Giant sucking sound in healthcare as HMO profit SKYROCKETS!

[BaliBabyDoc]

AMA News (extensive excerpts but I recommend you check the link)

This is an old story to Dr. Holmes, but the profit levels of most large insurers are surging with an exuberance that's catching the attention of Wall Street anew. Six of the seven largest health plans saw their profits increase in 2004 -- California-based Health Net was the only one to see a decline. Aetna and CIGNA saw their profits more than double. Aetna's were up 136% and CIGNA's were up 128%.

Hmm, must be those damn trial lawyers.

HMO premiums increased by about 10% to 12% last year on average, about two to three times the rate of inflation, Mercurio said. At the same time, medical cost increases fell from 7.8% to 6.4% last year, said Isabelle Roman-Barrio, a senior financial analyst at New Jersey-based A.M. Best Co.

"There's a lot of talk of medical care and technology and pharmaceuticals rising in cost, so that managed care companies feel justified in raising their rates," Dr. Holmes said. "But rates are far exceeding the [pace at which] the costs are going up."

We need tort reform!!

Celerant's survey of 30 managed care executives found six out of 10 expect growth in revenues in 2005. This is the second-highest level of optimism for any industry polled by Celerant, trailing only the telecommunications field.

Be aware that "growth in revenue" means mad $$ out of taxpayer and business pockets.

Wendell Potter, a spokesman for Philadelphia-based CIGNA, said his company more than doubled its earnings through a standard turnaround strategy that included raising many members' premiums and identifying and dropping the lines of business that are least profitable -- a move that has trimmed its member rolls by roughly 10% since the end of 2003.

Basically they cut you lose if you get sick and then they raise the rates on the healthy people leftover.

Potter rejected the idea that the profit levels attained by plans should be viewed by physicians as money extracted from the health care system, or from physicians' incomes.

He gave disease management programs as an example of initiatives that companies such as CIGNA are building up and which require funding. These will assist both patients and physicians by increasing the quality and efficiency of care in the long run, he said.

This is a pretty standard bait-and-switch. There's plenty of evidence that disease mitigation efforts can improve care and reduce costs. But it takes YEARS to see such benefits. This article is talking about profit growth occuring over ONE YEAR.

I'm not saying it's always a zero sum game . . . someone pays and someone else benefits. But Potter and his ilk are leeches in the system that are two to three orders of magnitude worse than an army of trial lawyers.

"They expect the doctors to do more, which is OK," Dr. Wasylik said. "Doctors want to do more. But we don't have the staff to do that if we can't hire employees. [Insurers] absolutely won't acknowledge the fact that we need adequate reimbursements. They're making double the profits. Can't they give doctors just a little of that? The public sees managed care as making a lot of money and they think it's going to the physician, and it's not."

I gave the last word to the MD b/c . . . well . . . those my peeps. IMHO, doctors and certainly the AMA has failed to serve the population very well over the past few decades. But having said that . . . at least we actually provide care. Doctors are becoming the elite college basketball player. In general, we get token compensation while we produce virtually ALL of the product/service of value. Fans/consumers demand more while complaining we get too much. In the meantime, a select group of individuals collect mad bank b/c they "facilitate" the transaction.

 

[dmcowen674]

Topic Summary: MDs make less, patients paying more, government paying more . . . HMO and drug companies make bank

You forgot Rich Republicans Rejoicing

 

[Zedtom]

We are focusing on Social Security, while the real crisis is with Medicare and Medicaid. The bottom line is: many people cannot afford health care. When they become ill, they are dependent upon the government to help them.

 

[BaliBabyDoc]

Originally posted by: Zedtom
We are focusing on Social Security, while the real crisis is with Medicare and Medicaid. The bottom line is: many people cannot afford health care. When they become ill, they are dependent upon the government to help them.

Actually the real crisis is sick, old people . . . in combination with a system of healthcare that's obsessed with treating diseases/injuries instead of people. If Medicaid was dedicated solely to poor, non-elderly people . . . there would be no crisis in Medicaid. The majority of Medicaid funding is paid to support people that already receive Medicare.

We have to fix the fundamental issues in healthcare . . . ie FAR MORE preventative healthcare and health maintenance with FAR FAR LESS on interventional healthcare. IMHO, we've reached the point of no return. We cannot expend MILLIONS to keep ONE grumpy old man like Dick Cheney alive while treating flu vaccine like it's just another commodity. Reducing lead and mercury in our environment will cost billions each year but it will pay back many billions more. People with chronic health conditions need chronic healthcare. But that care can be planned and executed in a cost efficient manner. It's not happening right now.

While I personally believe it's questionable to deny old people the care they need, I believe it's a greater moral lapse to deny children basic health protection (basic healthcare, nutrition support, environmental protection). Unfortunately, kids cannot vote. That's why we get BS like this from Bush . . .

cnn

The number of people getting food stamps rose over the past four years from 16.9 million to 25.1 million, the Food Research and Action Center said in a report scheduled for release Wednesday.
---
The administration's 2006 budget proposes to restrict access to food stamps for certain families that receive other government assistance, a restriction the group said would throw an estimated 300,000 people off the program.

