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Impassioned Health Insurance Debate on Linkedin

Posted Feb 20 2010 12:00am

Last week I wrote a blog post drawing attention to a recent news story on ABC News about health insurance firms raking in profits during the recession. The story was based on a report by the advocacy group Health Care For America Now (HCAN). I posted the piece to a number of LinkedIn Groups. It stimulated a lot of discussion – and set off an intriguing debate between group members. It was fascinating to watch the discussion evolve. I thought I’d share it with you in this forum. (By the way, if you don’t like the opinions expressed below, please remember that I am sharing the views of others. I simply initiated the discussion!)

Here’s my original post on the Linkedin Group:

New Report: Health Insurers Set Record Profits While Millions Lose Coverage

“Health Insurers Post Record Profits: Insurance Firms Rake in Profits as They Cut Patients, Advocacy Group Says.” New Report: The five largest health insurance companies have set record profits while 2.7 million Americans have lost health insurance coverage. Read more at http://tinyurl.com/ydoq3u4.

And here’s the discussion thread that has ensued:

Comments (13)

Yeah, I would agree that there’s an ax to grind with pushing this information with phrases like “big insurance” being tossed around. United Healthcare is an owner of a whole host of companies which are health industry related but not all insurance-based. Therefore, portions of their profit are not all insurance sales related profits.

What are we to believe? “Little insurance” is going to save us? Government is going to save us? Please! Give me a break. Government can do anything right. Every systemic problem we are facing in our country is directly related to 545 people in government which control all of the decisions of what happens with legislation as it is now. Therefore, change can only come when we get rid of all 545 people (senate and house of representatives) and start fresh with non-career, normal human beings, who wish to serve their country instead of feeding off of the public like a bunch of leeches.

Posted 3 days ago

Couldn’t agree with Lamon more! In 1980 it cost about 70¢ a minute to place a coast to coast call and now it’s about a nickel or less. Do yuh think it has anything to do with competition? Get government out of the way…they created the monopolistic environment that’s costing so much…and let Capitalism take its course.

Posted 3 days ago

Capitalism will not resolve the U.S. healthcare system’s enormous problems. We currently have capitalism running our healthcare system for most of the U.S. population that is not on Medicare, Medicaid or veteran’s benefits.

And capitalism in this area is not working.

Capitalism has great merits for business competition, and has produced some wonderful products and innovations, but peoples’ health choices are not conducted on the same playing field as their choices of phone coverage.

We have thousands of unemployed people in this recession, who have also lost their health insurance along with their jobs. Many of them have chronic health conditions which, if left untreated, will deteriorate. Some of them will die.

Many of them cannot qualify for Medicaid they have a few assets left or are underemployed at a stop-gap job with no insurance.

Purchasing private insurance often means premiums that are unaffordable to the uninsured who are also unemployed. And I know of at least two insurance companies who are doing their best to keep unemployed, uninsured people with pre-existing conditions from buying insurance with them.

That is capitalism in action, in an area for which it is not economically appropriate weeding out weaker ‘customers’ who are poor ‘risks.’

Emergency rooms and county clinics cannot provide adequate care for the uninsured. Hospital are having growing trouble collecting their bills.

In many cases the uninsured are discriminated against when seeking medical care, especially when seeking follow-up specialist care. Some specialists simply won’t see them.

That is also capitalism operating in a field for which it is not appropriate refusing ‘customers’ who ‘can’t pay.’ But these aren’t people being denied a phone plan they may lose their lives.

You can go without a phone if you have to, but not your diabetes or cancer medication. And you cannot do comparison shopping for insurance products when you are unemployed, uninsured, and about to suffer cardiac failure because you cannot find health insurance.

If you and your family members are fortunate enough to be in excellent health and insured, consider talking more with family members and friends who are unemployed and uninsured about the degrading and terrifying search for health insurance that they are currently facing.

Capitalism works very well in some areas of the economy, but healthcare is not one of them.

Posted 2 days ago

It’s not Capitalism that is the problem Ms. Margolis. The problem is one of entitlement. You, along with many others, believe that it is government’s job to give “free” healthcare (which isn’t free at all) to everyone regardless of their ability to pay for the healthcare.

