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News & ArtsFriday, December 4, 2009
Health / Politics Health Vs. Profit
Posted by Anthony Hecht on Fri, Dec 4, 2009 at 12:00 PM
Think private health insurance is just fine? Here's a nice example of the rank inhumanity of our current system:
Health insurance giant Aetna is planning to force up to 650,000 clients to drop their coverage next year as it seeks to raise additional revenue to meet profit expectations.In a third-quarter earnings conference call in late October, officials at Aetna announced that in an effort to improve on a less-than-anticipated profit margin in 2009, they would be raising prices on their consumers in 2010. The insurance giant predicted that the company would subsequently lose between 300,000 and 350,000 members next year from its national account as well as another 300,000 from smaller group accounts.
"The pricing we put in place for 2009 turned out to not really be what we needed to achieve the results and margins that we had historically been delivering," said chairman and CEO Ron Williams. "We view 2010 as a repositioning year, a year that does not fully reflect the earnings potential of our business. Our pricing actions should have a noticeable effect beginning in the first quarter of 2010, with additional financial impact realized during the remaining three quarters of the year."
That "noticeable effect" he's talking about doesn't have one single thing to do with anyone's health—he's just talking about money. How anyone thinks this is the way a health care system should work is completely beyond me. Tying people's health care to 100% profit-driven motives like the above is simply disgusting.
1
is making a lot of money not an acceptable reason to want to be a doctor? because it's probably the #1 reason based on my experiences knowing them personally.
2
So true, dat.
Those who have Aetna plans should also have recently recieved a letter stating they are going to drop UW Medical Center and Harborview from their network participating hospitals on January 1. That means that if your doctor has privileges at those facilites, you won't be covered at in-network rates, or possibly denied coverage completely for any services performed at those facilities.
Why is this important? UW has some of the best equipment for certain procedures and Harborview is the best regional trama center. Unless doctors who only have privlidges at one or both of those facilities can get privilieges at other hospitals, you are screwed.
Further proof of the conflict of interest when for-profit insurance companies base decsions primarily upon costs not what is the best outcome for the patient, or the recommendations of their doctors.
Those who have Aetna plans should also have recently recieved a letter stating they are going to drop UW Medical Center and Harborview from their network participating hospitals on January 1. That means that if your doctor has privileges at those facilites, you won't be covered at in-network rates, or possibly denied coverage completely for any services performed at those facilities.
Why is this important? UW has some of the best equipment for certain procedures and Harborview is the best regional trama center. Unless doctors who only have privlidges at one or both of those facilities can get privilieges at other hospitals, you are screwed.
Further proof of the conflict of interest when for-profit insurance companies base decsions primarily upon costs not what is the best outcome for the patient, or the recommendations of their doctors.
3
Interesting that you note that. My company (a very large employer indeed) is keeping Aetna on as an insurer next year but our premiums are increasing by 37.5%.
37.5% increase in one single fucking year! Guess how much my paycheck is going up by comparison.
Fuck the "public option" and "insurance exchanges!" What we really need is a single payer system that will put these rat bastards out of business for good!
37.5% increase in one single fucking year! Guess how much my paycheck is going up by comparison.
Fuck the "public option" and "insurance exchanges!" What we really need is a single payer system that will put these rat bastards out of business for good!
4
Totally agree. And Aetna makes a great example. I'll continue hyping the This American Life podcast "Someone Else's Money" from late last month, which used Aetna to demonstrate corporate insurers' baked-in helplessness to do anything but what they do. Not to mention the podcast's illumination of how the "public option" imposed on the system as is will make it all that much worse, not better. Though, as Julie in Eugene pointed out in a comment yesterday, "public option" is the only politically possible move.
The only silver lining would be if "public option" winds up surviving legislatively, its abject failure once enacted may at least finally spur some leader somewhere to rally voter energy to get single-payer on the move. Until then, don't get sick.
The only silver lining would be if "public option" winds up surviving legislatively, its abject failure once enacted may at least finally spur some leader somewhere to rally voter energy to get single-payer on the move. Until then, don't get sick.
5
Let's tighten up that wording a bit:
"We are kicking people off our plan to make more money."
---Aetna
That right there is why the entire debate against health care reform has boiled to down to red-baiting. Because the real argument for the current model is summed up above.
