Recently I came across a quote that I thought I would post and see if you can guess who made it (I marked XX to specific names so not to give identity away).
“I ran against XX, a sitting president from my own party, in large part because of this disagreement. Health reform became central to my 19XX presidential campaign: I argued then that the issue wasn’t just coverage but also out-of-control costs that would ultimately break both family and federal budgets, and increasingly burden the national economy.”
Who made the statement above?
- Ronald Reagan
- Dwight Eisenhower
- Ted Kennedy
- Barrack Obama
- None of the above
- All of the above
Have you selected an answer? If you selected 5 or 6, you are way off base. Try again … Okay time's up. The answer is Ted Kennedy.
When I saw this quote from the late Senator Kennedy that appeared in the July 18th, 2009 issue of Newsweek, it was referring to his presidential run against Jimmy Carter in 1980 and how healthcare was a central focus for him.
It made me think that he had it right (well almost right). You can’t just provide coverage to everyone and believe the problem is solved. You must also address the out-of-control costs that are in our system today. Targeting insurance companies and condemning them for ongoing rate increases is an easy thing to do, but keep in mind when a provider submits astronomical charges for a procedure, who is confronting the provider? Who is asking the tough question of what is a rational payment for care?
Over the last few months we've been hearing the following sentence, “This is the worst legislation ever passed.” They are referring to the healthcare reform legislation better known as PPACA. Listen to most news channels you will hear various groups share their sentiments that this is “the worst ever.” Those are strong words and especially when you say “worst ever.” Hearing this common theme I thought I would research on YouTube a category of “Worst Ever” and see what pops up. Based on my search, my Friday funny identified what I believe as “the worst ever.” No it has nothing to do with a piece of legislation or political candidate. It has to do with a sportscaster who has been given the dubious honor of “worst sportscaster ever.” Enjoy the clip and after you watch this I’m sure you will be more careful in what you classify as “world’s worst.” You have the sportscaster to compare it to.
Enjoy the weekend!
This week I came across an article in the Hartford Courant written by Matthew Sturderant. The gist of the article centered on how health insurers are asking for immediate rate increases of more than 20 percent in Connecticut for certain health plans. The rate increases still need to be approved by the state for the individual health insurance market, but what we see happening in Connecticut will be occurring throughout the United States. How each state will handle this is yet to be seen but bottom line, the new normal is in progress.
Connecticut Attorney General Richard Blumenthal has weighed in on the increases when he said, "These outrageous requests demonstrate the need for stronger Department of Insurance authority to block unjustified health insurance premium increases, as I strongly advocated in the last session. My proposed bill would have allowed the commissioner to consider insurer profitability, required insurers to inform customers of rate requests and mandated an up or down ruling on all increases."
As I mentioned in my previous posts, these increases may be unjustified and outrageous but for the sake of argument, what if these increase ARE justified. What makes them justified? The higher charges being submitted by the healthcare delivery system. With that said, has there been any government official sending out “threats” for outlandish charges? Most of the discussion today is on the insurance companies rate increases, salaries of the insurance companies executives and how they are the problem. Again, there may be justification in these arguments but do not lose sight that there are more people involved in this equation.
In my next post I will share some of the interesting findings of the recent healthcare salary survey. As the old saying goes, it takes two to tango.
In a recent Wall Street Journal article by Janet Adamy the headline read “U.S. Rebukes Health Insurers.” In the article it shared that the Obama administration will “track those who enact unjustified rate increases linked to the health overhaul.” I find this statement very interesting. We are “threatening” health insurers for putting into place rate increases to reflect the new health reform act. This threat is coming from the same group that has yet to finalize the PPACA regulations –HHS. We are taking the caps off lifetime limits, including children to the age of 26, developing regulations on how to define a grandfathered plan from non-grandfathered plan. How can you add all these benefits and have no experience, and yet “threaten” the insurers if they raise rates?
I’m all about keeping people in check for unjustified price gouging but I would also hope the administration would issue the same threat to the medical community. If providers charge “unjustified” prices what are the ramifications? The insurers and providers must work together. If the current administration is only focusing on insurers we are in trouble. As Karen Ignagni, President of AHIP stated, “To suggest that cost containment can be achieved by singling out health plans ignores the very inconvenient truth that premium increases reflect increases in the underlying cost of medical services,” Ignangi says. “Regulating premiums won’t do anything to reduce the soaring costs of medical care. This would be like capping the prices automakers can charge consumers, but letting the steel rubber and technology manufacturers charge the automakers whatever they want.”
We must have a rational, transparent payment system in place.
It’s Friday and it has been another full week (excluding Labor Day) of activity. Renewal rates are now starting to hit the streets for employers and the reality of what health reform looks like is starting to reveal itself. I will be writing more about this next week but since it is Friday and I designate Friday with a funny, I thought I would pass along this old video of how to keep selling even when things go terrible wrong. As they say in selling, you must be ABC – Always Be Closing. Enjoy the weekend and remember, “now it’s locked.”
