Blog

I recently lost my father to a fight with multiple medical problems. While he would be considered young at 80, there comes a point when the human body must surrender. That was the case with my dad. In his honor his children could not have had a more loving and instructive set of parents. Mom died at 57 after a long battle with multiple-myeloma. In both cases I and my youngest sister were blessed that our sister lived in the community and felt a strong passion for caring for both of them until they departed. It was trying on her and we can never repay her for what she did for our parents in our absence. Thanks sis, we love you very much.

Now why is this in my blog? Interesting story in the USA paper. I encourage you to read it. This article points out something that I witnessed first hand. Unfortunately the article does not explain how this really works. The article also doesn't properly defend the hospice organizations that get it right and don't defraud the system. The article implies that hospice should be slowed down when in fact, it will, by current demographics, get bigger. We are an aging society and we need to have a frank discussion about allowing people to die with dignity, and without pain.

Within the space of 24 hours our father went from unbearable pain to serenity. He began his hospice in a nursing home and the next day was admitted to a true hospice facility. While in the nursing home he continued to receive a drug costing thousands of dollars to treat MRSA. When asked the doctor admitted that the drug was maintaining the MRSA but would never cure it and our father would continue to be in extreme pain. We had to ask them to stop the treatment. While at the nursing home the staff was unresponsive, rude, and disengaged. We had to pry information out of the staff. Within 24 hours he was resting comfortably in a hospice facility in a private room. The surroundings were very quiet, open, clean, and refreshing. The staff went out of their way to keep us informed about every aspect of the ordeal our fathers body was going through. He was never in pain after reaching this facility. Early the next morning dad went to be with mom.

I mentioned to my sister that if we could ever figure out why these two facilities were so different we could likely fix healthcare, not just the hospice situation. Let's begin by having a national dialog about the fact there comes a time when people need to stop being selfish, both the family and the medical community. Providers are selfish because end of life can be a profitable revenue stream. Families can be selfish because they allow the provider community to exploit their situations because they cannot let the loved one go.

Statistics  (CLICK HERE FOR MUST READ ARTICLE) say that the average person will spend more on healthcare in the last 6 months of life than their entire past medical needs. It would seem that this is a great place to begin the repair. It will have to be done however with open hearts and minds; not pocketbooks. It will have to be done by accepting a few basic principles. First, we have invented more cures than we can afford without someone else paying for it. Second, the human body wears out and dies. Everyone dies.

Okay, we have this debt thing. The reason we have it is because the government cannot control it's spending, right? So let's turn over 18% or so of our country's gross national product to the government, right? Did I get that right? Am I understanding all of the details?

Let's keep this real simple.

The majority of us are not stupid.

I attended a regular safety meeting with one of my clients this week. This county has one of the most comprehensive programs of all my clients, big and small. The safety director handling the meeting distributed a piece of paper that made me wonder why it should only apply to property and casualty. It was titled, "The 5 Whys - Root Cause Determination." The purpose of the procedure was to do what children discover at a very early age, keep asking "why" until the parent gives in. In this case it was to keep asking why until you arrived at the root cause of the accident and ultimately an expense to the employer and everyone else participating in the program.

So why can't an employer keep asking why until the employee gives the real reason for their over utilization of the health care benefit plan? Why can't we use the same system to lower the cost of healthcare? This, I think, is a very good question.

So why does a particular covered employee or dependent use coverage inappropriately? More importantly, why do they get to continue to keep using it when they violate simple principles that would otherwise eliminate their need for coverage? Again, a great question. How am I doing on drilling down on the "why" thing?

If an employee, in Tennessee, covered by an OJI or On The Job Injury Plan (a public entity can opt out of workers compensation in Tennessee) hurts their eye because they refused to wear protective eye wear, the employer can deny the claim. However, if an employee is overweight, has high blood pressure, high cholesterol, smokes, or just generally abuses their body and refuses to change their ways, they get to keep going to a doctor and having surgery to correct their abusive lifestyle. Why is that?

In the case of workers compensation it goes back to labor. Benefits have been at the heart of union negotiations for decades and are considered entitlements. Nothing was ever negotiated concerning personal responsibility to maintain those benefits. In some cases the employees, or even owners of companies, who make recommendations about plan changes are themselves abusive in their health lifestyles and don't want to make changes.

Up until recently it was just a matter of being able to afford it and cost shifting. Today the costs are just too high and there is nothing left to shift. It is time to answer the question; why.

Back in the 60s and 70s there was a popular song performed by Peter, Paul and Mary called,Where Have All the Flowers Gone. Now the question is, where have all the insurance companies gone?  

Capitalism is a paradox. It allows things get big through consolidation only to eventually be broken up by a rash of small innovative companies and then the process starts over. When that does not happen, capitalism breaks down. America has seen this phenomenon in most every industry and financial market, except healthcare and healthcare financing. Power grids, when first established, were dominated only to be broken up by small local utilities. In the early days there were two or three dominate movie companies only to be over powered by small independent theater production. Ford, at first dominated the scene, only to be crowded by several small aggressive companies. A few banks dominated, only to be challenged by credit unions and small community banks. And of course, the "phone company." We know what has happened to that industry. In recent years cable companies, once monopolistic, have been challenged by local electric power distributors for a significant portion of the cable and internet business. IBM is now only a small part of the computer tech industry. Insurance, well that is a horse of a different color.

Over the past two decades health insurance companies have continued to consolidate and in some cases force competition out of the market because of their size. We are moving toward an era when there will be only one insurance company. And you thought the government running healthcare would be a problem? There seems to be no turning back this machine. Some sight healthcare exchanges as an answer. I disagree.

A recent issue of Wired magazine published a feature article called, the Web Is Dead.  In this piece they sighted statistics showing that the overall usage of the web was down. Why? Apps. Everyone is moving to smaller, simpler applications that do one thing and closed social networks. This is the theory behind insurance exchanges. Several small companies all competing for everyone's business on the internet. Maybe there will be an app for that as well. The problem is, where are all these small companies that will compete for your business? It is likely to be the same small group of companies that already dominate the market. The government is telling the American public that insurance companies will lower their rates in order to get business. Sorry, but that is just silly. If a company does that for any extended period they will not be able to pay claims because they will be out of business. They still have to pay claims, unregulated costs set by a provider community that is out of control and a public that thinks it is their right to demand it. The backdoor to the governments approach is that the "price" of healthcare in these exchanges will be less, not because insurance is less, but because the government (us) will be subsidizing the premium for almost everyone who uses it. That is not lowering the cost of healthcare.

