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.

The Inmates have taken over the Asylum: the 2nd step of health reform

When we last left health reform, one of its most significant early changes was dangling over the cliff. Guaranteed issue or the practice of no longer denying health insurance for children under the age of 19 was scheduled to start on Sept 23rd. Health insurance plans or the inmates in this analogy were expected to change their practices but there was a trouble brewin' on the horizon. The insurance companies pointed out that with this provision, children could drop their insurance whenever they didn't need it and then enroll whenever they needed it. This would be expensive and individual insurance could become even less affordable. The Obama administration was so concerned that they gave the state insurance divisions flexibility to negotiate and offer concessions like a limited period of time when children could enroll or open enrollment period.

How did the state insurance divisions and Obama respond in this crisis when it emerged in early August? Late and ineffectively. If they were super heros, school bus would have toppled over the cliff. If they were Austin Powers, they would have been eaten by sharks with frickin laser beams.

Children were supposed to stop being denied insurance on September 23rd. As that date approached, the two state insurance divisions in my area (Oregon and Washington) had yet to issue any guidance or rules to respond to the insurance companies' concerns. In response, the insurance companies steadily began to announce that they would stop offering insurance to children. First, national carrier Health Net, stopped offering individual insurance to anyone. Other national carriers like Cigna, Assurant, and Aetna pulled out of the child or dependent only market. This means that a parent must both pass the health screening and enroll in the individual insurance plan in order to purchase coverage for their child with these plans. In Oregon, the nail in the coffin was when when Regence, the local Blue Cross plan who sells almost half of the individual insurance plans in the state, announced they were leaving the child only market. When there is market uncertainty, the market seeks certainty. The main result of this health reform provision has been the disappearance of the option for children to purchase insurance without a parent.

There was great hope that reform would stop insurance companies from sinking to the lowest common denominator. It was thought that there would be vigorous and clear enforcement by the regulatory bodies that would convince all insurance companies to participate in guaranteed issue for children under fear of fines, exclusion from future opportunities, or even sharks with frickin laser beams. The biggest fear that insurance companies had is that they would be the only ones participating, receive a disproportionate share of unhealthy children, and be at a competitive disadvantage that they couldn't recover from. This fear was not allayed.

Instead, the Obama administration and Health and Human Services (HHS) did not provide sufficient support and guidance to the state insurance divisions. The state insurance divisions to not have the resources nor bandwidth and were overwhelmed by the issues with this implementation. Insurance companies filled this leadership vaccuum by announcing their own interpretations and intentions for how they would implement guaranteed issue.

The Washington and Oregon insurance divisions finally issued draft guidelines on open enrollment periods and other provisions that would apply on Sept 23rd which was the day that they were supposed to be implemented. Insurance brokers have reported that some insurance carriers like Lifewise, don't intend to comply until Sept 2011 when they have to refile their plans. However, that's actually fairly irrelevant since the insurance division haven't been able to provide guidance and ensure compliance for the insurance companies that have expressed an interest in following the rules.

I had higher expectations for reform then this.

Moving Away from a Middle Finger Relationship in Health Reform

During one of the many webinar's on health reform where I was multi-tasking (or looking at youtube videos of water skiing squirrels), there was a presentation on the evolution of the relationship between insurance companies and regulators. The speaker described it as an arm's length relationship that needed to move towards a hand shake or hug for the industry to be more successful. I disagree with this. The relationship is not currently arm's length but rather a middle finger relationship that may involve orifices shortly. The worst part is that the Obama administration has a model in place that could move the insurance industry and regulators to a friendlier position.

Health and Human Services Secretary and prominent middle finger extender, Kathleen Sebelius, fired off a statement last week accusing the insurance industry of blaming health reform for a 1%-9% increase in prices. Sebelius felt the price increase attributed to health reform should only be 2% at the most. The insurance industry pointed out that removing maximums on lifetime benefits, making preventive services like colonoscopies free for everyone, requiring that children under 19 never be denied insurance, and other provisions are not going to make insurance any cheaper and defended their numbers.

Implied was that insurance companies should reduce their profit margins which average 3%. While that is reasonable (and expected given the current viewpoint that the only difference between insurance companies and a horde of pillaging Vikings is that the insurance companies have moderately better personal hygiene), the insurance companies have been losing profit margin with other reform provisions. There are billions in new fees and a requirement that medical expenses be at least 80%-85% of revenues which has taken a few percent off profit margins already. Additionally, the reduction in Medicare Advantage payments will increase the cost that employers and individuals pay for insurance. Medicare Advantage was most of the profit margins for insurance companies the last few years.

Insurance companies are prepare to give the middle finger right back by refusing to participate in the coverage of all children under 19 by not offering individual insurance to any children at all. There has been some movements in that direction and it's increasing in my home state. Individual insurance covers 9% of all Americans and children make up around 1/3 of that group. Therefore, it's a very small line of business and insurance companies are signaling that they may leave it entirely rather than follow the new rules. Individual insurance may stop being sold to any child no matter how sick or how healthy as a result. I was initially surprised at the speed in which insurance companies deployed a nuclear option. However, given the Obama approach towards the industry, it's not like insurance executives were going to be invited to play pick up basketball anytime soon.

The state regulators are in no position to enforce rules as Sebelius has promised they would. In my state, the email around a proposed open enrollment period as a solution to this issue had the subject line, "Please disregard previous email, this is the correct version." If state regulators can't even send the right attachment with a very important email, they are not in a position for this volatile and tricky negotiation.

