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Friday, October 29, 2010

Roll Away the Dew is Speaking at the Society of Insurance Research Conference

It's road trip time at Roll Away the Dew. Well, actually it's just a plane trip with a connection in Altlanta, on the way to Jacksonville, Florida where I will be speaking at the 40th Annual Society of Insurance Research Annual Conference (SIR A.C.). Did you know that Jacksonville is the largest city in terms of square milage in the lower 48 states? That actually sounds horrifying me to as an example of uncontrolled urban sprawl that we don't see here in Oregon with our Urban Growth Bounderies. However, I did hear very positive things about Amelia Island and Florida in November is not something to look down at.

Readers may be wondering what Roll Away the Dew could pontificate upon for 45 minutes. How many colonoscopy or animal husbandry jokes will the speech include? Will the inmate and asylum analogy continue? Will familiar topics of MBA's behaving badly be broached or will this be a pure health care focus on the strengths of the Medicare Advantage program, the dysfunctions of the Individual insurance market, or the future of Accountable Care Organizations? Will the words, MediCAID for all be uttered and for those guessed this topic, you know Roll Away the Dew way too well!

Actually, I think that I need to make a "MediCAID for All" T-shirt for the conference. I will be speaking at the newly created Health Insurance track for the Society of Insurance Research. My topic will on the business opportunity that health reform created for Medicaid managed care companies. If there is a health care organization that can afford to ignore a market that is going to almost double then I want to see your business model. That's because that health care organization must be performing at a very high level in commercial, Medicare, individual, self-funded or other aspects of health care to be able to ignore 25% of the market.

If you want to hear more about my presentation, come to Jacksonville, Florida from November 14th-17th. I hear that the Property and Casualty insurance guys really know how to party. Another option is to just wait until after the conference when I'll do a full postmortem on my site.
Before I do that, I think that I really need to make myself a MediCAID for all T-shirt.

Wednesday, October 27, 2010

Seeking True North or How to Talk like an MBA

I graduated from my MBA program at the tail end of the dot-com/corporate scandal/Not so Great Recession of the early 'oo. As a result, I interviewed a lot and got to hear a lot of corporate jargon. Most jargon was a harmless way to avoid being specific about any answer. MBA's, including graduates of online MBA programs, pick this up to show they understand corporate code. The only insidious example was during my interview with The Advisory Board Company (ABC).

The ABC is very serious about their corporate jargon to the point it's used to brainwash employees. Every employees' answer to a question ends in an inflection? That is because ending in an inflection makes you sound curious? And interested in what everyone is trying to say?

The most egregious example was my interviewer's answer to my question of "What would you say the ABC company does best or how would you distinguish yourself from other consulting companies?" I admit that my question was a little obnoxious but I had already written off ABC as a likely employer and wanted to have some fun.

"We are best at finding true north?" my interviewer inflected back. I dug my nails into my thigh to keep from laughing. True North was a popular corporate cliche at that time that means finding the right strategic direction. Or finding any strategic direction. Or any direction and if it's actually strategic, that's a bonus. It merges on saying that ABC can predict the future on a high end or like saying they were really best at peeling the onion or kicking the tires on the low end. As Damon, from the HBO TV series Hung said, "All that you get when you peel the onion is more onion."

With that back story, I would like to share a recent column that has some of the best corporate jargon that I have seen in a long time. Here are my favorites from the link above:

End of the Day
Formerly 5 to 5:30 p.m., now defined as an uncertain point in the future when everything magically turns out okay. Example. "At the end of the day, the pollution in the groundwater may just drain into the earth's core and become unnoticeable."

Industry or field. Example: "I'm in the manufacturing space," "I'm in the waste disposal space," "She's in the adult film space," or "He's in the space exploration space."

Can't Wrap One's Head Around
Unwilling to get into the details or deal with the facts; intellectually lazy. Example: "I can't wrap my head around all this recycling business; Let's throw everything in the dumpster behind Home Depot and let them deal with it."

You will also talk like an MBA, especially if you remember the inflection in your voice?