The President has said he is willing to compromise on 1099 mandates. That is like changing a light bulb that is not blown out. The issue of exchanges, employer mandates, auditing self-funded plans, lack of serious concentration of wellness and disease management incentives, and busting up the managed care nightmare should be the focus of what congress addresses in the very near future. Say, tomorrow!

If only this was about a slick haired Brit with a bow and arrow wearing green tights. It is not however. It is about a group of people, not a political party ( many of their own are now disavowing any knowledge ) that truly believe that if they say it enough that it will become a fact. Maybe in Wikipedia, but not in the minds of rational thinking Americans. Taking from the rich and giving to everyone else will not fix or manage a host of ills in this country, especially healthcare and even more to the point; it will not create jobs. Let's start there - jobs.

How many of you reading this blog, other than mowing a lawn or baby sitting, have ever been given a job by a poor person? Okay, how about someone making $20,000 a year? Okay, let's be really generous and say a person making $50,000 a year? No? Why? Because jobs are not created by the middle class. That is why there is a middle class. If everyone were rich, there would be no one to work. Guess what, if everyone is middle class, other than the government, no one creates jobs. Did I go past that too quick? Sorry. Yes, there is the possibility that all we have is middle class folks who all pay taxes to the government, and, the government provides jobs. Doesn't that sound exciting?

Thank you for allowing me to get this off my chest. This redistributing wealth thing has really been dragging me down lately. The Constitution is about "the pursuit of", not the distribution of achievement. There are a few wealthy folks that may come by their fortunes with no regard for others, however, most of the folks I know in that category (which gets harder and harder to define)reaped their rewards through hard work, taking risk, and a little luck - meaning when opportunity meets preparation. O, and these folks also create a lot of...jobs with benefits and opportunity to advance. Only an out of control government would entertain the thought of wealth redistribution. The government used to be good at staying out of the way of private business, now, they create ways and reasons to take it over. Am I the only one that finds this disturbing?

There was another character in the Robin Hood series, Friar Tuck. He was probably my favorite. He would sneak up behind one of the kings bad men, hit him in the head with a club, and then cross himself asking for forgiveness. I know you can't see it but I am folding my hands in humble humility as I close. These guys are not Robin Hood and his band of merry men. They are proponents of the great lie, of protecting their occupation and re-election by slinging well rehearsed sound bites about the media daily. The only way to properly redistribute wealth is through capitalistic transactions.

Yes, blind squirrels do stumble over nuts. And, yes, occasionally some government bureaucrat gets it right. Such was the case reported by several news sources on October 19th announcing that the Administration through the Justice Department had filed suit against Blue Cross Blue Shield of Michigan on October 18th asserting that the insurer had violated anti-trust laws securing a competitive advantage by forcing hospitals to charge higher prices to the carrier's competition. Then there was this quote in the New York Times, "the Obama administration said that Blue Cross and Blue Shield had contracts with many hospitals that stifled competition, resulting in higher health insurance premiums for consumers and employers."  Well, you just don't expect complete understanding when the government is involved. What started out as an on target shot took an expected turn down an alley taking a shortcut to the Administrations monotone droll about healthcare financing. Other than the fact that this story will be killed by the BUCA's and drop into the cavernous wastebasket of meaningless media hype, it is sad that we could come so close to an answer and then let it soar by our face leaving only a slight feeling of a warm breeze against our cheek. So which road should it have taken?

As usual all roads lead to evil insurance companies. According to the administration it was all Blue Cross' fault for forcing these hospitals to take these contracts and make these back-room decisions. We are to believe that the hospitals were totally innocent and should get a free pass regarding these arrangements. Well no, they should not. Let's look again at the players.

Last week I was in Chicago attending a Self Insured Institute of America Association conference. In some spare time I walked around the city to see what had been added since I was last there. A lot has been built since 2000. Many of the buildings are named after insurance companies, buildings that cost billions of insured premium dollars. If, however, you go inside these structures you learn that the insurance company rarely occupies the entire building. There are tenets who pay very expensive lease payments. In other words, the buildings generate revenue. They are...an investment. Or in the case of the Willis Tower (formerly the Sears Tower) Willis only occupies 3% of the entire building. I noticed another thing. Many of these buildings are now reaching their 20th and 30th birthday. Many will have paid for themselves and the dollars generated from investment help the insurance company keep their premiums in check. These are the investments that insurers should have instead of risky junk mortgages. So what does this have to do with hospitals?

Drive around and look at the hospitals in major urban cities. They are every bit as impressive as the insurance buildings. Now walk inside the hospital. Do you see any other businesses renting space, other than the doctors who admit patients to that facility? No. Then who pays for the building? Where is the investment? That would be the patients. Who sets the rental amount paid by the patient occupying a room or surgery center? Good question. This is the road of truth we must eventually travel if we are to ever fix the healthcare cost crisis. We must demand transparency from every person and company that participates in the process; including the patient's excessive expectations of the system.

Back to the lawsuit. In the Detroit News release the Justice Department agues that the healthcare giant (BCBS) used it's market dominance to boost prices for it's competitors, resulting in Michigan patients paying higher prices for their healthcare AND health insurance. The Justice Department is seeking to block this practice. What practice? This is the end game of Managed Care; a system that has long outlived any usefulness it may have had two decades ago. All the Justice Department is going to do is spread the disease to two or three other giants. Their approach does nothing to offer a fertile ground for the invitation of dozens of small, aggressive, forward thinking insurers that could create real competition. Further, if there were more competition through total transparency the large carriers would also not dominate the self-funded third party administration arena creating enormous competition that covers 90 million working employees and their families.

