The most realistic path to ‘Medicare for All’ says a former Insurance CEO

I said back in 2010 to a healthcare consulting colleague, we will eventually need to consider national health insurance, but it won’t happen. When he asked why, I responded the “Healthcare industrial complex is too powerful.” People forget the reason we have the Affordable Care Act is CFOs were tired of rising healthcare costs to their bottom line.

Healthcare is a complex topic and the ACA added to that complexity. It has since gotten better, but we need to shore it up to stabilize it more, rather continue to allow it to be diminished as its opponents have down for several years.

But, national health care under the banner of “Medicare for All” is worthy of consideration with data and analysis. This retired actuary, benefits consultant and benefits manager supports data driven analysis to improve what we have and consider more substantive changes. JB Silvers, a former health insurance CEO and professor of health care finance at Case Western University, penned an article called “The most realistic path to ‘Medicare for All'” in The New York Times earlier this month. Here are excerpts from the article:

“Much to the dismay of single-payer advocates, our current health insurance system is likely to end with a whimper, not a bang. The average person simply prefers what we know versus the bureaucracy we fear.

But for entirely practical reasons, we might yet end up with a form of Medicare for All. Private health insurance is failing in slow motion, and all signs are that it will continue. It was for similar reasons that we got Medicare in 1965. Private insurance, under the crushing weight of chronic conditions and technologic breakthroughs (especially genetics), will increasingly be a losing proposition.

As a former health insurance company C.E.O., I know how insurance is supposed to work: It has to be reasonably priced, spread risks across a pool of policyholders and pay claims when needed. When companies can’t do those fundamental tasks and make a decent profit is when we will get single payer.

It’s already a tough business to be in. Right now the payment system for health care is just a mess. For every dollar of premium, administrative costs absorb up to 20 percent. That’s just too high, and it’s not the only reason for dissatisfaction.

Patients hate paying for cost-sharing in the form of deductibles and copays. Furthermore, narrow networks with a limited number of doctors and hospitals are good for insurers, because it gives them bargaining power, but patients are often left frustrated and hit with surprise bills.

As bad as these problems are, most people are afraid of losing coverage through their employers in favor of a government-run plan. Thus inertia wins — for now.

But there’s a reason Medicare for All is even a possibility: Most people like Medicare. It works reasonably well. And what could drive changes to our current arrangement is a disruption — like the collapse of private insurance.

There are two things insurers hate to do — take risks and pay claims. Before Affordable Care Act regulations, insurance companies cherry-picked for lower-risk customers and charged excessive rates for some enrollees…”

There is only one solution: pooling and financing many of the risks related to chronic and acute health care issues. A study by my former company noted generally 15% of participants drive 80% of the claims costs in any given year. It may not be the same 15%, but with major chronic issues, some could continue to be in the mix. The principle of insurance is to pool those risks, so that good risks can moderate the higher risks.

The ACA uses the private insurance system, exchanges and expanded Medicaid. Unfortunately, there are about 15 states who still have not expanded Medicaid. Medicare for All would consolidate the risk into one place, eliminating the profit load and reducing the relative administration cost of insurance companies. I have suggested for several years to do a pilot and expanded Medicare eligibility from age 65 to age 62, or even lower. This would let us measure the impact of such a change.

Yet, what we don’t need is this to become political. What people do not realize is the ACA has been sabotaged on several occasions by my former party which drove some insurers out of the market and increased premiums for everyone else more so than they otherwise would have been.

So, let’s cut to the chase and study options. And, politicians should let people who know what they are doing do the analysis. The ACA was made too complex and the exchange roll out was botched. On the flip side, what the GOP did in 2017 was sloppy and poorly staffed, so what was voted on woulf have been harmful to many.

Our children deserve better

Two time Pulitzer Prize winner Nicholas Kristof wrote an editorial earlier this week in The New York Times called “Our children deserve better.” It is a clarion call to our nation showing the plight of kids in America.

Here are a few quotes to frame the issue:

“UNICEF says America ranks No. 37 among countries in well-being of children, and Save the Children puts the United States at No. 36. European countries dominate the top places.

