The LA Times says that doctors are objecting to a letter sent by Blue Cross of California requesting that the docs help “indentify members who have failed to disclose medical conditions on their application that may be considered pre-existing.”
From the LA Times:
“We’re outraged that they are asking doctors to violate the sacred trust of patients to rat them out for medical information that patients would expect their doctors to handle with the utmost secrecy and confidentiality,” said Dr. Richard Frankenstein, president of the California Medical Assn.
Patients “will stop telling their doctors anything they think might be a problem for their insurance and they don’t think matters for their current health situation,” he said. “But they didn’t go to medical school, and there are all kinds of obscure things that could be very helpful to a doctor.”
WellPoint Inc., the Indianapolis-based company that operates Blue Cross of California, said Monday that it was sending out the letters in an effort to hold down costs.
“Enrolling an applicant who did not disclose their true condition (and the condition is chronic or acute), will quickly drive increased utilization of services, which drives up costs for all members,” WellPoint spokeswoman Shannon Troughton said in an e-mail.
“Blue Cross feels it is our responsibility to assure all records are accurate and up to date for HMO providers,” she said. “We send these letters to identify members early on in the process who may not have been honest in their application.”
Shannon sounds like a real sweetheart, doesn’t she? The article goes on to discuss recent lawsuits in California over insurance providers who approve people without checking their applications for errors, then cancel their policies later. Blue Cross is currently fighting a $1 million fine that the California Department of Managed Health Care assessed for “alleged systemic problems the agency identified in the way the company rescinds coverage.”
Doctors balk at request for data [LA Times] (Thanks, Everyone!)
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@PotKettleBlack: But the thing is, every insurance (including Medicare, which is what would approximate a single-payor model for universal healthcare in the US, if run by the government) already has what’s called a “maximum allowable charge”. A hospital can charge a million dollars for an aspirin, but if the insurance company only pays $50 per $50 per aspirin, the hospital only collects $50.
The difference does not usually get passed on to the patient, because most insurance companies stipulate that if a provider accepts reimbursement from them, they are agreeing to collect *only* that allowable amount, and not go after the patient for the rest.
What we need to look at is this: is $50 for an aspirin (and that is only SLIGHTLY exaggerated) an appropriate amount? In many cases, costs are very exaggerated, and the maximum allowable amounts only scale down that exaggeration by a small amount. This is what I mean that the *entire* system, from all conceivable angles, is very, very broken.
@bearymore: The Medicare loss ratio (% of premiums paid in claims) is 95%.
This is just patently false. I would like to see where you got this information from.
As per: “Review of the Relationship Between Medicare Part D Payments to Local, Community Pharmacies and the Pharmacies’ Drug Acquisition Costs.”
Medicare’s rate of reimbursement, and the obscenely slow pace at which they issue returns is one of the major problems in the pharmacy industry. Approximately 50% of Medicare accounts are 60 days past due! The notion that the inefficiency will somehow be offset is ludicrous. The inefficiencies of Medicare are causing smaller pharmacies to go out of business and forcing big-box chain pharmacies to ramp up the number of prescriptions they are filling in order to break even.
Don’t get me wrong, I don’t think a privatized system is the answer. But you are sorely, sorely mistaken if you think the inefficiencies of Medicare are a minor problem.
P.S. Here is the full reference:
Office of the Inspector General of the Department of Health and Human Services: A “Review of the Relationship Between Medicare Part D Payments to Local, Community Pharmacies and the Pharmacies’ Drug Acquisition Costs.”
@balthisar: I’m not condoning fraud, but I think you’re misunderstanding what the true goal of these fishing expeditions is. They aren’t really trying to stamp out the “fraud” of people lying about pre-existing conditions. Normally, they are okay with that as long as the patient isn’t costing them a lot of money. It’s only when someone starts to cost them lots of money that they start to care and try to find a reason to justify retroactively cancelling coverage. This is just another tactic to cut their costs by selecting only the healthiest patients as customers. And they are doing it with “omissions” that are not only totally unrelated to the condition that is costing them lots of money but also minor and unintentional in many/most cases. It’s like if you forget to mention that you have a food allergy and they use that as a pretext to retroactively cancel you when you get cancer. THAT is what this is about.
Moreover, this problem is going to get even more messy just a few years down the road once genomics start to becoming a bigger and bigger part of medical practice. Then the insurers will potentially be able to claim that almost anything is a “preexisting condition” since they will be able to show a potential genetic basis for all kinds of diseases. Genetics has an immense potential to revolutionize the practice of preventative medicine, but people will be afraid to use it if the insurers can use any genetic risk as a way to deny coverage or retroactively cancel policies. More and more people will be shut out of the healthcare system as insurers can do a better and better job of selecting only the healthiest people as their customers (and they will define “healthiest” in terms of things that we have NO control over, like genetics).
Nationalized healthcare is the only solution I can see that will ensure some level of equitable access to care for all. The profit motive simply does not work at providing healthcare because it guarantees that care will not be provided to everyone. It is immoral, inequitable, and soon may become a form of capitalist eugenics once the genetic testing stuff gets involved. We have to kill the insurance monster before the genetic stuff becomes a concern.