At the end of the day, if the Justice Departments wants to get real results for their boss, they need to understand that this problem cannot be fixed by tweaking the finance side. It must include the delivery vehicle as well. If you study history, if you look at insurance company annual reports you will soon see that the American Hospital Association as been and is a key figure in the debate over national healthcare. We will not fix this by dwelling on one side of the equation.

ROI, Return on Investment. This term is often used in industry to justify a continued investment in a product or project. Oddly enough it is just now making a screaming entrance into the healthcare cost crisis debate. It is particularly interesting in which sector of the debate; wellness. In over thirty years in this industry I can't ever recall an employer or an individual using this term to justify choosing or staying with a specific insurance company or carrier. How about now? Is anyone asking what the return on investment is for pouring millions of dollars into an insurance company cash flow? Is anyone demanding that their carrier show them return on their investment. Not likely.

Most group plans over the years have just excepted that, based on their claims and certain ambiguous pooling calculations, the insurer's rate increase at renewal was just the way it was. The result was for the employer or individual purchasing these services to lower their benefits, have the employer pay the increase, or pass the increase on to the user. Heck, there was always the option of a high deductible plan with a pretax benefit on an HSA or HRA consumer driven option. The only problem with any of these adjustments is that the risk and cost to the insurance company never changed. It was always on the backs of the consumer. Where is the ROI?

Lately carriers, large ones in particular, have added wellness options. These are not free but usually come with an added administrative charge. These new offers are generally based on the patient or user's motivation to participate. That is spiked by larger deductibles and out of pocket expense if the patient does not follow through. This is where ROI turns gray. If an employer chooses one of these wellness options just what are they investing in and how do they judge that the investment was a wise decision? This is impossible with a retail carrier for several reasons.

The largest obstacle to determining ROI is the definition of this term by economy. When you invest in a home, unquestionably the best investment anyone can make, does someone determine in year two of ownership if the investment was worthwhile? No, that takes years to return an investment. (All you house flippers out there stay out of this.) No investment in wellness can be determined in less than six to ten years. While wellness may prevent a few immediate heart attacks the intention is to change life styles over time and create less need for medical care.

The second obstacle with carrier wellness is that it is so new. Most of these programs have only been in place for two or three years. Also, there is little participation, even with consequences for not participating. Why? Cost and convenience. It costs money to go to the doctor and you have to take off work. While the new healthcare reform helps with the cost of service, it does nothing to take care of lost time.

A third obstacle is that the data gathering vehicle for a carrier wellness program is usually an on-line questionnaire. This questionnaire, while very thorough, asks many questions that the participant either, does not know - cholesterol level, or they are afraid to answer, or will not answer. So, where is the ROI and who is asking for it? Even if the carrier is asked, they do not yet have the data to give.

An even greater question should be why is this just now so important? Why have we not required carriers to prove they were lowering our costs in the past? The answer is simple and one that often gets me in trouble in this industry. The cash flow folks just don't like to discuss it. It's called discounts and who has the biggest one. Employer groups have been told for years that one carrier or the other has the lowest and best discounts and that due to their arrangement with doctors and hospitals, they are saving their insureds millions of dollars. One problem. Why haven't healthcare costs gone down instead of increasing, during some years by double digits. Where are the savings. The response will be, look how bad it would have been without our gynorous discounts. Does that answer make you feel better?

The most troubling combination of data sarcasm has to do with real, honest to goodness, cost reducing, better health promoting, laboratory diagnosed, on-site clinics. For those employers who have installed these aggressive, working models there is a constant, loud cry from the press and other nay-sayers for ROI. Guess what? The ROI is evident every month in reporting to the employer. It is called; transparency. Yes, you have heard that word lately from all those who are going to fix the healthcare system. On-site clinics are administered by a management company that is paid a fix fee per employee (generally). That is all they receive. Everything else is a direct pass through and the employer sees every bill and knows where every penny goes. For those pennies the employer and their employees and dependents receive a score of useful, real-time benefits. There are three levels to this ROI, not one general category.

Level one is the real difference between the cost of services at the on-site clinic compared to the same services being performed in a retail doctor's office. The problem with comparing these two costs is not because the on-site clinic doesn't provide transparent information. The cost for the on-site clinic services is readily available and understandable. However on the carrier side arriving at comparative data is near impossible. To arrive at a comparative cost the carrier has to back into an array of proprietary agreements with multiple providers, decipher pooling costs, back out and insert essential and non-essential fixed costs. Ask a carrier to provide that information in as simple a format as the on-site clinic and there can be a comparison. It would be much quicker, cleaner, and more understandable if the on-site clinic and the carrier gave the employer a simple trend on their participation in the plan. Past comparisons I have seen show that the on-site clinic numbers are near flat while the carrier numbers are on an eventual collision with bankruptcy of the plan. I said the plan, the carrier will walk away with cash in their pocket. The question should be, "Why is the on-site clinic being asked for ROI to prove their right to participate, instead of the carrier?"

Level two is long term return on investment. Eventually, just like your investment in your home, the return on investment for an on-site clinic will be significant. Plans that I have seen in place for six years or more have actually turned trend under zero, while the rest of the plan continues to escalate. It takes several years to properly identify certain chronic diseases  and manage them to success. That is when groups with clinics can begin to do some innovative structuring that would have been impossible years earlier under a traditional arrangement. What has been the long term return on investment from a carrier?

Level three ROI is often argued to be non-supportive. Why? Because it is subjective. It deals with many key issues that, while important, are not as measurable. Nonetheless, they should be considered. For instance, satisfaction of the participants and their willingness to participate and change life styles, a more productive workforce, removal of significant claims from the calculation underwriters use at the end of the plan year to determine a renewal rate, removal of certain high dollar claims costs as a result of an aggressive on-site medical program. These and many others are real ROI attributes.

So, how do you determine the ROI on an on-site program? You show me yours, and I'll show you mine. "Oops, I already have shown you mine", said the on-site clinic. We're waiting...

