I got hit with an additional wave of e-mails and phone calls when Iran my Jan. 22 blog entry–”What If Hillary Was Right AboutHealthcare Reform?”–as my editorial column in our Feb. 5 magazine.The spirited responses I received from readers (some irate, othersmerely furious, although a few actually agreed with me) are postedwith this entry. But I also want to call your attention to one veryinteresting phone call from an agent in Michigan who wondered howmuch better off the auto and workers' comp insurance industriesmight be if a single-payer health plan took over the troubledmedical components of both casualty lines. An intriguingpossibility, don't you think?

If you didn't catch my first take on this, I argued that many ofthe worst aspects critics associated with Hillary Clinton'shealthcare reform plan when she was First Lady have come to passanyway–having a faceless bureaucrat dictate which doctors,hospitals, rehabilitation centers and drugs you can and cannottake, while insurers play a shell game by shifting more and moreexpenses onto patients.

The first two reader responses are well thought out plans to fixour broken system. Terrific! This is the type of debate I expect onthe national level, particularly during the presidential race.

I am not suggesting that a government takeover is the only–oreven preferable solution. I am saying the current system doesnt getthe job done, leaving too many people out, and that we need toexplore better alternatives.

Enjoy the following reader responses. Feel free to post furthercomments on this blog!

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C. Gregory Bryan, Mulling Insurance Agency, Auburndale, Fla.

I could not agree with you more on the question Was HillaryRight? Although I am a staunch conservative Republican voting forevery candidate along political lines since 1974, I believe it istime to change our system.

As an agent providing property, casualty, health and lifeinsurance to my commercial accounts for over 28 years, I havewitnessed our health insurance system become too expensive for mostand difficult to work with for all. In addition, I know manyphysicians are starting to believe the same, including theorganization I believe is known as Physicians for a National HealthPlan.

Former Sen. Bill Bradley, D-N.J., came up with one solutionduring his primary run, allowing employers and those withoutinsurance to purchase coverage through the Federal Employees HealthPlan, but this does not address affordability.

It may take some type of tax increase to offer a subsidy or taxcredit to individuals not covered by their employer to afford this.Or, it may take a value added or sales tax on the entire economy tocover everyone. This taxation method is preferred over a payroll orincome tax, as all in the U.S. or purchasing products from the U.S.would have to pay. I cant begin to tell you the number of smallbusiness and self-employed I see everyday under-reporting theirincome to avoid income taxes.

The ramifications of having all U.S. citizens covered (please,no illegal aliens) could be financially devastating to the currentinsurance industry, although they could compete to earn thebusiness from the U.S. government.

If medical bills were eliminated from consideration, autoliability, general liability, workers compensation, and many otherpolicies providing medical expense protection could be drasticallyreduced. Some would be cut in half. No longer could attorneys usethe future cost of medical bills in swaying a jury verdict, asthese costs would be covered by the health plan.

For those who say this is socialized medicine, I agree. Just asMedicare is socialized medicine. Our nation enacted this programbecause the elderly could not afford to be covered and theinsurance industry was unwilling or unable to provide qualitycoverage at an affordable price to the vast majority ofseniors.

Thank you for starting this dialogue.

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Richard A Poppa, President & CEO, Independent Insurance Agents& Brokers of New York

First disclaimer: Im a property-casualty guy, so I dont have anexperiential or academic grounding on the heath side. However, Ivefound myself splashed with info and ideas from our dealing onbehalf of independent insurance agents, and as a consumer of theproduct myself. (Next disclaimer: These are my thoughts, and notIIABNYs. The Association should not be saddled with my personalopinions on this issue!!!)

There are no easy answers, nor are there any quick fixes. It hastaken us years to get here, and it will take years to get back.Also, I have to admit up front that I simply do not believe thatgovernment-sponsored healthcare is a good thing. So, I personallyoppose heathcare that is provided by the government.

