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President Obama Message to Insurers – Time to Dump Risk Management Algorithms That Are No Longer Legal

Posted Jun 23 2010 8:14am

This is basically it in a nutshell, some of those mathematical formulas are no more.  When you listen to the President speak, this is the entire issue of the entire image health insurance business and what has made the American public unhappy over the last number of years.  Everyone understands business but when you look at the massive profits made where dividends took precedence over better care, nobody is happy.  The methodologies used for years are now coming to the surface with transparency and the White House is taking numbers.  

Sure it’s an ugly picture as to what has been allowed to continue as a business model for health insurance for years and nobody was minding the shop.  I have said this many times but the prior administration has not come to terms with how transactional charges that carve out profits for services rendered are eating up money that should be available for actual care. 

“Department of Algorithms – Do We Need One of These to Regulate Upcoming Laws?

You can talk about it in many different fashions, but the bottom line is that algorithms were used for profit that crossed the line when it came to providing good care for many.  I wonder how the health insurance business will fully adjust with the new laws in place and no doubt, they will be looking for new “algorithms” and ways to slice the pie.  I think one thing that absolutely keeps this issue in the forefront is the “first hand” experience the President had with his own mother and he saw the nightmare first hand and knows it exists, so no matter how many fancy wrappers the packages contains, the same thing is inside.  As I always say, there’s a lot to be said for hands on experience, as it helps one stay in touch with the real world. 

Recently in California the news was big about increases with premiums and Blue Cross made a trip to Washington. 

Back in December of 2008 health insurers recommended more business intelligence and algorithms and look where we are today, perhaps the type of algorithms used were for profit only as we have all seen their numbers.  We certainly need business intelligence to help us work smarter and more intelligently but again with transparency today, the reality of what business models were used is out in the open and frankly people don’t like it as it was not a “human” way of doing business.

The algorithms of healthcare as they continue to develop, fragmented and with the overall focus on risk management business models are not the answer to our current dilemma and as we continue to fuel the fire, as we have seen in the last few years it continues to elevate.  Perhaps if we could come together on algorithms with the same goal someday, we might just see some progress.

Little Progress on Fighting Healthcare Fraud – Look At Who’s Getting the Anti-Fraud Contracts

In summary it’s a risky game here as some of the very same people that used algorithms for profit are now vying for contracts to help fight fraud, and the big question now is can they be trusted any more today with new business models or are we going to see the same old mathematical manipulations to find holes to cut for additional high profit yields?  The President’s message today basically is a warning to cut to the chaise and become partners and operate with ethics.  BD 

WASHINGTON -- President Barack Obama and Health and Human Services (HHS) Secretary Kathleen Sebelius warned insurance companies not to impose outsize premium increases while healthcare reform is being implemented.

In a call with reporters, Sebelius said she is urging state insurance commissioners to investigate suspicious premium increases and said the federal government is also monitoring such increases.

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