and Their “39%” Rate Increase

Wellpoint is getting killed in the press over a “39%” rate increase for their individual health insurance block in California.HHS Secretary Sebelius has pointed to the Wellpoint individual rate increases demanding an explanation. The President even brought it up in his interview on Sunday. At a time Democrats are fond of calling insurance executives “villains” this story just adds more fuel to

Ms. Sebelius and Wellpoint's Rate Increases: Doesn't HHS Have Enough to Worry About?

Egads, doesn't Ms. Sebelius have enough to worry about?

Our HHS Secretary faxed a letter to California-based Anthem Blue Cross, expressing how 'disturbed' she was by 'unaffordable' rate increases 'as much as 39%' in the face of 'soar'ing $2.7 billion profits. She calls for greater transparency on the ratio of medical vs. overhead costs and urges Anthem to 'cooperate fully' with California's Insurance Commissioner, because [gulp!] she will be 'closely monitoring the situation.'

While the Disease Management Care Blog appreciates this latest example of perma-campaign mode political grandstanding, it would like to remind the HHS leadership that there is no national health insurance comissioner with jurisdication over state regulated plans. Ms. Sebelius' considerable administrative and political skills would be better spent addressing the government's 10.4% trend rate, relentless growth to the point of accounting for 50% of all health care costs, a budget increase in 2011 in excess of $80 million with close to 3000 additional FTEs, not having anyone at the helm at CMS, and a looming deficit that has perilous national security implications.

The DMCB hopes that Ms. Sebelius' puffery wasn't completely orchestrated by the White House's Four Horsmen and that she actually took the took the time to personally look at Wellpoint's 2009 financials. If she did, she'd know the company lost 1.4 milion members, mostly from its small group business. Operating revenue went down compared to 2008, the cost trend was high at 8.9% thanks to rising provider costs and investment income was lower. The DMCB suspects it all adds up to a toxic brew of premium increases due to a combination of higher medical costs and unfavorable underwriting: in the current economy, healthy persons that can do without insurance drop it, leaving behind relatively more sick persons with high health care costs. The DMCB wonders why no one has pointed out that a rate increase was the responsible thing to do in the face of relentless health system cost increases - unless, of course, you're willing to trample on State's rights, fudge entitlements, print money and borrow from the Chinese.

Ms. Sebelius can fuss all she wants. The there are only so many premium dollars to cover the cost, the State of California is in charge, and the Obama Administration's time would be better spent on dealing with bigger problems that it can actually do something about.

Current and future Medicare beneficiaries deserve better.

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Addendum:

For an update on how things can snowball (no pun intended for those of us living in the Mid-Atlantic), check out the investigative spleen venting in the Health Access WeBlog. The veteran Bob Laszewski has more middle-of-the-road perspective here at the Health Care Policy and Marketplace Review Blog.

The DMCB is going to double down and predict that, once the news cycle moves on, Anthem will quietly provide all its pricing information to all the various Committee Chairs, Senators, Commissioners, Commissars and Potentates. After a requisite amount of nit-picking and face-saving adjustments, the bulk of the premium increases will stand. That's because, in this particular instance, health care inflation and the political process are the real problems, not the health insurance industry.

stolen content

If you are reading this post on a site other than Not Just About Cancer (besides Facebook or a feed reader), you are reading stolen content.

I have filed a complaint under the DMCA (US copyright law) and hope to have the site taken down (or at least have my content removed) but since the other blog seems to be scraping all my new content, I thought I would create this special post just for them.

Thanks to Sassymonkey for alerting me to the problem, Elise Bauer for this excellent article and Susan Getgood for suggesting I write this post.

The Health Care Summit—Who’s Gonna Win the Photo-Op?

Getting Democrats and Republicans to constructively engage on health care is the best way to make progress.To date, the Democrats have blown health care reform once again by being too arrogant in thinking they could just ram their version through.The Republicans have no health care proposal. Their “black book” list of ideas they handed the President in Baltimore is a collection of second and

spring dreams and other bits

I had a dream last night that spring had arrived. Everything was green and lush and the tulips were in bloom. When I woke up, I was very disappointed. The current temperature is -9C with a windchill of -18C (that's 16F, with a windchill hovering around 0F, for American readers).