The primary problem with our current system is that the consumerreally has no idea of the cost of their heathcare, and thereforeare not wise users. Our first move should be to eliminate directpayment from insurers to providers. Non-catastrophic items shouldbe paid by the patient and reimbursed by the insurer.

Second, we should eliminate the preferred provider arrangementsand let the marketplace cost where it should be. Our current systemunderprices one side, and overprices the uninsured orout-of-network clients to compensate.

If we were to go back to the idea that medical insurance is notfirst-dollar coverage, and that individuals and families shouldtake care of routine healthcare, and insurance is reserved formajor events, I suspect we could cut costs significantly. Then wecan focus government attention on those who need help with theirexpenses.

I think Health Savings Accounts are a step in the rightdirection. The problem is they are typically tied to some kind ofpreferred-provider arrangement. If we move back to generalindemnity-type coverage, use HSAs to force the use of medicalinsurance for major issues and then help those that cant pay theircosts, we will be moving in the right direction.

Im not sure of many things, but I am sure that if governmentgets into the heathcare business more, it will deteriorate evenmore.

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Scott F. Hokanson, Sr., Employee Benefit Administrators, Hanover,Mass.

I am a loyal reader to both your property-casualty andlife-health National Underwriter magazines. I am a health insurancespecialist in Massachusetts and I would like to provide some of mythoughts on health insurance in the U.S. I hope you find theseinsights useful.

To provide some credibility.I was just asked to speak at theNational Association of Health Underwriters annual capitolconference in D.C. to 650 of my peers on the new Massachusettshealth reform law that will be a guideline for other states healthreform packages.

Redundant Medicine:
To address the cost of health insurance, we have to address thecost of healthcare. One area that can get results is addressingredundant medicine. Today we have far too much diagnostic workbeing repeated when a person sees a new provider of care. If eachinsured person had an electronic file that had their COMPLETEmedical history available, physicians would not have to re-ordermany diagnostic procedures.

The doctor would also know the history of the patients reactionto medications, and what medications the person has been prescribedand family history. Today, physicians often rely on the intakepaperwork we all fill out each time we show up at a new office.Better informed physicians produce better results.

Our current malpractice liability system also encouragesproviders to perform defensive medicine because they do not haveall the information they need at their fingertips. A doctor can besued if they did not do their due diligence before ordering or notordering a procedure.

We cannot blame the doctors for their inability to know thehistory if we have not provided a method of delivering it to themwhen they need it. We can blame the doctors for not investing inthe systems that would let this happen. There is a solution.

Solution: Medicare mandates that all providers find a way todeliver medical information in a standard electronic format to acentralized database. This does come with serious privacy concerns,and we will have to rely on the parties involved to solve that veryserious concern.

Can this happen? The example I give is the Health InsuranceProtability and Accountability Act. When HIPAA was passed about adecade ago, providers were all on board and compliant before Jan.1, 2000. That was an incredible change in culture for physicians,but the threat of loss of Medicare income forced the change verysuccessfully.

Conservative estimates are we can save billions with a fullyimplemented electronic medical history system. AND WE WOULD NEVERHAVE TO FILL OUT INTAKE FORMS AGAIN!!

Medicare Negotiation of Prescriptions:
Private markets do drive down costs. Already, prescriptions aredelivered to insurance companies through few, but large pharmacybenefit managers. Some of these PBMs have substantially more peopleenrolled than Medicare. Buying power has been maximized already inthe private market.

Solution: Medicare should use existing private PBMs to negotiateon their behalf.

Canadian Drugs:
If a person wants to purchase drugs from Canada, I say go for it.If you are willing to take the risk of a lower level of oversight,then that is your right. Please realize that Canada does not havethe supply to support U.S. demand (and pharmacy manufacturers arenot motivated to increase that supply). If the U.S. ever passed alaw allowing purchase of Canadian drugs, Canada would pass onedisallowing it. But once again, if a free citizen wants to buydrugs from any country, I am not opposed.