Sunday, October 24, 2010

The Guards take over the North Gate: The battle for the Asylum of Health Reform Rages On

In the battle for the implementation for the first provisions of health reform, I will continue to beat my inmates battling for control of the asylum analogy like an actual inmate probably used to be beaten in an asylum. In the latest battle, the guards or the government agencies like the Oregon Insurance Division have beaten back one of the craziest inmates.

This inmate in question is Lifewise of Oregon, a subsidiary of Premera, the Washington Blue Cross/Blue Shield company. Lifewise typically acts like Oz's Ryan O'Reily. They don't look very strong, kind of wiry, but are devious and will not hesitate to do whatever they need to win. Lifewise's interpretation of guaranteed issue for children 19 and under or no longer denying coverage due to pre-existing conditions was that they could wait until September 2011. However, the law states that this provision must go into effect September 23, 2010. The Oregon Insurance Division informed Lifewise that all new sales of individual insurance plans would be suspended until they complied with the law. Lifewise also needed to comply by the end of October so they could participate in the first open enrollment period for children 19 and under.

Lifewise's defense was "that it is in alignment with the “good faith” provision of the U.S. Department of Labor FAQ (dated 10/8/2010),which provides issuers a reasonable period of time to come into compliance with the requirements of the Act". In other words, they would be happy to comply but would do it later. This is the same defense that young children use to avoid cleaning their room, high schoolers use to avoid doing their homework, and college graduates use to avoid moving out of their parents' house. I think that only college graduates are moderately successful with this defense.

Technically, Lifewise files their individual plans in September which is why they though that they could wait until September 2011. They planned to continue to deny coverage to children under 19 with pre-existing conditions until that date. However, there is nothing in the law or general field of logic that supports this conclusion.

Forcing an insurance carrier to not flagrantly disregard a health reform provision should not seem like a victory. However, if Lifewise's behavior was allowed to continue much longer, it would have been much worse. It would have provided every other insurance carrier with a complete disincentive to comply with health reform or made the future riots even worse.

Monday, October 18, 2010

Riots in the Asylum: Part 3 of the End of Pre-Existing Conditions for Children

When we last left this series of health reform implementation gone wildly badly, it looked like the inmates had built a roof top hot tub and organized a spa day. The state insurance divisions appeared to be overwhelmed trying to set up a system to ensure that insurance carriers would provide insurance for those under 19 without denying coverage to anyone with pre-existing conditions. This is also call guaranteed issue for children.

Insurance carriers had been defining their own rules or not participating. It had gotten even worse as insurance carriers started introducing perfectly legal ways to charge people even more money for insuring children in response to this legislation. This new method was to change the "underwriting tier" or how they classified the price based on the type of family unit that was applying. Most insurance carriers have a family tier that is the same whether a family has 1 child or 12. Only 5%-10% of families have even more than 2 children so it's not like John and Kate + Eight are getting a free ride. However, insurance carriers announced that they would no longer offer a family tier but would now charge families per child. When one thinks of Jon and Kate + Eight or OctoMom, this doesn't sound like a bad idea. However, for a family with 5 children this could triple the amount of money they pay for health insurance.

Regence Washington announced this change and attributed it to health reform. While nothing in health reform was related to underwriting classifications, it did cause insuring children to become more expensive. As a result, insurance carriers are moving away from any pricing strategy that makes it attractive to provide insurance to children. This probably represents the peak of the inmates' control over the asylum and showed just how many perfectly legal strategies they could deploy to not support guaranteed issue for children.

However, the insurance divisions sent in the riot squads, cut the electricity, drained the hot tubs, and poured out the exfoliating cremes and cucumber wraps from spa day. In response to Regence's Washington decision to stop selling child only policies, the Washington Insurance Division charged them with age discrimination. The California and Maryland state legislatures have introduced legislation to require insurance companies to offer child only plans. It's gearing up to be a siege on the asylum.

However, given how easily insurance carriers have short-circuited this legislation, I am not optimistic that the guards will regain control. The hole in the logic of any of the state insurance divisions or legislators, especially Washington's, is that the child only plan was an invention of the insurance industry. When insuring children was an attractive prospect, insurance companies developed new ways to insure them. A child only policy is not an inherent right of citizenship (except in Ohio, New York, and Virginia where this was mandated into state law a while ago) but a private sector innovation.

