Health Insurers To The Rescue

DrRich | February 18th, 2010 - 11:33 am

The U.S. Congress has been distracted from the vital issue of healthcare reform in recent weeks, due to the prospect of elections of one form or another (that is, Scott Brown’s, or their own). It may be a little difficult to understand why the Democrats – who still hold the Presidency, a large majority in the House, and a 59 to 41 majority in the Senate – suddenly seem to be so very disheartened, to the point of virtual paralysis, on healthcare reform. Healthcare reform, after all, is the crowning jewel in their agenda to fundamentally change America as we know it.

While President Obama, Speaker Pelosi, and a few other stalwarts seem to understand that passing healthcare reform would be worth almost any price that might be extracted by the electorate in November, less principled (and more at-risk) members of Congress, who are apparently less dedicated to a certain ideology than their leaders, apparently see it another way.

And so, from all appearances, things appear to have stalled on healthcare reform.

But while our political leaders seem willing at this moment to take a breather – either to lick their wounds and regroup, or to celebrate an important tactical victory – one interested party in the healthcare reform wars cannot afford to rest.

That would be the health insurance industry.

As DrRich has pointed out before, the health insurance industry is the one entity that simply cannot afford to wait. They need healthcare reform now.

The health insurance industry has pretty much run out its string. The era in which insurers can increase their market cap by acquiring public assets (i.e., non-profit institutions) for a fraction of their true value, and by making mergers and acquisitions, is pretty much over. For the past few years insurance companies, for the first time, have had to try to make a profit by taking care of sick people. They have never done that successfully, and never will. They have tried every underhanded trick imaginable to avoid paying benefits to their subscribers. They have already raised insurance premiums to the very breaking point. But an uncooperative public insists on getting older and sicker, and greedy drug and medical device companies insist on bringing ever-more expensive technologies to the clinic. The insurance industry finds its profit margins (already small) rapidly eroding. The industry’s business model – taking in inflated insurance premiums, then attempting to withhold medical services – is irreparably broken.

As a result, what the health insurance industry needs more than anything else is a graceful exit strategy. And Mr. Obama’s healthcare reforms promised them that very thing. (What, exactly, they have been promised is largely a matter of conjecture, but most likely they will take on a role in administering government-funded healthcare, quite possibly assuming the role of a public utility.)

Whatever may be the particulars of the “deal” the health insurance industry struck with the reformers, that deal offered them enough to purchase their silence during the entire roiling debate over healthcare reform through the summer, fall and winter. They have stoically (almost cheerfully) accepted their assigned role as “villain” in this set piece, and have silently borne the public “attacks” the President and his soldiers have dutifully launched against them in an effort to drum up support for their reforms. All the nasty things the Democrats have said about them, the industry understands, are necessary components of their last best hope to salvage something serviceable out of their broken business model. No Harry and Louise this time!

Despite this symbiotic relationship, the reforms envisioned by the Democrats and the insurance industry have now faltered. The stalling of the reforms, however, means very different things to these partners.

For the Democrats, while abandoning, or even substantially diminishing, the ambitious reforms they had in their sights might prove modestly embarrassing for a time, such is the nature of politics. When one overreaches, one pulls back and waits for a while, until the other side overreaches. Look at where the Republicans were just a year ago. A year or three from now, they may be back in a similarly diminished state – and the time for passing healthcare reform may again become propitious. If you’re a Democrat politician, you must take the long view.

But the insurance industry does not have that luxury. They are at the end of their tether, and their only alternative to a graceful exit strategy of the type (whatever it was) the President promised them, is a completely graceless one. Whatever happens or doesn’t happen with healthcare reform, the insurers can’t keep doing business as usual. DrRich believes the health insurance industry has been backed into a corner, and the doorway the Democrats were making for them is being nailed shut.

In such a situation, it is entirely predictable that the insurance industry will take some kind of drastic action, to try to force healthcare reform back on the table.

And last week, Wellpoint did so. Wellpoint’s California subsidiary, Anthem Blue Cross, announced it is raising its already-astronomical health insurance premiums by as much as 39%, a move that promises to greatly increase the number of Californians who are uninsured.