The Constitution of the United States does not provide for such entitlement nor guarantee any such social programs. Our representatives have already created other entitlement programs which can never be sustained such as Social Security, Medicare, Medicaid, Food Stamps, etc. These programs are always looked upon lovingly by everyone who believes in entitlement when it suits them, but then with disdain when it doesn’t cover and take care of everyone.

Capitalism is not the problem or the enemy. It’s believing that government will save us all by taking from one person and giving to another. It’s believing that a socialistic outlook of Medicine as utilized in Canada and the U.K. is exactly what American needs. It is believing that we can tax and spend our way out of problems and continue to fund programs which were never created to be what they are today (Social Security and Medicare).

I’m sure that you and many others will think me a non-compassionate, right wing extremist for my views. However, I can honestly say that I deeply care for people who are ill, cannot afford to pay for the best medical care, and want to provide for their families as best they can. I have been in that situation. I have been unemployed, had to work hard for the money I earned, payed out of my own pocket for private insurance, and have even purchased private insurance while being employed as the group plan was not a good choice. I have been poor enough in the past to be eligible for food stamps but never applied for them. Why? Because I believed it was possible to eventually get out of the circumstances I was in. Guess what? I did. The government didn’t help me either. No one else helped me. It was the grace of God and my own work ethic.

I refuse to believe it is my responsibility as a human being, U.S. Citizen, or anything else to give away to everyone something they are not willing to work for by the force of my government. I have no problem with charity, providing for and funding programs which help those who are needy, etc. But it is inexcusable to mandate by laws and taxes that I must give away what I freely earned. I’ve had enough of that and even in the guise of helping “the uninsured” and “covering everyone” I will not stand by and go along with this plan as an ox to the slaughter.

Posted 2 days ago

I wonder where HCAN get their numbers! Look up any filing and you will see no such a thing!

Below is the year to date:

  • Unitedhealth Group Inc vs. Peers

Company Market Cap YTD Price Performance
UnitedHealth Group Inc

  • 36.6B
  • +3.8%

WLP – WellPoint, Inc.

  • 26.8B
  • +0.3%

AET – Aetna Inc.

  • 12.5B
  • -9.3%

HUM – Humana Inc.

  • 7.8B
  • +4.8%

CI – CIGNA Corporation

  • 8.9B
  • -7.2%

Posted 1 day ago

Robin, you stated that “Capitalism works very well in some areas of the economy, but healthcare is not one of them.”

Unfortunately, there is no evidence that over the last three decades the U.S. healthcare industry has even remotely resembled a true free enterprise, competitive marketplace. Ideally, the prerequisites of such a market are free entry and exit of sellers, price and quality transparency for consumers, no seller or buyer large enough to dictate price and rational incentives for buyers to seek and sellers to compete by providing services and products of maximum value.

In the United States, the root causes of the crises of cost, quality and access are the excessive market concentration and absence of free competition in the U.S. markets for commercial health insurance, public health coverage (Medicare and Medicaid) and acute care hospital services and the adverse effects of monopoly and monopsony pricing power.

Unfortunately for most American physicians, individual and group health insurance purchasers and consumers, over the last 25 years many state Attorney Generals and the Federal government regulatory agencies (FTC and DOJ), which are required to protect consumer interests and competition among sellers, have been ineffective. As a result, many state insurance and hospital markets have become progressively more concentrated and monopolies, duopolies and oligopolies have been allowed to freely wield their economic power over physicians and consumers.

In regards to HOSPITALS see:

Study: Health costs higher where hospital competition is lower

Wall Street Journal Health Blog, February 9, 2010

In regards to COMMERCIAL HEALTH INSURERS, a November 2009 interactive map prepared by the Center for American Progress shows that one private health insurance carrier dominates the market in 17 states, and two dominate in 22 more.

