If Only Their Voices Could Be Heard....

Imagine how different the whole healthcare reform debate would be if all the voices of those who’ve been directly affected by the current system could be heard. Unfortunately, those same voices of people who’ve suffered with the shortcomings and inherent injustice of the system are, by virtue of their weakened physical or financial conditions, the people least likely to be heard. And, ironically, those who champion the cause on behalf of those unfortunates, have become easy objects of attack by healthcare reform opponents.

Opponents have become so clever and devious that it’s almost impossible to prove they’re kicking the sick, weakened, and disenfranchised while they’re down. But, they’re sure kicking-the-hell out of the people who are trying to help those others get up.

Apples-to-Oranges Comparison of Profits Among Healthcare Companies Lets Big Insurance Off the Hook

Rick Newman's recent U.S. News & World Report article, "Why Insurance Companies Make Lousy Villians", suggests that the profit levels of the major insurance companies are not that high compared to pharmaceutical, biotech, and medical equipment companies. Saying, “blaming insurance firms for runaway healthcare costs is a weak argument, because the insurance industry isn't all that profitable to start with," Mr. Newman's argument plays right into the hands of the insurance industry.

Using Morningstar's ranking of corporate profits among major healthcare-related companies, Mr. Newman has found yet one more way to let the insurance industry off the hot-seat. After all, who could begrudge those hard-working folks at WellPoint a measly 4% profit when Amgen's making 30% and Pfizer's pulling in over 16%?

This kind of analysis is exactly what the insurance industry counts on to (yet again) shift the spotlight away from what they're doing and onto someone else.

But when you consider the role that Aetna, Unitedhealth, and WellPoint play in the actual day-to-day financing and delivery of healthcare, Mr. Newman's comparison is truly "apples-to-oranges" and here's why:

By virtue of their agreements with doctors and hospitals across the country, as well as thousands of employers representing millions of subscribers, managed care companies can literally control how medical care is provided. They pay or don't pay for services; authorize or don't authorize treatments; and can quickly interfere with the delivery of medical services by doctors, hospitals, and other medical providers at any time to fulfill the insurance companies' profit motives.

I don't know of one pharmaceutical company, biotech firm, or medical equipment manufacturer that can dictate how physicians practice medicine or control what services are covered or paid for. The freebies, trips, and other incentives that these companies offer medical providers may create a certain amount of influence over what medications doctors prescribe or equipment/techniques they use. But in the end, doctors are still free to practice medicine as they see fit, regardless of marketing efforts put upon them by such profit-rich companies on Morningstar's list.

Shifting blame away from the insurance companies will not serve the advancement of meaningful healthcare reform. The integral part that managed care companies play is simply too big to suggest that any other factor should be considered first or foremost. My suggestion: Keep the heat turned up the managed care companies and the insurance industry, and keep the fork ready.

Want to Link Patient Advocacy to Death Panels? Look No Further Than Your Nearest PPO

Opponents of the healthcare reform have zeroed-in on the part of the bill that calls for reimbursing practitioners for “advance care consultation” inclusive of "end-of-life" considerations related to changes in the health condition of the individual, including diagnosis of a chronic, life-limiting condition, terminal illness or injury, etc. They're deeming this critical function of patient advocacy, and the patient advocates who fulfill it, as "death panels" in the opposition's reprehensible attempt to scare the public away from healthcare reform.

Isn't it ironic that Big Insurance has for years employed a huge number of so-called "patient advocates" who sureptitiously direct patient care in alignment with the profit motives of the managed care companies, rather than in alignment with the true medical interests of the patients?

Of course, no one is talking about Blue Cross, United Healthcare, Aetna, or Cigna "death panels" because who'd ever admit they exist? Yet every day, at every managed care company, medical decisions are being made or, at very least, are being influenced by people who are not the patient's doctor. Patient advocates who work for the managed care companies, in the process of fulfilling their noble profession, are nonetheless feeding information back-and-forth to their employers. Information that influences length of hospital stay, treatment options, and other medical considerations that, over time and in many cases, can influence whether a person lives or dies. Yet no one talks about this, nor ever mentions the deep-seated motives that underlie "patient advocacy" as sponsored by commercial managed care entities.

Death panels are a great way to scare people. Maybe if supporters of healthcare reform were willing to stoop as low its opponents, someone could build quite a case that such systems have been firmly in place all along in the profit-driven managed care business model of healthcare in the U.S.