Kathleen Sebelius immediately fired off a public letter to the company, demanding that they justify this unconscionable rate increase. And Wellpoint, lustily assuming its assigned role as villain, was delighted to comply. We’re in a recession, Wellpoint brazenly asserted, and in a recession, like it or not, people exercise their prerogative to drop their health insurance. The only people who don’t drop their health insurance are the sick people or those who are likely to become sick, which means that our cost per subscriber goes way up. So naturally, we have to increase premiums. By a lot. It’s just business. That’s just the nature of our current, unreformed healthcare system. So choke on it.

Wellpoint was also kind enough to mention (for anyone dense enough to have missed the point) that the need for higher premiums would be nicely mitigated if everybody was mandated to purchase health insurance.

Wellpoint’s premium increase immediately triggered great volumes of delighted outrage by thankful Democrats, who really need a large dose of “evil insurance company” right about now, but it elicited only a few lame and uncomfortable attempts by stunned Republicans to diminish the significance of the unfortunate action.

DrRich would like to point out that, from a pure business standpoint, there was no good reason for Wellpoint to stir the soup at this moment. Wellpoint is the most financially sound private health insurance company. While its California subsidiary did lose money last year, overall the company performed quite well, and reported a very nice profit growth for the year. And with several of its competitors in trouble, Wellpoint stands to do comparatively well for the foreseeable future. So it stands to reason that, if Wellpoint really wanted healthcare reform to go away, they would have waited a few months before announcing their rate hike. It would have cost them very little to do so. The last thing they would have done is to throw the reformers a critical lifeline just as they were going under for the last time.

Wellpoint’s astounding premium increase was, DrRich submits, a strategic move to push health insurance reform back to the front burner.

The Republicans, many of whom believe that the failure of Obama’s healthcare reform will spell the failure of his presidency, have been thereby served notice. An angry electorate – which, at the moment, seems ready to punish Democrats for their attempt at passing an unpopular government takeover of healthcare – is likely to become even angrier if it turns out that the failure to reform healthcare will give the haughty insurance companies the green light to price even more millions of hard-working Americans out of the health insurance market. That species of anger will be directed toward the Republicans, and not the Democrats.

DrRich has always maintained that if healthcare reform is to happen, despite the incompetence of the Democrats who control everything, the reason it will happen is because the insurance companies cannot survive without it.

Accordingly, Republicans who understand what Wellpoint is telling them will think twice about skipping President Obama’s proposed bipartisan summit on healthcare, or behaving intractably if they do show up. If they fail to get the message, DrRich suspects that we will soon be hearing about additional, even more astounding, rate hikes.

Let Us Remain Philosophical in Defeat

DrRich | February 15th, 2010 - 10:42 am

DrRich wishes to congratulate Bob Doherty of the ACP Advocate Blog for his victory over the Covert Rationing Blog in the 2009 Weblog Award Competition, in the category of Best Health Policy/Ethics Blog. As DrRich has said before, Doherty is a gentleman and a fine writer, and anyone who has read his blog will see right away that he is a worthy victor.

And now DrRich must turn to his loyal readers, to try to assuage what must be their bitter disappointment. We are, many of us, surprised, if not stunned, by the outcome of this vote. After all, the Covert Rationing Blog led the voting by a reasonably substantial margin throughout most of the two-and-a-half-week voting period, and indeed remained with a comfortable lead when most of us retired last night (Sunday, Feb. 14). Then upon awakening this morning, we find that our worthy competitor had received a truly impressive onslaught of last-minute votes, in the few hours before the polls closed at midnight, to secure the win.

DrRich cannot, of course, completely wipe out the disappointment for most of you. The pain, understandably, must be far too deep for mere words to vanquish. But allow DrRich to leave you with some thoughts to ponder as you work to resolve your frustration.

1) This election result merely reflects modern American political reality. While it is commonly said that, in elections, the winning strategy is to “Vote early and vote often,” the more assured path to victory is, “He who tabulates his votes last votes best.” That is, don’t let the opposition know how many votes you have until you yourself know how many votes you need. This rule was established by Mayor Daley (the original one) in the presidential election of 1960, and it has held up very nicely for 50 years. The ACP, which is largely a political organization, may be aware of this axiom.

