I got hit with an additional wave of e-mails and phone calls when I ran my Jan. 22 blog entry–”What If Hillary Was Right About Healthcare Reform?”–as my editorial column in our Feb. 5 magazine. The spirited responses I received from readers (some irate, others merely furious, although a few actually agreed with me) are posted with this entry. But I also want to call your attention to one very interesting phone call from an agent in Michigan who wondered how much better off the auto and workers' comp insurance industries might be if a single-payer health plan took over the troubled medical components of both casualty lines. An intriguing possibility, don't you think?

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

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

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

Enjoy the following reader responses. Feel free to post further comments 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 Hillary Right? Although I am a staunch conservative Republican voting for every candidate along political lines since 1974, I believe it is time to change our system.

As an agent providing property, casualty, health and life insurance to my commercial accounts for over 28 years, I have witnessed our health insurance system become too expensive for most and difficult to work with for all. In addition, I know many physicians are starting to believe the same, including the organization I believe is known as Physicians for a National Health Plan.

Former Sen. Bill Bradley, D-N.J., came up with one solution during his primary run, allowing employers and those without insurance to purchase coverage through the Federal Employees Health Plan, but this does not address affordability.

It may take some type of tax increase to offer a subsidy or tax credit to individuals not covered by their employer to afford this. Or, it may take a value added or sales tax on the entire economy to cover everyone. This taxation method is preferred over a payroll or income 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 small business and self-employed I see everyday under-reporting their income to avoid income taxes.

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

If medical bills were eliminated from consideration, auto liability, general liability, workers compensation, and many other policies providing medical expense protection could be drastically reduced. Some would be cut in half. No longer could attorneys use the future cost of medical bills in swaying a jury verdict, as these costs would be covered by the health plan.

For those who say this is socialized medicine, I agree. Just as Medicare is socialized medicine. Our nation enacted this program because the elderly could not afford to be covered and the insurance industry was unwilling or unable to provide quality coverage at an affordable price to the vast majority of seniors.

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 an experiential or academic grounding on the heath side. However, Ive found myself splashed with info and ideas from our dealing on behalf of independent insurance agents, and as a consumer of the product myself. (Next disclaimer: These are my thoughts, and not IIABNYs. The Association should not be saddled with my personal opinions on this issue!!!)

There are no easy answers, nor are there any quick fixes. It has taken 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 that government-sponsored healthcare is a good thing. So, I personally oppose heathcare that is provided by the government.

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

Second, we should eliminate the preferred provider arrangements and let the marketplace cost where it should be. Our current system underprices one side, and overprices the uninsured or out-of-network clients to compensate.

If we were to go back to the idea that medical insurance is not first-dollar coverage, and that individuals and families should take care of routine healthcare, and insurance is reserved for major events, I suspect we could cut costs significantly. Then we can focus government attention on those who need help with their expenses.

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

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

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

I am a loyal reader to both your property-casualty and life-health National Underwriter magazines. I am a health insurance specialist in Massachusetts and I would like to provide some of my thoughts on health insurance in the U.S. I hope you find these insights useful.

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

Redundant Medicine:
To address the cost of health insurance, we have to address the cost of healthcare. One area that can get results is addressing redundant medicine. Today we have far too much diagnostic work being repeated when a person sees a new provider of care. If each insured person had an electronic file that had their COMPLETE medical history available, physicians would not have to re-order many diagnostic procedures.

The doctor would also know the history of the patients reaction to medications, and what medications the person has been prescribed and family history. Today, physicians often rely on the intake paperwork 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 encourages providers to perform defensive medicine because they do not have all the information they need at their fingertips. A doctor can be sued if they did not do their due diligence before ordering or not ordering a procedure.

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

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

Can this happen? The example I give is the Health Insurance Protability and Accountability Act. When HIPAA was passed about a decade 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 very successfully.

Conservative estimates are we can save billions with a fully implemented electronic medical history system. AND WE WOULD NEVER HAVE TO FILL OUT INTAKE FORMS AGAIN!!