What makes this situation even more unfortunate is that the Obama administration has a way to avoid all these dueling middle fingers. That way is the much maligned Medicare Advantage program. This is the program that Obama has said doesn't work since it overpays insurance carriers since it pays 15% more than the federal government pays for traditional Medicare.

The private Medicare Advantage program used to be called Medicare + Choice and it paid 5% less than traditional Medicare. Not many insurance companies and only 7% of the seniors participated in it. I listened to a webinar with Tom Scully, former administrator of Medicare, where he explained that they needed to pay insurance plans more for participation. This increased payment did result in 25% of seniors participating and a lot more insurance companies. However, he agreed that 15% more was too much which is why Obama should have cut the payments (despite the impact on employer and individual insurance which I describe above). With the payment cuts, there are quality bonuses that plans can earn for demonstrating good customer service, medical management, and ensuring high quality care. To earn these bonuses, plans have to cover preventive services for free, pay 85% of revenue on medical expenses, and similar requirements as health reform. However, insurance plans are not fighting these provisions because of the Golden Rule. Medicare has all the gold so they make the rules. Insurance plans will be paid more for following these provisions and less if they do not.

This supports a future health insurance model of the government contracting with private insurance plans which is the current Medicare Advantage model. It's the simplest incentive plan in the planet. If the government controlled all payments for health insurance, insurance companies would have to follow the rules. There are no middle fingers given in Medicare Advantage. In fact, Tom Scully's advice for how insurance companies could form a successful relationship with Medicare regulators was:

"Suck up, suck up, and suck up some more. Take a nap, then suck up, suck up, and suck up again. Medicare likes working with good plans and doesn't like working with plans that don't follow the rules."

The Inmates are Running the Asylum: The 1st steps of Health Reform

The first parts of health insurance reform will start in a little over a month (Sept 23rd to be exact). One of the more significant pieces is that children under the age of 19 will no longer be denied coverage for an individual insurance plan due to pre-existing conditions. Overall, this is good and makes us a more compassionate and humane nation. This change also shows how tightly connected every piece of the health care system is as the details behind this change are getting really complicated. Just like the directions for assembling Ikea furniture, what seems simple is getting really difficult.

The Obama administration is turning the details over to the states who are in turn asking the insurance companies for guidance. This is how much of health reform will be implemented as the state insurance divisions, Medicaid offices, or other agencies will be making hard decisions based on a federal framework. To fully appreciate it, picture what would happen if the federal reserve turned interest rate setting and trade over to the states. Actually, that sounds too hard to visualize. Picture what would happen if parents turned the house hold management over to their 4 year old.

No longer denying children under 19 insurance seems simple to do. When someone who was born after 1991 applies for insurance, they get insurance. The only option is to say Yes, here's your insurance.

This is also called guaranteed issue. The difficult part is that in order for an insurance scheme to be viable in a world of guaranteed issue, individuals must be required to purchase insurance to eliminate what economists call the Free Ride. This is also called the individual mandate. If you want to sound like an insurance executive at your next cocktail party, you can say, "Without an individual mandate, you can't have guaranteed issue." Combine that statement with urinating in the ice bucket and you'll be the hit of the party.

As a result, children under 19 can just get insurance when they go to the doctor, then drop their insurance, and pick it up again when they need to go to the doctor again. Sounds great except that makes insurance more expensive and pretty soon unaffordable. This loophole is big enough to undermine the whole program. As a result, states are offering insurance companies concessions to avoid the collapse of the insurance market for children. Some include only allowing children guaranteed issue one month out of the year (called open enrollment) or requiring children under 19 to stay on an insurance plan for a certain period of time with penalties for leaving early.

Insurance companies are threatening to no longer allow only children to purchase insurance but requiring parents to be on the plan, too. Ultimately carriers could stop offering individual insurance to children under 19 at all so the states do have to offer possible concessions.

The Obama administration has allowed the states to offer concessions, mainly the open enrollment option, to address the situation. However, this puts the states in the awkward position of negotiating and trying to determine which concessions to offer. It gives insurance companies an opportunity to develop their own concessions. The final result of guaranteed issue for children could be very different than what everyone envisioned.

When I worked in previously worked in psychiatric facilities, I noticed that the only difference between the inmates and staff is who had the badge and keys. This may be the case with the future implementation of health reforms as the state divisions and insurance companies are being handed the keys and badges.

With Health Reform, the Obama Administration Needs to Learn to Keep its Enemies Closer

In October 2009, the Obama administration declared the insurance companies an enemy and began keeping them at arm's length (or really middle finger length). This move was triggered by the decision of the health insurance companies lobbying group, AHIP, commissioned a PricewaterhouseCoopers (PwC) report that forecasted significant increase in health insurance premiums and lack of affordability. This report was released shortly before Congress voted and PwC (why the lowercase w? What did waterhouse do?) shortly refuted AHIP's interpretation and how the methodology was applied.

Kathleen Sebelius of Health and Human Services returned the favor with a Wall Street Journal editorial that was released the day before Medicare Advantage bids were due. It's methodology was also not applied well and was also released too late for it to have an impact. Although, Sebelius could have extended the deadline for bid submission if she actually wanted something to be done. Like the PwC report, it was the equivalent of an abstinence lecture to a couple during their 6 month prenatal visit.

This WSJ editorial was not the first jab on the health insurance industry by Sebelius nor was it the least effective. The prize for the least effective was the angry letter to WellPoint that pretty much received a F#ck Off response from their CEO.