2) For those who believe that the last-minute, stroke-of-midnight outpouring of support for the ACP (on a Sunday! on Valentine’s Day!) seems suspicious, remember who you are dealing with here. This may be difficult for readers of the Covert Rationing Blog – who tend to be salt-of-the-earth, red-blooded, lusty folks, who (no doubt) spent the last few hours of Valentine’s Day with their loved ones doing, well, Valentine-y things – to understand. But you’re dealing with doctors here, and not with the let’s-just-go-cut-the-damned-thing-out surgery types, either. You’re dealing with internal medicine specialists. These are the guys (and girls) you knew in college who looked forward to football Saturdays because the library would always be so much quieter. It is not so unreasonable to visualize the ACP membership entering into their Blackberries a few weeks ago a notice to vote for the ACP at 11:59 PM on February 14. They knew they would probably be logged on to their computers at that moment anyway, reading the latest research on the complement cascade.

3) It would have been greatly embarrassing for the ACP to lose in this vote, while it was not at all embarrassing for the Covert Rationing Blog to lose. DrRich took great pains to make it so, what with his loud, persistent (and, if you’re the ACP, annoying) challenge to the New Ethics promulgated by the ACP. Especially when the ACP made a fairly ineffective and dismissive early effort to respond to DrRich, and then assiduously ignored him thereafter, DrRich did not think for a moment that this large and influential organization would allow this embarrassment to happen. Anyway, by virtue of the ACP’s victory, there is much less embarrassment in the universe today than otherwise would have been the case. And that’s a good thing.

4) DrRich never really believed he would be able to beat the mighty ACP in this competition. Their resources are simply too great. His only chance of victory, he understood from the beginning, would have been to remain entirely silent about the Weblog award, and hope the ACP did not take much notice of it. But instead, DrRich decided to use the fortuitous occasion of being named a co-finalist with the ACP in a medical ethics competition to call them out on medical ethics. By relentlessly poking away at what might otherwise have remained a sleeping giant, DrRich assured his own loss. But, dear readers, getting the ACP to respond publicly to this challenge was far more rewarding, and far more important, than winning a Weblog award. DrRich, for one, feels more firmly now than ever (based on that anemic response) about the ethical bankruptcy of the New Ethics.

In this process, DrRich hopes he was able to call the dangers of the New Ethics to the attention of at least a few of his readers – especially some of the patients who have become entirely marginalized by the New Ethics, and some of the doctors who are considering extricating themselves from the quagmire, and re-establishing the doctor-patient relationship outside the traditional system. If so, the experience will have been very worthwhile and very satisfying.

DrRich would like to thank the people at medGadget for selecting him as a finalist, and especially for selecting the ACP as a co-finalist; and he would particularly like to thank all the hundreds of people who went out of their way to vote for the Covert Rationing Blog. The magnitude of your support – which (judging from the evidence) may have required an extraordinary last-minute effort on the part of the mighty ACP to eke out a face-saving victory – is truly humbling.

Implications of the New Ethics – The Transcendent Importance of Retainer Medicine

DrRich | February 10th, 2010 - 10:49 am

In his past few posts, DrRich has offered a substantive criticism of the new code of medical ethics which has now been formally adopted by over 120 physicians’ organizations across the globe. (See here, here and here.) Fundamentally, the New Ethics abrogates the physician’s classic obligation to always place the welfare of their individual patients first, by adding to it a new and competing ethical obligation (called Social Justice), which requires doctors to work toward “the fair distribution of healthcare resources.”

The New Ethics was explicitly born of the frustration felt by physicians as a result of the multitude of coercions the payers have thought up to force them to place the needs of the payers (the proxy for “society”), ahead of the needs of their patients. Thanks to the New Ethics, doctors can now bend to this coercion without violating their ethical standards.

Coercion by the payers was, of course, quite effective even before the New Ethics made capitulation ethical. This is because the third party payers – both private insurers and the government – have long had a stranglehold on the individual physician’s professional viability. Nonetheless, the fact that the New Ethics now formally divides the physician’s ethical obligations between their patients and society has very practical implications. By eliminating the remaining (relatively low) hurdle of ethical nicety, the New Ethics clears the way for even more sophisticated, more “official,” and more enforceable methods for achieving bedside rationing. (We have even seen the phenomenon, DrRich submits, of professional organizations going along with – and even assisting with – the development and implementation of such methodologies.)