Yesterday’s Wall Street Journal an article written by Janet Adamy deals with the rise in health insurance premiums. As insurers start to assess the costs associated with the additional benefits mandated under PPACA we are seeing the beginning of what many people predicted: higher premiums. We all know that premiums were rising before the passage of PPACA and again I believe health reform is needed but what we are now seeing is how insurers are starting to assess the additional costs for the mandates provided under PPACA and this is where we get “unintended consequences.” The article highlights the premium increases for individual plans. Over the next few weeks we will have a clearer picture of what the landscape looks like for group plans. Between 65-75% of group plans renew January 1 so the renewal rates are now being shared with employers. It is again anticipated we will have double digit increases for group plans and when you include the likely repeal of the Bush tax cuts for 2011, employers will have to make some very serious decisions on how they will remain competitive in the marketplace.
I encourage you to watch and listen to the video above. Ron Williams, CEO of Aetna, is interviewed by Alan Murray of the Wall Street Journal, and Mr. Williams makes some excellent points regarding cost and quality in today’s healthcare environment. If we are to have true reform, we must have a rational payment system that us fully transparent to all parties. The time is now.
In the recent Bloomberg Businessweek magazine the above headline caught my attention. Reading the article highlighted the problems the healthcare industry is faced with in the coming years. In this article it shared the pricing disparity for services performed at a Sutter facility vs. other facilities in the area. The example given was a simple MRI. At the Sutter California Pacific Medical Center an MRI brain scan had a charge of $3,484 while the same type of brain scan performed at Seton Medical Center had a charge of $1,150. Why such a huge difference in charges? As the article shares, Sutter Health, a non-profit healthcare organization owns nearly a third of the medical-care market in the region going from San Francisco to Sacramento. Charges typically are 40 to 70 percent more than competing hospitals.
If you were working on a network agreement or trying to negotiate with their facilities you would be trying to negotiate from a starting point that is nearly double of their competitors. Typical negotiation is working off a billed charge (that is already higher than surrounding markets) and trying to work down from this. A losing proposition.
We must look at a rational payment approach that looks at payments in a fully transparent fashion. This includes looking at what the facilities true costs are to deliver care and do a comparison of like facilities and what costs their structures look like. From this a rational margin is applied to insure profitability. If we are to continue to pay or try to negotiate from a “billed charge” basis, we are headed for an unsustainable payment environment. This article highlights the environment we are dealing with. Providers must make money, but employers must be able to afford it. This is only achieved when we bring a fully transparent and rational payment approach to the market. Read the full article.
I hope all of you are looking forward to the upcoming holiday weekend. The dog days of summer have come and gone and now we are entering the last phase of 2010. It’s hard to believe we only have around 80 business days left in 2010. With the struggling economy, uncertainty of healthcare and what will happen with taxes in the upcoming year, we all could use a little motivational boost to get us through the remainder of the year. For some, this is achieved by reading motivational books. I’ve come across a little video that may help keep you motivated as we move into September (well at least through the weekend).
Enjoy the weekend!
Yesterday I blogged about the webinar I attended sponsored by HHS. One of the key items I took away from this webinar was the challenges states will face in trying to put together an IT infrastructure to handle the many requirements to support the insurance exchanges that need to be in place by 2014. After I posted my thoughts, I came across this article that I thought I would share for your review. This article appeared on Civsource Online, a site that focuses on items of interest for state and federal agencies.
Read the article:
Nation’s health care infrastructure a point of concern for states
Over the next few years there will be a mad scramble to put into place all the necessary pieces for states to support PPACA. With states burdened by a decreasing tax base and increase in overall program costs, finding additional dollars to put in place a system and infrastructure to support the insurance exchange will be very challenging. Stay tuned.
This week I listened in on a webinar sponsored by HHS. This was a day-long session where a number of people spoke about the implementation of PPACA and some of the barriers that need to be addressed in order for the regulations to be fully implemented. One key area that I did not give much thought to prior to hearing this webinar was the state’s ability to implement the required healthcare exchanges with its current IT infrastructure. We all know how challenging it is in the private sector to implement a major strategy shift within our own business and the need to line up the appropriate IT resources and structure to handle the changes. Multiply this exponentially when the public sector is involved. Some of the speakers were from states that are responsible for IT. All agreed that most states will need tremendous resources (people and money) to get their systems up to speed to handle insurance exchanges.
I remember back to the times when the state and federal governments required a substantial amount of additional funding just to get computer systems to be Y2K compliant. Think back to that time and remember how many consultants, new IT infrastructure and dollars were required by each state and federal agency to get their systems to recognize the year 2000 correctly.
Now fast forward to where we are today and each state will have to create a system that will be able to handle enrollment, family change status, billing, online tools, customer service, etc. This is to be done within the next three years. Oh yeah, we still don’t know what the final regulations look like. I thought getting through Y2K was a challenge. States…get ready.