See: http://www.americanprogress.org/issues/2009/11/insurance_market.html

and http://www.americanprogress.org/issues/2009/06/health_competition_map.html

In RI, for example, it’s a duopoly market with the two top private insurers having a 95% market share (RI BC/BS 71% and UnitedHealthcare 24%). In NH, the two top insurers’ market share is 66% (Wellpoint 37% and Cigna 29%). The Herfindahl Index (HI) is a measure of market concentration used by the FTC and DoJ in evaluating antitrust cases. The current HI for Rhode Island’s private health insurance market is 4,400, where anything above 1,000 is considered excessive concentration.

Like many other states, Rhode Island’s two government-run health coverage monopsonies, Medicare and Medicaid, cover more than a third of the population of 1 million. In Rhode Island, Medicare entitlement recipients make up 18% of the population and Medicaid recipients 20%, with about 10% currently uninsured and 13% (of about 450,000 total workers) currently unemployed.

Maybe the February 25th televised “bipartisan” health reform meeting with 37 members of Congress in the White House will produce a new, consumer-centered, value-driven reform framework rather than more government control and even less competition.

Posted 1 day ago

Lamon stated: The Constitution of the United States does not provide for such entitlement nor guarantee any such social programs. Our representatives have already created other entitlement programs which can never be sustained such as Social Security, Medicare, Medicaid, Food Stamps, etc. These programs are always looked upon lovingly by everyone who believes in entitlement when it suits them, but then with disdain when it doesn’t cover and take care of everyone.

Robin replies: Are you suggesting that we return to the 1930s, where thousands of our fellow citizens died during the depression of hunger and for lack of medical care because we had no social safety net? The “die-off” is amply documented in the books of that era.

If we abolish those programs, many of the unemployed and the chronically ill who have managed to gain access to some help will die very quickly.

There’s a healthcare solution!

Lamon: I have been in that situation. I have been unemployed, had to work hard for the money I earned, payed out of my own pocket for private insurance, and have even purchased private insurance while being employed as the group plan was not a good choice. I have been poor enough in the past to be eligible for food stamps but never applied for them. Why? Because I believed it was possible to eventually get out of the circumstances I was in. Guess what? I did. The government didn’t help me either. No one else helped me. It was the grace of God and my own work ethic.

Robin replies: You have never been in the situation of the chronically ill, who are uninsured. You have never, obviously, had to choose between food and medication to sustain your life.

Being healthy enough to work, and being able to afford private insurance is vastly different from the situation of many people with life-threatening chronic illnesses who have lost their jobs and health insurance. Their medical conditions then deteriorate while they search frantically for insurance and healthcare, become increasingly unable to work, and often die.

And many of the healthy workers who are unemployed right now can’t find jobs of any kind. They have family members with chronic illnesses whose medical care is extraordinarily expensive..

Seriously, am I the only person on this thread who has contact with the unemployed and the chronically ill?

Posted 1 day ago

Dr. Coli said, “Robin, you stated that “Capitalism works very well in some areas of the economy, but healthcare is not one of them.”

Unfortunately, there is no evidence that over the last three decades the U.S. healthcare industry has even remotely resembled a true free enterprise, competitive marketplace. Ideally, the prerequisites of such a market are free entry and exit of sellers, price and quality transparency for consumers, no seller or buyer large enough to dictate price and rational incentives for buyers to seek and sellers to compete by providing services and products of maximum value.”

Robin replies: Dr. Coli what you’ve presented is an anti-trust analysis I am familiar with them from years of reading antitrust healthcare lawsuits.

But healthcare has never been a competitive situation the way a cell phone sales market might be.

For example, the United States had unfettered competitive healthcare prior to 1930 there were many individual doctors and hosptials, all of whom competed quite vigorously with each other.

There was little in the way of healthcare monopolies. Most physicians were solo practitioners. It was a perfect model from an antitrust standpoint.

There were a few charity hospitals and some state mental institutions, but basically if you had no money, you got no medical care.

Under that system, the rich got excellent care; the middle class got whatever they could afford; and the poor often died.

From a humanitarian standpoint, I would have to say that unfettered competition didn’t work.

Posted 1 day ago

Robin, you still provide no solution and answer to the problem you present. You also do me a disservice in suggesting that I lied and stating that I have never had to choose between food and insurance, been chronically ill, always been healthy enough to work, etc.

