Health insurers have ‘ignited the case’ for regulation, Lois Quam says

Former UnitedHealth Group executive Lois Quam said Wednesday that the health-insurance industry’s actions in the reform debate have “ignited the case” for federal regulation of the industry, including its governance, compensation and business practices.

“It is simply a matter of when and what,” she told an audience at the Hubert H. Humphrey Institute of Public Affairs. “Insurers could have avoided this by demonstrating a consistent public spirit in this debate, but rather their actions have made these steps simply a matter of time.”

Insurers currently are regulated by individual states; in Minnesota, the Commerce Department polices the nonprofit industry.

Quam’s remarks came during a lecture titled “Making Insurers Accountable: The Case for a Public Option in Health Reform.” The lecture was sponsored by the Center for the Study of Politics and Governance. Though the lecture was scheduled some weeks ago, it was especially timely because Senate Majority Leader Harry Reid, D-Nev., proposed an opt-out public option earlier this week.

Views ‘have always differed’
Quam, who now runs an incubator focused on health care and the green economy, said she’s well aware that her views on insurance reform and a public option “have always differed” from other UnitedHealth executives and the insurance industry as a whole.

Lois Quam
Lois Quam

“Though I left the insurance industry several years ago,” she said, “I knew that this time the insurance industry had an opportunity to take a new course in the health-care reform debate — a different course than they had taken in the ’90s [during Clinton reform effort], a different course than they had taken when they opposed Medicare and Medicaid in the ’60s.”

She said the industry’s recent release of a controversial PriceWaterhouseCoopers report, which claims reform proposals will increase the cost of private insurance, showed her that little has changed since the last reform effort. Insurers’ “efforts to protect themselves rather than build something for the American people” will lead to more reform than expected, she said, pointing to the recent revival of the public option.  

“As a result, with its behavior during the debate, the industry itself has made the case for public health insurance,” she said.

Gaps showed need for programs
Public programs like Medicare and MinnesotaCare came about because of gaps in health insurance coverage, said Quam, who led the effort to create MinnesotaCare, an insurance program for low-income residents.

“The very reason Medicare had to be created in the 1960s was because the private health insurance market wasn’t offering affordable coverage to seniors,” she said.

In a question-and-answer session afterward, Larry Jacobs, director of the Center for the Study of Politics and Governance, asked Quam whether she supported the opt-out public option proposed by Reid. Such a provision would allow states to decide whether or not they wanted to participate in the health-care program.

“I’d much rather have a public option that does not include opt-out,” she said. “Having worked in health care for a long time, I’ve seen that some states like Minnesota do a good job (with public programs) and some states don’t.” She cited the Mississippi Medicaid program as one that does not work well.

It was also during the Q&A that Quam said that the health-insurance industry’s tactics in the debate prompted more calls for ending a longtime anti-trust exemption.

“Its actions in this debate have ignited the case for federal health-insurance regulation,” she said.

Though individual states have regulated the industry, she said, insurers are growing into national concerns. Quam’s former employer, Minnetonka-based UnitedHealth, is the nation’s largest insurer.

Health insurers could have made a better case for themselves in Washington, she said, by acknowledging their historic resistance to reform and indicating a willingness to work on universal access for all Americans, including a public option. “[They could have said] ‘we understand that reform is really important and that this is about the American people. It’s not about taking care of us; it’s about taking care of the American people, and we think we have a lot to offer and we would like to offer it.’

“They could have supported a public option, and when the going got tough, it’s not attacking the people who are trying to make it work. That’s what it would have taken.”

Casey Selix, a news editor and staff writer for MinnPost.com, can be reached at cselix[at]minnpost.com. Follow her on Twitter.

Comments (38)

  1. Submitted by Bill Schletzer on 10/29/2009 - 08:42 am.

    As someone who has had to face having to pay for COBRA or go without insurance after a layoff I’d like to hear the right wing posters here lay out their case for continuing things as they are. I have decent insurance at the moment because my employer offers it, but I don’t know a self-employed person who can afford the terrible plans that are now offered. And everytime we submit the simplest claim, it seems the company tries to wear us down and confuse us in order to try to get us to pay more than we should for our share. I’m sure many readers here can testify to being denied coverage for some reason and having no alternative but to incur a huge expense.

    So someone tell me, what is the case for not having a public option?

  2. Submitted by Raj Maddali on 10/29/2009 - 09:19 am.

    Do we really need a public option? Instead the govt. should be the re-insurer of last resort for catastrophic coverage/ preexisting conditions

    They can float an auction for that coverage among insurance companies. Just like the broadband spectrum. The govt. can subsidize that portion. That way an average family is only going to have to worry about regular coverage when they are unemployed.

