Reasonable and Customary

We just received a notice in the mail telling us we are part of another class action lawsuit. This time the defendant in the case is our health insurance company. When we’ve been included in a class action lawsuit in the past, it’s usually meant that a small check was coming our way. It’s always good to get an unexpected check in the mail, even a small one. And there’s the justice angle, too. Some corporation or other is paying for its bad behavior.

In this case, our health insurance company has agreed to stop relying on two questionable databases when they determine those wonderful “reasonable and customary” charges: “We could give you 80% of what your doctor charged. Instead, we’ll give you 80% of the reasonable and customary charges where you live”.

Unfortunately, as we all know, everyone’s doctor always seems to charge more than what is “reasonable and customary”, according to the insurance companies.

So it’s good news that the company will stop short-changing its customers by underestimating “reasonable and customary” charges. That’s the principal result of our class action lawsuit being settled.

Another result is that the two named plaintiffs in the case (the “class representatives”) are going to receive a total of $35,000 as “incentive payments”. In other words, they’re being rewarded for bringing the lawsuit, and to encourage other injured parties to bring their own lawsuits in similar cases. 

Ok, that’s all well and good, but how about that check for $25 or $11.95 that’s going to be coming our way? The settlement is supposed to be “fair, reasonable and adequate to the members of the Class”, and we are definitely members of the unfortunate class shortchanged by our insurance company, so some financial compensation is in order, even if it’s only enough to buy lunch.

To our surprise, however, the settlement doesn’t include cash compensation to anyone but the two named plaintiffs. Maybe the lawyers forgot about us (we’ve never been introduced).

What the lawyers clearly did remember was to collect their fees. The settlement calls for our insurance company to pay “an award of attorneys’ fees and costs for Class Counsel not to exceed the sum of $2,500,000”.

So the two plaintiffs get $35,000, the rest of us get a notice in the mail and a promise of good behavior from our insurance company, while the lawyers who handled the lawsuit get no more than $2.5 million, which the insurance company can pay off by adding a few pennies to its rates. 

I believe that’s what lawyers call “reasonable and customary”.

Moe Should Have Watched “The Wire”

David Simon, the creator of The Wire, spoke recently at a conference in Australia. The Guardian has an edited transcript of his talk here. Some selected paragraphs:

You know if you’ve read Capital or if you’ve got the Cliff Notes, you know that [Marx’s] imaginings of how classical Marxism – of how his logic would work when applied – kind of devolve into such nonsense as the withering away of the state and platitudes like that. But he was really sharp about what goes wrong when capital wins unequivocally, when it gets everything it asks for.

That may be the ultimate tragedy of capitalism in our time, that it has achieved its dominance without regard to a social compact, without being connected to any other metric for human progress.

From this moment forward unless we reverse course, the average human being is worth less on planet Earth. Unless we take stock of the fact that maybe socialism and the socialist impulse has to be addressed again; it has to be married as it was married in the 1930s, the 1940s and even into the 1950s, to the engine that is capitalism.

Mistaking capitalism for a blueprint as to how to build a society strikes me as a really dangerous idea in a bad way. Capitalism is a remarkable engine again for producing wealth. It’s a great tool to have in your toolbox if you’re trying to build a society and have that society advance. You wouldn’t want to go forward at this point without it. But it’s not a blueprint for how to build the just society. There are other metrics besides that quarterly profit report.

And that’s what The Wire was about basically, it was about people who were worth less and who were no longer necessary, as maybe 10 or 15% of my country is no longer necessary to the operation of the economy. It was about them trying to solve, for lack of a better term, an existential crisis. In their irrelevance, their economic irrelevance, they were nonetheless still on the ground occupying this place called Baltimore and they were going to have to endure somehow.

Moe really should have watched The Wire.

Finally, the Perfect Healthcare System!

Breaking news from Washington:

House of Representatives Republican leaders ripped the Affordable Care Act, known as Obamacare, and Majority Whip Kevin McCarthy, R-Calif., urged a “patient-driven health care system, not a government-driven health care system.”

So, House Speaker John Boehner, R-Ohio, was asked at a news conference, what does that mean?

“Well,” he said, “When you look at “Obamacare,” what you see is a government-centered health care delivery system. That’s not what the American people want.

“The American people want to be able to pick their own type of health insurance; they want to be able to pick their own doctor; they want to be able to pick their own hospital. That’s what a patient-centered health care system looks like.”

Asked if that was likely to come to a vote next year, Boehner said, “We’ll see.”

Finally, no more in-network-out-of-network! No more we-don’t-accept-Blue-Cross-Medicare-or-Medicaid! No more United-Healthcare-is-no-longer-offered-by-your-company! No more if-I-get-this-job-I’ll-get-health-insurance! No more reasonable-and-customary-charges!

The American people will be able to choose whatever doctor they want and any kind of health care insurance they want. It won’t matter if you’re homeless, you’ll be able to go to the best doctors on Park Avenue. If you stock shelves at Walmart, you’ll be able to get high-quality care at the Mayo Clinic. If your company offers health insurance plans A, B and C, you’ll be able to choose D.

It won’t make any difference to anyone how much doctors, hospitals or insurance companies charge, because the Republicans now have a plan, the ideal plan that nobody else had the courage or insight to propose. In retrospect, however, it’s clearly the only way to guarantee everyone’s right to whatever health care they want without interfering with the free market: 

Every American citizen will have an unlimited supply of money to spend on healthcare! It’s the MONEY IS NO OBJECT plan! (MINO, for short.)