American infants at last count were 76 percent more likely to die in their first year than children in other advanced countries, according to an article last year in the journal Health Affairs. We would save the lives of 20,000 American children each year if we could just achieve the same child mortality rates as the rest of the rich world.”

“Half a million American kids also suffer lead poisoning each year, and the youth suicide rate is at its highest level on record….The Census Bureau reported this week that the number of uninsured children increased by 425,000 last year.”

These are different views and sources of the threats to US children that note we have a problem. Another source I read a couple of years ago noted America has a much higher maternal mortality rate at child birth than other civilized countries, which further endangers children as well as the mothers.

Yet, these issues are not being discussed in the halls of government. We have a poverty problem in our country with too many living in or just above poverty levels. We have not expanded Medicaid in fifteen states whose numbers are worse than these national numbers per capita. We have not addressed our national water crisis which has a Flint, MI like exposure to lead in too many cities and a volume of available fresh water issue in other places. We have not invested as we should to diminish crime and provide more opportunities for jobs in disenfranchised areas. There are several pockets of success that can be emulated in more cities.

We also need to address better gun governance, especially with the number one gun death cause by far being suicide and a non-inconsequential accidental gun death rate. And, we have not dealt with the continuing and rising exposure to technology and artificial intelligence which have taken and will take even more jobs in the future. Finally, there is that climate change thing we need to deal with.

These are real problems. And, they will get worse. Data driven analysis of causes and solutions are needed. They are both multi-faceted. Investing more now, will save huge amounts later. This is not just an urban issue, it is rural one as well. The opioid crisis is rampant in these impoverished rural areas, for example.

None of the solutions will fit on a bumper sticker. And, political attempts to oversimplify issues should be questioned. Here is an easy contradiction to spot – if people believe gun deaths are a mental health issue, then why the effort to eliminate or not expand mental health benefits?

Please make your legislators aware of these issues and ask pointed questions. These questions deserve answers, not bumper sticker slogans. These concerns deserve to be talked about, studied and acted upon.

We should pay attention when people sound alarms at their own peril

It fascinates me when an old post starts getting some attention. Right now, one called “Who is Paul O’Neill and why should his opinions matter?” is getting a few looks (a link is below). In essence, O’Neill was fired as Secretary of the Treasury for voicing an opinion the President did not like.

What did he say, you ask? He said he was concerned about the debt and felt the Bush Tax Cuts were unneeded. This is after Bill Clinton handed a surplus budget to the younger Bush. It should be noted the debt is now 5 times larger.

Recently, the well respected Director of National Intelligence Dan Coats resigned under pressure as he told the inconvenient truth about Russian influence and its continuation. Like O’Neill, this clarion call should be heeded. Like with General James Mattis’ resignation last December, Coats departure is giving GOP Senators pause, yet they refuse to act.

Back in late 2007, a Texas financial analyst noticed that people who could “fog a mirror,” were getting huge mortgage loans on properties that seemed to be over-inflated in value. He did his homework and was able to get a meeting with the CFO of Bear Stearns. He told the CFO he thought Bear Stearns was over-extended with risk and was going to to go under.The CFO thanked him and the guy uttered these parting words – well, I am going to bet against you. Within the year, Bear Stearns was bought for a very discounted price before it went under.

Colin Kaepernick is a good NFL quarterback, but he has been blackballed from the league after calling attention to the unequal rights and treatment of Blacks in America. His civil protest was hyper-politicized by a hyper-political president, so he was blackballed, a term which seems apt. Yet, we have a difference in how Blacks are treated. Even further, our society is more economically unequal than it has ever been, with haves owning much greater shares. A society cannot withstand such differentiation for too long. Kaepernick’s protest should be heeded not condemned. His protest is far more emblematic of American values than a flag or anthem ever could be.

Those who are giving clarion calls should be given due consideration. There are financial analysts who have cautioned against Brexit from the outset. Those concerns have fallen on too many deaf ears. Their corollary message is even more dire – do not leave the EU without a deal. That is beyond poor stewardship. It matters not what the current PM says. Yet, if it does happen, it is only fitting that Mr. Johnson is the one trying to deal with the fallout.