Medicare Negotiation of Prescriptions:
Private markets do drive down costs. Already, prescriptions are delivered to insurance companies through few, but large pharmacy benefit managers. Some of these PBMs have substantially more people enrolled than Medicare. Buying power has been maximized already in the private market.

Solution: Medicare should use existing private PBMs to negotiate on 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 have the supply to support U.S. demand (and pharmacy manufacturers are not motivated to increase that supply). If the U.S. ever passed a law allowing purchase of Canadian drugs, Canada would pass one disallowing it. But once again, if a free citizen wants to buy drugs from any country, I am not opposed.

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

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

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

Publishing outcome data would also provide a level of accountability to all providers. If you are going to have LASIK eye surgery, wouldnt you like to know who performs the most, with the best results? Insurance companies and providers can provide this data–they have it already they just do not share it with the market.

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

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

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

Solution: Require providers to prove that they tried to enroll the patient in the available state/federal program prior to the provider submitting claims to the state's uncompensated care pools.

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

I assure you universal healthcare is not the answer. Americans need freedom, and we will not give it up. Consumers and providers do need more access to information, and that access will provide better results. If you give Americans and their doctors the information they need to make informed decisions, they more often than not make the right ones. The insurance companies, the providers of care and Medicare all have the information we need. We should 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 of grandeur. Everyone should be under a plan with a high deductible and a Health Savings Account, and here's why.

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

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

Do the medical providers care if they over-bill the insurance companies? Of course not, because either they'll get lucky and get paid the full bill, or at least when it gets denied as outside of reasonable and prudent, they have negotiating room. And it's not just the direct, quantifiable costs that are affecting the system, it's the “pirate” mentality that it creates that is really wreaking havoc. The providers keep inflating bills to whatever they think they can get away with, the insurers keep denying coverage in futile attempts to plug the holes in the ship, while the patients sit adrift, waiting for someone to come along and explain what the rules of the game are….for today.

Of course this doesn't matter to the fortunate few with the big time corporate or government insurance plans, who will visit the doctor to have someone wipe their nose when they sneeze, or go get an MRI to the tune of several thousand dollars, because they woke up a little stiff this morning, and besides, it's a good way to get a 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 came out of your pocket–money you put there from premium savings, AND if you don't spend that money, it's yours! You can stick it in interest bearing account, watch it grow, and maybe some day even pay your annual upfront costs, just from the interest!. Might you then take the time to decide what care/procedures are truely critical?

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

There is, and always will be a portion of the public that is not blessed with good health and/or good business acumen. The problem is, 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 sector either can't pay premiums, or is overwhelmed by the process, or both.

They need “assistance” in the form of governmental aide, or private charity. But if the balance of Americans are in a program that allows them to make the most basic healthcare decisions based on a medical professional's advice (imagine!), AND have the power to control routine expenses to THEIR own benefit, one David can slay 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 to maximize the current bill, because they never know what they'll get paid for on the next bill.

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

4. Maybe we'll get off the couch, stop stuffing ourselves with unhealthy food choices, and pay attention to our own well being.

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

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

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John Sorg:

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

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

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

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

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

–Eliminate the medical component from workers' compensation policies 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, who will then shop and bring the competitive element into healthcare, which has been missing. (In the current situation, the worst-case scenario in a profit-oriented industry exists because there is no competition
and costs just continue to rise without the competition regulator.)
–D) Other than using the tax code to encourage wellness, total coverage, elimination as much as possible of attorneys and their fees, 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 I am more than frustrated. When an experienced insurance professional, as you are, would think that any government controlled option is a better option than what the private marketplace would provide is unbelievable. The current system may seem status quo but it isnt. Businesses are always looking for a better, more competitive way to provide services, and like other industries the business of healthcare will solve its own challenges.