As DrRich has described before, it is the primary care physicians who, so far, have borne the brunt of payers’ efforts to force bedside healthcare rationing. And to the very great credit of PCPs, despite the New Ethics aimed specifically at “curing” their sense of guilt and frustration, a majority of them remain very disturbed by the increasing pressure to make the needs of their patients their secondary concern.

Indeed, if anything, their frustration has grown. In the past, when they were torn between laying out an expensive but likely beneficial medical option for a patient, and not offering it because doing so would anger (say) the government, they could at least rely on classic medical ethics to back them up if they chose the less expedient path. Today, they have ethics as well as expediency pushing them, in such a case, to remain silent about that more expensive option.

To many PCPs with a strong sense of obligation to their patients, the coercive nature of the payers, combined with new ethical standards that virtually obligate them to give in to the coercion, have made modern primary care medicine a nearly untenable proposition.

Thus has the New Ethics rendered the practice of retainer medicine a matter of transcendent importance.

DrRich here uses the term “retainer medicine” as shorthand for any practice arrangement in which the doctor is paid directly by the patient, and not by third party payers. In some of these arrangements, patients actually do pay their physician a retainer fee of a few hundred to several thousand dollars a year. Such formal retainer arrangements – often called “boutique” or “concierge” practices – first began to pop up a decade or so ago. More recently, practices have begun appearing in which there is no actual retainer fee, but instead, patients pay their doctors the same way they pay their plumbers – on a fixed payment schedule according to the time the doctor spends with them. These pay-as-you-go practices generally are inexpensive enough to be affordable to any family that can afford cable television, or cell phone service.

Many retainer practices also provide amenities you often don’t get when your doctor is paid by Medicare or an insurer, including access to the physician’s cell phone, e-mail correspondence, same-day appointments, and plenty of face time during appointments. But whatever the specifics of a particular practice may be, the key that defines “retainer medicine” (as DrRich is using the term here) is that the doctor works for the patient, and nobody else.

Retainer medicine has been under steady attack, from the moment it first appeared, as being elitist, unethical, and divisive. The argument goes: While retainer medicine may be good for individual selfish doctors, and individual wealthy patients, this style of practice threatens to do much harm to the greater good. Critics maintain that retainer medicine threatens to create a two-tiered healthcare system (one for the wealthy and one for the poor). Plus, they say, if any substantial number of physicians were to adopt this odious new style of practice, there wouldn’t be enough PCPs to go around. Many critics have even called for making retainer practices illegal, and some states have already taken action to do so. The rationale for banning retainer medicine, boiled down, is: It is bad for doctors, patients and the public good.

To DrRich, the vociferous objections being raised against retainer medicine strongly suggest something deeper. DrRich believes that critics would simply find it far too “inconvenient” to have a bunch of wild retainer practitioners running around, disclosing to patients ALL their healthcare options, when the more well-behaved doctors are disclosing to patients only the healthcare options approved by government-assembled panels of experts. Retainer practitioners, in other words, will make covert rationing much more difficult. However, this is not a point of view which critics have been willing to express publicly, so DrRich will let it lay.

But even the publicly-expressed objections to retainer medicine – the notion that it is bad for doctors, patients, and the public good – are wrongheaded. Indeed, thanks particularly to the New Ethics, the opposite is true. Retainer medicine is perhaps the only pathway toward rescuing patients and the medical profession – and thus for best serving the public good. For PCPs to continue practicing under what has become the “traditional,” third-party-payment system is, in fact, the far greater threat.

It has become impossible – both in practical terms and now, in ethical terms – for “traditional” PCPs to fight the pervasive pressures being visited upon them to ration healthcare at the bedside. To escape this fate, they must either become specialists, deep-sea fishermen – or a retainer practitioner. That is, PCPs must choose between remaining in a system that ruthlessly pushes them toward a practice of bedside rationing (which many find an unethical, demeaning, and harmful style of practice), or, one way or another, getting out of traditional primary care medicine altogether.

To argue that retainer medicine is unethical is completely backwards. Retainer medicine restores the professional integrity of medical practice, and re-establishes a doctor-patient relationship in which the physician can again assume the duty of a true advocate. It is perhaps the only remaining means to restore the foundational (but now officially obsolete) medical ethic of always placing the patient first.