  3. Submitted by Raj Maddali on 10/29/2009 - 09:29 am.

    Lois Quam, states that she had a different view point all these years. Can the author of this article or Mrs Quam point to any proof that such a view point actually existed.

    There is nothing wrong with singing the kool aid of your big employer. Hey, I would do that too if i was making decent money out there.

    Mrs. Quam, as we all know is the wife of a gubernatorial candidate. IMO there is no track record here.

    She claims she helped create MinnCare. Without characterizing the program, ask any primary clinic physician, and the odds are they will tell u that they can identify a MinnCare patient without asking them.

    There no health care competition in Minnesota. If Mr Schletzer wants affordable care; the very people who are now crying out for public option are the ones who make sure that health care is most expensive by making sure there is no competition.

  4. Submitted by Michael Hunt on 10/29/2009 - 09:48 am.

    “Without characterizing the program, ask any primary clinic physician, and the odds are they will tell u that they can identify a MinnCare patient without asking them.”

    Wow, Raj…help me out….what’s that code for?

  5. Submitted by Bill Schletzer on 10/29/2009 - 09:57 am.

    Raj, every article I’ve ever read says that the US trails all the western, industrial democracies in health care costs and outcomes and that all those places have some form of single payer government sponsored plan. The market place might be good at regulating the cost of home PCs but it doesn’t seem to work when it comes to health insurance or the cost of health care. Raj, you haven’t convinced me.

  6. Submitted by Raj Maddali on 10/29/2009 - 10:24 am.

    Michael

    No code, no hidden agendas. All i can say is people act differentl when dealt with a limited resource (ex. co-pays etc).

  7. Submitted by myles spicer on 10/29/2009 - 10:24 am.

    Bold, brave, intelligent, incisive, expert, and needed comments. Kudos to Ms Quam for sharing her expertise in this critically national debate.

    For those further interested, I urge you to vet and study United Health Cares current Quarterly Report; and 2008 Annual Report. You can easily find and see how OUR premium dollars are used and expended to provide us with inferior health care for the revenue we pay in.

  8. Submitted by Raj Maddali on 10/29/2009 - 10:34 am.

    Bill

    British outcomes are better because they refuse to treat/expend great amounts of money on certain kinds of life threatening illnesses. In America every one wants the maximum treatment all the time.

    Of course their outcomes are going to be better, because any way patients with life threatening are going to pass on at a sooner than later.

    A govt back stop/subsidy would be better acheives a better outcome (universal care) than creating a totall new buereacracy.

  9. Submitted by Geoff Laskowski on 10/29/2009 - 11:19 am.

    Mr. Maddali,
    The key difference between insurance coverage and the broadband spectrum is that companies make money when people use the provided services on the spectrum. Insurance companies make money when people don’t use services provided by their coverage.

    Also, if such coverage is government subsidized, what’s to stop the insurance companies from jacking up the premiums on that coverage? And what’s to stop the insurance companies from cherry picking the individuals for whom they bid? And if the answer to that question is to require the companies to provide coverage to all the members in the auction pool, again, what’s to stop them from providing that coverage at dramatically high premiums, for which the government will cover the difference?

    And if the government is going to be writing checks anyway, why not just have them write the checks to the actual health care providers through a public option instead of to the insurance companies through a subsidized auction system?

  10. Submitted by David Brauer on 10/29/2009 - 12:21 pm.

    While at United Health, didn’t Lois Quam help create Ovations, one of the Medicare Advantage plans the Obama administration claims are oversubsidized given the relative value they deliver?

  11. Submitted by Ginny Martin on 10/29/2009 - 01:23 pm.

    Raj, I don’t think you have the facts. If you have evidence that the UK refuses to pay for life-threatening illnesses, I’d like to see credible evidence. I’ve never heard this before.
    As for a government of last resort, if you were diabetic, for example, when would “catastrophe” begin: when you’re in a diabetic coma because you couldn’t afford the everyday treatment and drugs to keep you alive and functioning (and paying taxes). How about maternity. Is that a catastrophe when the woman gives birth — or is it? No payments up to then for pre-natal care, which saves lives? This is a nutty idea.

