Long time THCB readers will remember how several times I’ve called out AHIP president Karen Ignagni for being economical with the truth. Today in a letter to the NY Times she actually tells it how it is. Medicare Advantage plans provide more and better benefits than the FFS program. Ignagni also says that FFS program is outdated and that Medicare Advantage plans also emphasize prevention, wellness, care coordination and management of chronic conditions, do better than the FFS program in reducing hospitalizations and even are fostering the innovations needed to reduce health care cost growth. So given that there is so much waste and poor care in the FFS program (over 35% by most estimates) why do the so superbly managed Medicare Advantage plans require and spend more money per capita than the FFS program? Imagine my surprise when I was unsuccessful in my search to find the explanation for this in Ms Ignagni’s letter.
Karen Ignagni tells the truth, unfortunately
There’s a big to-do about whether there are really any cost-saving measures in the House and Senate bill. Most people say that the answers are “no” and “sort of”. There’ll be much more discussion about that on THCB this week, and I suspect the answer will really come down to whether or not pilot programs which have the potential to reduce costs can be both successfully piloted, then extended by CMS and then protected from Blue Dogs, reps from academic medical centers, Republicans saving Medicare and basically everyone in Congress carrying the industry’s water. So “sort of” may well mean no.
But let’s not dwell on that. Instead let’s have some fun. Regular THCB readers will know that AHIP’s Karen Ignagni has told half-truth after half-truth after outright lie to protect the position of her members. All the while somehow holding together a coalition that really should have broken apart long ago (and may yet still do that). And she gets paid very well for that role.
But today in the WaPo she told the truth:
Karen Ignagni, president of America’s Health Insurance Plans, said the Senate bill includes only “pilot programs and timid steps” to reform the health-care delivery system, “given the scope of the cost challenge the nation faces.” Unless lawmakers institute changes across the entire system, Ignagni said in a statement Wednesday, “Health costs will continue to weigh down the economy and place a crushing burden on employers and families.”
Don McCanne (who runs the Quote of the Day service from the PNHP) puts the boot in:
There could not be a more explicit admission that the private insurance industry is not and never has been capable of controlling our very high health care costs. <snip> Karen Ignagni says that the lawmakers must institute the necessary changes across the entire system (because the insurers can’t). Let’s join her in demanding that Congress take the actions necessary, and then thank her for her efforts, as we dismiss her superfluous industry from any further obligations to manage our health care dollars.
And it’s basically true. Health plans have no ability to overall restrict health care costs. And worse, because they’ve been able to charge more to their customers than the increases they’ve received from their suppliers, they do better in a world in which costs go up.
Of course Ignagni knows that gravy train can’t roll on forever, so she’s trying to craft a future in which the health plans can continue to make money, yet not bankrupt their customers outright. Whether it’s good for the rest of us remains a very open question.
Meanwhile, in another example of catching someone saying something that they don’t really understand the meaning of, Uwe Reinhardt busts Sen. Kay Bailey Hutchinson (R-TX) as saying that not having insurance coverage is rationing and shouldn’t be allowed. Well she may know have thought she was saying that, but that’s what she was saying.
HEALTH PLANS: From the AHIP fields (Ignagni loves Shalala and vice versa–Newt’s just watching!)
AHIP’s annual conference last week, and Karen Ignagni was recently spotted in USA Today slagging off Michael Moore as part of that newspaper’s “fair and balanced” look at the topic, and telling yet more lies about “Canadians coming to the US for health care.” Apparently her research team doesn’t subscribe to Health Affairs. I meanwhile was at Meditech having way more fun (more about that anon). But an anonymous THCB reader did indeed make it to Vegas. And considering AHIP’s somewhat risky current political tactics, I’d think Vegas was an appropriate place for them to have the show! Here’s his report:
The AHIP (America’s Health Insurance Plans) conference was everything that you would expect from a group of health insurance executives and the people who want to sell them stuff. Held at the posh Wynn resort in Las Vegas, it brought together the who’s who in health insurance, although fewer CEO-level folks than the World Health Care Congress. Unlike HIMSS, which is both much larger and pushing to include payers, purchasers and health information exchanges, AHIP doesn’t seem to be pushing such democratization. This is the business of health insurance.
Of course the triple 800-pound-gorillas in the room were the release of Michael Moore’s “Sicko,” the public awareness that CDHP wasn’t panning out to be the panacea that it was positioned to be, and the Democratic takeover of Congress.
Karen Ignagni, AHIP’s fearless leader, opened the conference with a less than rousing invitation for the assembled attendees to pat themselves on the back for all of the good work that they are doing to improve healthcare…and to consider themselves among “the patriots” on July 4. Maybe it was the early hour, but I believe that I counted exactly twelve people clapping.