The Obama administration has tried to brawl with the insurance companies as part of is health reform strategy and given the AHIP PwC report, I can't blame them. However, I do blame the strategy. Providers and hospitals brawled with the health insurance companies in the 90's once providers got big enough to fight back. In California, Sutter Health System and California Blue Shield made some of the World Wrestling Foundation rivalries look tasteful in comparison. It was also about as effective as both lost their reputation and money over the stalemate. Through consolidation, providers and health insurance have become equally strong which has mostly higher payments to providers and higher insurance premiums for the country. Still licking wounds from their previous battle, these two were mistrustful and had no interest in learning each other's business. For example, with medical management, providers have missed the opportunity that insurance companies capitalized on with nurse case management programs. Insurance companies could learn from hospitals on how to develop better cooperative partnerships with physicians.

The Obama administration is fighting a 90's style battle with insurance companies. Like acid wash jeans, it's no longer fashionable and not yet retro cool (like leg warmers). Although most in health care thought that the insurance companies would lose influence as their business models were not sustainable, they are as powerful as ever. There is no reason to think that the Obama administration's battle would have a different outcome as doing the same thing but expecting a different outcome is the definition of insanity.

My recommendation is that the Obama administration keep a closer relationship with the insurance companies. There is much to learn about the insurance model that can be applied to populatio health or how to talk its beneficiaries. For example, insurance companies learned a long time ago not to send glossy 4 page full color material to seniors since they see it as a waste of money. Insurance companies could price out some of the Obama administration initiatives which will help address future claims of affordability. Simply, it's an Abraham Lincoln, Team of Rivals approach of staffing his cabinet with his enemies. It would represent a new approach to competing with the insurance companies since the current approach hasn't worked for anyone else.

Democrats: Missing the Point about Segmentation in the Medicare Advantage Market

I read a recent Government Accountability Organization (GAO) report about the Medicare Advantage market that Democrats are portraying as an example of private health plans "piling on extra costs to health seniors." Some readers might be shocked at the Democrats accusation. Some readers might be more shocked that I actually read a GAO reports.

The reports notes that healthier Medicare beneficiaries who buy less expensive, lower premium plans have higher out of pocket expenses for hospital visits, skilled nursing facility stays, and other services than seniors in poor health who buy more expensive plans. The Democrats feel that is evidence that "health care reform will protect Medicare beneficiaries from unscrupulous insurers". I feel that a better parallel for this example is to note that college seniors tend to buy cheaper alcohol when hanging out with their friends watching sports than they do when they're on a date with a woman they're trying to impress. There is a time when a case of Pabst Blue Ribbon will get you a fist bump and a time when a nice bottle of red wine will get you invited back to her place. Democrats are really missing the point of market segmentation.

With health insurance, you either pay more upfront in the form of a higher premium to minimize the risk of having to pay more if you get sick or you do the opposite. If you are sicker, you are probably more likely to buy better health insurance because you know that you are likely to use it. This GAO report describes this perfectly. Healthier seniors buy cheaper plans that have a higher copays and out of pocket costs for hospital services or skilled nursing facilities. The plans are cheaper because they cover less services and according to the report, the 43% in good health prefer those plans. For the 20% in poor health, they will pay more upfront in order to have lower costs when they are likely to enter the hospital.

To underscore this example of segmentation, 55% of the plans that seniors in good health chose, had fitness discount benefits. Only 28% of the of the plan that seniors in poor health chose had fitness discounts. In other words, a healthy senior would rather pay a lower premium for a plan with a fitness discount than one with a good hospital benefit that they are not likely to use.

I should stop acting indignant when political parties spin reports to support their point of view. It's like getting indignant when your cat doesn't listen to you. But I can get indignant when political parties seem to completely misunderstand the data or think so poorly of the average citizen that we believe their illogical point of view.

The most interesting question that the report helped address is whether it is worth it to pay more for a Medicare Advantage plan with richer benefits. When we buy insurance, we always wonder if we should we pay more for the lower deductible an our auto insurance or will we never use it?

The report noted that the average premium for a plan that a healthy senior chose was $24/month, for a moderately healthy senior it was $37/month, and $31/month for a senior in poor health. For seniors in poor health, this likely includes Special Needs Plans (SNP) which receive more money from Medicare so they charge lower premiums. They also have less healthy, low income members so are not a good comparable. The best comparison is the $24/month plan for a health senior and $37/month for the moderately health senior. The difference per year is $156.

The report indicates that for the plans that a healthy senior would select compared to a moderately healthy senior are:

• $97 more for a hospital stay for the plans a healthy senior would select
• $14 more for an inpatient psychiatric stay
• $60 more for a skilled nursing facility stay
• $320 more for renal dialysis for the year

It looks like the healthier seniors are saving money with their plan selection. If a healthy senior has a hospital stay and a skilled nursing facility stay in a given year, they will break even from their premium savings ($156 vs $157). Otherwise, they will be ahead financially.

From talking with seniors, they make very calculated decisions when selecting a Medicare plan. They literally take out a calculator, look at the premium difference and how much they project to spend in out of pocket costs for services they are likely to use. They don't rely on Democrats to protect them.

Medicare is Teaching Private Health Plans about Free Market Principles

I never thought that I would write a title about the Center for Medicare and Medicaid Services (CMS) is teaching private health plans about free market principles. I shouldn't be surprised considering how our current president has captured the merchandising opportunity that passing health care legislation presented. My sister bought me a T shirt from Obama's store that immortalized Joe Biden's reference that health care reform is a big f#cking deal. After seeing the Obama store, I don't see how anyone can accuse Obama of being a socialist. That's like accusing Dick Cheny of being nice.

