Monday, June 29, 2009


MY TIMES/Insurance Company Schemes
Congressional committees heard a lot this month about the devious schemes used by health insurance companies to drop or shortchange sick patients. It was a damning portrait — and one Americans know from painful personal experience — of an industry that all too often puts profits ahead of patients.

As health care reform moves forward, Congress must impose tighter regulation of companies that clearly are not doing enough to regulate themselves. Creating a public plan could also help restrain the worst practices, by providing competition and an alternative.

A House oversight subcommittee took a close look at a particularly shameful practice known as “rescission,” in which insurance companies cancel coverage for some sick policyholders rather than pay an expensive claim. The companies contend that rescissions are rare. But Congressional investigators found that three big insurers canceled about 20,000 individual policies over a five-year period — allowing them to avoid paying more than $300 million in medical claims.

The companies typically argue that the policyholders withheld information about pre-existing conditions that would have disqualified them from coverage. But the subcommittee unearthed cases where the pre-existing conditions were trivial, or unrelated to the claim, or not known to the patient. When executives for the three companies were asked if they would be willing to limit rescissions to cases where the policyholder deliberately lied on an application form, all said they would not. This tactic will not be ended voluntarily.

Meanwhile, the Senate Commerce Committee was getting an earful from a former head of corporate communications for Cigna, a big health insurer. He charged that the industry deliberately confuses its customers by making it hard to obtain information about its practices and issuing incomprehensible documents.

He also charged that the companies “dump the sick,” through rescissions and by purging small businesses whose employees’ claims exceed what underwriters expected. They are often hit with huge rate increases intended to force them to drop coverage.

The Commerce Committee also released a staff report elaborating on how insurance companies operating in every region of the country have used statistically manipulated databases to reduce their payments for services provided by doctors outside their networks. Patients must then pay the often considerable difference.

Any legislation to reform the health care system, and extend coverage to millions of uninsured Americans, must stop these practices.

One way to do that is by creating insurance exchanges where individuals and small businesses could buy policies from insurers that would be required to accept all applicants without regard to pre-existing conditions and charge them premiums unrelated to their health status, and would be barred from dropping them no matter what illnesses they developed.

If health care reform requires virtually all Americans to carry health insurance — as it should — industry leaders acknowledge that there would be enough healthy people paying premiums to offset the higher costs of covering the sick and the need for rescissions and other such practices would disappear.

No matter what happens, strong regulatory oversight will be a must to ensure that insurers skilled in denying coverage don’t find new ways to evade just claims.

Competition from a new public plan could provide a benchmark for judging how well private plans are performing. And clear evaluations of both public and private plans would be a boon for consumers. Senator Jay Rockefeller has proposed creating a nonprofit organization to grade all plans offered on a national exchange based on such factors as adequacy of coverage, affordability, customer and health provider satisfaction, and transparency of procedures and decision-making.

The health insurance industry has pledged to assist in the reform effort. Congress will have to be tough and vigilant to ensure that it does.


Focus on results, not treatments
The way to cut costs is to base payments on medical outcomes rather than pouring money into individual medical services.

Alarmed by increases in healthcare costs, policymakers and insurers have adopted a series of reforms over the years -- such as price controls and HMOs -- whose savings proved to be temporary at best. With that history in mind, some experts say that the only sure way to control the growth in healthcare spending is for the government to cap it, a cure that would be worse than the disease. There may be no quick fix, but there certainly are ways to deliver and pay for healthcare that can give consumers more value for their money. If we undertake them now, the eventual result will be a higher-quality system that's more sustainable and affordable.

The cost problem has multiple causes, but a primary one is the overuse of medical services and technology. Today's health insurance system gives physicians and hospitals little incentive to practice medicine cost-effectively. And as long as they can pass their costs on to consumers in the form of ever-rising premiums, insurance companies don't need to be disciplined spenders either. To create the right incentives, insurers should move away from paying for each treatment or service performed for a patient -- an approach that rewards volume, not effectiveness -- and instead base reimbursements on the treatment plans that produce the best results.