Aetna made lower profits in the economic downturn (they didn't lose money, mind you, just made slightly less) and they are maintaining their boom-time profit margin by raising prices and lowering level of care. Just as their corporate charter demands. Remember, fiduciary duty means they are required by law to do this.
"We are kicking people off our plan to make more money."
---Aetna
That right there is why the entire debate against health care reform has boiled to down to red-baiting. Because the real argument for the current model is summed up above.
Aetna made lower profits in the economic downturn (they didn't lose money, mind you, just made slightly less) and they are maintaining their boom-time profit margin by raising prices and lowering level of care. Just as their corporate charter demands. Remember, fiduciary duty means they are required by law to do this.
6
B-but it's the economy, stupid!
Sigh. Yes. This is really quite disgusting. We're only going to shift from one profit-driven modality to another, though, no matter how much we reform, so long as Americans continue to conflate free markets and actual freedom.
Sigh. Yes. This is really quite disgusting. We're only going to shift from one profit-driven modality to another, though, no matter how much we reform, so long as Americans continue to conflate free markets and actual freedom.
8
@2 it's not really that Aetna has cut off UW. It's that Aetna and UW could not come to an agreement on their contract, so as of 2010 UW will not be under contract as an in-network provider. There is still a possibility that that would change, but UW wanted to try to get the word out as quickly as possible so that folks would at least have a chance to change carriers during open enrollment.
9
@1,
But doctors have a legal and ethical responsibility to put the interest of the patient first. Whether they do that, how well they do that, and how well the government and medical boards actually enforce that are up for debate, but they still technically have more responsibility to their patients than insurance companies do.
But doctors have a legal and ethical responsibility to put the interest of the patient first. Whether they do that, how well they do that, and how well the government and medical boards actually enforce that are up for debate, but they still technically have more responsibility to their patients than insurance companies do.
11
@10, Because health insurance in this country is an oligopoly and every single provider is a massive douchebag.
12
@1 does have a good point. It's not just the insurance companies that are greedy fucks. Many doctors are really just in it for the money. Not all, maybe not the majority, but certainly lots of them just want to be filthy rich.
Human beings are extremely selfish. Basing the successful functioning of the nation on capitalism only reinforces that. People will often fight tooth and nail against helping others and will only grudgingly acquiesce with loud complaints when they're forced to help, as is happening now with health care reform.
Human beings are extremely selfish. Basing the successful functioning of the nation on capitalism only reinforces that. People will often fight tooth and nail against helping others and will only grudgingly acquiesce with loud complaints when they're forced to help, as is happening now with health care reform.
14
Okay, Urgutha, I'm with you inasmuch as agreeing that a lot of doctors are in it for the money.
That said, how much worse would our current shortage of health care professionals be if there weren't doctors who were in it for the money? Just look at the critical lack of GPs and nurses. That could be extended to every single part of medicine.
I don't have a solution, mind you, it's just... people ARE inherently selfish and sometimes they need to be rewarded sufficiently to be motivated to do hard, shitty jobs. The fact that someone does need to do those jobs whether the money's there or not doesn't change that fact.
That said, how much worse would our current shortage of health care professionals be if there weren't doctors who were in it for the money? Just look at the critical lack of GPs and nurses. That could be extended to every single part of medicine.
I don't have a solution, mind you, it's just... people ARE inherently selfish and sometimes they need to be rewarded sufficiently to be motivated to do hard, shitty jobs. The fact that someone does need to do those jobs whether the money's there or not doesn't change that fact.
15
@1 & @12...it is entirely conceivable that self-interest on the part of Doctors can lead to better healthcare outcomes. It is not conceivable that self-interest on the part of Insurance companies can lead to better healthcare outcomes.
The Insurance industry brings does not add value to the healthcare system, but docs do.
The Insurance industry brings does not add value to the healthcare system, but docs do.
16
"Let's sit down with insurers and make sure our health care reform is a responsible, bipartisan effort!"
17
Oops. That last sentence @15 should read:
The insurance industry does not add value to the healthcare system, but Docs do.
The insurance industry does not add value to the healthcare system, but Docs do.
19
When I signed up with UnitedHealth in 2007, the combined premium for myself & my s/o was $795.71/mo.
As of September of this year, it has increased to $1,318.03/mo -- a 66% increase in just two years.
Fuck this whole so-called "industry."
As of September of this year, it has increased to $1,318.03/mo -- a 66% increase in just two years.
Fuck this whole so-called "industry."