I personally honor and respect the work of truly independent patient advocates. Such people saved my mother's life when she was prematurely released from hospital several years back with a latent staph infection. Had they not asked the hard questions of the managed care providers who were treating my mother, and then arranged for her re-admittance to the hospital, she'd probably not be alive today. I won't "blame" commercial managed care for releasing her too early, but I've thought of how differently that situation would have been had the managed care discharge planners recommended releasing her when she was "healthy", instead of releasing her when their managed care protocols said she was "ready."

Co-Ops vs. Big Insurance: David vs. Goliath?

After I recently commented on HealthBeat Blog about co-ops, one of their readers posted the following:

A.J.

With your 30 years of experience, do you have any suggestions of ways to compete with the big boys, that is not government funded? Co-ops are intended to be member owned and member run (the government is not supposed to be a member). They also are intended to be the David that changed Goliath's way of doing business.

Here's my response:

The best way to compete is one that's worked for major clients of mine for the past 15 years: Eliminate the managed care middleman and contract directly with medical providers.

This approach, not co-ops, is the real David vs. Goliath. It calls for exceptionally bold and confident CEOs (who've historically stayed uninvolved in matters related to health benefits within their own companies) to leave their big carrier and contract directly with doctors and hospitals.

If you go to my corporate website ajlester. com, you'll find case studies of companies that have successfully developed their own direct networks. In doing so, they've regained the control over their health care plan operations and finances that most employers have relinquished to managed care companies.

For self-insured employers (the majority of larger companies are self-insured), medical claims are paid by the insurance company using the employer's funds according to the contracted terms and and reimbursements of the managed care network's provider agreements. The employer has zero input or control over these agreements, and little, if any influence over how the claims are paid. Blue Cross, United, Aetna, Cigna, and others never release details of their agreements with providers, so it's impossible for employers to know whether they're fair or the actual amount of the middleman "skim." All the employer knows is that plan costs keep rising every year.

In the direct contracting model, claims are paid from the employer's funds, but they're processed by independent Third Party Administrators (TPAs) according to the contractual terms and reimbursements negotiated directly between the employer and the medical providers. This pure "buyer-seller" relationship is unencumbered by the managed care middleman's profit motives and need for total control.

The idea behind co-ops is a good one, but unless the largest employers, who are now clients of and held hostage by the Big Insurance carriers, are willing to leave those carriers and get behind the co-ops, the whole idea will fail.

The giant managed care companies have been so effective as middlemen that most employers and providers believe there's no really credible alternative. The middlemen have created a fallacy that passes as a virtually unassailable form of conventional wisdom among employers. It goes something like this: "If Blue Cross (or United, Aetna, etc.) with their size and millions of members can't handle this, no one can." Consequently, otherwise business-savvy employers and medical providers summarily dismiss the idea of directly contracting with each other. They remain hostages of Big Insurance.

My concern is that this prevailing belief will carry over into any consideration of co-ops as a viable alternative. In any given market, co-ops will have to go in and compete with a middleman-created business model that's brainwashed employers and providers into thinking there's no other way to do business.

Over the years, I've found some success at overcoming that brainwashing whenever we've approached providers with the idea of contracting directly with employers in their own community. If the employer is committed to the approach, most providers jump at the opportunity for a direct agreement. Although it's almost always perceived as a good business decision for providers to make, sometimes its biggest attraction is that it is NOT a conventional commercial PPO network agreement. At those times, in that situation, the direct employer/provider agreement is the only respite from the managed care "hostage" situation that most employers or providers will ever experience.

Health Care Co-Ops: A Doomed Idea That Big Insurance Will Love

As opposition to the Public Option of the Healthcare Reform Bill grows, "waffling" Congressmen are floating the idea of establishing a few nonprofit co-operatives to compete with the insurance companies. Such an idea seems doomed to failure and, for that reason, the Big Insurance companies are certain to love it.

The idea that any newly-created, public-backed co-ops can compete with Big Insurance anywhere at any time is frankly ridiculous. It's like suggesting that a small co-op fruitstand will make the market more competitive by opening across the street from a Sam's Club/Wal-Mart mega-complex. It simply won't succeed.

Initially, it's reasonable to assume that Big Insurance would oppose co-ops for the same reasons they oppose the public option. But if co-ops really cannot succeed, and if it shifts the focus away from what they're doing, the Big Insurance carriers will support it hammer and tong. Especially if it become labeled as a negative approach, the carriers are still going to love it.