Back to Medicare's venture into capitalism. They recently issued a memo announcing that if a health plan has multiple Medicare Advantage plan designs, there must be a significant difference the total out of pocket costs for a member. Medicare analyzed utilization for 15,000 Medicare members to come up with the significant cost difference at $20 per month between 2 plans that a company offers. Therefore, if a plan has 2 different Medicare Advantage plans (in the same category like both HMO or both PPO), than the member's copays, coinsurance and other costs must have greater than a $20 per month difference.

This is good old fashioned proper product segmentation. Good product design will result in plans that appeal to different segments based on how much they want to spend and the difference in benefit design. If plan sells 2 HMO plans and the only difference is the color of the brochures and $500 in hospital visit copays, that's poor product development. That's like selling cars whose only difference is the size of their spoiler. Or breeding yak whose only difference is whether there fur turns into dread locks (I haven't made an animal husbandry joke in a while). Those are 2 overlapping plans and the insurance company should have the good sense to terminate one of those plans or change it. They appeal to the same segment of customers and offer no significant choice or benefit.

However, private insurance plans have not done that themselves which is why Medicare has stepped in with a good lesson on proper product segmentation. In the early wild west of the Medicare Modernization gold rush, health plans through some plans on the wall just to see what stuck. Some ideas didn't work and it's the private plans fault for not correcting their portfolio on their own.

Comprehensively Do or Do Pass Health Reform; There is no Incrementally Trying

The previous Republican solutions to health care reform have been to change the definition of uninsured, talk about torte reform instead, talk about immigration instead, and produce torte reform bills that just happen to cover only 10% of the uninsured.

The latest Republican plan was announced at the Feb 25th bipartisan televised summit where everyone was carefully seated in a way that alternated boys and girls. Senator Lamar Alexander announced as folksily as he could that the Republicans favored an incremental approach because we "have proved we haven’t done comprehensive very well in Congress." The only thing missing was the "You betcha."

Congress hasn't done comprehensive well? By what standards? In health care alone, I recall the very comprehensive Medicare Provider Improvement Act of 2008 and Bush's 2003 Medicare Modernization Act. I recall some very comprehensive stimulus packages, credit card reform, and I don't even use my television set anymore. How incremental do Alexander's Republicans want to be? Do they want credit for showing up to work but don't want to strain themselves by being too comprehensive and turning on their computers? Can I tell my boss that I'll happily do an analysis of a problem but I won't actually solve the problem because it's hard to do comprehensive well?

The proposed incremental approach sounded good for about 15 seconds before I realized that it was just the latest version of the Republicans announcing that they are more concerned with their Facebook quizzes and figuring out which Lost character they would be than fixing health insurance.

Besides the abject disinterest that statement reflects, here's why incremental does not work in health insurance. There are 4 main markets or ways that people get insurance which are 1) through employers, 2) individually, 3) Medicare (you're at least 65), 4) Medicaid, (you make less than $14,000/year). Those markets are interrelated so if you make changes to one, the others are effected.

For example, if you do something to reduce the incentive for employers to offer health insurance, more people will enter the dysfunctional individual market with pre-existing conditions. The individual market would have to be changed at the same time to accommodate new entrants.

If insurance companies profitability in one line of business changes, they will have to raise prices in another line of business. For example, if Medicare cuts Medicare Advantage reimbursement by 2% like they did this year, insurance companies have to charge someone else, like employers or individuals, 2% more. And no, with profit margins of 3% and capitalistic and pillaging shareholders, insurance companies are still supposed to make money. Taking the loss is not really a viable alternative and cutting executive salaries would only cover a fraction of a percent.

Growing or reducing Medicaid can have an impact on individual and employer insurance. Bush opposed expanding the State Children's Health Insurance Program (SCHIP) because he felt that it would "crowd out" these private insurance markets. People would elect Medicaid instead of purchasing employer or individual insurance for their children. The "crowd out" effect is debatable but the bigger point is that even President Bush understands that health insurance markets are linked and incremental doesn't work! When President Bush needs to give you a lecture on how health insurance market, that should be an indication that your argument is starting to rank down there with the theory that polar bear farts are the primary cause of melting Arctic ice.

The two planks of the Republican health care reform also stink as bad as polar bear farts. They have held out 1) medical malpractice reform and 2) selling insurance across state lines as guaranteed ways to reduce the cost of health insurance without having to do all this complicated stuff. The CBO did an analysis of Senator Hatch's medical malpractice proposal and determined that it would save $54 billion over 10 years. That's about a 0.5% reduction in the growth of health care costs or what would be swallowed by medical inflation in about 2 months. In other words, this proposal would move health care costs from unsustainably unaffordable to unsustainably unaffordable. Notice any difference? Exactly.

I discussed the 2nd idea of selling insurance across state lines in this post where I called this idea Tweedledumber. At my place of work, I would be the one to analyze the decision to participate in this program and my recommendation would be a no, we do not want people in higher cost states buying my state's insurance plans because it will make my plans more expensive and less competitive.

With Republicans using their patented wide stance technique to piss away the chance to fix health insurance, it makes me yearn for a real conservative party. Since I spend more time reading the Economist than I do looking at my Grateful Dead bootlegs, I can now appreciate a good conservative fiscal policy. I'm still a big D Democrat due to my belief in spending to preserve a safety net and socially, I think that there should be national days of cross-dressing. However, I have stopped agreeing with everything Dennis Kucinich says. This Republican party does not provide a viable alternative and their dismissal of health care as a relevant issue is not something that I can easily forgive.

Obama's push to pass this bill through the reconciliation process regardless of the political fall out that he may face, both impresses me and makes me want to have a lighter ready the next time he goes out for a smoke. I now finally understand what he means about being a good one term president as opposed to a mediocre two term president. He would rather do the right thing with a comprehensive health care reform than just follow the polls incrementally.