I have had to choose between food and insurance and I chose food. Insurance and having everything given to me is not my “god” and I will not be suckered into some argument suggesting that I am inhumane because I disagree.

I do disagree with you and don’t believe it is possible to “give” everyone everything they want or even everything they need. If you believe that, good for you. But don’t suggest you can take my money, change my government, or force your opinion upon all by saying we are being inhumane because we disagree.

The facts are – healthcare costs money.  Just like food, clothes, housing, utilities, and a myriad of other things. Every person will not be equal by sheer outcome of circumstances. If you believe that government exists to equalize everything for everyone, I again disagree with you and would suggest that these types of ideas belong in another country.

In your next comments, speak of solutions to the problems you present without making government steal from those who have to give to those who don’t. Answer such tough questions as how to sustain the viability of such a government funded program unending without causing your monetary system to totally collapse and/or because “third world.” Draw a comparison between how this system will differ from Canada and Europe and tell us why we should believe that anything would be different from their horrendous health industries. Please, enlighten us all!

Posted 1 day ago

Robin,

Being a pro-life, capitalism, big business / small government angry conservative I normally wouldn’t agree with your point of view. However, you stated the issue from another point of view very well, without bias and with intelligence. In the end it really is all about perspective and the truth is that none of us should be without healthcare. The problem as I see it in our current political climate is that the true agenda doesn’t seem to be about peoples health, but power over the people. Whether what I stated is true or not remains to be seen and I hope I’m wrong, but one thing I know for certain is that I cannot name many, if any government programs being run with better efficiency than private sector ran programs. Do we really believe government will do better this time? Is that a risk we really want to take? Do you honestly trust politicians to make decisions regarding your health treatment? Truly we have a problem, but I don’t believe the government will fix the problem, but multiply the already overwhelming issues you have stated very well.

Posted 1 day ago

It is wonderful that these companies had such good earnings for their shareholders….but at what cost? Corporations have no allegiance or obligations to the health of their subscribers nor to anything else, other than the healthy return to their shareholders. That is their primary obligation…this is a rare occasion when Corporate obligation collide directly with growing moral and social obligations. These new obligations have only arisen in the past 25 years. I do believe the solutions lie in the private sector. Business models may need to be re-organized to meet the moral demands; all the while meeting their primary obligations to the shareholders with healthy margins, profits and growth. “Big Gov” needs to do nothing other than enhance the market; to allow the new models to succeed and flourish or at least get out of the way. After all, look at what happened to Amtrak, The Post Office, and now GM. None of these companies ever changed their business model, and are nothing more than “wards of the state”

I do not want my insurance company or healthcare providers to be “wards of the state”. I want the state to left the barriers so these companies can restructure in a way to increase competition, technology, services while controlling cost. This is a very complicated and deep rooted issue we face and each one of your responses and debate points holds part of the answer. The real trick is putting it all together without the “draconian” approach.

Posted 1 day ago

While I might agree with some of your points Kevin, I don’t know how you make a corporation adapt to morality without enforcing some kind of laws to restrain it which would mean not “lifting barriers” by the government but actually either creating more barriers or different barriers. Morality is followed by people, not corporations. In order to make a corporation tow the line you must enforce rules, regulations, and laws. How would we restrict their profitability without taking away their ability? What would make people want to invest in a company that can’t profit?

It seems that whenever companies have “obscene profits” like health insurance companies, oil companies, financial industry, etc., it’s always somehow wrong, evil, immoral, etc. I really don’t understand why that is? Yeah, I get that some media outlets and liberal socialist – progressives push this idea, but more and more I see people discussing and talking about these issues as if profiting in business is somehow wrong.

Am I reading too much between the lines on the issue? I don’t mean too, but it doesn’t make sense.

Posted 1 day ago

No rational American can deny the absolute necessity of making affordable, high quality healthcare services and products available to every U.S. citizen.

The core issue is whether this goal is more likely to be achieved with consumer-centered, value-driven reforms or by additional government interventions and controls. Sixty-two years since the creation of private health insurance by Harry Truman and Congress, and even with government now responsible for over 50 percent of the $2.5 trillion in annual spending, a truly competitive healthcare market does not yet exist. It seems totally unrealistic to me to think further expansion of coercive government monopsony power will magically create one.