Yeah this happened to me about 5 years ago. Got health insurance through BC. Was hospitalized some months later. Retroactively canceled my coverage. Thanks Blue Cross.
I didn’t see anything about the letter being revoked, so here’s the URL: [www.mercurynews.com]
BC came to its senses and canceled the entire thing.
Someone needs to send another letter to all of the doctors Reminding them of Dr / Patient confidentiality.
Blue Cross is organized crime. They let people die to make a few extra bucks.
Nationalizing health care will not get rid of this problem – it will only reduce the health care quality available to us. What WILL reduce these types of problems is implementing capitalistic market forces into the system. If people were really able to pick a company based on the costs of services and they were able to shop around whenever they wanted (instead of the few choices offered through companies, usually once a year), then people would quickly dump the insurance companies that do this. It isn’t like the cable/satellite markets where you MIGHT have 2 or 3 choices in an area which really creates an oligopoly. for insurance, you’d have MANY choices and you could truly shop around – just like clothes buying from multiple retailers in your local area.
[www.grahamazon.com]
@ericole: That is nothing like how our current system works. I realize you aren’t saying it is, but many people that favor the status quo seem to think that we currently have a market-based system. We don’t.
Here’s the main problem I have with your proposal to “fix it with capitalism”: it does not address the inequality inherent in a system where insurance companies want to make a profit, and it doesn’t recognize the fact that insurance isn’t a good solution to the problem of providing healthcare. Insurance is meant to hedge against the risk of infrequent events that you hope don’t happen to you (like a car wreck). If you are a bad driver, your auto insurance premiums go up, providing you an incentive not to be a bad driver.
Health insurance doesn’t really work like that. While some health events are under your control, many others aren’t. Genetic predispositions are not under your control, for example. Everyone gets sick at least sometime in the life. And health takes constant investment in maintenance…do we use insurance to pay for car repairs (beyond the warranty period where expected losses are low)?
So this brings us to the question of fairness. Everyone needs to take care of their health, but it’s more expensive than the average for many people through no fault of their own. I think it’s wrong for society to allow those people to be put at the mercy of for-profit insurers, who will want only customers who don’t cost them much money. It’s a different moral question than car insurance, since after all you don’t need a car to live. An analogous situation would be if a statistical study showed that blacks were more likely to get a certain disease than whites (many such studies exist, for all races). Should insurers then be allowed to charge blacks higher premiums based on this risk, even though they have no control over their skin color? There is really no difference between this and other genetic discrimination except for that skin color is an externally visible genetic characteristic. I don’t think society should tolerate this, and I don’t see how we can prevent it in a for-profit insurance model.
Well, health insurance is for healthy people. AT least in this country.
@Hambriq:Medical loss ratio refers to the percent of premiums paid out in claims. It is totally unrelated to the reimbursement procedure or amounts reimbursed. The most recent data I have can be found in the Statistical Abstract of the United States, 2006 for calendar year 2005 (Table 136). Total income from premiums and general government funds were $356.8 billion, while total benefit disbursements were $330.3 billion for a 93% loss ratio. Relevant to your point, the last year before Part D, 2003, the loss ratio was 97%. Look what Part D has accomplished. It is a poorly designed and poorly administered program — just what you’d expect from a Republican congress more interested in subsidies to big Pharma than designing a reasonable and efficient program. It is no accident that Billy Tauzin (R-LA), the Congressman who pushed the bill through the House in an unprecedented all night session, was hired by Phrma, the industry association, at a reported salary of $2.5 million when he left Congress two months later.
@bearymore: Gotcha.
The main reason for my confusion, of course, was the context in which you were using the medical loss ratio. That particular statistic has no real meaning without a very specific context surrounding it.
It is by no means an indicator of quality, because the number does not take into account the number of beneficiaries. It is also by no means an indicator of efficiency, because there’s no universally agreed-upon scale of efficiency for medical programs. Indeed, traditional measures of ‘efficiency’ would indicate that a lower loss ratio is better; after all, the program would be spending far less than it is bringing in. We can obviously see why this is not a good thing for participants in the program.
It is only what is is: the measure of how much is paid out versus what is brought in. We cannot unilaterally say that “higher is better”; a loss ratio of 10,000% would indicate a severely bankrupt system. On the other hand, a loss ratio of 0% would be woefully underserving its participants.
What it comes down to is, we have to look to more concrete examples of quality and efficiency to judge public (and private, for that matter) health care systems. Working in a pharmacy, I can say from personal experience that, by far, the lowest quality of care tends to come from publicly funded programs: Tricare, VA, Medicare, Medicaid. Of course, this is just the anecdotal evidence of one person, and it holds no real weight in the overall course of discussion. But it does make me regard each side of the issue with a hefty grain of salt.
I think, in the end, we would be all be better served if everyone did this.
Also, to clarify, I’m not anti-Universalized Health Care. I believe that, to some end, every person should have health care in this country. And I think that most people would agree with the thought behind that statement; it’s just the logistics of making it happen that we all argue about.