Check out this article from the Denver Post. This time the NAIC and the feds got it right. Stop with the carrier whining! Stop with the sound bites! Demand numbers to back up these ridiculous assertions that these basic reforms are going to cost billions. Say it ain't so. Well, it ain't. According to a 2009 Kaiser Commission on Medicaid and the Uninsured 30% of the 45.7 million uninsured at that time were between the ages of 19 and 29 or 13,710,000 individuals. I cannot find the claims data nationally on this age group but I can tell you that on the groups we work with it is very low. Using the minor changes just moving into law today, September 23, 2010, does not and cannot justify the kind of increase being asked by insurance companies. This only adds credibility to the wrongful assertion that insurance companies are the sole reason for our crisis. The other side of the coin is that politicians are taking credit for saving the world by inserting these cosmetic changes into the reform bill.

So both sides win by sound bite. Insurance companies try to increase their cash flow because the changes are mandated and the politicians try to use the changes as fodder for their failing political campaigns. I am getting sick again. Come on people. The truth is, we needed to make these changes but they are not like discovering another planet filled with people like us. They should not cause rate increases and they are not going to lower the cost of healthcare.

Here is some earth shattering news however. Consider these images knowing that the real reason for our healthcare cost crisis is our degenerative lifestyle:

Millions of Americans have health problems caused by smoking. Cigarette smoking and exposure to tobacco smoke cause an estimated average of 438,000 premature deaths each year in the United States. Of these premature deaths, about 40 percent are from cancer, 35 percent are from heart disease and stroke, and 25 percent are from lung disease. Smoking is the leading cause of premature, preventable death in this country.

Quitting smoking reduces the risk of cancer and other diseases, such as heart disease and lung disease, caused by smoking. People who quit smoking, regardless of their age, are less likely than those who continue to smoke to die from smoking-related illness. Studies have shown that quitting at about age 30 reduces the chance of dying from smoking-related diseases by more than 90 percent. People who quit at about age 50 reduce their risk of dying prematurely by 50 percent compared with those who continue to smoke. Even people who quit at about age 60 or older live longer than those who continue to smoke.

Perhaps adult children ages 19 to their 26th birthday could only stay on if they were non-smokers.

Mike Huckabee lost 120 pounds during his preparation for a presidential bid.

It is now known that obesity is not just an ordinary problem but a serious health hazard. Obesity raises the risks of a number of grave medical conditions such as heart disease and stroke, high blood pressure, diabetes, cancer, gallbladder disease and gallstones, osteoarthritis, gout, and breathing problems like sleep apnea and asthma.

If we are to fix this problem those who design it must be an example. They must also appoint and nominate people who are dedicated to changing our view of responsible spending on healthcare. That combined with an equal look under the covers of the provider industry might just yield some astounding results.

I am not so self consumed that I think I am the only one who was speaking out against the current healthcare reform. However, I have had a perspective that most ignored or even laughed at. Well guess what? Yes, I have to say it, I've been waiting patiently for over six years. Yes, even back in the Bush era.

Click this link for some very interesting reading. Here's another one. And here's the document.

Now that you are in on their little secret, do something about it.

Welcome to my world.

As I often do, I recently attended a public meeting of our Department of Commerce and Insurance, moderated by our Commissioner. As a member of the NAIC and an appointee to their executive committee, she was very proud of the work they were doing. The feds charged them with overseeing the suggested writing of the regulations regarding the rating practices of the insurance industry. It was clear that insurance companies should expect the toughest scrutiny possible as a result of their suggested word smithing. Overlooked by the feds, and the NAIC, is the fact that most of the fraud and abuse in the healthcare system has come from the provider side - can you say HCA Medicare - including multiple doctors billing practices.

The truth is, and government will never understand it, charging more for something than it should is not a crime; unless there is a mandate and government regulation. Tote-Your-Note car dealers have been doing it for years. Your down payment is what they generally have in the car. Everything else is profit. Is that wrong? No. It is commerce. It is establishing what something is worth. How do you do that in America. I asked my son-in-law, an expert on baseball cards, how much a particular card was worth. His response, "What ever someone will pay for it." How does that apply to health care costs?

Almost no one asks a provider what something costs. Why? They know their cost, their deductible or copay. They don't need to know what it really costs. The insurance company, or actually the employer providing the benefit, pays the real cost. The provider establishes what they will charge based on what the insurance company will pay or the government in the case of federal programs like Medicare and Medicaid. Who oversees this establishment of cost? The provider community and their professional societies. Are they being overseen by the NAIC? No.

This is another argument for why it is imperative that both sides of this equation be addressed, finance and delivery, if we are to ever fix it.

Here is one of my shorter rants. Campaign financing reform has all but been lost in the wilderness of all of the other "reforms" being bantered about. It came to me in a vision the other night as I stared at my retirement account. There was a zero in the "what did I gain this month" column. That was it. That was the answer! Eureka, I have sucked the air out of the debate. Okay, here it is. After every election, all politicians have to "zero" out their fund raising accounts. What ever is left MUST be donated to a legitimate charity. They will have to start over raising funds for the next campaign. Yes, that is a lot of work. Yes, that is a hassle. Yes, if they want to stay in office as a career, they need to have these problems.

Yes, there is more. There will be a cap on what an individual can contribute to their own campaign. That will be 10% of the total amount raised. That will hinder the very wealthy from buying an office.

One last word about all of this money that is spent on campaigns. It is not all bad. Most of that money goes right back into the economy to buy printing, radio and TV air time, newspaper ads, billboards, and websites. All of that provides jobs! But in the end there is way too much spent for an office that can never pay back what it costs. In the end, successful business people, the ones we need in DC, will not consider running because they can't raise the money. Campaigns should be focused on local communities and on people who make their mark in that community through other means, not because they get a lot of money and decide to run for office. We need to get the right people running for office, not running from it.

I attended a Tennessee state department of insurance meeting this morning. It was two hours of my life that I will never see again. All of the usual players were there, Blue Cross wanting to know the new definition of certain terms included in the "minimum loss ratio" calculations, attorneys of various sorts making sure folks like myself were made to look uninformed, a representative from the American Cancer Society heralding what a grand job the Department was doing in complying with the new healthcare reform-because it was patient centered, or was that the title of the reform act? I must admit that I was encouraged when I first sat down to glance over the literature that had been supplied for the meeting. One word in particular jumped at me, transparency. Finally, my department of Insurance-sorry, Department of Commerce and Insurance- was going to demand the one thing that holds promise of fixing this healthcare cost thing. I was disappointed.