Ignagni introduced her “close personal friend” former Secretary of Health and Human Services Donna Shalala (under President Clinton) and current president of University of Miami. I think that Shalala was chosen as a way of demonstrating that AHIP has connections with Democrats as well as Republicans. Shalala told the audience to support AHIP because Ignagni is among the most connected people in Washington on health issues…and – again to a smattering of applause – echoed the sentiment that those in the audience were somehow “patriots” in the cause of improving healthcare. Shalala continued about her co-chairmanship (with Senator Bob Dole) of the commission looking into the mistreatment of troops at Walter Reed. It’s a very difficult problem because there are very few experts on the military health system. But, she told us, that it was an example of a single payer, government run system…and look, look…at all of the problems, especially in transitions of care (that I’m sure have nothing to do with the rivalries that exist between military branches and are all about the MHS being “single payer” and government run). She went on to speak about how unlikely it was that there would be transformational change anytime soon because while there is widespread agreement that healthcare needs reform that there is not widespread agreement on how to fix it. We could expect incrementalism or worse, and that she (and the Clintons) had mis-read the public’s desire for change in 1993. (Ed’s note: It appears that the time and options Shalala has acquired on the United HealthGroup board have softened her liberal credentials somewhat!)
Next up was Newt Gingrich, who began by recommending Nicholas Sarcozy’s new book and focused on the new French President’s admission that the French people need to “work harder”. He said that he might run for President but was waiting for the current group of those “interviewing” for the position to narrow a bit. He declared the Medicare drug benefit and the sign-up process a success because of the power of consumer choice. Using a metaphor he dubbed “Medi-Cruise” for government run or single payer healthcare, he likened the ability of senior citizens to navigate the complexities of choosing vacation cruises with their abilities to choose optimal drug benefits. Seniors – according to Newt – did a much better job of choosing a benefit than if the government had chosen a one-size-fits-all benefit: Just imagine if the government chose your cruise for you – “Medi-Cruise”…and if everyone was forced to have the same-type room! As if a cruise – paid for on a voluntary basis by people themselves and health benefits – necessary and paid for by the government – are the same thing. Gingrich – on a positive note – said that the National Health Information Network (including digitization of individual providers) should be viewed on the same importance and scale as the national highway projects under Eisenhower. He rationalized this huge government project because it was for national security. He also focused on ferreting out fraud and abuse instead of making wholesale rate cuts. Ultimately, Gingrich is among those who believe that transparency of cost and quality information and consumer incentives will make healthcare a functioning market. He expects consumers to lead transformative changes in healthcare. There was no mention of the recent CDHP story in the WSJ.
Possibly fearing disruption or protest, Q&A at both sessions was short, seemed tense, and required clear identification by name and affiliation…not unreasonable…I had the feeling that any overtly accusatory questioner would be cut off, ushered out, and pilloried by the crowd. Ignagni seemed loaded for bear.
Why AHIP needs the public option
It’s been a fun week. After years of THCB explaining that neither could AHIP do genuine research nor could its venerable President open her mouth without lying, the rest of the world has caught on. I won’t rehash the blow by blow here—Jonathan Cohn is among many who’s done that already—but essentially AHIP commissioned PWC to include the half of the analysis about the Baucus bill that was favorable to them and leave the rest out. And the fall from grace has been particularly fun to watch. Even the whores from PWC who wrote the report criticizing the bill have been backing away from it. And some astute commentators think that the debacle has helped the likelihood of a more liberal bill’s passage.
Now to be fair (or overly fair as they’d never concede this to the other side), the insurers have a point. They loaded Baucus up with lots of cash and put a former Wellpoint exec in as his chief of staff. They romanced the White House and kept quiet when Pelosi and the rabble criticized them. The deal they thought they’d cut was that they would give up the way they currently make money by underwriting and risk skimming in individual-small group and being overpaid for Medicare Advantage, and in return they’d get 45 million more customers, all forced to buy insurance and subsidized by the government to do so.
But somehow along the way the Democrats, despite lots of tough talk about “bending the curve,” lost the cojones to find even a mere $100 billion a year to redistribute from the probably $1 trillion waste in our $2.5 trillion health care system.
I’m not sure that’s how Uwe meant it!
The AP has a puff piece on the greatness of Karen Ignagni. Well greatness if greatness is defined as doing anything it takes to screw the nation on behalf of her organization’s members, all the while telling bold face lies about their activities. But the lies of Karen Ignagni have been well documented here on THCB and we don’t need to rehash them now.
But then the AP reporter Erica Werner quotes Uwe Reinhardt and has this somewhat remarkable passage:
"Whatever AHIP pays her, it's not enough. She's unbelievably effective," said Princeton economist Uwe Reinhardt. "It's just amazing what she's achieved for them against all odds." Ignagni's total compensation, according to AHIP's most recent filing from 2007, was $1.58 million, which includes $700,000 in base salary, $370,000 in deferred compensation and a bonus. Ignagni won't say how many hours a week she works. The number's so high it's embarrassing, she said.