20
if Aetna is being unreasonable then no doubt other insurance companies will scoop up these poor souls and offer them a better deal than Aetna did. If in fact the increase reflects what it will cost to cover these folks then where is Aetna at fault? Do you think the government will cover them cheaper? Aetna profits or government waste, fraud and abuse- you're screwed either way.
21
@14 & 15/17,
I'd agree with that and it's a good point. Give doctors lots of money and you attract more people to the job so you can weed out those with less talent and keep those with more. We should do the same with teachers too (some places already do).
That said, isn't there some saying "the most expensive piece of medical equiptment is the doctor's pen?" Part of that problem, of course, is the drug companies bribing them with vacation cruises and new golf clubs in exchange for "suggesting" pills for patients who don't need them. However, doctors also do get reimbursed for providing medical care that is optional but maybe not necessary.
But yes, insurance companies are unnecessary and they cause more problems than they fix, I agree.
I'd agree with that and it's a good point. Give doctors lots of money and you attract more people to the job so you can weed out those with less talent and keep those with more. We should do the same with teachers too (some places already do).
That said, isn't there some saying "the most expensive piece of medical equiptment is the doctor's pen?" Part of that problem, of course, is the drug companies bribing them with vacation cruises and new golf clubs in exchange for "suggesting" pills for patients who don't need them. However, doctors also do get reimbursed for providing medical care that is optional but maybe not necessary.
But yes, insurance companies are unnecessary and they cause more problems than they fix, I agree.
22
I guess I should be happy I am now on Medicare (though I have to pay the Medicare Part B premium of $96.20 a month plus the Medicare Advantage Plan with RX premium of $86 a month). I was on COBRA - Aetna through my former employer Amazon.com. Wondering if Corydon works for Amazon, too? At the time, the amount paid for COBRA was cheaper than it could have been (due to Amazon's largess and their ability to leverage that when negotiating costs for health insurance). That being said my COBRA cost $364 a month for the first 18 months and then $560 for the next 6 - until I qualified for Medicare. When you become disabled you have to wait 2 years before you qualify for Medicare. My SSD check is $1335 a month - BEFORE they take the premiums for Medicare. Try living on that! Our entire system is seriously fucked and these health insurance companies are raking in the money hand over fist (with their CEOs making millions and billions of dollars). It's absolute insanity.
23
Try getting a job!
Our entire system is seriously fucked because there are too many 'disabled' pile of shit leeches sucking off the taxpayers' bloody assholes.
and then bitching because they don't think they get enough...
Our entire system is seriously fucked because there are too many 'disabled' pile of shit leeches sucking off the taxpayers' bloody assholes.
and then bitching because they don't think they get enough...
24
meanwhile the outgoing CFO of Microsoft got $5.9 million for leaving.
Think about how many H1-B visa holders they had to employ to pay for that "bonus" ...
Or how much health care that would pay for.
Think about how many H1-B visa holders they had to employ to pay for that "bonus" ...
Or how much health care that would pay for.
25
One thing that is pounded into the heads of business school students is: public companies are only accountable to their shareholders. Everything that a business does should be soley focued on increasing profits in the short term to therefore increse shareholder value.
26
22- Medicare Advantage is just another handout to private insurance companies. It costs way more to the tax payers and you get less compared to government run medicare.
27
Will... Out of all the arguments that would make any sort of sense at all, you choose this.
Microsoft is 1) self-insured, and 2) fully covers H1-B workers, many of whom are brought here *specifically because* they can't get decent healthcare for their special needs kids where they come from (Russia, India, etc.). I work with three such workers with special needs kids, all of whom are exceptional workers--and they're not underpaid, either.
Also, 5.9M would pay for, what, a dozen CT scan machines or courses of chemotherapy? Not a whole lot.
And stop skeezing all over my YDA girls. Creep.
Microsoft is 1) self-insured, and 2) fully covers H1-B workers, many of whom are brought here *specifically because* they can't get decent healthcare for their special needs kids where they come from (Russia, India, etc.). I work with three such workers with special needs kids, all of whom are exceptional workers--and they're not underpaid, either.
Also, 5.9M would pay for, what, a dozen CT scan machines or courses of chemotherapy? Not a whole lot.
And stop skeezing all over my YDA girls. Creep.