Solution: Legalize it, but be prepared when Canada outlaws itfrom their side. This will save consumers money in short run, butit is not a long-term solution.

Transparency of Costs AND Outcomes:
We need access to cost and outcome results for providers. There aremany procedures that do allow consumers to research where and whenthey want to have their care delivered. This is true even within alimited network.

The problem today is we all think the local teaching hospital isthe end- all and be-all for every procedure. You cannot blamepatients who do not have the information.

Publishing outcome data would also provide a level ofaccountability to all providers. If you are going to have LASIK eyesurgery, wouldnt you like to know who performs the most, with thebest results? Insurance companies and providers can provide thisdata–they have it already they just do not share it with themarket.

Solution: Require Web-based access to information on cost andoutcomes.

Address Those Uninsured Who Do Not Pay For Care:
Covering the uninsured is the right thing to do, and theCommonwealth of Massachusetts is providing a great model for doingso.

What we do know is if a person goes to a provider, and thatperson does not pay for care, the cost of that unreimbursed care isessentially passed onto the private market. Today about 30 percentof the uninsured accessing free care are eligible for state and/orfederal aid. If they enrolled in aid programs, the provider wouldbe compensated.

Solution: Require providers to prove that they tried to enrollthe patient in the available state/federal program prior to theprovider submitting claims to the state's uncompensated carepools.

One note on the uninsured: Did you know that around 35 percentof the uninsured make over $50,000, and they pay for 96 percent ofthe care they receive. These people are classed as uninsured, butthey should be (or 96 percent of them should be) classed asself-insured

I assure you universal healthcare is not the answer. Americansneed freedom, and we will not give it up. Consumers and providersdo need more access to information, and that access will providebetter results. If you give Americans and their doctors theinformation they need to make informed decisions, they more oftenthan not make the right ones. The insurance companies, theproviders of care and Medicare all have the information we need. Weshould require they share it.

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Chip Morrison:

I'm conviced that the solution to our healthcare mess is simple,though I'm sure I'm not the first to have such delusions ofgrandeur. Everyone should be under a plan with a high deductibleand a Health Savings Account, and here's why.

Our healthcare may seem to be excessively expensive, but topquality care comes at a price. However, a significant portion ofthe cost of healthcare is generated from accounting andadministrative expense. While this provides a great employmentopportunity for those in the field of medical billing and insurancereview, the system is grinding to a halt trying to support
what should be a minor, ancillary branch, rather than the master ofthe puppet that it has become.

Who is making the decisions on what type of care the publicshould have? The doctors in conslutation with the patients?….Nope.That would be the insurance professional whose job it is to makesure that every dime of payout is justifiable at their next qualitycontrol review.

Do the medical providers care if they over-bill the insurancecompanies? Of course not, because either they'll get lucky and getpaid the full bill, or at least when it gets denied as outside ofreasonable and prudent, they have negotiating room. And it's notjust the direct, quantifiable costs that are affecting the system,it's the “pirate” mentality that it creates that is really wreakinghavoc. The providers keep inflating bills to whatever they thinkthey can get away with, the insurers keep denying coverage infutile attempts to plug the holes in the ship, while the patientssit adrift, waiting for someone to come along and explain what therules of the game are….for today.

Of course this doesn't matter to the fortunate few with the bigtime corporate or government insurance plans, who will visit thedoctor to have someone wipe their nose when they sneeze, or go getan MRI to the tune of several thousand dollars, because they wokeup a little stiff this morning, and besides, it's a good way to geta half day off. So our current system has created the haves &have nots, but neither is motivated to be an educated consumer.

But what if the first $5,000 of your annual medical expense cameout of your pocket–money you put there from premium savings, AND ifyou don't spend that money, it's yours! You can stick it ininterest bearing account, watch it grow, and maybe some day evenpay your annual upfront costs, just from the interest!. Might youthen take the time to decide what care/procedures are truelycritical?