It seems that when insurance companies disclose, bear their transparent underside dealing with minimum loss ratio quotas, that they will have to list every cent that comes in and goes out. The motive for the exercise is so the state government can monitor those revenues and expenditures and make sure that they spend at least 80% to 85% (not yet determined) on claims. Also, not completely determined, is what goes in what column. Oh, here is the best part, the state will not be monitoring this or enforcing it, I know I just contradicted myself, but remember where I was. Actually all of the dirty work will fall to the IRS. Yes that is a federal bureau giving oversight and control over a state agency. Did I mention I was disappointed?

You see, for now, this only applies to fully insured insurance and only to insurance companies. Undocumented are hospitals, doctor's, ancillary medical facilities, and anyone else that is a middle-man involved in the sale and service of human pain intervention. It is like taking two fingers and carefully lifting the corner of a college students bed sheet hoping you are not embarrassed by what you find. Instead I suggest grabbing the sheet in the middle and ripping the entire piece of material off the bed exposing every unspeakable thing that has been accomplished under the cloak of satin. We can't change one corner of the bed and claim cleanliness. Everyone that is contributing to this circus has to open their records, everyone. Combine that with tempering the unrealistic expectation of the average citizen looking for their right to healthcare and we may just have a shot at doing something socialized countries have never done; run a successful healthcare program. I'll be covering a few of these bed stains in a later blog spot.

Deception is an art form, a very ancient art form. It is what a magician does when they make things appear and disappear. The art is getting you to look at the wrong thing long enough to make the other thing look believable. If some of the long-tooth politicians in DC do get their walking papers I suggest they move to Vegas and perfect their act for the casino's.

Every day some new sound bite is offered up to a gullible American audience that amazingly swallows every deceptive word as fact. Fortunately, some of us are watching the slight of hand and are chanting cat-calls from the audience. An example you ask.

How about this one from Mr. Reid, August 4, 2010 in the Washington Wire, “It’s very obvious that people have a lack of understanding of our health care reform bill,” Reid said. “The more people learn about this bill, the more they like it.” 

Like what? Do people really believe that this reform is meant to lower the cost of healthcare in this country, or do they like it because they will have access to healthcare anytime they want it, anywhere, for practically nothing, and they will not be required to do anything to change their life style? I had a meeting with a client yesterday. In that meeting was a benefits attorney, my client, his staff, and myself. We were discussing the changes that would need to take place in their written plan document to comply with the recent reform. After two hours most everyone in the room was satisfied that the more they learned about what was in the reform the more they wildly disliked it.

There are a handful of items in the reform that are good and could have been included in any other reform package. Those are the only things that are being blasted to the public. They are also being said in a way that is misleading and criminal. If this kind of literature was being distributed through the US Postal Service by anyone else they would be put in jail for false advertising. So what is false about their assertions?

Remember this statement, “Let me be exactly clear about what health care reform means to you,” the president told residents of the Garden State. “First of all, if you’ve got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan.  Nobody is talking about taking that away from you.”  A speech in Holmdale, New Jersey, July 16, 2009 by President Obama. He left off one word at the end of that statement, "today." The reform that has been passed and the subsequent "Interim Final Rules" clearly outline the death walk of every medical plan in this country. Execution day will take place on every plan's renewal in 2014. Until that time over 90 million employees and their dependents who are covered under self funded plans have to walk a tightrope of undefined pitfalls that will cause them to lose their "grandfather" status. Eventually, in 2014 these plans will have to file a report with a government agency that certifies that they are in compliance with a standard established by the government. Those that are not self funded, but are fully insured, will lose their grandfather status for the simple act of moving to another insurance carrier, even if it is better and cheaper! The current reform has locked down the entire insurance financing mechanism for the next four years and is intentionally diverting all sources into a central stream that flows directly into the mouth of the federal government.

But, we are told, that competition will be increased by "exchanges." These are to be private concerns that will compete for everyone's business, like a bunch of small farmers at the produce market on Saturday. Sounds homey, doesn't it? Here is a definition of private you might want to consider. A private system doesn't have a set of government mandates outlining what coverage will be offered. A private system doesn't have regulations specifying what they can charge. So, if the governments sets the rules and the price, explain to me how it is private sector.

Now, explain to me how any of this has anything to do with lowering the cost of healthcare. In other areas of this site I have explained in great detail that this not a singular issue. It is not just about financing, yet every discussion gravitates back to that subject. It is all anybody knows to discuss. The "other thing," as President Kennedy so famously coined, delivery (not going to the moon) should have equal billing. How much we are paying for services and products is never touched, but just accepted that pricing is where it should be and that those who set these prices are interested only in serving mankind humanitarily. Back to the produce market. Let's say that apples are $10 a piece. Our goal then is to find a way to pay for them. How do we finance this problem? Well, we spend everything we have to buy a dozen, or we get someone else to buy them for us, or we get the government to subsidize our purchase, or as some would say, "We will just be apple-less." And as we all know, if there are those who are apple-less it will cause the cost of apples to go up for the rest of us. Or maybe, just maybe, the apples are priced too high. But, who am I to question an apple farmer?

A lot has transpired and expired over the past couple of weeks. I have not posted for a while waiting on the last shoe to drop; and I believe it will. Democrats are-some Democrats-are overwhelmed by a desire to make history; what ever the cost. They want to be known as the ones who...  Well, what we need now is to ask some very pointed questions, not make some emotional statements. Let's ask a few here by simply saying, "What happens when...