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

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

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

Sam's Response:

Frankly, Im disappointed to hear you will cancel your subscription over this. One of the big problems in this country is that every disagreement is magnified into all-out war. No one listens to anyone elses opinion anymore. Friction is what democracy is all about; compromises are made among people of different interests, philosophies and views for the common good. You dont just 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 in the right. I am a professional journalist and experienced observer covering news objectively and offering my opinion in the appropriate space. If you disagree, say so, as you do here. But to just turn your back on anyone the moment you disagree with them is wrong, sir.

As for the substance of your argument, Social Security and Medicare have kept tens of millions out of poverty, myself included. Indeed, Medicares overhead is far lower and the program operates more efficiently than any private health plan. The fact that tens of millions are uninsured in our private market is a problem I would like to hear you address more substantially than merely objecting to another alternative.

Jim Responds:

I understand that to disagree is good and what our country is all about, and I dont consider our differences war. I consider NU a publication that should inform me and understand the business aspects of our industry. I am not walking out of an argument; I just dont want to spend my dollars for a subscription to a business that wants to suggest and condone the position that our business is better served by having government intervention and government controls.

I dont see the government as the solution to the insurance industry's challenges and I disagree with your position that Medicare is a lower cost and I disagree that Social Security has accomplished its intended goal. Both programs are too expensive for what you receive, and the taxes that pay for these services, if left in the hands of the taxpayer, would handle this in a much more effective way. Social security is a program that is bankrupt and needs 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 for other programs, and if we had been able to use these tax dollars for 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 whether the government is best suited to solve business challenges or let the free marketplace settle them.

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

Most people choose how to spend their own income, and if they choose not to buy health insurance thats their decision. Health insurance is available to people, either through employers who offer health insurance or through individual plans or through state assigned risk plans, but for the majority of people I thinks its a decision that they make to not spend their own dollars for health care as they have other priorities for spending.

To me this is the classic crisis that government wants to solve so they can once again jump in and save us from us. Theres always a crisis that needs to be solved–today its healthcare, tomorrow it will be a new crisiseverybody deserves a home, or everybody needs a car, or everybody deserves a job and shouldnt be fired. In the end its the same old story–some government employee thinks they can solve 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.

***
Bob Heusinkveld:

After reading Sams editorial in the Feb 5 issue, its obvious Sam doesnt know the first thing about health insurance or the medical care system. He really ought to stick to subjects he knows something about.

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

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

Sam Responds:

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

Perhaps you represent one of those “gold plated plans that President Bush wants to tax as part of his healthcare reform plan.

Bob Responds:

As I suspected, it seems you have based your analysis of our national health care system on personal experience with limited exposure. Based on that experience I can understand your feelings. However, many New Yorkers have trouble remembering theres a big country out there west of the Hudson and most of us dont share your problem. The system is working pretty well out here and to suggest that it be replaced with an inefficient bureaucratic federal nightmare shows a lack of understanding.

Sam Reponds:

the last time I checked, there were at least 43 million uninsured and counting, and many more underinsured, or discouraged from using healthcare because of the cost or limitations involved.Gotta be a few outside of New York, right?

Bob Responds:

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

Sam Responds:

All I am saying is that the system is not functioning efficiently or effectively, and alternatives should be considerednot necessarily a government takeover, but not throwing out the possibility of government intervention, either. Are you saying there should be no political discussion of this problem?

Bob Responds:

I believe the demand for health care is close to infinite. The supply isnt. The economic allocation of the resources isnt always fair, but government allocation and intervention would be worse, either inflexible or controlled by political influence. The solution has to be controlling obesity and technological progress to continue to control some disease and reduce the amount of treatment needed. End of life treatment and preemie babies are getting an exorbitant share of resources. Maybe government should step 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 basic economics is sadly lacking. The root of the serious problems surrounding healthcare is a combination of tax preferred treatment of premiums (government intrusion) with a disconnect between user of services and having third-party payer system.

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

Getting more government involvement will make things worse while politicians pretend they can give some benefit to constituents for free. Thus, my observation, about economics.

THERE IS NO FREE LUNCH!

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

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

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