And when you do need care, you pay CASH, right out of yourHealth Savings Account, and the provider charges you 20-to-30percent less than they would bill your insurance company, becausethey don't have to join the pitchfork-toting mob storming the gatesof the insurance company castle trying to get payment. And in timethe cost reductions could continue to grow, as the army of billersand reviewers are decommissioned, and the public becomes morehealth care savy in a more truely capitalistic market.

There is, and always will be a portion of the public that is notblessed with good health and/or good business acumen. The problemis, we've always tried to make health insurance avaiable to them,and that just hamstrings the whole system. They don't need“insurance” in the truest form. For various reasons this sectoreither can't pay premiums, or is overwhelmed by the process, orboth.

They need “assistance” in the form of governmental aide, orprivate charity. But if the balance of Americans are in a programthat allows them to make the most basic healthcare decisions basedon a medical professional's advice (imagine!), AND have the powerto control routine expenses to THEIR own benefit, one David canslay multiple Goliaths:

1. Maybe we'll go back to being a more self-dependent, savings(instead of credit)-oriented society.

2.Maybe providers will focus on healthcare, instead of how tomaximize the current bill, because they never know what they'll getpaid for on the next bill.

3. Maybe insurance companies will be able to feret out the realcheaters, if not everyone is trying to cheat them all the time.

4. Maybe we'll get off the couch, stop stuffing ourselves withunhealthy food choices, and pay attention to our own wellbeing.

It all starts with one small step. But we'll all have to play bythe same, single set of rules, and if it's set up right, it willhave the counter effect of our current system. The goverment aidewill be the least attractive, but sufficient for those who truelyneed it option, while the HSA option will provide real opportunityto build savings and empower the public in an area of life wherewe're currently as helpless as a dingy in a hurricane.

And “Yes,” we'd need a program to help folks learn to manage andmaintain their account, and “No,” it's not going to be all bettertomorrow morning. Would Hillary's plan work? The answer to thatquestion is the same as this one: Would Hillary's plan be acatalyst for any of the aforementioned “Maybe's”? I'm not thatdelusional.

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John Sorg:

Your point seems to be “there are serious problems, so let's doanything, even if it will make it worse!!”

Sorry, but taking the socialist “out” will take one set ofproblems and replace them with a worse set of problems. You mentionthe problems with Canada, so you obviously realize that replacingour profit-oriented system with bureaucrats is like trying to cureheart-disease with cancer!

There are all kinds of tax-code solutions, tort-reformsolutions, etc. You want specifics?? How about these??

–Welfare recipients and others unable to afford basic healthcarereceive a voucher for up to $5,000 per year in healthcare. Thevouchers can only be redeemed from licensed healthcare providers.For more serious problems, private catastrophe policies will beprovided, and the insurers providing this coverage for theunderprivileged will receive 100 percent credit on their incometaxes for each dollar of coverage paid for.

–There should be national tort reform with regard to medicalprofessional liability. There should be capping of awards and alimit of 5 percent contingency on attorney fees. (I don't want tohear about how the stupid lawyers control everything–that's ourfault for electing them!! Do this and eliminate billions of dollarsof wasteful spending on “defensive” medicine!)

–Eliminate the medical component from workers' compensationpolicies in exchange for universal coverage.

Otherwise, use the tax code to encourage wellness programs.Whatever is done needs to have these components:

–A) Make sure all are covered.
–B) Eliminate the tort lottery for attorneys.
–C) Put the decision for care in the hands of the patients, whowill then shop and bring the competitive element into healthcare,which has been missing. (In the current situation, the worst-casescenario in a profit-oriented industry exists because there is nocompetition
and costs just continue to rise without the competitionregulator.)
–D) Other than using the tax code to encourage wellness, totalcoverage, elimination as much as possible of attorneys and theirfees, get the government out of providing for healthcare!!