1. the 1% who pay 90% of all income tax decide to not receive a salary for a year?
2. Wal Mart is the only place you can buy anything?
3. all insurance professionals work for and everyone else buys their insurance from one company (notice I did not say government)?
4. all providers (doctors and hospitals) are in the same network?
5. we find out that there is no blank sheet of paper?
6. the only doctor you can see is a specialist?
7. all drugs are custom made according to your own genetic code?
8. Medicare goes broke in 2015?
9. federal subsidies to states for their Medicaid programs are cut off?
10. China asks for their money back?
11. America's Standard and Poor's rating drops to a "B"?
12. we find a cure for all cancer?
13. all Tea Party candidates are elected?
14. states lose all regulatory authority to the federal government?
15. obesity reaches 75% in America?
16. hospitals are all located in major metro areas?
17. other countries refuse to loan us money?
18. everyone is covered and those who already had access now have complete access?
19. we find more money to pay for healthcare?

And then my mind wanders into other areas of change sweeping our country...

"What happens when..."

1. all advertising revenue for FOX and CNN comes from ads for tax cheats and those who had the unfortunate luck to be associated with asbestos?
2. we send all illegal aliens home?
3. global warming just doesn't work?
4. the Internet is regulated and taxed by each individual nation?
5. major bridges fail and collapse due to neglect and lack of funding for infrastructure?
6. America is no longer considered a Christian nation?

And maybe the ultimate question...

"Who said the fix for healthcare was supposed to come from Washington D.C.?"

There is at least one good question in there - don't you think?

In the early 1990s Clinton health care reform died because people understood that their right to choose was going to be removed. Health Maintenance Organizations or HMOs fell from grace when people realized that their right to choose was in jeopardy. So what is different in the current debate? Why are people not frightened to death over the loss of choice in their health care decisions? Good question and one that needs to be addressed. You would think that when given the choice of receiving just the bare necessities or being offered opportunity, that the average American citizen would do what they have done since the birth of our nation; choose opportunity. One would think so.

Early in what seemed to be an endless blast of political sound bites, accusations were made that suggested our country was moving toward socialism. Those comments were met with equal force asserting that to suggest that a national health care system was socialist was ludicrous. Most Americans, comfortable in the lap of security provided by their country, accepted the retort and the thought of America sliding down the slippery slope of socialism faded into background noise. A few more attempts were made, but they to failed to arouse any passion in the heartland, or on the West Coast. The average American cannot get their head around a socialistic America. The very thought is repulsive. Really?

Let's take a brief look at the definition of socialism from Wikipedia and Mirrium-Webster.

Wikipedia - Socialism refers to various theories of economic organization advocating public or direct worker ownership and administration of the means of production and allocation of resources, and a society characterized by equal access to resources for all individuals with a method of compensation based on the amount of labor expended.

Most socialists share the view that capitalism unfairly concentrates power and wealth among a small segment of society that controls capital and derives its wealth through exploitation, creates an unequal society, does not provide equal opportunities for everyone to maximize their potentialities and does not utilize technology and resources to their maximum potential nor in the interests of the public.

Socialists inspired by the Soviet model of economic development have advocated the creation of centrally planned economies directed by a state that owns all the means of production. Others, including Yugoslavian, Hungarian, German and Chinese communist governments in the 1970s and 1980s, instituted various forms of market socialism, combining co-operative and state ownership models with the free market exchange and free price system (but not free prices for the means of production).

Notice in particular the last sentence. Do any of those terms sound familiar?

Merriam-Webster - Any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.

Well, maybe things have gone a little further than those early opponents of the socialism discussion had intended. Perhaps it is time to have a very frank discussion about where all of this is headed, and in fact, where it has been headed for a very long time.

Although America is, currently, far from a socialist society, elements of socialism have been present for decades. In fact there are some things that our early forefathers envisioned that could only be accomplished by a cooperative union. Those are clearly spelled out in the Constitution, Article 1, Section 8. There are however certain things that do not fit neatly into Section 8 that we have taken for granted for decades. In fact, many seniors raise their canes in rebellion when the slightest mention of tampering with them is leaked. They are, Social Security, Medicare and Medicaid. These are social programs created by the government without a clear constitutional mandate to do so. For decades these programs have assisted seniors and the poor with funds to have what ever they desire. No, that would be be wrong. Should we say, to have just enough to get by, but enough to bolt the individual to the frame of the dependency bus? I think that would be more accurate. So have these programs been successful? The answer depends on what you call successful. If that definition includes failure to adjust and change these vehicles over time to keep up with technology and enormous advances in healthcare and drugs, then yes, it has been successful in failing to meet the need for which it was originally intended.

Today, Social Security, like our national supply of gold to back our money, is gone. It has been used to prop up other failing government programs. Those who have contributed may get back exactly what they put in to it over a life time; maybe. Chances are very good that those now in their fifties will get nothing back. Our nation is now being told that Americans should have the right to make decisions about their own health care, a hollow assertion when you consider that the same politician refuses to allow the same citizen the right to make decisions about their own retirement accounts.

Medicare was sold as having catastrophic coverage in 1965. That was a lie. The deal was sealed behind closed doors. Sound familiar? Neither Medicare nor Medicaid were structured to do what the voting public was told they would do. Neither was designed to keep up with medicine and drug advances that we enjoy today. Neither was structured to work beside commercial insurance. The cost of both over the past decades has been controlled entirely by price setting by the government at the cost of those with private health care insurance. Both of these programs are beyond repair. They can only remain afloat with massive borrowing on the part of the government.

Back to socialism, are we headed toward a socialistic America? A common man looking at the control the government already has over their life would have to conclude, yes. Recent purchases by the government, with borrowed money, in the finance and auto industry coupled with their ownership of all of the "...Mac" mortgages could only hasten the event. Shifting 20% of the gross national product (that is what health care represents) would be the straw that breaks the camels back. So what do we do?

On this website there is a tab marked "Solution." If you have not looked at it I encourage you to do so. This site is a model for a solution. You have the opportunity to participate in its creation. It is not perfect but it starts with the three layers of healthcare delivery and finance, individual responsibility, commercial insurance, and government involvement. The problem is that the third layer, the government, leaks down into every fiber of the other two. That has to be stopped and corrected. These three need to be separate entities and act on their own. Individuals need to take an active part in their cost and their health, a significant part. Commercial insurance must be reformed and transparency and competition must return. The government should be assigned a role that is appropriate. That would be the big stuff, not fixing the broken arm of an 85 year old grandmother. These three social programs need to be dumped with as much enthusiasm as when they were created. Social Security should be made a choice allowing folks to stay in if they want or transfer their money to an account they choose. Medicare and Medicaid should be completely dropped and a mechanism put in place to allow those patients to be covered under commercial insurance without intervention by the government, except when the individual reaches some predetermined catastrophic level, at which point the government program would take over (see model on Solution Tap.)

