NY's Cuomo: How To Drive Up The Cost Of Insurance

New York's Attorney General Andrew Cuomo, aspiring to the governorship once held by his father, finds a handy populist target, health insurers. Cuomo, borrowing from an earlier New York City district federal court suit and one in New Jersey, charges that insurers underpay out-of-network claims by lowballing the reasonable-and-customary charges of doctors against which health plan members' coinsurance (% payable by insured) is applied. The database, Ingenix, is owned by United Healthcare but shares the data of all major insurers in order to arrive at reasonable-and-customary charges for medical procedures. The first problem is that Cuomo appears to exaggerate:

Mr. Cuomo said his office had compared the prevailing market rate for a routine doctor's visit with the amount Ingenix had calculated as reasonable and customary. While doctors in the metropolitan New York City area typically charged $200 for an office visit, he said, Ingenix calculated the rate at only $77. Under a typical plan, the insurer would pay 8o percent of the $77, or only $62. The patient would be responsible for covering the remaining $138 balance.

UnitedHealth disputes the numbers Mr. Cuomo provided, saying Ingenix calculates the range of prices for those office visits as $125 to $300. The company said it did not know how Mr. Cuomo's office came up with its figures. Members of Mr. Cuomo's staff declined to describe the method.

The second problem is that Cuomo refuses to be transparent, while accusing insurers of not being transparent:

"There is no disclosure; there's no transparency; there's no accountability," said Mr. Cuomo, saying his office began investigating the matter after receiving complaints from consumers.

The third problem is that Cuomo charges as illicit the common statistical method of discarding extreme outliers in calculating reliable averages:

The company rejects charges that seem far from the norm and subjects the information to a "strong validation process," according to a UnitedHealth spokesman, Don Nathan. The information gives insurers "a snapshot of current charges in a geographic area" that they can use to determine what is a reasonable and customary fee for a service, he said.

The fourth problem is that Cuomo disregards the cost impact of his charges. If extreme charges are included in calculating reasonable-and-customary, then the costs of insurance must rise.

Acknowledging what he called the headline risk, Doug Simpson, a Merrill Lynch analyst, predicted in a research report Wednesday that consumers would end up paying more, no matter the end result of the investigation. "We believe to the extent that regulators wish to raise provider payments for out-of-network care," Mr. Simpson wrote, "there will be a corresponding increase in the cost of coverage."

In that vein, to keep premiums down, insurers can increase the percentage of out-of-network charges the insured is responsible for, and can apply that percentage against the discounted charges paid network doctors, resulting in both cases in higher out-of-pocket costs to care users. The fifth problem is that Cuomo, coming from the pro-government-run healthcare camp, wouldn't mind that at all. Cuomo asks:

Individuals generally pay higher premiums for the privilege of being able to select doctors or hospitals outside the network, Mr. Cuomo said. "You could have paid less and be limited to the in-network doctors," he said.

For in-network doctors, substitute lower-paid government-run healthcare doctors. Also, expect the long waits and rationed treatments that accompany. New York State's health insurance premiums are already near $500 more a month higher than the average state for family coverage, reflecting primarily New York's relatively expansive coverage laws and mandates.

For decades, sane people and states elsewhere in the country have marveled at New York's excesses, and sought to avoid them. The result is a highly taxed, stagnant, aging population in New York and its one-legged economy's reliance on Wall Street's booms-and-busts (including bust the economy). Tort lawyers seeking class-action payoffs, and ambitious attorney generals elsewhere seeking populist platforms for their ambitions may follow Cuomo's lead, but the rest of us will suffer.

Source





Major Australian regional hospital could not handle miscarriage

This hospital serves an area approximately the size of England

Bree Steele's shocking experience at Cairns Base Hospital is another tragic example of why the Far North is long overdue for a new, better-equipped hospital. Mrs Steele went to the Cairns Base Hospital emergency department the week before Christmas, with symptoms of an undiagnosed miscarriage. She was 13 weeks pregnant but was later told by her doctor that the fetus had died at eight weeks.

The mother of Adelaide, 1, said she was forced to wait six hours at the hospital and was eventually told to go home. She then spent another two days trying to get medical help through the hospital. Later she was told the hospital could not provide the treatment she required to remove the fetus, she told The Cairns Post. Eventually, on the advice of a midwife at the hospital, she went to Townsville for the surgery, which took only 15 minutes a day later.

"I didn't realise there was a problem with the hospital until I had to use it," Mrs Steele, 22, said. "It was traumatic event that was made worse. "I was in a totally desperate situation and no one could help me."

Queensland Health last night confirmed Mrs Steele had experienced a long wait, and had been told she would have to wait until the following week for an appointment to have the miscarried fetus removed. "Queensland Health deeply sympathises with Ms Steele's loss, and recognises what a deeply distressing experience this would have been for her," a Queensland Health spokesman said. "Queensland Health regrets that her experience with the health system was not to her satisfaction.

"While we appreciate how difficult it would have been for Ms Steele, the emergency department at Cairns Base Hospital was extremely busy that night, seeing 135 patients, which is more than the average daily attendance of 110 patients."

Mrs Steele said staff at the Cairns Base Hospital had their hands tied by a lack of facilities and resources. "I really hope this campaign comes to something because there would be other women out there like me," she said. "The hospital needs the services to cope with special needs." "They can't just rebuild the same hospital at a different location because we need more than that."

Source





Government drug manufacturers at work: "At least 115 Panamanians died after drinking toxic cough syrup in 2006, investigators said on Thursday, as the slow probe into the health disaster turned up more cases. Jose Oro, a spokesman for the Ministry of Public Affairs, said recent clinical tests had shown at least 115 people died after taking cough syrup that was adulterated with diethylene glycol, a poisonous substance normally used in engine coolant. The Chinese-made toxin was mistaken for a sweetener by government drug manufacturers, who made low-cost medicines for Panama's poorest people. Investigators previously estimated the drug had killed 94 people, mainly from kidney failure or related ailments. Investigations are only slowly turning up new cases because of the number of people involved. Only around 20 percent of the 763 people tested to date have actually shown traces of the deadly drug, according to a government study."