In the past 20 years, Big Insurance has found a way to turn every seemingly negative approach (e.g. CDH, high-deductible plans, etc.) into profits by diverting employers' attention away from the real causes of skyrocketing health plan costs. The same will hold true of co-ops. And Cigna, Blue Cross, Aetna, United, and others will find a way to support the idea of co-ops as it becomes increasingly evident that they won't work. What's more, they'll pay lots of lip-service because co-ops will divert attention away from their "business-as-usual" efforts to dominate the markets those co-ops are meant to serve.

If such co-ops are formed and try to compete with the Big Boys, it'll play right into the hands of the carriers. When the doomed co-op fails to work in a big market currently dominated by a couple of carriers (like Blue Cross and Aetna in Philadelphia), maybe Cigna will find a way to ride in on a white horse with some cockamamie plan to save the day, or, at very least, split spoils with BC and Aetna. In the end, no matter what the outcome, Big Insurance will still win.

I remember the days in the 1980's when independent staff-model and group HMOs were failing. Carriers waltzed in with PPOs and built their (now indomitable) position by acquiring those HMOs and selling providers on participating in their so-call "less restrictive" networks. The Big Carriers found a way to turn the fear and angst most employers and providers felt toward managed care at that time into a system of healthcare delivery and finance from which few have every been able to escape.

What do they call that psychological condition when hostages fall in love with their abductors? In my 30 years in this business, I've seen medical providers and employers taken hostage by Big Insurance. As suffering, long-term hostages, they're truly scared to death to leave their abductors because the managed care companies have so completely brain-washed them that they cannot live without the Big Insurance business model.

So co-ops will only solidify Big Insurance's strangle-hold of American healthcare. If it's tried, it's bound to fail. And, sadly, all those hostages who glimpsed the co-op approach and held a brief glimmer of hope for freedom from captivity, will have to sink back into hopelessness. Never fear, though, their insurance carriers will reassure them: "Don't worry, things will get better."

One Little Word - "Public" - Causing Real Trouble for Obama

The reason the Obama administration is having so much trouble defining and defending their position is because of one innocent, little word: "public."

If only they'd used the term "Anti-Insurance Industry" option or "Alternative to 8-figure CEO Salary" option, things might be going better. No matter how Obama or the administration spins it, the word "public" has inherently negative connotations. Probably hearkens back to visions of "public" relief or "public" assistance. Hell, these days, people could be thinking of "public" transportation or "public" bathrooms and getting a bad feeling.

The point is, this one word, "public," provides the perfect segue for the insurance lobby, anti-reformers, and squawk-radio to label the whole plan as "government -ontrolled", "socialist" , or, for some Right-wingers, "fascist".

No matter how negatively Americans perceive "Big Insurance", the notion of a "public" option seems much worse. Even if a public option is the only way mitigate the insurance industry's virtually dictatorial control of American health care, the negative "spin" that naysayers can attach to the word "public" is simply too strong.

Unfortunately, Obama's chief message for positive change is lost whenever he says the best alternative to Big Insurance is the "public" option. No wonder he's having a hard time. Americans understand the words "greedy", "self-serving", and "corrupt". Why, oh why can't someone among Obama's sharp staff find a way to define "public" option for what it really is: A viable alternative to everything that's wrong with commercial managed care.

Dr. Ornish is Right: Reimbursements a Major Determinant in the Way Medicine is Practiced

Dr. Dean Ornish, new Medical Editor at the Huffington Post, in an article entitled Resuscitating Health Care Reform, suggested that physician reimbursement is a major deterrant in the way medicine is practiced. He's right, but I'd go a step further and say, reimbursement is THE major determinant. Unfortunately, the overwhelming trend in managed care has been to pay primary care physicians (PCPs) very poorly for their services.

Managed care companies, through their self-serving provider agreements, shortchange PCPs on office visit fees and other primary services. That removes all incentive for these "front-line" doctors to spend time with patients, let alone offer them additional treatment or medical education. Whatever additional services a PCP might otherwise provide a patient by virtue of the doc's additional training, or sub-specialty, are derailed by inadequate reimbursements. So the PCP refers the patient away to a more costly specialist for treatment he might have handled himself.

In my experience negotiating direct agreements between employers and medical providers, cutting out the managed care middleman, we've found that "win-win" agreements based on fair reimbursements to PCPs are the best way to gain their support for employer-driven preventive care initiatives. Higher reimbursement of primary services also removes the disincentive to spend more time with patients and provide additional treatment. In the process of paying PCPs more, employer health plan costs have actually gone down, not up.