You do have a choice. You have a choice of which candidate you vote for. You have a choice of sitting on your rear end and not voting at all. You have a choice of making your voice heard by current elected officials. You have the choice of doing nothing. If you choose the latter prepare to bend over and kiss the thing you have been sitting on good by.

There is a phrase - I will leave it to your imagination - that many have heard and, several males have experienced; once. There are just some things that do not work well when facing the wind. For instance, trying to fly a kite in front of you while facing into the wind, holding the underside of an umbrella facing into the wind, and my favorite walking into the wind on Rush Street in Chicago in February without holding on to a rope. There are however some things that work well into the wind, like taking off in an airplane. What does this have to do with "Minimum Loss Ratio Requirements?" This seemingly vital piece of the proposed healthcare reform package may offer immediate relief from public opinion but it will make a mess and embarrass the ones who suggested it.

What is the intent of this section of the legislation? First, it is a lethal suggestion that all insurance companies are spending less than 85% of the money they take in on paying claims and second, suggests that the federal government is spending at least 85%, or more, of the money they take in on "pure" claims. I would debate this here except for one small detail. The whole argument is stupid. What if you just go ahead and say spend 99% of everything you take in on claims? Does that lower healthcare costs? No. It is what is not being said that should make you mad.

Nowhere in this section, or for that matter any section of this bill does the legislation simply suggest that what the 85%, 90%, 99%, or 65% of money being spent on claims, is actually paying for claims that should have been created, or more importantly that the claims that are being paid are priced correctly to begin with. In short, setting an arbitrary cap on what any company or government must pay for claims does nothing to lower the cost of healthcare! This has been my argument from day one, whenever that was, that the problem is not financing healthcare but the delivery of and the control of utilization of healthcare.

Here are the facts. A 2008 report by Price, Waterhouse, Coopers, commissioned by America's Health Plans, found that 87% of all premium dollars collected are being spent on care. The other 13% is not pure profit. This report states that in 2007 three-quarters of the increase in healthcare costs were driven by provider cost increases. Administrative costs-claims processing, consumer and provider support, taxes and profits accounted for one tenth of the total increase. This report shows the average profit to be 3%. Fortune Magazine reported last year that insurance company profits averaged 6.2% of revenue, far below other industries. There are numerous items that have to be paid out of that 13% including, in most states, setting aside a required 25% of paid claims as a reserve in case the client leaves and the company has to pay the run-out of claims incurred before the group left. It includes the administrative cost of disease management programs, staffing, processing, electronic medical record maintenance, case management, AND a mountain of compliance with GOVERNMENT regulations and taxes. Setting a minimum loss ratio has nothing to do with cutting down on utilization of services, poor life styles, eating choices, smoking, obesity, misuse of imaging for profit, preventive tests to protect the physician (which they do make money on), and a warehouse full of other cost producing items. 

The purpose of this section of the 2,500 plus pages of the bill has but one agenda, cast shame of the insurance industry and push our country toward national healthcare. It is about controlling almost 20% of our GDP. The sad part is that those pushing this current agenda are so convinced that the American public won't question this, that they can get by with it, and get re-elected. I really, really hope they are very wrong. If not, then they can continue doing it into the wind while the country does it up a rope.  

According to a U.S. Geological Survey there is no scientific definition of the volume of a faucet drip, but after measuring a number of kitchen and bathroom sink faucets, the volume seems to be between 1/5th and 1/3rd of a milliliter (mL). Drips from bathroom tubs come in a bit more, though, at about 1/2 mL. So, for our calculations below (numbers are rounded), we are going to use 1/4 mL as the volume of a faucet drip. So, by these drip estimates:One gallon: 15,140 drips, One liter: 4,000 drips.

Looking at it this way, it seems like that drop of water down the drain is pretty insignificant. But, as you can see by the following estimates assuming one home with three dripping faucets leaking at 60 drops a minute, all those drops flowing in "real time" can really add up to a flood.

259,200 drips per day, or 17 gallons per day, or 6,248 gallons per year, or 124 baths per year. And that is just one house. Speaking of houses, in the U.S. House of Representatives there 435 leaks. This number is currently fixed by the Reapportionment Act of 1929. There are an additional 100 dripping leaks in the U.S. Senate. Granted, some are leaking worse than others, but there is very little intention of calling a plumber.

The current march to healthcare reform is a slow, steady drum beat. It is just slow enough to avoid serious attention by the owner of the House, the American public, but persistent enough to cause a flood of Biblical proportions. Yes, there will be reform, of some sort. It really doesn't matter what reform, just something. This is stated in a way that makes it seem harmless. It is being called watered-down, unacceptable to the right and the left. Do you hear the soft music in the background?

WAKE UP AMERICA!!!!

The media reports would have you believe that all they were doing behind closed doors was writing this 2,500 plus page bill. Yes, that was done early in the process. The rest of the time was spent planning how this would be eased through the American bias against actually finding out the truth. The plan, the entire plan, has already been set and is being implemented; right now. There is only one thing that can stop it; YOU, your vote. It doesn't take a doctorate in political science to understand what is going on. A casual understanding of the bill in both the House and the Senate uncovers the real agenda; a socialized healthcare system. Under both the House and the Senate bills, and the Republican bill, healthcare financing cannot survive as we know it. It will become impotent and the only hope will be for the government to step in save the world, while bankrupting our country. We are not only going to have government run healthcare, we are going to have a healthcare system owned and operated by our U.S. Bank - China.

You have to vote these people out of office at your first opportunity and send people to Washington that have no intention of making it a career. We have uncovered an array of ideas on this website that can address the real problems and offer a sound solution. The problem is getting past the need of congress and the media for self-sustaining, self-promotion.