  12. Submitted by Richard Schulze on 10/29/2009 - 01:31 pm.

    Except for our country, no country that has insurance companies lets insurance companies make a profit on “basic health insurance”, and they have pretty strict rules. In Germany, for example, there are about 200 insurance companies. It’s not single-payer. I want to make that point, 200 insurance companies. Anybody in Germany can buy any of the 200 company plans. If you don’t like your insurance, guess what: You can drop it, shift to the next guy, and the new guy can’t raise your premium. Now, that’s, you know, more choice than anybody in America has. These companies have to cover everybody. They have to pay every claim. They don’t have all those people going through, saying sorry, we don’t cover that.

    Switzerland got to the point – five percent of the people in Switzerland couldn’t get insurance, and that was a scandal. That was unthinkable, that was not acceptable in Switzerland. So they had a national referendum, took the profit out of “basic health insurance” and said that everybody has to have a policy. In Switzerland, it’s interesting. The same company that sells the nonprofit, basic health insurance plan also sells life insurance and fire insurance. And they sell this kind of supplemental insurance to cover breast enlargement or hair replacement. So they try to win you by being really good nonprofit health insurance companies, and then you have an opportunity to buy fire insurance there, too. And they’re all making more money because they use the basic health insurance as a way to bring in customers. In these countries,the insurance companies they have one goal in life, and that is to keep people healthy. That’s what they’re for, and the reason for that is those countries have all decided that there’s a basic conflict between making a profit for investors and covering people’s health.

    No doctor in America could quote you a price on a procedure because they don’t know what they’re getting paid. They get 30 different fees for the same procedure in the same week because of all the different plans. The result is enormous administrative complexity. The American health insurance industry – you know, it’s free enterprise, it’s competitive, those guys, as we said, make huge salaries – it’s the least efficient payment system in the world. They spend 18 to 20 percent of every premium dollar on administration costs.

    So we are just pouring tons of money into stuff that doesn’t buy anybody health care largely because we have this hugely complicated overlapping set of systems and that’s one of the reasons all the other countries went to a single system.(not to be confused with single payer)

    Another reason is if everybody’s in the same system – and it doesn’t have to be a single-payer. Japan has 3,000 payers but it’s a coordinated system with one set of rules. If everybody’s in it then they have an economic incentive to pay for preventive care.

    Preventive medicine works but it costs some money up front. And, you know, in our system your insurance company’s probably only going to cover you for five or six years until you move to the next job. It’s not in their interest to spend money to keep you healthy. By the time you get sick, you’re somebody else’s problem.

    The enormous administrative complexity of the system, the multi-layered system of billing. Each insurance company has its own internal code for each procedure multiplied by how many insurance companies? A single system would go a long ways to solving the cumbersome and wasteful bureaucratic system we currently “enjoy”.

  13. Submitted by Carrie Coleman on 10/29/2009 - 01:34 pm.

    David – Yes.

  14. Submitted by Peter Soulen on 10/29/2009 - 02:03 pm.

    Often we’ll see comments here at MP with pleas for input from conservatives. We ask for help to understand what makes them tick.

    Here I go again. Will a conservative please weigh in and tell me exactly why he or she feels a need to protect the health insurance industry? If you work in the industry I can understand wanting to protect it. But otherwise? Why do they deserve to continue on as they have been? What’s the reason? Why should they not have to change?

    I go back and forth on this one with my conservative friends – a treasure well worth having – and it always comes down to just plain not liking anyone telling them what to do. Cussedness! When pressed, they admit they really don’t care what insurers do, but they hate the idea of liberals getting their way on changes to the insurance industry. What’s up with that?

  15. Submitted by Raj Maddali on 10/29/2009 - 02:37 pm.

    Ms. Martin

    “Raj, I don’t think you have the facts. If you have evidence that the UK refuses to pay for life-threatening illnesses, I’d like to see credible evidence. I’ve never heard this before.”

    The British agency is called National Institute for Health and Clinical Excellence (NICE). They ration care based on an economic model. Which means expensive treatments for elderly are more likely to be questioned.

    http://www.time.com/time/health/article/0,8599,1888006,00.html

    “His organization uses hard-nosed cost-effectiveness reviews to decide which treatments Britain’s National Health Service (NHS) should pay for. A new drug doesn’t just have to work to impress NICE, it has to offer value for money — and if it doesn’t, whether it is life-saving or not, Rawlins’ group won’t approve it.”

  16. Submitted by Bill Schletzer on 10/29/2009 - 02:50 pm.

    Raj, I’d love to see you try to pick apart post #12. It seems so obvious and logical. Why don’t you buy it? By the way, what kind of insurance do you have? Have you ever been layed off, afraid your kid might break his arm and suddenly you can’t make house payments because you owe 10k? Ever tried to pay family cobra payments on unemployment?