To create a healthcare system that removes disincentives for providing prevention and education, managed care companies will need to pay primary care doctors more, not less, for their services. Any public option will also need to do the same thing.

Ironically, most services provided by PCPs are relatively low-dollar evaluation and management (E&M) procedures, such as office visits, so the difference between a fair and unfair reimbursement is often just a few dollars. But that adds to a big loss of income, especially for PCPs who have lots of HMO and PPO patients. Until managed care companies stop gypping PCPs through unfair agreements and inadequate reimbursements, how can things possibly change?

Open Letter to Wendell Potter RE: Cutting Out the Middleman

An open letter to Wendell Potter, a Senior Fellow at the Center for Media and Democracy, and ex-PR VP at Cigna, who's now speaking out against the insurance industry's efforts to kill healthcare reform. This letter appeared as a post on Wendell Potter's blog.

Mr. Potter, I applaud your efforts on behalf of the CMD and would like your thoughts on one solution that's been entirely overlooked amidst the healthcare reform debate: Employers eliminating the managed care middleman and contracting directly with doctors and hospitals.

For the past 15 years, I've been working with major self-insured employers, negotiating direct agreements between those employers and medical providers as an alternative to conventional PPO networks. Coincidentally, one of my largest clients, a company with over 40,000 covered lives, was with Cigna when they opted to develop their own direct networks instead of using Cigna's PPO networks.

With direct networks now across 14 states, my client's medical trend has been essentially flat for the past 9 years, while companies their size suffered increases of 10% or more each and every year. This client's employer-owned networks, built upon fair "win-win" agreements, are stable and well-liked by providers. Compare that to the openly contentious and adversarial relationships you and I know exist in virtually every commercial PPO network.

The huge savings this particular employer has achieved by having its own direct networks for the past 9 years has allowed it to maintain a relatively rich medical benefits plan, with low deductibles and without shifting costs onto employees.

Incidentally, this employer uses a third party administrator (TPA) to process its claims according to the reimbursement and contractual terms of the direct agreements, as well as the UR, pre-cert, and case-management components. In this case, the TPA works for the client, and has no middleman loss-ratio to protect, so the admin costs are a fraction of what they run with Cigna.

I invite you to peruse the articles about the success of this approach that appeared in the WSJ, Business Insurance, Employee Benefits Review, and the Kiplinger Letter. Many of these are available at my website, AJLester.com.com, in the Resource Center-Newsroom.

For years, managed care companies have disdained my efforts to help employers bypass PPO networks by contracting directly with providers. Even Cigna tried to dissuade my client from developing their own networks, a story I'll share with you off-line, if you're interested.

Unfortunately, the insurance companies have done such a bullet-proof job as middlemen, that most doctors and employers believe there is no other way for them to do business with each other than through a managed care company. Ironically, the very first people that my prospective clients consult with about the idea of direct contracting is....you guessed it, their insurance company. Coming from Cigna, I'm sure you know how quickly employers can be talked out of that idea.

So, notwithstanding your background as a managed care guy, what are your thoughts about employers cutting out the middleman and contracting directly with doctors and hospitals? Shouldn't it be promoted as an alternative to commercial PPO networks? It's still a "private-payer" approach, which should appease opponents of the "public option". But the private part of it really is private. That is, between the employer as buyer and the medical provider as seller, without need of a middleman.

Lastly, is anyone else you know talking about this approach? If not, why not? If it's because no one thinks it'll work, where is that message coming from? There are companies out there, albeit not a huge number, who can tell a compelling story about the success of this approach. Is it possible to get people to listen?

Many thanks in advance for whatever insights you can lend.

Mobilizing Supporters of Obama's Healthcare Reform Requires New Strategy

To have any hope of getting his healthcare reform package through Congress, President Obama will need the same level of grass-roots support he had during the presidential campaign. Without a new strategy for creating it, however,that's going to prove difficult.

The huge mobilized base of support Obama enjoyed during the presidential campaign was comprised of mostly young and healthy people. When it comes to healthcare, there's no group whose lives are touched less on a day-to-day basis than the healthy, robust masses in their 20's and 30's. For them personally, healthcare reform is, at best, an ideological issue. Unlike the economy or even the wars in Iraq and Afganistan, there's no perceivable impact from the issue, unless they get sick and, even then, only gravely so.