28
@8
UW had open enrollment and didn't mention this change until the last few days. I heard from a doctor who works at HMC that UW didn't want to publicly announce the terminated contract because they didn't want to seem like a horrible institution because they were asking for more money. The thing is, UW Medicine needs that money to still be in operation and run efficiently. UW doctors don't necessarily roll in the dough. See below:
@1
If the services performed at HMC aren't paid for, (and the providers AKA physicians aren't paid), that's less money that HMC has to keep their doors open.
Doctors and other medical professionals that work at HMC are paid significantly less than their colleagues that work at other facilities because HMC can never turn away a patient, even if it means that the patient can't pay the expenses and therefore HMC spends more money that it could make (to help keep the doors open).
Aetna also got caught underpaying the providers by very small amounts, adding up to a big sum that aetna got to "keep". They did this thinking that UWP wouldn't run billing reports. There are several lawsuits against aetna right now all over the country.
It's a complicated issue, and it's a fucked up one. But UW isn't a monster for wanting to keep the money flow in so as to keep a decent facility up and running properly.
UW had open enrollment and didn't mention this change until the last few days. I heard from a doctor who works at HMC that UW didn't want to publicly announce the terminated contract because they didn't want to seem like a horrible institution because they were asking for more money. The thing is, UW Medicine needs that money to still be in operation and run efficiently. UW doctors don't necessarily roll in the dough. See below:
@1
If the services performed at HMC aren't paid for, (and the providers AKA physicians aren't paid), that's less money that HMC has to keep their doors open.
Doctors and other medical professionals that work at HMC are paid significantly less than their colleagues that work at other facilities because HMC can never turn away a patient, even if it means that the patient can't pay the expenses and therefore HMC spends more money that it could make (to help keep the doors open).
Aetna also got caught underpaying the providers by very small amounts, adding up to a big sum that aetna got to "keep". They did this thinking that UWP wouldn't run billing reports. There are several lawsuits against aetna right now all over the country.
It's a complicated issue, and it's a fucked up one. But UW isn't a monster for wanting to keep the money flow in so as to keep a decent facility up and running properly.
30
Aetna's CEO Ron Williams' Compensation for 2008
Salary: $1,091,764.00
Bonus: $0.00
Restricted stock awards: $6,456,630.00
All other compensation: $101,487.00
Option awards: $13,537,365.00
Non-equity incentive plan compensation: $1,950,000.00
Change in pension value and nonqualified deferred compensation earnings: $1,162,866.00
Total Compensation: $24,300,112.00
Salary: $1,091,764.00
Bonus: $0.00
Restricted stock awards: $6,456,630.00
All other compensation: $101,487.00
Option awards: $13,537,365.00
Non-equity incentive plan compensation: $1,950,000.00
Change in pension value and nonqualified deferred compensation earnings: $1,162,866.00
Total Compensation: $24,300,112.00
33
@1,
Many, many moons ago (back in the 80's during the Reagan Administration), the government became concerned about health care costs and funded a study that said the rising costs of health care were due to the U.S. having too many doctors, and so the government stopped subsidizing medical schools. Previously, medical school candidates were chosen because of talent, brains, and empathy. Now they are solely chosen on income level. Only those who have parents that can pay for medical school (such as the Bushes, the Roves, the Chaneys, the Hiltons, the Kardashians) are accepted to medical school. Or you can import doctors from India, Pakistan, China, and other foreign countries and hope they have the same skill, training, and ethics as one trained in this country. Some do. Some do not.
Previously, when doctors worked for a salary and didn't have to prescribe a certain number of procedures or expensive "new and improved" drugs to make money they could just concentrate on treating the patient. They had far less motivation to push unnecessary treatments, surgery, and drugs onto their patients for the sake of making a profit.
Many, many moons ago (back in the 80's during the Reagan Administration), the government became concerned about health care costs and funded a study that said the rising costs of health care were due to the U.S. having too many doctors, and so the government stopped subsidizing medical schools. Previously, medical school candidates were chosen because of talent, brains, and empathy. Now they are solely chosen on income level. Only those who have parents that can pay for medical school (such as the Bushes, the Roves, the Chaneys, the Hiltons, the Kardashians) are accepted to medical school. Or you can import doctors from India, Pakistan, China, and other foreign countries and hope they have the same skill, training, and ethics as one trained in this country. Some do. Some do not.
Previously, when doctors worked for a salary and didn't have to prescribe a certain number of procedures or expensive "new and improved" drugs to make money they could just concentrate on treating the patient. They had far less motivation to push unnecessary treatments, surgery, and drugs onto their patients for the sake of making a profit.
