Category: Health plans

Farewell to Fatso?

published date
February 16th, 2007 by

Two recent Boston Globe headlines on Tufts Health Plan may be related

The layoff is to reduce administrative costs as Tufts tries hard to compete with Blue Cross, Harvard Pilgrim and Fallon. The restriction on obesity surgery is a cost reduction exercise, too. The Globe article and other commentators have focused on the effect on individual patients…

Doctors condemned the new policy, which takes effect March 6, saying Tufts is ignoring a growing body of clinical evidence that shows that such operations help those who have exhausted other methods to lose weight. Delaying surgery worsens conditions such as diabetes and heart disease that are often complications of pronounced weight gain, they said.

“This is Draconian,” said Dr. Philip Schauer , president of the American Society for Bariatric Surgery and director of bariatric surgery at the Cleveland Clinic. “This flies in the face of the medical evidence. These policies sentence a patient to a life of dealing with obesity without the possibility of parole.”

…but it seems plausible to me that Tufts is looking for ways to dump obese patients out of its plans and onto its competitors. Beyond the considerable money saved from not covering bariatric surgery, Tufts may benefit from a healthier, lower cost patient mix. Not only will obese people quit Tufts, but some non-obese people may actually select Tufts for taking a hard line against members they think may be driving up their own insurance costs.

Then again, it’s certainly possible that Tufts is doing what it says it is: making a decision that saves costs and improves patients’ health.

Question: What do gay marriage, abortion rights and health care reform have in common?

published date
February 7th, 2007 by

Answer: They are all topics where former Massachusetts Governor Mitt Romney has changed his tune in his run for the Presidency. As Health Care for All’s John McDonough blogs:

Had to happen, only a question of when and how much…[F]ormer Gov. and Republican Pres. candidate Mitt Romney is distancing himself from the April 2006 health reform law he signed and has bragged about all over the nation.

Last year’s development of the Massachusetts health care reform law was a real bipartisan effort. Governor Romney pulled a bit of a slimy move at the time by vetoing the provision that required larger employers to pay $295 per employee per year if they didn’t offer health insurance. He was sanctimonious about it at the time, knowing full well that the Democrat-dominated legislature would override the veto and improve the viability of the plan. Democrats took that move in stride, understanding why Romney wanted to position himself that way.

Romney also touted the prospect of $200 per month health care coverage for individuals, citing prototype plans he’d asked the state’s health insurers to create. When the actual bids came in around $380 per month, now ex-Governor Romney was quick to cast aspersions on the Democrats for screwing things up.

Blue Cross Blue Shield of MA, perhaps fearing it will be the next one on the receiving end of Romney’s bad-mouthing, said this week in the Boston Globe that the $200 per month plan was for real, though of course based on different assumptions than the $380 plan. BCBS MA’s CFO Allen Maltz was quoted extensively in the article. (I’ve met Mr. Maltz, and he is not the type to throw around numbers loosely!)

The state’s largest health insurer, Blue Cross Blue Shield, said that with more flexibility from the state, it could offer slimmer coverage for an average of $210 a month — near the price originally suggested by former governor Mitt Romney.

“If it’s buy or die, they could buy at $210 or $220,” said Allen Maltz, chief financial officer for Blue Cross. “It would be a comprehensive plan, covering hospital, office visits, prescription drugs. It wouldn’t eliminate categories of coverage.”

That plan, however, would not satisfy requirements proposed by the state board overseeing the law’s implementation because of the plan’s high deductible and out-of-pocket limits

Romney has positioned himself to take credit for the law if it works well, and to blame Democrats if it doesn’t.

Will the people buy it? As McDonough writes:

Romney is now irrelevant to the real work of implementing health reform. Thank goodness. And his comments should be understood as the dance presidential candidates need to perform to survive the primary process. But if he think he can completely separate himself from the reform structure he signed, he’s mistaken.

If Romney wins the Republican nomination I predict he’ll have something in common with Al Gore: a loss in his “home” state.

The answer is no

published date
January 25th, 2007 by

In October I asked Is there a $200/month health insurance solution? At the time, then Governor Mitt Romney asserted that such a premium level was attainable for individuals under the newly mandated health insurance requirements.

Last week the actual bids came back: $200 per month became $380. The problem is that the law requires affordable, comprehensive coverage. Unfortunately, reasonably comprehensive coverage –as specified by the Connector– costs more than $200 per month in Massachusetts.

Something has to give. It’s impossible to have affordable, comprehensive, universal coverage in Massachusetts without large subsidies.  The health care reform  bill does almost nothing to restructure the health care industry in the state.