It's a fundamental shift that would take years to implement, in part because of the work healthcare providers must do to create and maintain treatment guidelines for doctors and hospitals. To help advance the process, Congress included $1.1 billion in the economic stimulus bill in February for research that compares the effectiveness of different treatments. There's much that remains unknown about how best to treat various illnesses and injuries, and each new drug or device that's developed raises new questions about effectiveness. There are significant issues too about how to enforce such guidelines. But the development of "best practices" could help doctors by providing a shield against malpractice claims, reducing the incidence of wasteful tests and other "defensive" procedures.

Another needed improvement would be to simplify the interaction between doctors and insurers. A recent study in Health Affairs magazine reported that for every three full-time physicians, two employees were needed to handle the billing and insurance paperwork. That's an outrageous administrative burden that diverts money from delivering care. Doctors and hospitals, meanwhile, must update the way they collect, store and share information about patients and treatments. Computerizing medical records and integrating information technology into patient care promise to improve care and cut costs by eliminating duplication, averting errors and better monitoring chronic ailments, among other benefits. Congress promoted the effort with about $20 billion in subsidies for electronic medical records in the stimulus bill. But it's an expensive and time-consuming process -- one estimate put the total cost at $150 billion -- and especially daunting for primary-care doctors in small practices.

A new approach to paying for care can also bring valuable improvements to the way healthcare is delivered. By bundling payments into a lump sum -- rather than reimbursing doctors, hospitals and specialists separately for what they do for a patient -- insurers can promote more coordinated, team-based care. Such techniques have helped such organizations as the Veterans Health Administration, the Mayo Clinic and Minnesota-based HealthPartners, a combined insurer and healthcare provider, deliver high-quality care while also cutting costs.

Just as the incentives for insurers and providers must change, so must the incentives for consumers. Far too many healthcare dollars are being spent on ailments that could have been prevented. Doctors typically start by citing America's obesity problem -- this country has the highest obesity rate in the developed world by far, contributing to such costly chronic illnesses as diabetes and heart disease -- but they also point to simpler behavioral lapses, such as the high percentage of patients who don't take their medications as directed. Grocery giant Safeway has demonstrated that employers can save themselves and their workers money by providing financial incentives for healthy behavior and making workers responsible for a meaningful share of their healthcare expenses. Other public and privately funded insurance programs should follow suit, with this caveat: The incentive system shouldn't penalize those who get sick. After all, that's one of the biggest shortcomings of private insurance today.

More broadly, the overhaul should help bring market forces to bear on healthcare costs. Most people are concerned about getting the best care, not the least expensive, yet there are few standards for measuring how well healthcare providers do their jobs. Healthcare providers -- not insurers -- need to take the lead in developing those measures to ensure that performance is gauged mainly by medical standards, not economic ones. Consumers could then seek out the best care at the lowest price. The same goes for insurance -- making it easier for consumers to compare insurance companies' policies and performance would promote competition and restrain costs.

These changes are ambitious, but they could make a significant difference in costs even if they were implemented only for patients with the handful of chronic diseases that account for most healthcare spending. Insurers, hospitals and medical groups have already started testing most of these ideas, with some promising results. The federal government can do its part by promoting these reforms in Medicare and Medicaid. The entire healthcare system would benefit if Washington made those programs more efficient,rather than just slashing payments to doctors and hospitals again and shifting more costs onto other consumers.

High Court Rules for White Firefighters

The conservative judges get another one wrong!
Making decisions to avoid problems is always a good way to modify behavior.
Speed limits have no effect on street safety?
That a look at the '10 Commandments'. Hk

High Court Rules for White Firefighters in Discrimination Suit
Ruling Reverses High-Profile Decision by Supreme Court Nominee Sonia Sotomayor

By Robert Barnes Washington Post

The Supreme Court today narrowly ruled in favor of white firefighters in New Haven, Conn., who said they were denied promotions because of their race, reversing a decision by Judge Sonia Sotomayor and others that had come to play a large role in the consideration of her nomination for the high court.