36
35
If you stop your ears and chant real loud maybe nothing will intrude on your naive liberal PC worldview...
"I Do believe in Obama
I Do believe in Obama
I Do
I Do
I DO believe in Obama..."
If you stop your ears and chant real loud maybe nothing will intrude on your naive liberal PC worldview...
"I Do believe in Obama
I Do believe in Obama
I Do
I Do
I DO believe in Obama..."
37
#23 - i have a progressive, degenerative neuromuscular disease, related to ALS. i can't work. if i could, i would be working. until i got sick i worked from the time i was 16 years old - and i paid into the social security system with every paycheck. i was working when i got sick and my employer fired me.
#26 - you are completely wrong about getting less than original medicare. original medicare pays for NOTHING except critical care. no preventative services whatsover - except for a ONE TIME ONLY "welcome to medicare" physical. without the medicare advantage plan i couldn't get a physical every year, a pelvic exam/pap smear once a year, and since my illness has no treatment and no cure - it's totally managed by medications for my symptoms (i am currently on 5 medications) - original medicare doesn't pay for meds - and part D, as set up by GWB, doesn't cover the donut hole (aka coverage gap). since the gap starts at $2700 and ONE of my meds costs $315 a month, i'd hit the gap with that one medication 9 months into the year. i can't afford to pay thousands of dollars for medications during the donut hole when my SSD check is just slight over $1100 a month (after the two Medicare premiums are deducted). i've had 2 years to investigate all of the options regarding medicare and having a medicare advantage plan is the ONLY feasible way i can get the medical care i need without gutting my family financially (who is just my mother, who houses me, feeds me, cares for me). if original medicare were a better option i would have taken it. also - don't forget - anyone who gets disability has to wait TWO years until they qualify for medicare - and while I was fortunate to have a friend pay for my COBRA, most disabled people do not. 4% of the disabled waiting the 2 years DIE before they qualify for medicare. our system is broken and medicare is a huge part of that broken system.
More...
#26 - you are completely wrong about getting less than original medicare. original medicare pays for NOTHING except critical care. no preventative services whatsover - except for a ONE TIME ONLY "welcome to medicare" physical. without the medicare advantage plan i couldn't get a physical every year, a pelvic exam/pap smear once a year, and since my illness has no treatment and no cure - it's totally managed by medications for my symptoms (i am currently on 5 medications) - original medicare doesn't pay for meds - and part D, as set up by GWB, doesn't cover the donut hole (aka coverage gap). since the gap starts at $2700 and ONE of my meds costs $315 a month, i'd hit the gap with that one medication 9 months into the year. i can't afford to pay thousands of dollars for medications during the donut hole when my SSD check is just slight over $1100 a month (after the two Medicare premiums are deducted). i've had 2 years to investigate all of the options regarding medicare and having a medicare advantage plan is the ONLY feasible way i can get the medical care i need without gutting my family financially (who is just my mother, who houses me, feeds me, cares for me). if original medicare were a better option i would have taken it. also - don't forget - anyone who gets disability has to wait TWO years until they qualify for medicare - and while I was fortunate to have a friend pay for my COBRA, most disabled people do not. 4% of the disabled waiting the 2 years DIE before they qualify for medicare. our system is broken and medicare is a huge part of that broken system.
38
Did someone mention tort reform? You know, part of the reason why medicine is so expensive is because of an extremely litigious climate as well as the neurotic insistence of patients that they receive TOO MUCH healthcare: expensive, risky tests and procedures. Healthcare is a scarce commodity. It will always be rationed by price. However, it does not NEED to be as expensive as it is. In our myopic public discussion of supply, we've neglected an equally important component of the market: demand.
39
At my work, we help companies self insure their medical benefits for their employees. Even without insurance companies making any profit at all, the cost for the self insured palns continues to grow every year at a really high rate.
I am not trying to stick up for insurance companies, but it is important to know that in the absence of insurance companies - the cost still rise just as fast.
Eliminating insurance companies might make you feel good, but it does not do anything to address the underlying problem - which is the increasing cost of medical services and the increasing demand for medical services.
I am not trying to stick up for insurance companies, but it is important to know that in the absence of insurance companies - the cost still rise just as fast.
Eliminating insurance companies might make you feel good, but it does not do anything to address the underlying problem - which is the increasing cost of medical services and the increasing demand for medical services.
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