Among successes cited by Reinhardt and others is helping persuade the Bush administration to develop private insurance plans within Medicare that are producing unexpectedly high payments for private insurers. When Congress was considering expanding a children's health insurance program in 2007 by taking money from the private Medicare Advantage plans, Ignagni worked successfully to stop it. Those private plans are being targeted again by Obama, who wants to squeeze them to pay for his health care agenda. Ignagni's industry group is organizing older people to defend the plans.
There’s lots of more puffery about how she’s good at building consensus among the diverse interests in her group. My take on that is “we’ll see”.
Now, Sleepless in San Francisco
Having returned from Seattle, the persistent itching from the sand-fly bites of Roatan has awakened me at 5 a.m. So I’m commenting on three pieces of news, which I’ve commented on before here and at Spot-On.
First, United HealthGroup has introduced two new things this week. One is is a consumer portal/WebMD competitor called myOptumHealth, which gave a sneak preview (and was a sponsor) at the Health 2.0 Conference in October.
At first blush I like the look of what they’ve pulled together, although the about us section doesn’t exactly tell you much about who owns Optum! But the really interesting product United launched this week was aimed right at me. It’s an option to repurchase your individual health insurance without being re-underwritten and rejected.
PODCAST: Overtreated, Shannon Brownlee explains all
I am so so far behind getting my transcripts of podcasts up here that it’s not funny. But this was one of the most recent and one of the most fun that I’ve ever done. It was a discussion with Shannon Brownlee. author of Overtreated, of which everyone in America should be forced to read at least the Cliff Notes version. (Warning, it’s long and the two of us had far too much fun talking with each other….)
Matthew Holt: It’s Matthew Holt with the Health Care Blog, and I’m back with yet another podcast. This time I’m talking with Shannon Brownlee. Shannon is a senior fellow at the New America Foundation and, more importantly, has just written a great book called "Overtreated: Why Too Much Medicine is Making Us Sicker and Poorer." Shannon, first of all, thanks for coming on The Health Care Blog. I’m really excited to have you here.
Shannon Brownlee: Oh, I’m delighted to be with you.
Matthew: My feeling about reading this book is that I thought I knew all this stuff. I’m sure in the last 15 years of hanging out in healthcare, I know all the Wennberg stuff, and I’ve known all this and I’ve known all that. I pretty well read all the studies. I’ve got to confess that when I read the first chapter, and you can introduce the first chapter in a little bit, it’s kind of like a homage to Jack Wennberg. You went and hung out at Dartmouth and it’s kind of almost like a folksy introduction to his character.
And I guess I started reading this and going, yeah, but is this is a serious way to treat a health policy issue. So why did you go about starting in that fashion?
Shannon: I started it that way because I found Jack Wennberg to be one of the most interesting people I’ve ever met, and the fact that he kept plugging away at this idea that started, oh gosh, almost 40 years ago, now 40 years ago, that he saw this enormous variation in practice patterns in the state of Vermont, and sort of puzzled over it and puzzled over it and puzzled over it. And then he finally started to say, "Yeah, this is real, there’s a variation in practice patterns. It’s not driven by how sick patients are. It’s driven by what the doctors are doing."
PHARMA/POLICY: Anyone know about best price?
This is pretty interesting, and it relates to real wonkery AND to more stretching of the truth by my favorite health plan lobbyist, Karen Ignagni. In the article Drug firms to get profits windfall, a Univ of Minnesota Professor estimates that because the dual eligibles are no longer in Medicaid — they’re the ones that have been automatically moved to Medicare — and therefore they don’t have to offer "best price", they can charge higher prices to the taxpayer for their drugs.
The boost in profits comes from a shift in the drug coverage of 6.4 million poor and elderly people from Medicaid to the new Medicare drug benefit. Unlike Medicaid, which requires drug companies to charge their lowest or "best price" for medications, the Medicare program relies on competition among private drug plans to keep prices low.By eliminating the need to discount drugs for the government, the industry can now pocket the savings. "The net effect over 10 years is probably closer to $40 billion in extra profit," said Stephen Schondelmeyer, a pharmaceutical economics professor at the University of Minnesota. A little-known study by the Prudential Equity Group from June 2005 estimated that the makers of three anti-psychotic medications stand to benefit most from the change, taking in roughly $1.1 billion in new profits on products used by the 6.4 million who are Medicare’s most poor and frail patients.Experts say drug prices in the Medicare program will be higher this year than prices under Medicaid because the private Medicare drug plans won’t likely match the price discounts achieved by Medicaid, the joint state and federal health program for the poor.
Now hang on a second. This raises two key points. Not one week ago, Karen Ignagni said that the exact opposite was true. State medicaid directors were apparently telling her that they were getting worse deals than the private plans she represents. So which is true? Well guess who I’m more likely to believe. After all, did PhRMA pay all those political contributions to end up losing money
And then one thing that I just don’t know. Suspend your disbelief and pretend that at least in some cases for some drugs, Ignagni is telling the truth. Presumably best price still applies to the rest of the Medicaid program. Are deals between Pharma and Medicare Part D PDPs exempt from Medicaid best price? Anyone know?