The city had thrown out the results of a promotion test because no African Americans and only two Hispanics would have qualified for promotions. It said it feared a lawsuit from minorities under federal laws that said such "disparate impacts" on test results could be used to show discrimination.

In effect, the court was deciding when avoiding potential discrimination against one group amounted to actual discrimination against another.

The court's conservative majority said in a 5 to 4 vote that is what happened in New Haven.

"Fear of litigation alone cannot justify an employer's reliance on race to the detriment of individuals who passed the examinations and qualified for promotions," wrote Justice Anthony M. Kennedy.

Justice Ruth Bader Ginsburg wrote for the liberals on the court and said the decision knocks the pegs from Title VII of the Civil Rights Act.

She read her dissent from the bench for emphasis. "Congress endeavored to promote equal opportunity in fact, and not simply in form," she said. "The damage today's decision does to that objective is untold."

On the last day on the bench for retiring Justice David H. Souter, the court failed to reach a decision on one of its most important cases of the term: whether a conservative group's production of a 90-minute film on Hillary Rodham Clinton amounted to a documentary, or merely a long commercial of the type restricted by the McCain-Feingold campaign finance reform act.

Instead, the court took the unusual action of scheduling new arguments on the case for Sept. 9, before the court's new term begins next October. The court wants new briefings on issues that could lead to the justices declaring unconstitutional that part of the act, formally called the Bipartisan Campaign Finance Reform Act of 2002.

The court's decision probably will lead Democrats to push efforts to have a vote on Sotomayor's confirmation so she can be in place before the September hearing, although it is unclear whether her replacement of Souter would affect the outcome of the case.

Senate hearings on her nomination are set to begin in two weeks.

The New Haven case, Ricci v. DeStefano, has become the ruling that Sotomayor's critics most point to for evidence that she lets her background influence her decisions, even though her role has been somewhat inflated.

The promotion test results produced a heated debate in New Haven, and government lawyers warned the city's civil service board that if it certified the test results, minority firefighters might have a good case for claiming discrimination under Title VII. Federal guidelines presume discrimination when a test has such a disparate impact on minorities.

The board split 2 to 2, which meant the exam was not certified. Those who opposed using the results said they worried the test must be flawed in some way that disadvantaged minorities. (The test questions have not been made public.)

The white firefighters filed suit, saying their rights had been violated under both the law and the Constitution's protections of due process.

District Judge Janet Bond Arterton dismissed their suit before it went to trial. She said in her 47-page decision that the city was justified under the law in junking the test, even if it could not explain its flaws.

The case then went to the U.S. Court of Appeals for the 2nd Circuit, where Sotomayor and judges Robert Sack and Rosemary S. Pooler heard the appeal. Oral arguments lasted an hour, with Sotomayor leading the questioning, as is her reputation. But instead of issuing a detailed and signed opinion, the panel said in a brief summary that, although it was "not unsympathetic" to the plight of the white firefighters, it unanimously affirmed the lower court's decision for "reasons stated in the thorough, thoughtful, and well-reasoned opinion."

Kennedy's opinion referred to the judgment of Sotomayor and the other judges only by noting the short opinion.

Kennedy said the standard for whether an employer may discard a test is whether there is a strong reason to the employer to believe that the test is flawed in a way that discriminates against minorities, not just by looking at the results.

In New Haven's case, "there is no evidence -- let alone the required strong basis in evidence -- that the tests were flawed because they were not job-related or because other, equally valid and less discriminatory tests were available to the city," Kennedy wrote.

The case has drawn considerable attention not just because of Sotomayor's role but because of the sympathetic nature of the claim brought by the firefighters, who said they were discriminated against simply because of the color of their skin.

The lead plaintiff, Frank Ricci, is a veteran firefighter who said in sworn statements that he spent thousands of dollars in preparation and studied for months for the exam. Ricci said he is dyslexic, so he had tapes made of the test materials and listened to them on his commute to work.