To argue that retainer medicine somehow threatens patients completely ignores reality. Retainer medicine may be the only remaining viable pathway toward restoring protections that patients are supposed to have when facing a healthcare system that is utterly bent on avoiding spending money on them.

To argue that retainer practitioners are creating a two-tiered healthcare system is ridiculous on its face, in a society that gives mere lip service (though, to be sure, plenty of it) to the problem of 47 million uninsured, and in which physicians already cannot afford to care for patients on Medicaid (or increasingly, on Medicare), because they lose money each time such a patient walks in the door.

To argue that retainer medicine will create a subpopulation of elites (because it provides a mechanism by which some individual patients can escape the deadly obstacles that have been intentionally laid before them), is as absurd as arguing that George Washington was wrong to free his slaves upon his death (or even that New York State was wrong to abolish slavery at about the same time), because it created a subpopulation of “elite” (i.e., free) African Americans; that until all slaves were freed, no slaves should have been freed. Rather, freeing at least some slaves – and forthrightly stating why it needed to be done (see: Declaration of Independence) – was not only ethical, but also showed what was possible, and over time created an expectation that eventually could no longer be ignored.

Finally, we should recognize that any innovation that can potentially spare patients from some of the harm the healthcare system has in store for them will necessarily be applicable to only a minority of patients at first. That’s how disruptive processes work. They begin as niche products or services, attractive only to a few high-end users; too expensive or too marginal for the vast majority; ignored, ridiculed or castigated by current providers and by most experts. But if at their core they’re offering something fundamentally useful, they will slowly demonstrate their worth – and eventually all the potential users will see the light, and demand for the product will become explosive. When that happens, the means are found to make the new product affordable and available to meet the demand – often by making significant “adjustments” to the original concept, that nonetheless preserve the core benefits. And when that happens, the traditional providers (who never saw it coming) are suddenly out of business.

It may not be that retainer-style medicine plays the personal computer to the traditional healthcare system’s mainframe. But it is inarguable that what retainer medicine offers to patients – at its core – is every bit as vital and every bit as indispensable. And if a critical mass of the public can be made to understand what is really being offered here, there will be no holding it back.

There never has been anything even slightly unethical about retainer medicine. The arrangement by which patients pay their doctors directly was, after all, how Marcus Welby practiced medicine, and how nearly every PCP practiced until the 1970s.

The problem began when third party payers were interposed between doctors and their patients, and it became progressively more difficult for doctors to honor their primary ethical obligations. The New Ethics has escalated the problem, however, from one where basic ethical precepts were merely being violated, to one where the precepts themselves were abandoned.

And by so doing, the New Ethics has elevated retainer medicine from something that was merely an ethically justifiable curiosity, to the last refuge for classic medical ethics, and the last best hope for patients, the profession of medicine, and the doctor-patient relationship.

On Parsimonious Care

DrRich | February 2nd, 2010 - 10:54 am

Regular readers will know that Dr. Virginia Hood, Chair of the American College of Physician’s Center for Ethics, Professionalism and Human Rights, has responded on behalf of the ACP to DrRich’s challenge to debate the New Ethics being promulgated by the ACP (and sister organizations) – and that the ACP’s response was the functional equivalent of an ethics Dear John letter.

The gist of this formal reply was: “There is no ethical issue here at all. It is quite surprising that anybody would take issue with the New Ethics. And indeed “nobody” has.”

DrRich, suitably brushed off, has already delivered his analysis of the ACP’s statement, a disappointing statement which left the fundamental ethical question (namely, why the New Ethics has rendered covert bedside rationing the ethical duty of physicians) not only unanswered, but unacknowledged. So much for the proposed “debate.”

So DrRich, who back in the day was the recipient of his rightful share of Dear John letters, knows his role here. The ACP is preening for the office of Virgin Queen of the Prom, and DrRich – the jilted boyfriend who knows she’s been sleeping with the lacrosse team – is supposed to keep out of the way and shut up. And so, while he reserves the right to elaborate on some of the more surprising implications of the New Ethics, he recognizes that the ACP (and likely the 120 other physician organizations that have signed on to this manifesto) are very satisfied with their new ethical standards, and are not interested in revisiting them.