In the spirit of "if you can't beat it, join it" I went skating on the canal yesterday with my family and a friend of my younger son. It was fun but I realized that I am seriously out of shape and out of practice. I think I fooled myself into thinking I was a decent skater when I was pushing the stroller. I'm a lot more wobbly now than I was in those days.

I was in the library on Saturday and a woman ahead of me in the checkout line had a fit because she had a big fine for overdue books. She claimed that it was an outrage that she had only received an email reminder when her books were two weeks overdue. Seriously? It's the library's job to keep track of everyone's books? 

She had a pre-teen girl with her, who was checking out a book. The woman told the girl, loudly, "This is the last book you are getting from here!" and again blamed the library because the books were overdue.

It was all I could do to keep my mouth shut. My older son has been responsible for his own books and his own fines for two years. I think this is a very reasonable expectation. I did tell the staffer who had been dealing with the woman that I thought he was unbelievably patient.

Mom2Amara included me in a post that left me speechless. I was so moved and even a little shocked at being included in the list of those that inspire her that I have been hesitant to mention it here. I want her to know how much that post meant to me, though. I have been feeling somewhat at sea of late and her words were a reminder that I have done some good work over the last couple of years. I will hold her words in my heart for a long time to come.

Compare and Contrast CIGNA's and General Electric's Approach to Disease Management. What's the Difference... Really?

After reading the latest CIGNA earnings call transcript, the Disease Management Care Blog couldn't help thinking some more about the Business Week (BW) faux exposé of the disease management (DM) industry.

CIGNA seems to have had a very good year thanks to a total income of $1.1 billion or earnings of $3.98 of per share. This represents an impressive 16% increase compared to last year. Not only have their capital levels been clawing their way back to healthy levels, but the insurer has also been tackling overhead, including a reduction of $100 million in its healthcare operations, while simultaneously providing a 24/7 service model with 'a broad portfolio of capabilities to achieve health improvement, including risk identification, lifestyle and wellness programs, incentives, coaching, and engagement services.' Armed with a motto of 'Go Deep, Go Global, Go Individual,' the company said that '(t)here is no question (that), regardless of what happens with US healthcare reform, there will be more individual accountability for health and healthcare. So "Go individual" is a fundamental philosophy as well as part of our growth strategy.'

Critics of DM would probably say that CIGNA's commitment to the principles of DM described above isn't based on proof, but to unsophisticated market demand. Yet, there is still a telling contrast between CIGNA's many 'believing' customers versus the experience of General Electric that was described in BW. If many pilots and trials of DM are conducted in multiple settings, a distribution of outcomes is pretty much guaranteed. Is the one company's experience with DM described by BW typical, or a statistical outlier? The DMCB can't tell, but has learned to distrust the media's ability to distinguish between the two.

The faultfinding BW article ends with a description of a curious decision by GE:

This spring, GE will start an outreach service that shares some elements with traditional disease management. Nurses will use claims data to identify gaps in care, such as unfilled prescriptions or missed checkups. But rather than just contacting patients, the nurses will also call the treating physicians, if patients agree....

What about the company's pronouncement that its experience with DM was a failure? It's more likely that, much like the rest of the DM industry, there is ongoing innovation, building on the lessons of what has worked and what doesn't work. Much like CIGNA, it appears GE appears to have a commitment to population-based care management that includes remote nurse coaching. Does that include what BW portrays as foolish DM? You be the judge.

In the meantime, good for CIGNA, good for GE, good for the DM industry and most of all, good for the moms, dads, grandparents and all the American workers and dependents that are lucky enough to be insured by CIGNA or to be working in companies like GE.

Let the evolution continue.