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Jim Conner:

I read your column–Was Hillary Right?–and I must tell you that Iam more than frustrated. When an experienced insuranceprofessional, as you are, would think that any governmentcontrolled option is a better option than what the privatemarketplace would provide is unbelievable. The current system mayseem status quo but it isnt. Businesses are always looking for abetter, more competitive way to provide services, and like otherindustries the business of healthcare will solve its ownchallenges.

Im not looking for the next presidential candidate to solve thehealthcare challenges. Im looking for our marketplace to solvethese challenges. Government, whether its run by Hillary or George,is not the solution but an additional problem that will result inwaste, inefficiency, few choices and higher taxes.

When is the last time a government solution has been the bestsolution? Think Post Office, Social Security and Medicare. All ofthese are fraught with waste, inefficiency, no choice and are moreexpensive than what the private marketplace would charge.

I thought you were an advocate for the insurance industry but Iwas wrong, and I will be cancelling my subscription as I can getthe “government is the solution” on the nightly news. They are alsolosing their marketplace as competition has replaced them.

Sam's Response:

Frankly, Im disappointed to hear you will cancel yoursubscription over this. One of the big problems in this country isthat every disagreement is magnified into all-out war. No onelistens to anyone elses opinion anymore. Friction is what democracyis all about; compromises are made among people of differentinterests, philosophies and views for the common good. You dontjust walk out on an argument.

I am not an advocate of the insurance industry, and never was,although I frequently defend the industry when I think they are inthe right. I am a professional journalist and experienced observercovering news objectively and offering my opinion in theappropriate space. If you disagree, say so, as you do here. But tojust turn your back on anyone the moment you disagree with them iswrong, sir.

As for the substance of your argument, Social Security andMedicare have kept tens of millions out of poverty, myselfincluded. Indeed, Medicares overhead is far lower and the programoperates more efficiently than any private health plan. The factthat tens of millions are uninsured in our private market is aproblem I would like to hear you address more substantially thanmerely objecting to another alternative.

Jim Responds:

I understand that to disagree is good and what our country isall about, and I dont consider our differences war. I consider NU apublication that should inform me and understand the businessaspects of our industry. I am not walking out of an argument; Ijust dont want to spend my dollars for a subscription to a businessthat wants to suggest and condone the position that our business isbetter served by having government intervention and governmentcontrols.

I dont see the government as the solution to the insuranceindustry's challenges and I disagree with your position thatMedicare is a lower cost and I disagree that Social Security hasaccomplished its intended goal. Both programs are too expensive forwhat you receive, and the taxes that pay for these services, ifleft in the hands of the taxpayer, would handle this in a much moreeffective way. Social security is a program that is bankrupt andneeds more taxes to keep going, and like all government programs,accountability and effective use of taxes are never addressed.Congress has been robbing Social Security for years to pay forother programs, and if we had been able to use these tax dollarsfor our own retirement we all would have more.

Your position and mine are at opposite ends of the spectrum.However, I would defend your right to write them and publish them.I think that our differences are central to the argument of whetherthe government is best suited to solve business challenges or letthe free marketplace settle them.

Your question on how I would address the issue of tens ofmillions are uninsured is a problem and how that would be addressedis quite simple. These millions of people are not uninsured for thesame reasons. Some of them choose not work at a business thatoffers health insurance, and some of them choose to spend theirincome on other things that are more important than healthinsurance to them.

Most people choose how to spend their own income, and if theychoose not to buy health insurance thats their decision. Healthinsurance is available to people, either through employers whooffer health insurance or through individual plans or through stateassigned risk plans, but for the majority of people I thinks its adecision that they make to not spend their own dollars for healthcare as they have other priorities for spending.

To me this is the classic crisis that government wants to solveso they can once again jump in and save us from us. Theres always acrisis that needs to be solved–today its healthcare, tomorrow itwill be a new crisiseverybody deserves a home, or everybody needs acar, or everybody deserves a job and shouldnt be fired. In the endits the same old story–some government employee thinks they cansolve my problems better than I can.

History shows that anything the government does is more costly,less effective and we need less government not more.