Once the public. the Governor, the legislature and the Connector face up to the fact that something has to give, maybe the focus will turn to reform of the health care delivery system, not just the insurance market.

Taking a whack at tobacco use

published date
January 22nd, 2007 by

Inside the latest BCBS of MA newsletter for employers (which has the catchy title IAI, for “Important Administrative Information”) are several significant announcements, including information about the new state health insurance mandate, formulary changes, and a progress report on BCBS’s crackdown on rogue bariatric surgery programs. But the most interesting announcement was entitled, “Tobacco Premium Contribution Offerings.”

BCBS is offering employers the opportunity to make smokers pay a higher contribution toward their premium. The rationale for the new program is phrased in a passive manner, as though no one at BCBS wants to be blamed for coming up with the idea:

It has come to our attention that you have an interest in offering premium contribution differentials to tobacco users at your worksite.

Regardless, BCBS offers to help design and implement the program in a way that “in most cases” is “cost neutral” to employers. A key question for employers will be how to verify that its employees (and presumably their family members) don’t use tobacco. BCBS implies that they have many verification options, although the only one mentioned is having employees sign an affidavit. Presumably the other options are more invasive, such as urine or blood tests.

Smokers who are actively trying to quit are placed in the same category as non-smokers. They have to demonstrate their participation in a smoking cessation program (another affidavit is suggested here.)

It will be interesting to see where this leads. I remember a few years ago, when efforts to ban smoking got underway, opponents of the bans used a variety of scare tactics –suggesting for example that hamburgers would be banned next—to generate opposition. At the time I thought they were overdoing it. After all, smoking has direct negative effects on people nearby because of secondhand smoke. Eating and other activities are different.

Over time I’ve seen that the opponents were on to something. The movement to ban trans fats is a good example, and I have to say I’m not as opposed to such bans as I used to be.

I expect we’ll see similar expansion in the workplace related to health coverage. (It’s already being tried elsewhere to some extent.) Any matter seen as personal choice –diet, exercise, drinking– will be fair game. If those parameters gain traction, there could be expansion into other areas. For example, diabetics could be required to check their glucose levels a certain number of times a day or face higher contributions.

It’s not as far-fetched as it sounds, especially as employers and health plans make personal health records available and apply pay for performance logic to patients as well as providers. The verification could be done more directly than affidavits, too. For example, the employer could monitor the number of blood glucose tests uploaded to the PHR and keep track of the number of prescription refills while they’re at it.

BCBS of MA pitches the program as a way to help employees improve their health. But there’s another rationale, too. Employers that single out and punish workers who are at risk of poor health or who smoke may discourage such workers from applying in the first place. For instance they may hope to benefit by reductions in absenteeism. Walmart, for one, has clearly been thinking this way.

Universal health insurance wouldn’t help that much anyway

published date
January 19th, 2007 by

A page one Wall Street Journal article (Health-Insurance Gap Surges as Political Issue), charts the ascent of the uninsured as a political issue. With one in six Americans lacking health insurance, it’s a juicy topic. Despite all the rhetoric, it’s unlikely we’ll see much happen at the federal level. The voices of change are too fractured and it’s unclear that there’s room for consensus.

The picture is different at the state level: Massachusetts has enacted legislation requiring residents to have health insurance. California and others are following suit.

But just for a minute, assume we did achieve universal insurance coverage. There would still be plenty of problems; costs might be even higher. A common argument is that costs would go down as uninsured patients head to less costly primary care physicians rather than emergency rooms for routine treatment. That would be great if true, but there’s evidence that insured patients use the emergency room more than uninsured patients. That could be because the uninsured tend to avoid treatment unless they’re in dire straits. Once the same patient has insurance he or she may want to test it out.

Employers complain now that the prevalence of uninsured patients drives up their premiums, but it could get worse if greater availability of insurance leads to the need for larger and larger subsidies.

Insurance mandates make sense in Massachusetts. The proportion of uninsured is relatively low, and a good number of the uninsured are healthy, young adults who could afford to pay. The cost of living is high; we need knowledge-based businesses that offer high pay and high benefits. I’m less sanguine about efforts in states like CA where the gap to close is much bigger and lower paying industries like agriculture are a substantial portion of the economy.

I’d like to see insurance for routine care done away with. Instead, allow a more efficient market to develop where people pay directly and doctors don’t spend so much trying to collect payment from third parties. Walmart, Walgreen, CVS and others are starting down this path. Physician practices could begin to do the same. If we hope to have affordable care, this is a more promising path than spreading insurance around to everyone.