Speak up at every opportunity and keep it short and simple. Something like this:

We cannot afford the current solution. There are not enough primary care doctors to give access to everyone. The government cannot do healthcare cost effectively. The problem ain't financing, it is delivery and utilization. I am doing something about the high cost of healthcare; I am changing my lifestyle and eating habits. Oops, that last one just slipped out.

If simple doesn't seem to work try the ones listed by the National Association of Health Underwriters. Some of the most serious concerns in HB 3590 are:

• A minimum loss ratio requirement that applies to all fully insured plans, including grandfathered plans, as of January 1, 2011.
• A completely ineffective individual mandate requirement that will make it more financially advantageous for many healthy Americans to forgo coverage until they are sick and then utilize the guaranteed-issue protections to temporarily obtain coverage and then drop it again.
• Strict modified community premium rating requirements (including age bands of 3:1) that now apply to all fully insured plans.
• State-based exchanges that create costly and confusing layers of dual regulation.
• New employee voucher provisions to allow choice between employer coverage and the exchange, which could actually hurt participation in employer-based health insurance plans.
• An expansion of the federal Medicaid program to individuals up to 133% of the Federal Poverty Level (FPL).
• The creation of a huge new federal long-term care program that threatens the private long-term care insurance market and is inadequately financed.
• Financing mechanisms that would significantly, and negatively, impact the health care industry, consumers, employers and our overall economy.  
• New annual health insurance premium taxes of over $6 billion per year to be enforced on 2010 contracts that have already been priced and sold prior to the enactment of the bill and taxes.
• The 40% federal excise tax on high-cost health plans ($8,500 for individuals and $23,000 for families) is not properly indexed for inflation, and this bill does so little to control the medical care costs that are the true drivers of health insurance premiums, eventually all plans may fall under this excise tax umbrella.
• Massive proposed cuts in funding to Medicare, particularly the Medicare Advantage program.

Well, there you have it. Now, start making plans to call the plumber. Better yet, become one.

Lost, or maybe assumed, in this current debate about healthcare costs is that the key reason to defeat the democratic proposal-healthcare reform du jour-is to allow the republican proposal to come to the front of the pack. There is one small problem with that strategy; the republican bill is no better and is based on the same mis-information as the democratic nightmare on Pennsylvania Avenue.

The Patient's Choice Act would assure essential health coverage and health care to every U.S. citizen, without increased federal spending and taxes, and without the federal government taking over health care. The key to the bill is that it shifts the tax benefits for employer provided health insurance from corporations to all workers. As a result, every citizen not retired on Medicare will get a refundable tax credit of $2,300 per year for individual health insurance or $5,700 per year for family coverage. For workers who don't have insurance now or who pay for their own insurance, that is thousands of dollars a year they don't have today to help pay for health insurance. Workers with employer-provided coverage can keep that or use these credits to purchase their own preferred insurance instead.

Under the bill, each state would set up their own Health Insurance Exchange, where insurers could compete to offer coverage to everyone in the state. All insurance offered on the Exchange would have to provide coverage meeting the same standards as the insurance offered to federal employees and members of Congress under the Federal Employee Health Benefits System. The bill would also enable employers to devote a specified amount toward health coverage for each worker each month, with the worker to then use those funds to buy the health plan of his choice on the state Exchange, or outside the Exchange. States could join with others to form regional Health Insurance Exchanges that would expand insurance options. Consumers in each state in a regional Exchange would be free to purchase health insurance from any other state in the Exchange.

Do you understand what you just read? Are you shaking your head, as you should be, and asking what is so different about this approach when laid along-side the democratic version? The republican approach makes some fatal catastrophic assumptions; bigger is cheaper, buying insurance across state lines will not make the cheaper insurance become more expensive, individuals know better what to buy than their employers, and that a Health Insurance Exchange is somehow not "insurance." Remember, insurance companies are cheats and greedy corporate robbers of helpless American citizens. Let's look at each of these assumptions.

Bigger is cheaper. No, bigger, to a point, offers more choices for administration and flexibility of plan design and for the formation of a self-funded model (preferred.) There is no, did catch that, no empirical data that proves bigger is cheaper. Buying insurance across state lines will not make the cheaper insurance become more expensive. Why, you should be asking, is insurance in Tennessee cheaper than in New Jersey? Why is anything cheaper? It cost less to make. Insurance costs in Tennessee are based on the regional costs for medical care; e.g. hospitals, doctors, and what drug stores can get by with in pricing. If someone in New Jersey buys a policy based on Tennessee rates, those rates will eventually go up. Why? Because the person in New Jersey is going to use New Jersey healthcare...which is...more expensive. Get it? 

Individuals know better what to buy than their employers. Really? Why do over half of the people who have insurance depend entirely on their employers to offer benefit plans designed for their group? The same reason why individual sales of health insurance have lagged behind for years, people don't understand insurance. They don't want to understand insurance. If it is left to an individual they will buy based on cost alone. This is not in conflict with the earlier statement that bigger is not cheaper. Remember I said there were limits. Finally, that a Health Insurance Exchange is somehow not "insurance."  Several years ago this was offered and defeated as "Association Health Plans." It was the same concept. It wouldn't work then because it was so restrictive. It will only work if it is set up correctly, self insured, reinsured and restraints are placed on members who wish to withdraw for the wrong reasons. Again, an exchange will work, not because it will be cheaper, but because it will offer choices not available otherwise.

In the end, this republican alternative still has at it's core the destruction of the current financing system. Why is that important? Simple, there is nothing wrong with the financing side that a few tweaks within the industry will not cure. The problem is delivery, and over utilization by a society that prides itself in finishing everything on their plate; so starving children in India won't be mad at them. The only hope we have to fix this problem is to take a step back - politicians please take a hundred steps back and stay there - take a deep breath, and then look around for some folks who know what they are doing. Those folks need to fix this one step at a time, not reinvent the things that do work. The current approaches on both sides resemble touching up a Rembrandt with a four inch paint brush that has be dipped all the way to the bottom of the can. One would hope that many in the current Congress would take their retirement and stay home after the next election. Any statesmen, I'm sorry, statesperson out there that would like to run for office. Send me your credentials.