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Bob Heusinkveld:

After reading Sams editorial in the Feb 5 issue, its obvious Samdoesnt know the first thing about health insurance or the medicalcare system. He really ought to stick to subjects he knowssomething about.

After 45 plus years in the health business and several recentsurgeries, I can testify that he just doesnt have a clue. To givejust one example, if you are covered by a health plan administeredby Blue Cross of Alabama you have a choice of using any hospital inthe state and over 90 percent of the doctors, all at substantialdiscounts from billed charges. And they cover over half the peoplein the state.

Most PPO plans give participants more than adequate choices, andAlabama is not an exception to the rule. I dont know who sold Sam abill of goods but he ought to check the facts.

Sam Responds:

I know my own health plan quite well, sir, which provides nocoverage for any provider outside the network. None. I am luckythat most of my doctors in Brooklyn are covered, but not all,forcing us to shop for another doctor for no good reason other thanthe fact they dont have a contract with that particular insurer.And for many of my colleagues working in New Jersey, the choice ofphysicians and facilities is extremely limited. Plans of friendsand family with other insurers face similar restrictions. Drugcoverage is similarly limited, with perfectly fine drugs that aredoing the job arbitrarily banned mid-policy, and the patient toldto take what's been approved or pay for it out of your ownpocket.

Perhaps you represent one of those “gold plated plans thatPresident Bush wants to tax as part of his healthcare reformplan.

Bob Responds:

As I suspected, it seems you have based your analysis of ournational health care system on personal experience with limitedexposure. Based on that experience I can understand your feelings.However, many New Yorkers have trouble remembering theres a bigcountry out there west of the Hudson and most of us dont share yourproblem. The system is working pretty well out here and to suggestthat it be replaced with an inefficient bureaucratic federalnightmare shows a lack of understanding.

Sam Reponds:

the last time I checked, there were at least 43 millionuninsured and counting, and many more underinsured, or discouragedfrom using healthcare because of the cost or limitationsinvolved.Gotta be a few outside of New York, right?

Bob Responds:

We dont have a perfect system, but for most of us its a lotbetter than the picture your editorial painted. I sure wouldnt dumpit for a single-payer monster thats too large to function. By theway, those 43 million are all getting health care now and were allpaying for it one way or another.

Sam Responds:

All I am saying is that the system is not functioningefficiently or effectively, and alternatives should beconsiderednot necessarily a government takeover, but not throwingout the possibility of government intervention, either. Are yousaying there should be no political discussion of this problem?

Bob Responds:

I believe the demand for health care is close to infinite. Thesupply isnt. The economic allocation of the resources isnt alwaysfair, but government allocation and intervention would be worse,either inflexible or controlled by political influence. Thesolution has to be controlling obesity and technological progressto continue to control some disease and reduce the amount oftreatment needed. End of life treatment and preemie babies aregetting an exorbitant share of resources. Maybe government shouldstep in there but can you imagine the political outcry?

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Wayne Six, President, Six & Geving Insurance, Inc.

I am a long-time agent and reader. Your knowledge of basiceconomics is sadly lacking. The root of the serious problemssurrounding healthcare is a combination of tax preferred treatmentof premiums (government intrusion) with a disconnect between userof services and having third-party payer system.

The first issue tied healthcare to employment and tax-favoredstatus–both abysmal ideas. The second issue insulates the user fromdirectly knowing and having involvement in the cost.

Getting more government involvement will make things worse whilepoliticians pretend they can give some benefit to constituents forfree. Thus, my observation, about economics.

THERE IS NO FREE LUNCH!

Government cannot give any benefit without tax revenue in excessof the benefit. Government does not possess the capability,knowledge, or resources to provide healthcare. It is only leftoversocialist thinking from academics who have confused a list of whatthey believe people have a right to have. In essence trading afalse idea of security from a disastrous health issue, for thefreedom to direct your own health care decisions, and costs.

I have several steps to provide a framework for healthinsurance, if you are interested let me know.