It’s the perfect “conservative” free-market solution, since everything for sale in the healthcare marketplace will be as good as free for consumers, while providers will retain the right to make as much money as possible.

(Note: Aside from replacing the words “government-centered” with “patient-centered”, details of the plan are, to be polite, “sketchy”.)

Meanwhile, here on Earth, there is an informative article in a recent New York Review of Books called “Obamacare: How It Should Be Fixed”. It’s by Arnold Relman, Professor Emeritus at Harvard Medical School. Unfortunately, you have to pay to read the whole thing (after MINO is in effect, we’ll all be able to afford it). But Dr. Relman concludes that our best hope of getting a high-quality, affordable health care system would be a single-payer system built on Accountable Care Organizations, i.e. private medical groups that would be paid by the government, not for every service performed, but for their patients’ overall care:

The only type of ACO [Affordable Care Organization] that has been proven to satisfy patients and physicians is multispecialty group practice. According to the American Medical Group Association, there are now well over 430 such group practices and their number is increasing rapidly as more physicians seek group employment….

Data from the Medical Group Management Association indicate that average staff earnings in groups are fully competitive with earnings in solo or small partnership practice, particularly if the generous fringe benefits that groups usually offer are also considered (for example, office expenses, malpractice insurance, paid vacation, pension plans). And judging from their low turnover rate, physicians who choose employment in successful, well-managed groups are usually satisfied with their job.

However, only a few medical groups currently avoid the inflationary incentives of fee-for-service by contracting with insurance plans that pay them on a per capita basis for comprehensive care of some or all of their patients; and even fewer pay their medical staff by salary….

… I have described in detail how a single-payer system sponsored by the federal government would function when coupled with a reorganized medical care system based on independent multispecialty group practices with salaried physicians. Replacement of all public and private insurance and elimination of itemized bills with a public tax-funded system that simply paid medical groups per capita for comprehensive care would avoid much of the expense and many of the other problems with the current system. The enormous savings could ensure adequate compensation for all the facilities and physicians needed for universal care.

The loss of jobs in the eliminated private insurance industry would probably be more than compensated by increased employment in a greatly expanded public-payer system, and by the new jobs created by the emerging business opportunities created when employers no longer need to pay the health costs of their employees. Government would be able to contain the rise in total health expenditures by its power to set prices and determine the level of taxation required to fund the system, but it need not micromanage medical care. Medical decisions should remain in the hands of physicians and their patients, where they belong.

Most important, this revolution in our health care system would make universal access to good care affordable. It is a revolution that seems inevitable, even though it is not yet on the political horizon.

I’d say it’s far, far beyond the horizon, but at least it’s on planet Earth. Meanwhile, we’ve got the ACA, which is significantly better than what we’ve had.

In Case You’re Concerned About Health Insurance Cancelations

It’s the media’s current ACA crisis. In other words, a lot of sound and fury, signifying very little.

The policies being canceled are those that don’t meet the ACA’s new minimum standards. All policy holders will be able to sign up for better policies. That’s the basic story. This short article in the New York Times explains what happened at a House committee hearing today:

Republicans were apparently furious that government would dare intrude on an insurance company’s freedom to offer a terrible product to desperate people.

http://takingnote.blogs.nytimes.com/2013/10/30/the-uproar-over-insurance-cancellation-letters/

It’s worth reading, if only for its humor value.

To B Or Not To B

That is a question. If Hamlet were with us today, would he ask himself: “To blog or not to blog?”

That’s what I asked myself this morning. Whether I should put this blog on hold.

But how can I save the world (one blog post at a time) or find out what I think if I don’t speak whereof I can?

Especially today, after a respected reader shared this letter to the editor:

When seniors started enrolling in the new Medicare system, hardly anyone touched a computer, there was no internet, or broadband connection. The system worked. Today, the same tools are available to us as were available then: applications, telephone, person-to-person help. The preferred method of access is the Internet, but the Internet is really just a way to get one into the system. The media is spending way too much time complaining about the method by which people sign up. They should be pointing out that millions of people who have not had access to health coverage will now have it. We need more stories about people with sick children who can now get coverage, not how much trouble people are having logging in to a web site. (BTW, just to see how it would work, I went to healthcare.gov and created an account. No problems. Maybe they kick in when you try to actually sign up for something.) 

I hate the media.

Me too, much of the time.

Now, in this autumn of our discontent, everyone with access to a media bullhorn should keep in mind that large information technology projects almost always have problems, especially when a “drop-dead date” is involved. The Republicans will “investigate”, silly people on TV and the radio will say stupid things (except in Afghanistan), columnists will draw the wrong conclusions, but the problems will be fixed, millions of people will benefit and, as someone said the other day, the ACA isn’t just a website.

We should also remember that most people sign up for things as the deadline approaches, and in this case the deadline (March 31, 2014) isn’t “drop-dead” at all – it’s a soft deadline that can be delayed a while, if necessary.

On the even brighter side, healthcare.gov is getting all kinds of free publicity! Let’s hope everyone spells the name right – although that’s not required these days (“did you mean healthcare.gov?”).

For the icing on the cake, take a look at how Republican politicians defended the problem-plagued rollout of the Medicare prescription drug benefit eight years ago, when one of their own was in the White House:

http://thinkprogress.org/health/2013/10/24/2828261/hearing-post/

“The empty vessel makes the greatest sound.” (Henry V, act 4, scene 4)