The group also worries that Bush's proposal to cap discretionary spending for five years would prevent the Special Supplemental Nutrition Program for Women, Infants and Children, or WIC, from keeping up with program growth and higher costs.

As long as these people aren't eating Cheetos and Twizzlers, there's no excuse for underfunding nutrition programs. The school lunch and WIC programs cost less than $20B a year. They have serious flaws but why not give them MORE $$ to make the program a health maximizer instead of accelerating the race to the bottom by restricting funds?

I still remember the good old days when people picked on the fat kid. You could do that b/c there was only ONE friggin' fat kid.

Before I stray too far OT . . . HMOs sux, drug companies sux, our healthcare system sux, Congress sux, Bush sux, and fat people that smoke and don't exercise deserve to die an early death . . . but not a subsidized one. That's pure karma baby . . . ask Buddha . . . he was fat, too.

 

[BaliBabyDoc]

Here's where the "profits" come from

WASHINGTON (AP) -- Within a decade, the government will be footing the bill for nearly half the nation's medical costs, its share propelled higher by the new Medicare drug program, administration economists estimate.
---
By 2014, overall medical payments are projected at about $3.6 trillion, with the government footing 1.8 trillion, or 49.4 percent, and private funding covering just over 50 percent, it said.

I may have to move to Canada b/c THEY will have lower taxes.

 

[conjur]

Premiums have gone up.
Deductibles have gone up.

(out-of-pocket expenses have gone up, iow.)

Insurance companies reap record profits.


Hmmm...yeah...tort reform is what we need. :roll:

 

[lozina]

Damn those trial lawyers... more profit for insurance corporations!

*Draws devil horns on nearest picture of trial lawyer*

 

[Genx87]

Prime example of why we cant put the entire nation on a govt healthcare plan. SS is a crisis but Medicare is worse.

Both social programs will bankrupt this country.

These insurance companies would probably love nothing more than the govt foot the bill. Instead of trying to scam millions they just need to scam a few beauracrats in washinton and rake in trillions.

Tort reform isnt the answer either. I think tort reform is nothing more than legislating margins for the insruance companies.

 

[Darkhawk28]

Originally posted by: Genx87
Prime example of why we cant put the entire nation on a govt healthcare plan. SS is a crisis but Medicare is worse.

Both social programs will bankrupt this country.

These insurance companies would probably love nothing more than the govt foot the bill. Instead of trying to scam millions they just need to scam a few beauracrats in washinton and rake in trillions.

Tort reform isnt the answer either. I think tort reform is nothing more than legislating margins for the insruance companies.

I agree with your view on tort reform, but I don't think killing medicaid and medicare is the solution either. We need to tighten the screws on these insurance companies.

 

[SuperTool]

Price controls is what we need. If the government pays for something it should have the right to set a limit for the price it's willing to pay.

 

[Genx87]

I agree with your view on tort reform, but I don't think killing medicaid and medicare is the solution either. We need to tighten the screws on these insurance companies.

The problem is how? I dont think letting them into the coffers of the tax system is a wise decision and would probably only increase the problem. But this time it will come out of taxpayers pockets.

 

[Genx87]

Originally posted by: SuperTool
Price controls is what we need. If the government pays for something it should have the right to set a limit for the price it's willing to pay.

Sure but we are talking about the federal govt here. 5000 dollar toilet seats. They dont have the first clue on price control. I wouldnt trust them to keep the price down at all. Especially with the amount of lobbying the insurance industry does.

Can anybody explain to me why you are required to have car insurance in states with no fault?

Prime example of what the insurance industry can do.

 

[cKGunslinger]

Originally posted by: dmcowen674
Topic Summary: MDs make less, patients paying more, government paying more . . . HMO and drug companies make bank

You forgot Rich Republicans Rejoicing

Yep, cause we all know that Rich Republicans never fall into the [MDs, patients, or taxpayers] category - they are all HMO and Drug company CEOs! :roll:

 

[BaliBabyDoc]

Originally posted by: cKGunslinger

Originally posted by: dmcowen674
Topic Summary: MDs make less, patients paying more, government paying more . . . HMO and drug companies make bank

You forgot Rich Republicans Rejoicing

Yep, cause we all know that Rich Republicans never fall into the [MDs, patients, or taxpayers] category - they are all HMO and Drug company CEOs! :roll:

Well AMA has largely been in the GOP camp for years. The GOP keeps promising medmal (tort) reform and increased reimbursements from Medicare/Medicaid. But the AMA is arguably one of the least reputable (and least intelligent) "unions" on the planet. Although medmal reform is "possible" it's highly unlikely that such reforms alone would dramatically improve the environment for purchasing liability insurance. And there's absolutely NO WAY that the government can afford to increase payments to physicians in our current environment.