  17. Submitted by Raj Maddali on 10/29/2009 - 03:09 pm.

    Ms. Martin

    “As for a government of last resort, if you were diabetic, for example, when would “catastrophe” begin: when you’re in a diabetic coma because you couldn’t afford the everyday treatment and drugs to keep you alive and functioning (and paying taxes). How about maternity. Is that a catastrophe when the woman gives birth — or is it? No payments up to then for pre-natal care, which saves lives? This is a nutty idea.”

    You may want to reread my statement. I stated pre-existing conditions/catastrophic coverage.

    Statistics prove that most middle class people are rejected for coverage or go bankrupt when they have one of these two circumstances.

    Poor people with diabetes can apply for Medicaid under most state plans.

    If you are not responding to diabetic treatments then it becomes a catastrophe. If your pregnancy leads to complications, it becomes a catastrophe.

    The rest of the time regular insurance for middle class people should be able to cover most of life’s events.

    However if you wish to cover anything and everything under a single payer, I have some news for you. We will go broke. If we are not already.

    Go and check out the sophistication of care provided under the British model and compare it to the American model and you will know what exactly u will get with single payer.

  18. Submitted by Bernice Vetsch on 10/29/2009 - 04:25 pm.

    Since the administration and Congress seem to think single payer is un-American, we could look at those places where insurance is treated like a public utility instead of a money-maker. In Switzerland and Norway, health insurance is privatized but the industry is not allowed to control the system to its own advantage (and to the harm of its customers).

    In those countries and perhaps more, all insurers are non-profit entities. The government sets prices for care and premiums, determines benefits, forbids all the abuses the companies have until now gotten away with in America, and provides subsidies to help the poor buy insurance.

    Competition is on customer service only. The companies make a living, but not a (literal) killing.

  19. Submitted by Richard Schulze on 10/29/2009 - 06:53 pm.

    Raj, you describe the British National Health Service as probably what’s closest to what Americans have in mind when they talk about socialized medicine.

    I would say that’s socialized medicine. Government owns the hospitals. It employs a lot of the doctors and nurses, and government buys the pills, government pays the bills. Yeah, I’d say that’s socialized medicine.

    Your use of the red herring “the single payer” is clearly not accurate nor true.

    There is no one advocating that our country have a government take over of hospitals, or the medical staff, or doctors and nurses. It is simply not true. While it is true that is the model in Britain. There is no one advocating for that leap here in America. The last I checked it was about a 7 hour flight to London or about 3500 miles across the pond and that will be the closest that socialized medicine (gov’t owned) will ever get to this country.

    But you know, you get a lot of benefits out it. For one thing, it’s so simple administratively. There’s one set of rules. So those systems really work.

    In Britain there are private insurance plans that will cover things they don’t cover, like botox or other cosmetic and elective surgeries. Private health insurance will get you to the top of the waiting list faster – although now, because Tony Blair spent so much money -the waiting lists are a lot shorter. It’ll get you a private room in the hospital.

    About 10 percent of the people in Britain have private insurance, but it only accounts for about three percent of the money spent on health care. When anything serious has to happen – this is interesting people go to the public hospital.

    Every country rations health care, there’s no question about that. And yeah, they do some of it at the end of life. They limit some of the procedures. They limit this drug, Herceptin, for breast cancer. They only allow that in certain cases. I think there’s an age cutoff in Britain, and it’s kind of hard to figure out what that is, I think it varies by region, after which they won’t give you kidney dialysis. That’s a fairly expensive and intrusive procedure, and at age 89, 90 or something, they won’t do it, but that’s true in some plans in America, too.

    Rationing is certainly true in Britain, but it’s true everywhere. Every country rations health care. This is not a nice thing to say, but the United States rations health care. The distinction is we ration differently from everybody else. I think this is important.

    In the other countries, they have sort of a basic floor of care that everybody has access to, and the result is nobody dies for lack of a doctor. In America, some people get everything. The ceiling is the sky, you know, kind of thing, and get it right away with no waiting, but a lot of people don’t have access to care. So that’s how we ration. We ration by cutting off access for tens of millions of people, and no other country rations health care that way.

  20. Submitted by Raj Maddali on 10/29/2009 - 10:01 pm.

    Richard

    I pointed to Britain, because it was pointed out that other western countries have better outcomes. Britain has better outcomes because they ration care. Therefore the outcomes are skewed from Day 1.