Before I close, let me go back to someone who is similar to the Texas man who tried to forewarn Bear Stearns. The movie “The Big Short” highlighted one person of several who saw the housing recession coming. When his concerns fell on deaf ears, he had them create a product to pay off if he was right.  The industry laughed at him until a couple of years later they realized he was right. His clients made a fortune. The movie ends by telling us what this man is now investing in – water. While it does not get much play here, we have a global water crisis which rivals climate change as a concern. He saw it coming.

https://musingsofanoldfart.wordpress.com/2013/03/20/who-is-paul-oneill-and-why-should-his-opinions-matter/

Blue Cross Blue Shield of North Carolina ACA premium rate cut request

Earlier this week, Blue Cross Blue Shield of North Carolina (BCBSNC) has announced a request of a premium rate cut for the second year in a row under the Affordable Care Act. They announced a request of a 5.2% rate reduction for their 435,000 members and one of 3.3% for small businesses in the state. It would have been three years in a row, but as I mentioned in earlier blogs, the Trump decision to renege on paying insurers for absorbing co-pays and deductibles for people making less than 2 1/2 x poverty limit caused premiums to increase for all.

This shows the ACA is stabilizing for insurance carriers who have been at it a few years. It would be nice to get more carriers back in for members to have choices. Many left when the Senate, led by the GOP defunded the risk corrider payments to the tune of 89% of the adverse selection cost. These carriers left the markets with the US government owing them money.

These two efforts to dampen the ACA have gone largely unreported. But, there is one more which is critical that impacts premiums and threatens the entire ACA. The tax bill passed by the GOP led Congress eliminating an unpopular feature of the ACA, which required individual coverage. It was called the individual mandate. By obligating people to have coverage, it lessened the risk on the insurers which will keep premiums lower than they would be otherwise.

Here is what BCBSNC said in their announcement as reported by The Charlotte Observer.

“The rate of decrease requested for 2019 would have been larger, the company told the Observer in 201, if the GOP tax reform legislation signed by President Donald Trump hadn’t repealed the ACA’s individual health insurance mandate.”

Further, several GOP led-states are suing the federal government to rule the ACA unconstitutional due to the elimination of the mandate. The tax laws are complex, but it is going to end up at the Supreme Court. It is thought by experts this case is weak, but the Trump Justice Department has decided to not defend the law which helps so many. Ironically, this is happening as it stabilizes even more, the GOP lost seats because of their ham-handed efforts to repeal it and when some Democrats want Medicare-for-all.

Credit risk appraiser Moody’s buys a firm that assesses climate change risk

Even for those not very familiar with Moody’s, this headline speaks volumes about the impact of the risk of climate change on our country and planet. In a July 24, 2019 article in The New York Times by Christopher Flavelle called “Moody’s Buys Climate Data Firm, Signaling New Scrutiny of Climate Risks,” the company that measures credit risks for bond investors in companies, cities, counties, states and countries, has added to its expertise. Per Flavelle’s article

“Moody’s Corporation has purchased a controlling stake in a firm that measures the physical risks of climate change, the latest indication that global warming can threaten the creditworthiness of governments and companies around the world.

The rating agency bought a majority share in Four Twenty Seven, a California-based company that measures a range of hazards, including extreme rainfall, hurricanes, heat stress and sea level rise, and tracks their impact on 2,000 companies and 196 countries. In the US, the data covers 761 cities and more than 3,000 counties.

‘We are taking these risks very seriously,’ said Myriam Durand, global head of assessments at Moody’s Investor Service, who said the purchase would allow its credit analysts to be more precise in their review of climate-related risks. ‘You can’t mitigate what you don’t understand.’

Sudden shocks such as floods, wildfires, or storms can hurt businesses and send residents fleeing, taking away the tax revenue that government s use to pay debts. And, longer term threats – such as rising seas or higher temperatures – can make those places less desirable to live in, hurting property values and, in turn, the amount raised by taxes.”

To illustrate this risk, the same day I read a reprint of this article in The Charlotte Observer, the local paper ran a story on the town of Fair Bluff, NC which has been flooded twice in that past four years due to Hurricanes Matthew and Florence which lingered over their area. Sitting near the Lumber River, the citizens of Fair Bluff saw the river rise well beyond flood range. The previous flood of this magnitude occurred 90 years before. Sadly, the population and business is declining due to rebuilding costs. As a result, so is the tax revenue to provide services.