Leaving the Evidence Behind: the Obama administration response to Anthem Blue Cross

It had been 19 days since my last post about health care. There hadn't been much material for musing or ranting since the election of Massachusetts's Scott Brown. There was so little material about health care that I was even debating a post on the commercial real state of affairs based on the obvious failure of the new complex next to my office. The creation of a new reality TV show, Obama and the Republicans talking health reform on TV, didn't trigger any new material even though those on the right would call it a spin-off of Big Brother and those on the left would compare it to Fear Factor.

However, readers are spared my analysis of commercial real estate failures based on my proposal that a 7-Eleven can't be the anchor store or yet another reality TV show suggestion. The savior is the Obama's decision to lay the smack down on Anthem Blue Cross's 39% price hike on its 800,000 Californian individual insurance members. Basically, Anthem had a very profitable year but filed this large rate increase with the state insurance division. Although, regulating Anthem's insurance filings is the responsibility of the California state insurance division, the federal government wants to be a part of the action.

What I find disturbing is that while we try to promote evidence-based practice on the provider side of the health care system, we're throwing out the evidence-based practices on the insurance side. Insurance prices are determined by actuaries and their rigorous mathematical analysis. Even after the application of all that math, actuaries sign an attestation while they solemnly swear that their numbers were objectively derived. In other words, using actuarial science to calculate the cost of insurance is evidence-based. Using political pressure to get prices that you like better is debased.

We've made progress in terms of becoming a nation of health care wonks, but I know that the phrase "actuarialy speaking" may still result in some blank looks. In the case of the Obama administration response, he's basically telling Anthem's actuaries that they suck, their mathematical models suck, and their sisters would have sucked if he had- well you get the picture.

The individual insurance market is generally a break even market for insurance carriers at best. Administrative costs are often 20% of the price compared to 5%-8% in the larger group market. It's much cheaper to enroll 1,000 people on one data file and send the bill to one employer then it is to enroll and bill 1,000 people individually. With such high administrative costs, there isn't as much room for profitability as there are for mid-sized groups or other lines of business because it's tougher to add additional margin. If the individual market is subsidized with the profits from the mid-sized group market, then that mid-sized group is paying more than it should. However, given that employer groups don't have to pay taxes on their health insurance and individuals do pay taxes, this subsidization might not be a bad idea.

If anything, Anthem's 39% price increase marks some point of the potential insurance death spiral. Health care has gotten so expensive that it's only beneficial to buy insurance for those who are going to use a lot of it. The Obama administration generally understand this principle which is why health care reform has been rightly framed as an economic issue. However, demanding to see the homework assignment that the Anthem actuaries turned in to the California insurance division is not economics but just politics. But maybe this could be turned into some kind of reality TV show with actuaries?

A Musical Montage of the end of Health Reform

After reading about Scott Brown's Senate victory in Massachusetts, I riffed a Don Mclean American Pie cover on my Facebook status of "I can't remember if I cried/When I read what Mass voters decide(d)/Something punched me deep inside/The day that health reform died". Based on the empathetic comments that I got, my friends sensed my apparent deep inner pain. However, readers of this blog might have been confused by this rather poignant poetic lyrical display since my posts have always found something to criticize about health care reform. I compared Medicare Advantage cuts to the worst thing to happen to seniors since the end of Denny's early bird dinner special and the nicest thing that I said about the Public Option was that it was a marginally better idea than Death Panels.

To this confusion, I respond with Joni Mitchell's song Big Yellow Taxi (otherwise known as They paved over paradise and put up a Parking Lot) "Don't it always seem to go/ That you don't know what you've got/Till it's gone". Now that the possibility of reform is disappearing faster than Gilbert Arenas's basketball career, I now realize the amazing potential of what this country had.

For the first time in a long time, we were grappling with tough questions about our health care system. We became a nation of health policy wonks. Radio programs analyzed the true drivers of health care costs and how requiring everyone to buy insurance would impact costs. More importantly, people with conditions that would prevent them from ever being accepted to an individual health insurance plan sensed an end to their fear of losing access to health care if they ever lost their job. The fact that the bills ensured that everyone could be insured outweighed their weak cost controls and clumsy handling of the Medicare program. As Crosby Stills Nash and Young sang, "If you can't be with the one you love, love the one you're with."

Now as Slate's Timothy Noah pointed out, health reform will likely not happen. The Democrats will not ram their bills through and the Republicans will not offer any solutions or help. The Republicans solution to the uninsured is a reclassification of the definition of uninsured. The one bill that they offered was a torte reform bill that just happened to cover 7-8% of the uninsured. They blew off the health care reform debates. Iowa Senator Chuck Grassley used that time to learn how to use the Twitter. He even taught John McCain how to use the Google. Kentucky Senator Mitch McConnell used that time to discover what feelings were. I'm not saying that he has any feelings yet but now he knows what they are.

As I grow moderate with my years, I start to understand the appeal of conservatism, some of its merits, and thus the Republican party. However, I cannot forgive the GOP for its dismissal of health care reform as a relevant issue and their sheer laziness and unwillingness to understand it or put together a bill.

Health Reform has been declared dead before so I'll remind myself of Bruce Springsteen's Reason to Believe with the lyrics: "Struck me kinda funny/ seem kinda funny sir to me/How
at the end of every hard earned day people find some reason to believe."

I know more than the Financial Crisis Inquiry Commission

We had so much fun with the 9/11 Commission that the Obama administration offered a sequel entitled The Financial Crisis Inquiry Commission. Like a lot of sequels, it's looking disappointing compared to the original.