    Secondly, you state that single payer will be so simple administratively. Well lets examine that premise. Medicare is a program that is largely single payer. Now look at the fraud and political corruption in that one single program. In some states like Florida Medicare fraud is so pervasive it rivals the drug trade.

    http://www.reuters.com/article/latestCrisis/idUSN21298045

    “In the second half of last year just three counties — Miami-Dade, Broward and Palm Beach — accounted for half the total infusion drug therapy charges nationwide, and nearly 80 percent of the amount of drugs, billed across the entire United States for HIV/AIDS patients on Medicare, the report said.”

    A relatively simple program like Medicare wheelchair is so fraudulent. The govt. gets billed almost $6000 for a $1500 wheelchair.
    If the govt. cannot run a wheelchair program that is probably .0000001% of any potential single payer system, I am not willing to take the leap of faith that they can run a single payer system without all the nepotism, waste corruption and fraud.

    Medical care is severely rationed in Europe. That is why there is no incentive for medical students to pursue advanced programs. Why would anyone want to work for a govt program after 15+ years of studies ?

    As I have stated the Govt. should provide coverage for poor and catastrophic and pre-existing conditions. Premiums will drop as the insurance companies will have to bid for this business that is subisdized by the govt.

    This will remove a large hindrance to obtaining healthcare.

    However to provide a one size fits all will be a recipe for disaster.

  21. Submitted by EP Barnes on 10/29/2009 - 11:11 pm.

    Thank you Mr. Schulze for the calmest, most comprehensive, and clearest description of the situation with our utterly broken health care delivery system I’ve ever seen. Let me throw in some of my own experience with the greatly-feared “end of life” rationing: My dad passed away at almost 89 years of age. He was dealing with a congestive heart failure diagnosis for several years, and so 4 months before he passed, when his heart stopped beating for almost one minute and miraculously restarted on its own, he was highly, highly encouraged to have a defibrillator installed. He was told that this would ensure that if his heart stopped beating again he would be brought back to life. Of all the many doctors who paraded through his hospital room at the time there was only one doctor who simply said in passing that this would not be his first choice of how to proceed, but offered no more insight or information. So Dad has the surgery, survived the surgery, but lo-and-behold 4 months later his heart did stop, and regardless of whether the defibrillator functioned or not, he passed. I believe this was a situation where this expensive surgical procedure was totally unwarranted, given all the circumstances. However most of the doctors/surgeons wanted to have the opportunity to do a procedure, and the one doctor who didn’t agree did not feel comfortable simply saying to us that Dad would almost certainly be dying soon, so this was a waste of discomfort, emotions, and money. I believe that many seniors approaching the end of their lives are being subjected to all manner of treatments because nobody wants to accept that life ends. If “rationing” is what you want to call making reasonable, compassionate decisions on what is appropriate and what is not, given all circumstances, well bring it on!

  22. Submitted by Rebecca Hoover on 10/29/2009 - 11:23 pm.

    Lois Quam’s epiphany seems a bit self-serving. It is hard to believe in the sincerity of someone who makes millions at Unitedhealth Group, one of the Terribles, and then starts preaching the public option.

    It seems that Lois Quam manages to say whatever it is that will get her the most out of a situation. Now that she has millions made doing what insurance executives do, she seems set on reforming her image to help her husband get into the governor’s seat.

    Her self-interest aside, she is right that big insurance has created its own problems. With its emphasis on profits (and Lois Quam played right into this emphasis), big insurance has hurt many and aroused the anger and distrust of many Americans. That said, it is also appropriate to note that health care probably should not be driven by the profit motive. Mayo Clinic is non-profit and pays its doctors salaries so profits are not needed to ensure excellence. (Realizing this, I have long avoided fee-for-service doctors. The doctors I see are paid salaries and all do an excellent job. I am comforted that their recommendations for procedures for me are not based on their economic best interests.)

    It is also appropriate to note that Lois Quam and her husband Matt Entenza would do the people of Minnesota a favor by forgetting the gubernatorial aspirations. They both need to perform years and years of selfless service to rehab their images. Let’s hope they undertake this task in good cheer. Only by setting their egos and need for the center stage aside will they earn even marginal trust from Minnesotans once again. The Governor’s office is not the place for Matt Entenza and his Unitedhealth Group wife. Their rehab is going to take too long.

    Some things in life cannot be reversed.

  23. Submitted by Richard Schulze on 10/30/2009 - 07:04 am.

    @ #20 Raj: You misread or misunderstood my point. Which was “one single system.” With regard to billing codes and billing procedures. A uniform system which would be applied across the board and used by all. This is huge difference from single payer.

    Please refer to these paragraphs in order to allow you to reread my premise….