There is a huge financial impact of climate change on the lives and business of people and communities. Rebuilding a town that may continue to be in harms way adds to the risk and some people are choosing to relocate. And, It is not just small towns. Houston has had two major floods over the past five years, as well. Houston has felt on a larger scale what Fair Bluff has felt. Not only do the rains of the Hurricane sit over them, the rivers upstate overfill and flow toward the sea. This causes extra flooding.

So, Moody’s is improving their ability to assess repayment risk to bondholders. A city that has rebuilt or prepared poorly is at greater risk of flight of people, businesses and tax dollars. What should also be alarming to American citizens is while Moody’s is taking forward thinking action, the US government is stripping climate change reports from their websites and demoting, transferring or running off Ph.Ds who are expert in measuring and addressing climate change. In short, we are throwing away a technical advantage that could help the US and the world.

Repeating what Ms. Durand said above, “You can’t mitigate what you don’t understand.”  So, please ask all politicians what they plan to do about climate change including the US president. And, a question for those who still buy the hoax stuff, why is Moody’s spending all of that money on a hoax?

 

Medical errors are a problem – here are some thoughts on how to reduce them

Earlier this week, a US health news piece entitled “In a review of 337,000 patient cases, this was the no 1 most common preventative medical error” by Meera Jagannathan was made available on msn.com. This article echoes the findings of two pieces I have referenced previously, the first, a book called “Internal Bleeding: the truth behind American medicine’s terrible epidemic of medical mistakes,” written in 2004 by two internists Dr. Robert Wachter and Dr. Kaveh Shojania. The second was the Leapfrog Study which looked at deaths caused by medical errors toward the turn of the century. A link to the recent article is below.

The article reveals the results of four medical studies that analyzed medical death rates from 2000 – 2008. Of the just over 251,000 medical deaths, 9.5% of the deaths could be attributed to medical error. In other words, 1 out of 10 deaths could have been avoided as they resulted from a medical error.

The article focuses on nine things that should be done to reduce medical mistakes. I will just list them, but please click on the article link below.

  1. Make sure you fully understand the procedure and why it is necessary.
  2. Brief the doctors on your allergies, health conditions and medicines.
  3. Don’t assume every provider has access to your records.
  4. Bring a friend or family member if the patient is not good with asking questions about what is happening.
  5. Keep close track of your medicines and results.
  6. Make sure the doctors and nurses wash their hands.
  7. Research wisely.
  8. Don’t be afraid to speak.
  9.  Ask providers what they are doing to prevent  mistakes.

The Leapfrog study noted three things to reduce deaths due to medical errors.

  1. Have complex surgeries performed in centers of excellence where they have done multiple hundreds or thousands of the procedure.
  2. While dated, poor handwriting of prescriptions or instructions caused mistakes. Most hospitals now have electronic orders, but be sure you understand what is being asked or prescribed.
  3. Make sure there are doctors on site and not just residents in intensive care units.

I wrote earlier about the book “Internal Bleeding,” so I provided a link below. Reviewing that summary and comparing to the above, here are a few more thoughts from that post as well as a few others thrown in.

  • write a summary of your and your family medical history
  • write down what your symptoms are – people see the white coat and forget.
  • if you are not sick or injured, the hospital is the last place you should be; some hospitals incent ER doctors to admit patients; ask questions about this.
  • know your environment; if you have bladder or some other cancer it may be environmental not familial. Bladder cancer is a bellweather environmental caused cancer.
  • ask for other pain medications beside opioids; they should be only used for severe pain and for short durations.
  • introduce yourself to all providers; make sure they know who you are.
  • Complete the prescription regimen and don’t stop when you are feeling better.

Medical professionals do not want medical errors either. So, help them help you. And, if you have trouble advocating for yourself, take a trusted person with you.

https://www.msn.com/en-us/health/health-news/in-a-review-of-337000-patient-cases-this-was-the-no-1-most-common-preventable-medical-error/ar-AAEGPVF?ocid=spartandhp

https://musingsofanoldfart.wordpress.com/2012/07/28/internal-bleeding-be-your-own-health-care-advocate/

Please stabilize the Affordable Care Act NOW to help Americans

A February, 2017 Morning Consult Poll noted that 35% did not know the Affordable Care Act (ACA) and Obamacare are the same thing. I want you to think of this poll when you see how Americans feel about the ACA. Today, just under half of American approve of the ACA, but that is in part due to the above and the fact more progressive Democrats want a Medicare-for-All replacement.