I believe that simply tinkering with and reconciling last year’s “more government control bills” in the House and Senate will only guarantee that the tyranny of the status quo is perpetuated.

Historical evidence in many other markets for services and products suggests that the only realistic way to simultaneously reduce private and public healthcare costs while increasing both quality and access, is for federal and state governments to collaborate in establishing all four prerequisites of a competitive marketplace and then, acting only as a referee, ensure that they are permanently sustained.

Posted 19 hours ago

Here are some additional comments from a different thread – same discussion topic:

“Health Care for America Now” (HCAN) is a left-wing group that supports national health insurance, so its report cannot be construed as a balanced one. Last summer it was noted that the profit margin in the health insurance industry ranks 86th among industries (see this link for the list: http://mjperry.blogspot.com/2009/08/health-insurance-industry-ranks-86-by.html ). The industry’s average profit margin is reported to be 3.3%.

To reinforce this point, the health insurers’ lobbying group, America’s Health Insurance Plans (AHIP), made the following statement:

“For every dollar spent on healthcare in America, less than one penny goes towards health plan profits,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans (AHIP). He argued that in 2009, it was spending on hospitals, physicians, and prescription drugs that “continued to soar.”

Indeed, a recent report by the Centers for Medicare and Medicaid Service (CMS) found that health spending grew 5.7%, reaching $2.5 trillion in 2009, even though the overall economy declined by 1%. The report pointed to increased spending on hospitals, doctors, and medications as major drivers in the rising cost of healthcare.

The above article may be found at this link: http://www.medpagetoday.com/Washington-Watch/Washington-Watch/18451

The Obama administration likes to designate “villains” when it suits its purposes to do so; health insurers are just one easy target (others include banks and oil companies). The HCAN report was picked up by a generally supportive media, with few outlets going beyond the report to provide a complete, accurate examination of health insurers’ profits. It’s easier, but misleading, to join in the demonization.

Depending on your point of view, you could easily flip this reasoning and come up with the following statement, also based on opinion and fact:

The insurance companies are right-wing organizations that support maximum profits for their shareholders, so their comments cannot be construed as balanced ones…..

The Republicans like to designate “villains” when its suits their purposes to do so; the Canadian health care system is just one easy target (others include the French and anyone working to get health care for more Americans).

Fill in the paras between with figures of your choice about personal bankruptcies due to serious health issues, higher administrative costs in the U.S., or the fact that millions of your fellow citizens don’t have health insurance, which was one of the original points of the report.

As a Canadian following this debate, I have seen all sorts of figures used and misused to support different positions and ideologies here and in the U.S.

I don’t have a stake in the U.S. system, but obviously a strong bias!

On a personal level, when comparing costs with friends in the U.S. in various states, I can say that we pay less in overall taxes than they do in taxes and outrageous monthly health insurance payments through employer-sponsored programs, plus the deductibles.

Those are the numbers that speak to me and I’m glad I’m on this side of the border.

Related to this discussion, there’s an interesting editorial in today’s Wall Street Journal. Some of it is pasted below, but it was too long to include all of it, so here’s the link:

http://online.wsj.com/article/SB10001424052748704804204575069833643345608.html?mod=WSJ_Opinion_AboveLEFTTop

FEBRUARY 18, 2010 The WellPoint Mugging

The brawl over rate increases is a preview of ObamaCare.

Democrats and their media allies have found a new insurance piñata: WellPoint and its recent health-premium price increases in California. This spat deserves more attention, because its real lesson is what will happen to health insurance costs around the country if ObamaCare passes.

WellPoint’s California unit, Anthem Blue Cross, recently informed nearly 700,000 individual insurance customers of premium increases of up to 39%. President Obama jumped on the announcement, claiming in a pre-Superbowl TV interview that the hikes were a “portrait of the future if we don’t do something now.”

Health and Human Services Secretary Kathleen Sebelius quickly piled on by ordering a federal inquiry, claiming a company that made “$2.7 billion in the last quarter of 2009″ could not “justify massive increases.” Senate Majority Leader Harry Reid ripped WellPoint and other “greedy insurance companies that care more about profits than people.” And right on cue, House baron Henry Waxman scheduled a hearing, where he will not blow kisses.