    From comment #12
    //”No doctor in America could quote you a price on a procedure because they don’t know what they’re getting paid. They get 30 different fees for the same procedure in the same week because of all the different plans. The result is enormous administrative complexity. The American health insurance industry – you know, it’s free enterprise, it’s competitive, those guys, as we said, make huge salaries – it’s the least efficient payment system in the world. They spend 18 to 20 percent of every premium dollar on administration costs.”//

    //”So we are just pouring tons of money into stuff that doesn’t buy anybody health care largely because we have this hugely complicated overlapping set of systems and that’s one of the reasons all the other countries went to a single system.(not to be confused with single payer)”//

    //”The enormous administrative complexity of the system, the multi-layered system of billing. Each insurance company has its own internal code for each procedure multiplied by how many insurance companies? A single system would go a long ways to solving the cumbersome and wasteful bureaucratic system we currently “enjoy”.”//

    That you were not able to read this in my comments, may have been an error on your part as you seem entirely fixated on single payer. As I clearly notated [“not to be confused with single payer”] the difference.

    My comments regarding Britain and “single payer” were only meant to stimulate the conversation to another degree.

    If you care to address my comments from #12 which represents my point on this insurance business. I think that you might find that we have more in common than otherwise.

  24. Submitted by Raj Maddali on 10/30/2009 - 08:03 am.

    Hello Richard

    I will answer the points you have raised.

    Point 1.

    Why cannot u get a price on a procedure in this country. Because there is no competition. If the govt. changed the rules by creating more competition then we will not be stuck with three or four health plans that basically have no incentive to innovate.

    If single payer/pricer was so great, let’s take the case of the airline industry. When there was regulation there was one price. However when deregulated there were many prices. And prices came down by about 40%. And airtravel became more affordable for the common person. Because airlines like SouthWest were created.

    //”So we are just pouring tons of money into stuff that doesn’t buy anybody health care largely because we have this hugely complicated overlapping set of systems and that’s one of the reasons all the other countries went to a single system.(not to be confused with single payer)”//

    The Govt has created a single tier system of health insurance that has so many rules that the only ones who can manage so many rules are these large health oligopolies.

    No one these days starts a health insurance company because there are tens of thousands of rules.

    The govt should create a tiered system of rules. Primary Care, Critical Care, Existing Conditions. Then new insurance companies would be formed say for Primary Care. They would contract on a more simplified format of rules with individual groups of physicians.

    //”The enormous administrative complexity of the system, the multi-layered system of billing. Each insurance company has its own internal code for each procedure multiplied by how many insurance companies? A single system would go a long ways to solving the cumbersome and wasteful bureaucratic system we currently “enjoy”.”//

    Once again tier the system. There will have to be some subsidy for certain tiers like prexisting conditions/ affordable health care initiatives, but let the new providers and new insurance companies drive the cost down with the new rules.

  25. Submitted by Raj Maddali on 10/30/2009 - 08:04 am.

    Richard

    I have answered your question. Can you answer my points regarding Medicare in post #20.

    “A relatively simple program like Medicare wheelchair is so fraudulent. The govt. gets billed almost $6000 for a $1500 wheelchair.
    If the govt. cannot run a wheelchair program that is probably .0000001% of any potential single payer system, I am not willing to take the leap of faith that they can run a single payer system without all the nepotism, waste corruption and fraud.”

    I look forward to your thoughts and inputs.

  26. Submitted by Geoff Laskowski on 10/30/2009 - 09:31 am.

    Mr. Maddali,

    “As I have stated the Govt. should provide coverage for poor and catastrophic and pre-existing conditions. Premiums will drop as the insurance companies will have to bid for this business that is subisdized by the govt.”

    I’m afraid I don’t see why would insurance companies “have to bid” to provide this coverage? They seem to be making more than enough money now by denying coverage to people with pre-existing and catastrophic conditions. I asked it before, and I’ll ask it again, if this coverage is subsidized by the government, what’s to stop the insurance companies from covering these people, but with exorbitant premiums for which the government will then cover the cost? And if the government puts a cap on rates, why wouldn’t the insurance companies just say, “no thanks”?

    Also, I’m not sure your airline analogy is valid anymore. Last time I checked, airlines were charging more and more for less and less service. We’ve seen here in Minnesota that Northwest/Delta will lower their rates long enough to drive a new carrier out, then raise them back to normal. And with the amount of consolidation going on in the industry, I’m not sure how long it will be before we have one rate again, because there’s only one airline left.