I wrote the following post a few months back as I am of the opinion Democrats and Republicans need to stabilize the ACA now and explore a few changes on a measured basis. As I wrote this, I call politics on the carpet for causing some of this mess, but everyone needs to check their egos and zero-sum games and fix the problems which are fixable. They also need to drop the BS lawsuits that are asking to rule the ACA unconstitutional again, when the group making the request changed a feature to further this mission. That is like ripping an engine off the plane and blaming the engineer while it is flying.

So for what it is worth, here are my suggestions. I am an Independent voter and retired, but my career included being an actuary, benefits consultant and benefits manager for a Fortune 500 company. I have shared with Senators and Congressional representatives a few thoughts on stabilizing the ACA, something Democrats campaigned on last fall and won in the midterms after the disastrous attempts of the Republicans to clean the slate that fortunately failed.

Medicare-for-All deserves debate, but will require a more elongated and data-driven discussion. We need to have Congress take steps to stabilize the ACA now. To do otherwise, is a disservice to Americans.

Here are my thoughts.
– the GOP sabotaged the ACA in two specific steps which increased premiums even more. They defunded 89% of the risk corridors (for initial adverse selection) driving some insurers out of the market. The other is Trump reneged on reimbursing insurers for copays/ deductibles for people making less than 2 1/2 times the poverty level. My suggestion is to pay insurers what we promised in writing and invite those who left back into the exchanges.*

– I suggest the lowering of the eligibility age for Medicare to age 62 (the age when retirees can first draw Social Security). This could be viewed as a pilot for Medicare-for- All. This action would lower the Medicare premium rate for all and lower the ACA exchange premiums due to the age of those leaving the ACA and joining Medicare. In other words, both the average age of Medicare and the exchanges would be lower, so the actuarial cost per person is less in both.

– Actively encourage the expansion of Medicaid in the remaining states – this will help the economies, healthcare providers and people in those markets. There are now 36 states who have done so. GOP Ohio Governor John Kasich calls Medicaid expansion a “no brainer.” North Carolina is debating this issue, but it needs to move forward with the number of rural hospitals that have closed thus far in the state.

– Finally, where only one option exists in a rural county, offer a Medicare option, again as a pilot. People should have choices.

There are other changes that would help, but this needs a data-driven analysis and not whatever the GOP did in 2017, which was a horrible approach to legislation that resulted in horrible legislation. Had any of the GOP legislation passed to kill the ACA, the GOP would have lost even more seats and we would be talking about a recession coming our way.
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* Please feel free to Google these topics: “Marco Rubio and risk corridors” and Donald “Trump and ACA subsidy decision”. The former caused insurance premiums to increase more than they otherwise would have and some insurance companies left the exchanges with the US government owing them money. The risk corridors were designed to tie insurers over until the initial adverse selection flushed out of the system.

The latter was frustrating because the subsidy helped people in need. Trump untruthfully claimed it will only affect insurer profits, but the carriers committed to the customers to do this under contract. The CBO said this action raised the deficit by $10 billion, since premium subsidies went up to pay for the increased premiums. In my home state of NC, BCBS said before the Trump decision premiums were NOT going to increase. After the decision, the premiums increased 8%.

Saying this in a more succinct way, the GOP screwed American people to win a political argument. Sadly, that is the truth, but very few people know of this. This also is an exemplar of the President’s lying affecting hard-working people. Lying is one thing, but setting policy off lying is another matter altogether.

Note, the ACA is imperfect and complex. Obama was not truthful when he said you could keep your doctor – no new network should make that universal claim. But, it still has not been fully implemented in all the states with those who did not expand Medicaid. But, people need to be fully aware of the sabotaging of the ACA undertaken by the GOP, which I find interesting, as the ACA is largely based on a GOP idea. That is politics for you – you did it, so I must be against it.