He ought to subpoena California’s political class because Wellpoint’s rate hikes are the direct result of the Golden State’s insurance regulationsthe kind that Democrats want to impose on all 50 states. Under federal Cobra rules, the unemployed are allowed to keep their job-related health benefits for 18 to 36 months. California then goes further and bars Anthem from dropping these customers even after they have exhausted Cobra. California also caps what Anthem can charge these post-Cobra customers.

Most other states direct these customers to high-risk pools that are partly subsidized, but California requires the individual market to absorb the customers and their costs. Even as California insurers have had to keep insuring these typically older and sicker patients, the recession has driven many younger, healthier policy holders to drop their insuranceleaving fewer customers to fund a more expensive insurance pool.

This explains why Anthem lost $58 million in California on its post-Cobra customers in 2009. If WellPoint didn’t raise premiums amid these losses, it would soon be under assault from its shareholders, if not out of business.

This episode is a preview of the adverse selection that would happen nationwide if ObamaCare passes. The Democratic bills would control what insurers could charge and force them to take all comers, regardless of health status. These burdens were supposed to be made tolerable by requiring all Americans to buy insurance or face a penalty. Yet when this “individual mandate” proved to be unpopular, Congress watered it down so that younger customers would be able to pay the penalty knowing they can wait until they’re sick to pay the more expensive premiums. The only way an insurer can make up for these higher costs is to raise premiums……….

Posted 1 day ago

Anita’s comment hits the nail on the head! There’s really no tactical advantage to labeling positions left-wing, conservative, etc. The data from several government sources shows that the US expenditures for health care are more than twice that of other industrial nations–all of which have universal care for their residents. And by many measures and studies of international systems, the outcomes of Americans’ health is far poorer than EVERY other industrialized nation. In the latest WHO study the US ranked 37th in health outcomes, just two notches above Cuba and below many nations we think of as “third-world”.

The causes and consequences of these FACTS are another discussion. What is NOT being addressed in all the health care reform debate is STRUCTURAL reasons our health care is so expensive and so poor. Americans are four percent of the world’s population, and we consume over 50 percent of the world’s pharmaceutical drugs. (A fact, not my opinion) Our MDs are educated ONLY on the use of drugs (pharmas build our medical schools, and have “consulting fees” and perks for quotas of scripts). Other than the US only New Zealand has direct-to-consumer advertising, and 12 years of DTC advertising in the US has boosted sales and revenues and, most certainly, the costs of drugs.

Now at national health conferences when I’ve broached PATIENT EDUCATION to enable the consumer/patient to take responsibility for their own health, leaders of national organizations (except the Commonwealth Fund) have looked at me like I’d grown a second head. This involves teaching the population to use homeopathy (safe, effective, fast relief from most routine illnesses and injuries–never been a recall in 200 years and w/o side-effects), nutrition, use of herbs, and non-invasive physical treatments.

As an ad for a vaginal yeast infection said years ago, “If you THINK you have ____, see a (health practitioner). If you KNOW you have a ____, try blah-blah-blah.” The same rule and common sense can be applied to most health issues–if you have an educated populace, and, maybe, revised and expanded MD education. Visits to MDs and the use of pharmaceuticals should be the LAST RESORT.

Of course, this empowerment of the consumer/patient diverts power (and, most importantly, revenues) from the world of the AMA, pharmaceutical companies, and health insurers. So, in the end, are we more interested in the public’s health or corporate profits? Interestingly, individuals can make this choice for themselves and bypass the corporation’s interests.

I do think that it’s critical to understand the perspective of any individual or group that’s citing numbers as “facts” in these health care discussions.

We all know that Americans are deeply divided as to the appropriate solutions to our health care problems; it makes for a better-informed discussion, then, to dig a little deeper when anyone is citing figures to make a particular point, as “Health Care for America Now” was doing in its report. (Reminds me of that famous quotation about “lies, damned lies, and statistics.”)

Post by Dan Dunlop, The Healthcare Marketer

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