  27. Submitted by Richard Schulze on 10/30/2009 - 09:37 am.

    Raj,
    At no point in my comments did I state that the government was the solution or should be the solution.

    What your position reflects instead is ideology: who cares that the federal government could build a better mousetrap? They’re the government and that’s bad. Your argument is really no more sophisticated than that. If a libertarian conservative wants to make this argument, more power to them, but they absolutely should not be turning around and suggesting that a public option would raise health care costs. They’re saying, rather, that they’re morally opposed to the cost savings that would ensue.

    Perhaps we are at a philosophical impasse and I am alright with that.

    Best to all

  28. Submitted by Raj Maddali on 10/30/2009 - 10:11 am.

    Mr. Laskowski

    “I asked it before, and I’ll ask it again, if this coverage is subsidized by the government, what’s to stop the insurance companies from covering these people, but with exorbitant premiums for which the government will then cover the cost? And if the government puts a cap on rates, why wouldn’t the insurance companies just say, “no thanks”?”

    Mandate or legislate the simplification of the tiers of coverage. You will get more participants in the insurance field. What we have currently is an health care system with so many rules that only the large providers and their humongous bureaucracies can manage those rules.

    There should be special tiers for catastrophic, prexisting coverage for which the govt. will have to subsidize. But the current one size fits all plays directly into the hands of the large insurers.

  29. Submitted by Bill Schletzer on 10/30/2009 - 10:35 am.

    Good debate! Thanks to Raj for playing the evil guy in a goalie mask and thanks to Richard for being the hero. (That’s a joke. Laugh!)

    It seems that real life, i.e. what is going on in the “official” debate, is less nuanced than this. There are the democrats trying to come up with some kind of passable reform, which to me means overly compromised. On the other side are the Republicans who oppose any reform in principle and seem to debate only to impede, not influence the final bill.

    I see Raj as somewhere to the left of the congressional Republicans (except for maybe Olympia Snow), but to the right of the voices that dominate here at Minnpost.

  30. Submitted by Geoff Laskowski on 10/30/2009 - 11:07 am.

    Mr. Maddali,
    I’m still not sure how a tiered system, even with a simplified administrative process, would provide incentive for insurers of any size to provide coverage to the people in those tiers. This is not like the financial markets, where higher risk gets you a higher reward. I’m sure you would agree that insurance companies make money when they don’t have to pay out on the policies they issue. And if the government subsidized the premiums for the highest risk tiers to mitigate the risk, that’s just a cash pipeline to the private insurers.

    It does appear though, that we can at least agree that administrative simplification needs to be a part of real reform.

  31. Submitted by Bernice Vetsch on 10/30/2009 - 06:54 pm.

    David B: I believe the UnitedHealth medical and drug plans sold by AARP are the Private Fee for Service (PFFS) plans that, while traditional Medicare providers are often paid less than their work costs them, are funded at much higher rates in order to provide such wellness opportunities as gym memberships to insurees.

    The cuts to Medicare spending that are included in the reform plans now being developed are to the overpayments now enjoyed by these private plans.

  32. Submitted by Andrew Zabilla on 10/31/2009 - 12:30 am.

    Raj, as a very frequent flier, let me tell you what we got with lower prices associated with the deregulation of the airline industry – horrible service, broken and dirty planes, delayed flights, stolen luggage, tiny seats, overbooked flights, etc…

    In the Netherlands, they have government regulated and mandated health insurance run by private insurers. Basic coverage is $190 a month, no matter who you are and their health care systems is much better. If you want more insurance to cover newer treatments or elective surgery, you can buy it. Private insurance for me at 29 would be about $250 a month and I know people who are very healthy and in their mid-fifties who are paying $900 per month, without nearly the effectiveness of the Netherlands health care system. Why can’t we simply adopt a similar standard which would avoid a public option (keeping the GOP happy) but would cover everyone (subsidies for the poor of course) at much, much less cost than our current system but with better outcomes? It seems like the perfect compromise and would actually do something to lower our ridiculously high insurance rates.

  33. Submitted by Raj Maddali on 10/31/2009 - 08:04 am.

    Mr Laskowski

    When u simplify the coverage and coverage rules under the basic tiers, more insurance companies or even medical groups can participate in that tier.

    For ex. if there is a tier of service, called dialysis provider. Then individual groups of doctors or insurance companies can set up such clinics to provide such service. To make profit they would have to run it as efficiently as possible, because a dialysis patient, who would have to pay parts of the premium will shop around, thereby standardizing the rates they could charge.

    If a clinic screws over a patient, they leave for the next or can get sued. Will there be some misuse on both sides. Absolutely.