Business Week and Disease Management: A Closer Look

The Feb. 4 Business Week has an article on disease management provocatively titled ‘Take Your Meds, Exercise – and Spend Billions.’ The accompanying graphic displays a circa 1950’s nurse pointing to a Rube Goldberg contraption that ends in cash being shredded.

Ouch.

The article opens with a description of General Electric’s disease management (DM) misadventure and contrasts that with the seemingly inexplicable $2.5 billion commitment of 75% of the nation’s large employers to the DM industry. Even more mysterious to authors Chad Terhune and Arlene Weintraub is the success of ‘industry lobbyists’ in convincing the Obama Administration and Congress to include some version of DM in health reform. They credit a vast lobbying operation, fanciful marketing, exaggeration, lack of scrutiny and the dissemination of biased insider studies. And what unfriendly news article on DM would be complete without dredging up the hapless Medicare Health Support study. Alas, says the expert-critics that are quoted in this piece, tobacco cessation and exercise promotion have no return on investment, it's all waste, it's all money down the drain!

To the reporters’ credit, they did take the time to interview industry veterans who recycle many of the Ver. 1.0 arguments in favor of disease management: 1) the fact that employers and Medicaid programs continue to support the concept year after year cannot be ascribed to naivety, there’s gotta be something to this, 2) studies in the public domain are old studies with crude methodologies examining relatively primitive programs, while newer studies or newer programs are in-house, involve state-of-the-art consumer/physician oureach and not readily available to dubious reporters, and 3) enough with Medicare Health Support already, it was stillborn thanks to sicker patients tilting the intervention groups and Medicare strangling things by not providing timely information.

The Disease Management Care Blog offers up some additional Ver. 2.0 observations not addressed in Business Week:

1. While measures used to gauge DM, such as claims expense and hospitalizations are relatively crude, the DM industry has only just begun to coalesce around a common assessment methodology. Future reports on DM’s programs will a) hopefully use it and b) submit their findings to peer review. Pending that.....

2. No proof that DM works is not the same as proof that DM doesn’t work. And if the lack of proof is the standard by which we should judge the merits of medical care in general, what proof is there that the patient centered medical home, pay for performance or the electronic health record really saves money? Or for that matter, has anyone subjected primary care to a prospective randomized clinical trial? Before readers shake their heads at such apostasy, consider an important question: would the introduction of a primary care network into Dade Country result in lower per capita health care costs?

3. While the lack of proof is a result of the lack of positive peer reviewed research, but maybe it’s peer reviewed research's reliance on randomized clinical trials that is lacking. To quote Don Berwick in JAMA:

'...multicomponent intervention (is) essentially a process of social change. The effectiveness of these systems is sensitive to an array of influences: leadership, changing environments, details of implementation, organizational history, and much more. In such complex terrain, the RCT is an impoverished way to learn. Critics who use it as a truth standard in this context are incorrect.'

4. As for the MHS demo, the DMCB doesn't believe any DM results from FFS Medicare is generalizable to the commerical employed populations. It's a different kind of population with a different kind of insurance benefit. What's more, the DMCB thinks it's notoriously difficult to demonstrate any savings in a FFS Medicare setting. Even the allegedly successful Medicare Coordinated Care Demo would have been a complete bust if it weren't for some statistical legerdemain that barely squeezed 1 success out of 15 times at bat. The DMCB thinks that there is too much ‘noise’ in the health care utilization of an elderly 'free-range' population with access to every health care option known to man. Modern clinical trial methodology just may not be up to the task to detect differences in an environment with a relentless 10% trend.

5. Finally, the DMCB says the real value of DM is not necessarily a function of how much it can reduce costs. Rather, its value is based on what offers for the cost. While the Business Week article alleges it adds up to billions, the cost at an individual level per member per month is comparatively modest and the benefit to the consumer is relatively high. Compared to the majority of high-cost low-value services typically covered by U.S. health insurance, DM is a bargain. The coin of the realm is NOT saving money but giving consumers their money’s worth.

(Welcome Cav of Risk Readers! There's more on this topic here)