 

[SuperTool]

I know how we can fix our medical system. Declare war on Canada, then immediately surrender

 

[cKGunslinger]

Originally posted by: BaliBabyDoc

Originally posted by: cKGunslinger

Originally posted by: dmcowen674
Topic Summary: MDs make less, patients paying more, government paying more . . . HMO and drug companies make bank

You forgot Rich Republicans Rejoicing

Yep, cause we all know that Rich Republicans never fall into the [MDs, patients, or taxpayers] category - they are all HMO and Drug company CEOs! :roll:

Well AMA has largely been in the GOP camp for years. The GOP keeps promising medmal (tort) reform and increased reimbursements from Medicare/Medicaid. But the AMA is arguably one of the least reputable (and least intelligent) "unions" on the planet. Although medmal reform is "possible" it's highly unlikely that such reforms alone would dramatically improve the environment for purchasing liability insurance. And there's absolutely NO WAY that the government can afford to increase payments to physicians in our current environment.

Which is why both unions and government-funded healthcare suck (or blow, whatever your preference.)

 

[cKGunslinger]

Originally posted by: SuperTool
I know how we can fix our medical system. Declare war on Canada, then immediately surrender, then go get a checkup, find a cancerous tumor, see that you have to wait 8 weeks until you can be treated, realize you can't flee to the States for private treament now, and die! Hooray for socialized medicine!

Fixed.

 

[slash196]

Universal Health Care. Problem solved.

 

[Michael]

BaliBabyDoc,

It wasn't long ago that HMO's were struggling, some were going under and being bought by other HMO's and the space basically was terrible to be in. Since then, the HMO's have concentrated on getting their business to a more stable footing.

I don't mind the fact that MDs get less money (the AMA would complain and isn't exactly unbiased). The market used to be very, very inefficient with the MDs holding many of the cards. Now they're competing much more in a market where costs and pricing is much better understood.

I do not disagree that more has to be done with preventative medicine, but the HMO's I have been involved in seem to do that more than other groups (Kaiser was a good example). When you're an HMO and getting a fixed fee per person regardless of how many doctor visits they make, then it makes sense to work on changing the health environment. When you're paid for doing things at every visit (typical PPO or hospital system), then there is no incentive to work on preventative medicine.

I read your post as saying that you're unhappy because you're not being paid enough.

Michael

 

[cKGunslinger]

Originally posted by: slash196
Universal Health Care. Problem solved.

Bzzzt. Try again.

 

[DealMonkey]

I've thought about a solution to the medical coverage crisis for a while now. What do you think of this idea?

We need to tear-down the layers of bureaucracy and middle-men sucking profit that exists between the patient and the doctors/nurses/hospitals. We do this by forming a non-profit organization that exists to insure people without making a profit. As people sign-up and pay their monthly coverage amounts (or businesses pay for their employees), the cash goes into a centralized slush fund that then gets paid out for claims as needed. The non-profit org would have to set up a series of minor co pays ($15 office visits, $20 drug co-pays, small yearly deductibles, etc.) to help discourage those covered from completely abusing the system, which they would probably do if everything was gratis.

By eliminating the profit motive, coverage is more affordable and doctors and hospitals get paid what they deserve. You could even introduce a sliding scale of co-pays so that for the poorest patients, they don't pay much of anything, and for the wealthy, they pay a little more. If you did this at the state level, you could even have the state kicking in funds to subsidize the fund and/or guarantee the fund in case it dips low periodically.

 

[Michael]

DealMonkey - You're basically describing Blue Cross Blue Shield. This has been tried many times in the past. Government funded health care is another example of this.

The base problem is that you tend to get what you pay for. With no profit motive, you lose out on attracting some of the best people to administer the program as you significantly cap their wealth potential.

One theory is that many competing insurance comapies, even with a profit motive, drive the admin expenses down.

Admin expenses will always be decently high in the medical profession because of the need for detailed medical records.

Most doctors prefer to deal with insurance companies directly because it seriously cuts down the number of people they have to chase for collection.

Michael

 

[charrison]

Originally posted by: Michael
DealMonkey - You're basically describing Blue Cross Blue Shield. This has been tried many times in the past. Government funded health care is another example of this.

The base problem is that you tend to get what you pay for. With no profit motive, you lose out on attracting some of the best people to administer the program as you significantly cap their wealth potential.

One theory is that many competing insurance comapies, even with a profit motive, drive the admin expenses down.

Admin expenses will always be decently high in the medical profession because of the need for detailed medical records.

Most doctors prefer to deal with insurance companies directly because it seriously cuts down the number of people they have to chase for collection.

Michael

I visited a doctors office for the first time this week that did not have a great wall of paper records. Every exam room had a terminal in it for records entry. I am surprised it has taken this long to get there.

 

[DealMonkey]

Originally posted by: Michael
The base problem is that you tend to get what you pay for. With no profit motive, you lose out on attracting some of the best people to administer the program as you significantly cap their wealth potential.

Well my personal feeling is that there is no great talent required to "administer the program" to begin with. I mean, we're talking essentially about [--> claims in --> payments out]. How difficult does it need to be?

 

[Michael]

DealMonkey - Have you ever worked in Health Insurance or the Healthcare field?

There is a huge flow of cash that will happen. That alone means risk and professional management is needed.

You need to protect privacy.

You need tons of automation because of the high transaction volume.

Someone has to negotiate with doctors, drug benefit providers, hospitals, etc.

It actually is quite complicated.

Michael