The mission statement of this Commission look promising:

The Financial Crisis Inquiry Commission is a bipartisan commission that has been given a critical non-partisan mission — to examine the causes of the financial crisis that has gripped the country and to report our findings to the Congress, the President, and the American people.

Hopefully, the Commission's work can help rebuild the American people's belief in a financial system that puts Americans to work, fulfills their goals and provides the foundation for a new era of broadly shared prosperity.

However, based on their line of questioning that I heard about on NPR, their performance is not promising.

The Financial Crisis Commission does not apparently know what hedges are. I'm not talking about gardening but rather "hedging your bets." In financial terms, this often entails buying a financial asset with the expectation that the price will increase while purchasing a short position or some kind of insurance in case it loses money. Or taking a long and a short position. It's about managing risk.

One of the Grand Inquisitors sputtered how a bank was selling securities and also taking short positions against that same securities was the equivalent of "selling a car with faulty breaks and then buying insurance."

I call that as fine an example of hedging that I have ever seen. If the securities do not sell well then the bank has protected itself from those losses. That's contrasted with an absolutely terrible analogy about the car with faulty breaks. What does he even mean by buying insurance? How about comparing it to placing a bet with 3:1 odds that the Yankees will win and a bet with 4:1 odds that the Red Sox will win? One could argue that only a soulless banker would not pick either the Red Sox or Yankees but bet on both just to make some money. Others would point out, it's a systematic way to gamble.

They don't understand hiring or compensation either: Another Grand Inquisitor suggestion was that banks pay risk management staff more in order to attract more talented individuals. Or in other words, they were asking if the banks ever studied compensation for this position and their own cost structure. Given that banks generally study the cost structure of every asset from Danish wind mills to Russian sky scrapers, they've probably figured out how much they need to pay their supporting staff. Given the support staff is a form of overhead, it's probably less than they pay revenue generators like traders.

With that question, the Grand Inquisitors ideas are right on par with what Human Resources was probably thinking in 1985.

They don't really understand bonuses: Lately, bonus has become a dirtier word than boner. Okay, I was going to call it a 4 letter word but bonus has 5 letters but it's kind of close to boner. Plus I want to see what kind of Google searches that I draw by saying boner.

Digressions aside, at least 50% of a bankers compensation comes from their bonus. Their base salaries are on par with industry positions. It's the compensation model that banks have chosen since they study this stuff (like how much they need to pay a competent risk manager) and have concluded that it results in behavior that they want to reward. The fact that bonuses are dramatically increased by financial engineering or providing services that don't really improve the value or efficiency of a company is not good. The fact that they reward creating asset bubbles that will later pop isn't good either.

However, nothing is inherently wrong with a compensation structure that is heavily weighted towards the bonus. Sales compensation is either heavily driven by commission or salaried depending on the results that the company wants to achieve. Focusing on the bonus is looking at the cart and ignoring the horse.

Personally, I think it would be kind of interesting if politician's salary and campaign contributions were tied to a bonus type level of performance. Suppose Congress had to reduce the unemployment rate by 1% in order to get half their salary or campaign contributions? Or pass 10 major pieces of legislation? That might result in a more bipartisan approach especially among Congressman who only own 1 house.

Summary: The 9/11 commission was probably viewed as successful since the members really understood the topic. The Pecora commission to the financial crash in the 1930's was very successful since it was both entertaining and produced lasting results. From what I have heard so far, I'm not impressed with the competency of the Financial Crisis Inquiry Commission nor their sense of humor (I still don't understand the car with the faulty brakes analogy). I don't think that Wall Street is so different from the rest of the economy to result in this level of misunderstanding. Wall Street bankers are not irrational and there is a logic behind their actions. The commission needs to understand that logic.

2010 Health Care Predictions

For those of who belong to religions where we think Jesus was just a really good carpenter, we have a lot of free time on Christmas Eve. Thus, this is a perfect time for my planned post on 2010 mostly health care predictions.

A year ago, I boldly predicted there would be a lot of talk about change but not much done. For the most part, I was right as we have not finalized the latest health care bills yet. However, I was wrong about no changes to the Medicare Advantage program. A reduction of payments resulted in benefit reductions, 25% average increase in premiums, and approximately 20% of plans exiting the market. Scrutiny increased significantly signaling that future insurance marketing will become even more highly regulated. When reform is fully implemented, it's likely all health plans will have the same templates for all documents explaining benefit plans. That's not a bad thing except for the fact that Medicare considers 33 pages to be a reasonable length for a benefit "summary". If that's a summary, you can imagine what the full book looks like. Health care reform may result in deforestation.

For 2010 predictions, I will continue to shoot down the middle:

1. Seniors finally realize what is happening to Medicare Advantage but don't riot: There will likely be additional cuts to revenue that Medicare Advantage pays health plans which will result in an average increase of $30 per month for seniors. The Republicans repeatedly raised this point to try and foment a senior rebellion but the Democrats countered by claiming that the only cuts would be to health plans' profits.

As Medicare beneficiaries realize the true impact, they will rise up and announce that they are still happy with the Medicare program. They don't need gold plated health plans and understand they are not immune to the health care increases.

2. No one else riots over the passage of health care reform either: Although opinion polls on the health care bills place it on the same satisfaction level as the latest straight to DVD version of American Pie (Does Eugene Levy need the money that badly?), Democrats will not be punished in the mid-term 2010 elections. As the incumbent party, they will lose some seats.

However, the public will better understand the benefits that they got from the health care bill and forgive its shortcomings. I also realized that the Republicans won't get punished for spending most of the debate playing Sudoku. Republicans always oppose new social benefit programs just like they did with Medicare in 1965. I think that it's part of the oath that they take when they join the party.