When the courts would probably rule in favor of the inmates, the Obama administration might need to rethink it's health reform implementation approach.

Wednesday, October 13, 2010

Oregon Health Insurance CEO Forum: Lame and Lamer

Last year I attended, the Oregon Health Insurance CEO Forum and noticed some excitement in the air around some new developments such as cost transparency, value-based benefit design, and the importance of caring for children. This year, despite their very industry being turned upside down, they talked about popular health care topics from the 80's and 90's. That was the lame part. The lamer part was four CEO's including the CEO from local Blue Cross, Regence, which used to have the largest market share, didn't attend. Considering the unpopular decisions their plans were making around not providing access to insurance for children, it was not very likely that their absence was because they were receiving humanitarian awards elsewhere.

First, the Lame:
  • The popular topics from the 80's were around capitated arrangements with providers where the primary care physician manages medical costs and how 10% of the population uses 70% of health care costs. The Cigna Northwest Region CEO, Chris Blanton, still wanted to talk about how employer groups should play an active role in driving health insurance change. The only thing that was missing from his 90's flashback was flannel as employer groups are either currently pushing the innovation to the limits of what their employees will accept or scrambling to understand the post-health reform environment.
  • To further underscore the stock shorting performance of Cigna's Blanton, he did a poor job of hiding the smirks on his face when questions were asked such as what did everyone think about Health and Human Service's (HHS) assessment that health reform would only increase insurance prices by 1%-2%.
  • Robert Pallari, the former CEO of the Portland-based Legacy Health System and architect of the Oregon Health Plan was the moderator. He was also formerly colorful and bombastic as he lobbed soft ball questions like "Look into your crystal ball and tell me what you see in the future?", "How will health reform influence your organization", and "What type of partnerships are you pursuing with providers?"
  • Actually Pallari did blatantly insult the Kaiser Permanente CEO, Andy McCulloch, by pointing out that the Kaiser system has been as much about setting up barriers to health care as it is about providing care. Perhaps, McCulloch was too distracted by Banton's smirking or thinking about who play 3rd base for the Cleveland Indians in the 80's since his expression didn't change at all. Nor did he respond.
  • During this forum, the battle for the future of the individual insurance market was raging, the payment process for Medicare and Medicare Advantage is being completely revamped, and the new health reform provisions had been effective for 5 days. Three of the CEO's were trying to decide if their individual plans should remain open to children while Cigna and their Chief Smirking Officer had already decided to close their plan to children. Yet not one question was asked about insurance for children. Last year, CEO's couldn't talk enough about how important it was. I badly wanted to ask the question but I recognized that it would a CLM (Career Limiting Move). Next year, I'll find a plant in the audience to ask questions like this one.
There were some bright spots:
  • ODS CEO Robert Gootee did have the great line of pointing out that we "can't drink our bath water and call it champagne" about some of the more egregious performances.
  • Gootee also called the Secretary of HHS and Middle Finger Extending Kathleen Sebelius by the name, "Kathleen Celibate". That would explain a lot. Actually, I talked with someone who worked at HHS who did vouch for Celibate's er I mean Sebelius's administrative skill. That person also pointed out that just because she has been launching the political attacks doesn't mean that she wrote them or necessarily believes in them. It's just politics.
  • My main conclusion from last year's forum was that we should let our children grow up to be actuaries. This conclusion was proven again by the presence of the PacificSource Chief Operating Officer, Sujata Sanghvi, who is a Harvard educated actuary!
And the Lamest Aware goes to:
  • While the CEO's that did show up gave lame performances, at least they came. Well, Cigna's Blanton could have just sent a 12 year old boy to smirk for him so I don't give him credit for attending.
  • On the other hand, Lifewise, Health Net, United, and Regence sent no representatives. They all have announced that they are no longer offering child only coverage in the individual market in the last few days so their lack of attendance is probably not a coincidence.
  • Lifewise's membership has been dropping like acid at Woodstock, Regence has lost their 2 largest group accounts in the last 2 years and 40% of their group enrollment, Health Net is trying to sell itself, and United is well, still United. Given how badly these plans are currently doing, I can't imagine that they would have many great ideas to share. Perhaps it's best that they did not attend.
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