To gain the support of the young and healthy for reform of a system that seems to immediately affect only the old(er) and sickly, is going to require the same kind of effort that the Civil Rights movement of the 60's required. That movement garnered support from millions who were not personally touched by racism through actively exposing the injustices and inequality of the status quo. Young people today will respond and, hopefully, mobilize on the healthcare issue, but they'll have to witness the injustices and inequality that infect healthcare in the U.S. Specifically, they'll have to be shown how their parents, relatives, friends, and other members of society are suffering daily under the current system.

President Obama Needs to Take Case for Healthcare Reform Directly to Employers

There's been lots of talk that President Obama should have the courage to pull his healthcare bill away from the lobby-taintedCongress and pitch his case for reform directly to the American public. I disagree. If he takes it to the people, amidst the barrage of negative advertising funded by the insurance industry and big PHarma, perhaps they'll contact their elected representatives. But, by then,the lobbying juggernaught of the anti-reformers will have negated whatever positive effect that outraged public sentiment might otherwise have had on members of Congress.

No, the President should take his case to American employers. They’re the ones who’ve been paying the escalating tab of medical costs through their double-digit annual premium increases over the past ten years. If corporate CEOs and CFOs don’t already know it, Mr. Obama could remind them of how private insurance companies, as managed care middlemen, have built huge profits at the expense of American employers, while offering nothing in the way of true cooperation to lower costs or provide better service. The President could also remind them that every contract renewal signed by employers (whether they have any choice or not) is sending the clear message to the insurance companies: “Keep up the bad work.”

Employers that have been beaten-up by health insurance companies (are there any who haven’t?) are really the most powerful entity in the entire healthcare reform debate. They hold the true purse-strings. Imagine the impact of hundreds or thousands of major employers canceling their agreements with insurance companies and contracting with medical providers, either directly or through a public option. There are a handful of major employers out there right now who’ve eliminated the insurance company managed care middlemen to deal directly with doctors and hospitals. The results, in terms of lower costs, fewer administrative hassles, and higher satisfaction among patients and providers have been astounding. Unfortunately, however, those results have been largely overlooked. Seems most employers were too busy buying into new illusory savings alternatives offered by their insurance companies. Such as consumer-driven health plans and other ruses that simply shifted escalating costs onto the backs of employees, and did little to mitigate the long-term trend of rising premiums.

Demand by employers for an alternative to private insurance companies is key to the debate and something the President should focus on first. True, the lobbyists will have their way with Congress and the insurance industry will its way with the American public. But if major U.S. employers really are mad as hell and aren’t gonna take it anymore, they’ll choose not to buy what the insurance industry is selling and demand other options.

A Critical Omission in Bill Moyers' Interview w/Former Cigna VP

Bill Moyers' interview with former Cigna VP, Wendell Potter, was timely, though I wish it hadn't taken 15 years for Potter to see the light. Or was it that he felt the heat? Nevertheless, in an industry of tight lips and stealth PR tactics, it's good to have at least one insider willing to jump ship and spill the beans.

There was a critical omission, however, one key factor on which Mr. Potter needs to shed light. If the American public is going to know the whole story of the insurance industry's strangle-hold of American health care, lobbying efforts notwithstanding, this factor has to be exposed and addressed.

It concerns the insurance industry’s control of nation’s private medical delivery system via their managed care agreements with doctors and hospitals. These lengthy, complicated, and often adversarial contracts signed by medical providers to become part of a PPO or HMO network are heavily slanted toward the financial interests of the insurance companies. The denials of coverage and over-turned medical decisions that outrage patients, consumer-advocates, and members of Congress are actually stipulated by contractual clauses in the provider agreements. Or, they’re permitted by contractual reference to vague utilization review protocols and case management programs that the insurance companies also control.

Mr. Potter talked about insurance company bureaucrats standing between the doctor and patient. But, he needs to also acknowledge that Cigna’s agreements with its network providers completely allow it. Managed care companies leverage huge membership numbers to get exactly what they want in their contracts from providers. Whether it’s lower reimbursements or more control, insurance companies hold hospitals and physician groups hostage by the threat of losing patient revenue if they don’t agree to contractual terms. Even in the face of insufficient reimbursement levels or other unreasonable contractual stipulations, providers invariably sign these agreements because they have no other choice.

If Mr. Potter wants to expose some real dirt, let him find and release a copy of an actual provider agreement Cigna has with a network doctor or hospital. I doubt he’ll be able to do it. Such agreements are “proprietary,” you know. But, if he can, everyone will see just how lopsided those agreements really are in favor of the insurance companies. And, how they’ve completely codified a medical delivery system in which insurance company bureaucrats really can legally call all the shots.