3. Health Insurance Reform Passes! In other bold predictions, we still don't resolve the question of whether people to drink Miller Lite because it tastes great or is less filling. Congress will produce one bill that passes. It's major provisions will start earlier, in 2013, to realize benefits sooner. There will be no Public Option plan.

4. The Health Care Construction Boom is over: Architects bemoan the loss of one of their more lucrative lines of business. The restrictions on health insurance will reduce the amount of money in health care. There is now only enough to money to pay for the Boomers hospital stays in the existing supply of beds. The next boom will be in technology that keeps patients out of hospitals and doctor's offices since space and supply won't increase.

5. State start working on their own health care reform: We saw the federal government's best effort with health care reform. While admirable, it's kind of like the best effort of whoever is playing quarterback for the Chicago Bears. It fell short. The states will stop waiting for the federal government for solutions and start designing their own. This will make health care even more local and regional which will hurt national plans. However, it will represent the best chance for true heath. care. reform.

6. We finally learn how to pronounce 2010: People who call it Oh-10 will be viewed in the same light as those who think global warming is caused by polar bear farts. Aught 10 is too awkward. Ten will work just fine.

The Public Plan: Know when to hold 'em and know when to fold 'em

The latest version of the Public Plan (or Public Option), which involves the government starting a health insurance plan to compete with other insurance companies, involved getting 5 liberal and 5 moderate senators in a room for a game of Truth or Dare and other drinking games. Not really, it was just the latest version of the Public Plan which involves the government contracting with insurance companies for predetermined plans like bidding for the Federal Employees Health Insurance, Healthy Kids, or Medicare Advantage. As a result, the Public Plan has now come full circle and now resembles other current government health plans. The government has contracted many plans through a competitive bidding process as its free market solution. One interesting note about the bidding process, is that with the Federal Employees Health Insurance, participating plans are required to offer best price or any price discounts that they give to comparable groups to the government. That's one of the key ways that the agency that manages this plan can claim victory for keeping prices so low.\

This is potentially the end to the biggest distraction to achieving health insurance reform besides abortion. The Public Plan has gone from Medicare Part E (for Everyone) to Cooperatives to Robust Plans to a simple government contracting process, like the same way they decide food service in the Pentagon dining hall.

While the Public Plan almost derailed health insurance reform, I see two successful outcomes. First, I think that Congress is finally realizing that the only way that the Public Plan could be a lower cost option was by paying providers 80% of market rates. In that regards, they gained a better understanding of true cost drivers.

Second, the Public Plan was a great bargaining tool for the Obama administration to gain concessions and support from the health care stakeholders. Providers of health care feared the lower reimbursement and insurance companies feared that it would cause providers to require higher reimbursement from them. Obama bluffed everyone with this hand.

The ones who lost the most with the demise of the Public Plan were those who really wanted a single payer system and saw this as the best vehicle. Their position was otherwise not addressed in health insurance reform. More time was spent talking about death panels than a viable single payer system. Given how marginalized their position was, I hope that they can parlay their lack of attention into a vice presidency spot for Dennis Kucinich or another one of their leaders.

With the looming end of the Public Plan, I think that it's time to remember the lyrics of Kenny Roger's karaoke classic, The Gambler which is "You've got to know when to hold 'em, know when to throw 'em, know when to walk away, and know when to run." I think that the Obama administration played the Public Plan hand as long as they needed to get concessions and then folded. The rest of the Democratic party needs to do the same and know when to walk away.

Review of the House Health Care Bill, Affordable Health Care for America

My review of the Affordable Health Care for America Act, HR 3962, is based on 2 key aspects. First, it's a health insurance reform bill, not health care bill reform. The prevailing mood around reform has been that if we just get everyone insured, we'll win. Insurance reform is not time for a victory lap but rather a quick pit stop to prepare for the hard work of cost containment. I am making the big assumption that government will address health care costs after addressing coverage. This strategy worked for the creation of Medicare as Lyndon Johson knew that he could never show Medicare would pay for itself initially. Instead he focused on creating the need and for better or worse, let future governments work on the financial viability.

Second, our current health care system is a mostly clogged artery that's waiting to burst. Taking the stairs instead of the elevator would be an improvement. Doing nothing is rapidly disappearing as a choice. That's why I found the Republican's decision to work on their Sudoku or their profiles on the new GOP social networking site to be so counterproductive. Their lack of interest made the narrow House vote less significant.

With those two caveats (and these caveats border on assumptions like Lindsey Lohan has finally gotten herself straightened out), I'll say that the House bill is not bad. Just like NCIS Los Angeles, I first found it to be unwatchable due to the complete lack of chemistry between the main parts. However, some role players have emerged and the writing has improved. While the Senate bill will dictate the final outcome, here's how I see the House bill using my trusted framework of the Good, the Bad, and the Ugly:


The Good:

• The House was somewhat serious about the individual mandate: Everyone is starting to understand that in order for insurance to really be affordable, everyone has to participate. The young, healthy, and good-looking have to pay for the old, sick, and ugly. The House bill has a penalty that is 2.5% of income. Considering there should be available health plans for 8% of income, that penalty should be enough to make most participate. One of the biggest problems with the Massachusetts reform was that the penalty was not significant for people to care given the cost of insurance. While I'm going to congratulate Congress for growing a pair, I'll at least offer a fist bump.