But before finally leaving the ACP entirely to its own devices, dear readers, DrRich hopes you will forgive him if he cannot resist commenting on just one more, particularly curious aspect of Dr. Hood’s reply. He refers to her remarkable injunction that, in order to meet their new ethical obligation towards the fair distribution of society’s resources, physicians should engage in “parsimonious care.”

DrRich was pretty sure he knew what parsimonious meant, of course. But the fact that the Chair of the ACP’s Center for Ethics (&c.) was now specifically enjoining doctors to practice medicine parsimoniously made DrRich wonder if perhaps he’d gotten it wrong. So he decided he’d better look it up.

The common meaning for parsimonious, and the only meaning supplied by most dictionaries (such as Webster’s New World Dictionary) conveys the sense of stinginess, or extreme frugality. Other dictionaries and thesauruses suggest: excessively unwilling to spend, ungenerous, penurious, penny-pinching, miserly, sparing, grasping, tight, close, niggardly, illiberal, mean, avaricious, covetous, and tight-assed. Illustrated dictionaries are likely to show a picture of Jack Benny or pre-ghost-of-Christmas-Future Ebeneezer Scrooge, though children’s dictionaries will likely depict Scrooge McDuck, and if progressives had their own dictionary (and they certainly need one of their own), they would show a Republican elephant.

So it would certainly appear that the “parsimonious care” which Dr. Hood urges physicians to adopt hardly seems the kind of medical care patients would hope to receive, or that most doctors would aspire to give.

Perhaps, one might think, Dr. Hood simply misspoke in this instance. Indeed, if one can manage to work one’s way through the entire sentence (which reads, “Parsimonious care that utilizes the most efficient means to effectively diagnose a condition and treat a patient respects the need to use resources wisely and to help ensure that resources are equitably available.”), it might be just possible to believe that perhaps she only meant “efficient.” And (one might speculate) in her hurry to toss off a quick reply to DrRich this past Sunday, no doubt so that she could get back to the Pro Bowl, she simply chose the wrong word inadvisedly.

But that’s not what happened. Dr. Hood did not misspeak. In fact, these words are not hers. She is quoting here directly from a key part of the ACP’s Ethics Manual.

Bear in mind that before it ever saw the light of day, the Ethics Manual received extremely close scrutiny. The Ethics Manual is a document whose every syllable has gone through numerous and careful edits and revisions, by many well-educated experts. And experts on ethics, out of all the multitudes of wordsmiths residing in the academy, are the most careful and precise with their choice of words. The use of “parsimonious” was not an error, nor could it have been a subliminal choice. Like every other word in the Ethics Manual, “parsimonious” was very carefully considered, and was specifically chosen for its precise meaning. And therefore we can only conclude that what the ACP ethicists mean when they urge parsimonious care is: parsimonious care.

And most assuredly, parsimonious does not mean merely “efficient.” Indeed, the carefully-engineered sentence in which this word appears tells us that, while “parsimonious care” certainly encompasses efficiency, it’s something more than just efficient care. Efficient care is to parsimonious care as fondness is to lust; as a gentle spring rain is to a deadly deluge. “Parsimonious” crosses that line which converts a virtue to a vice.

So yes, the ACP Ethics Manual exhorts physicians to efficient care; but also to something well beyond just efficient care – to parsimonious care. To miserly care; to penurious care; to grasping, tight, close, niggardly, illiberal, mean, avaricious, covetous and tight-assed care.

But, of course, only for the benefit of society as a whole.

Now, if we were actually engaging in a debate (which of course, he recognizes, we are not), DrRich would smugly turn to his opponent at this point and make the following summation: “Since the ‘parsimonious care’ you champion is quite consistent with the new Social Justice mandate as interpreted by me (i.e., a mandate to ration healthcare at the bedside), but not so much with the Social Justice mandate as interpreted by you (i.e., a mandate only to be efficient), I rest my case.” (Note: DrRich is courteous enough not to refer to himself in the third person when engaged in a one-on-one exchange, as that would seem impolite and arrogant.)

Then, DrRich would simply end this post, and wait for the ACP (presumably this time in consultation with the Chair of the ACP’s Center for Lexicography) to attempt painfully to assemble some sort of rebuttal.


DrRich has updated his commentary on medical parsimony, in light of the newly-published Sixth Edition of the ACP Ethics Manual, here.