    However compare that to the open fraud and cost per patient under Medicare.

    In a single payer system the govt. pays irregardless. That is how u end up with Medicare wheelchairs costing $6000 when the market price is $1500.

    Similarly for govt subsidized tiers of healthcare, use data in a few years would indicate the optimum subsidy for a tier. Then the insurance companies and other groups could bid on such coverage. No one insurance company is going to let another rake in moolah and sit quiet if they can rake in the same moolaah.

  34. Submitted by Raj Maddali on 10/31/2009 - 08:08 am.

    Mr Zabilla

    Certain airlines (American) have tried to provide increased service for an additional price. Guess what ? It did not work. Despite all the passengers complaining the first thing they do is go online and buy the cheapest ticket.

    Public option sounds really good in practice, but if you have the govt. as the only sole provider of a service without an incentivized party in the middle, then we end up with the $6000 wheelchair.

  35. Submitted by Raj Maddali on 10/31/2009 - 08:14 am.

    Currently under MinnCare a person, based on their income level, can use an ambulance for free. There are patients who use the ambulance because they have a headache.

    I am all for providing care for needy people.
    However progressives should also distinguish between intent and implementation. By claiming that govt. should be the implementer for every intent, we loose support.

  36. Submitted by Raj Maddali on 10/31/2009 - 08:18 am.

    “Bold, brave, intelligent, incisive, expert, and needed comments. Kudos to Ms Quam for sharing her expertise in this critically national debate.”

    Mr Myles Spicer called Lois Quam’s ideas “bold, brave…incisive and expert”. What exactly is bold here ? What exactly is expert here ? What exactly is incisive here ?

    Ms Quam is basically parroting the “public option good, insurers bad”. And this is some bold discovery by her ?

    This is typical DFL politics. People who are well connected are somehow portrayed as modern day geniuses. While people who have real alternative ideas are shoved to the side because the party machine would have none such nonsense.

  37. Submitted by Richard Schulze on 10/31/2009 - 12:28 pm.

    The fact that many people are without insurance, the fact insurance is not portable. Those problems all stem from a single cause. Which is that we rely on private insurers to provide health insurance. That’s a failed business model effectively for this enterprise.

    The private insurance companies imperative is to not sign up as clients, people who need medical care. They want to find healthy people or people who won’t need medical care.

    Much of their budget is devoted to identifying who is going to need care and then taking steps to exclude those people from their policy rolls.

    Another major part of their budget is based on aggressive efforts to deny reimbursement claims, so if you do have a policy and you do get a procedure and then you seek reimbursement for it. They have experts who get extra salary if they deny a higher proportion of claims.

    That is a failed business model for providing health care. That is called the adverse selection problem.

    That is why no other major economy provides health care along the lines of that model. Every other country has a universal access system that is “roughly” speaking a single payer system.

  38. Submitted by Raj Maddali on 11/03/2009 - 05:47 am.

    The Strib has this editorial from the Chicago Tribune today.

    http://www.startribune.com/opinion

    “But government doesn’t compete. It overwhelms. It has the power to set prices, control costs, and squelch innovation and competition. And if it goes over budget? Well, just watch what happens with Medicare. One part of Medicare will be insolvent in 2017 if nothing is done.

    Something will be done. Keep an eye on your wallet, taxpayer.

    Ditto a new public plan. If it gets into trouble by charging too little to cover its expenses, the execs running the plan probably won’t hike rates on customers. They’ll go running to Uncle Sam.

    The government has shown over the past decades that it can spend prodigious amounts of money for health care. But it hasn’t shown that it can update and streamline its plodding fee-for-service system.

    Or stop losing billions to fraud and waste. Or resist political pressure to spend even more.

    Case in point: For the last several years, Medicare has tried to impose Congress-mandated cuts to doctors’ fees. But then the doctors howl. And Congress buckles. And the cuts get rescinded.

    Creating another federal health care program is a huge — and expensive — step toward handing the government complete control of Americans’ health care.”

    As I have stated, we should ask for more competition by changing the rules. Intent should not be confused with implementation.
    Progressives loose credibility when their intent gets all mangled up with implementation.

    Everybody thinks of Medicare as one big subsidy. As long as we have $6000 wheelchairs no one can tell me one payer system will reduce the cost. No way. In theory it is supposed to, but no one can point to any Govt run system that actually reduces costs.

    I challenge Ms. Quam to debate this. She claims she is some kind of health care expert. I am just a working stiff. Come on Ms. Quam, I am a progressive. I challenge you.

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