• The fact the Florida seniors get twice as much for Medicare was discussed: According to the >Huffington Post, there is a provision to study the geographic variation in the costs of health care or why it costs twice as much in Florida or McAllen, TX. I think the fact that some seniors receive twice as many health care dollars or that their doctors are paid enough to accept Medicare while others do not and are not is one of the least talked about injustices of our health care system. While I know commissioning a study is like forming a committee to address a problem, at least, it's getting discussed.


• It's an insurance reform bill: There is no great secret to paying for universal health care. It's always been a matter of requiring the Haves to contribute to the Have Not in some way to prevent people from gaming the system. The wealthy, health care companies, and employers will be taxed more. Seniors will receive lower Medicare benefits and individuals will have to pay or play. Whether this is considered to be socialism, communism, or paganism, it's just the basic concept of how you pay for insurance.
  

The Bad:

• There are no cost containment plans: Health insurance for everyone is going to be expensive and the government has had little success reducing costs. Medicare has had little to no success with disease management programs. No one in government has ever negotiated with drug companies or providers. Their only ideas around value-based benefit (value-based involves covering evidence-based services at little to no cost while charging more for services with questionable value) designs involve lower copays for preventive services. Private insurance companies figured that out 10 years ago. The government has had success with requiring providers to manage all care, including complications, for a set price (called DRGs). However, that's it and that's why I really hope that there is still the political fortitude to get serious about cost when the bills come. The bills will be about as pretty as lipstick on a pig.


• Seniors are going to be pissed: This bill will cut funding for Medicare Advantage which includes health plans that have been providing Medicare coverage for decades. This year, we have seen that a 4.5% revenue cut resulted in higher prices for Medicare Advantage by 25%, reduced benefits, and had plans already leave the business. Seniors were told not to worry about benefit cuts and that the doughut hole in the drug plans will be filled with this bill. By the way, the doughnut hole (after a certain level of coverage, seniors whose drug spending is around the 75th percentile will have to pay $1500 on their own, and then only have to pay 5% of drug costs in the catastrophic category. The $1500 they they pay on their own is the doughnut hole), is an example of a value-based design to promote better utilization of drugs. However, the government is running away from it in an effort to show seniors something bright, shiny, and new with Medicare. Taking money away from Medicare to fund the uninsured is probably a good use of the health care dollars, but no one has been that honest with the seniors. No, I did not expect politicians to be upfront with a key voting block about bad news, but this is an impressive bait and switch considering the cuts will wipe out the prescription drug program and its newly filled doughnut hole.
  

The Ugly:

• With this Public Plan Option, the government is going to start a brand new insurance company: A government-run health plan or the Public Plan was included in this bill but it requires that they negotiate with providers for fees and act like a regular insurance plans. I have written ad nauseum about how I think the Public Plan is a bad idea and the majority of the cost savings would come from paying providers lower rates. This Public Plan in the bill does not pay providers a lower fixed rate and the Congressional Budget Office notes that price for the Public Plan will be higher than comparable private plans. I have am image of dominant hospitals telling the Public Plan administrators the astronomical fees that they will have to pay them to make up for the fact that Medicare and Medicaid pay them too little. Next, the dominant hospital would tell them that they don't accept Medicare, don't accept Medicare, and where they can shove the Pubic Plan. The Public Plan has been a bigger distraction from the real issues than abortion or immigration.
  

If you're looking for more information or think I'm an idiot and want to hear other opinions, This American Life did an excellent job of explaining the key issues of the health care system that this bill does not address. Here's the more pessimistic view from an objective (but grumpy) health care insider or a slightly wonkish but accessible view.

Reinvigorated about Health Care Reform: The Good, the Bad, and the Ugly

I'll admit, I got tingly, hearing Obama say, "I still believe" and about his vow to be the last president to address health care reform. Kind of like I got during some of those good early Grey's Anatomy episodes when they would play a montage of the different patients and characters wrestling with tough emotional decision while playing music from the latest Emo folk singer.

What's gotten me even more excited is Senator Max Baucus's 18 page framework for his working group on the Senate Finance Committee. The proposal has real specific ideas that address serious issues in health care like a dysfunctional individual market and underpayment of primary care. This proposal is a working draft for his "Gang of Six". While I don't think that everything in it is a good idea, I think that Baucus can now spend more time thinking of a better nickname than "Gang of Six". What about the "The Sick Shooters" or "Maverick Baucus and the Top Gunners"?

We've got some solid ideas and some inspiration back on the health care reform table. It's enough for me to ignore the fact that the Republicans are not interested in health care reform. For me, the work will be between Obama, the Blue Dogs aka fiscally conservative Democrats who will have a tough re-election, and the California Democrats aka liberal wing who can spend more time worrying about their flossing schedule than their re-election chances.

For the purposes of this blog post, I can think of no better way to express myself than my favorite format, the good, the bad, and the ugly

The Good

• Help for those who need it the most, small groups and individuals: Groups with less than 50 employees and individuals have the worst options when purchasing health care. They get the least benefits, most limitations, and denied most often. Baucus's proposal of risk adjustment that will pay a plan more for insuring sicker members and guaranteed coverage gives consumers more options. Additionally, the proposal requires that plans offer 4 levels of benefits (bronze through platinum) and even a "young invincible" option. It cracks me that they even call it the "young invincible" option when they could call it "Doesn't give a crap about buying insurance option". This limits cherry picking by requiring plans to offer something for everyone and the prices of the different levels are at 1:7.5 ratio.
• Interesting definition of Affordability: It defines an affordable plan as costing 13% of someone's income. Maybe it's the health care policy geek in me, but it's a pretty clear expectation of how much someone is expected to pay for health care before the government helps. Overall, the specificity of the definition of affordability provides a specific direction on the opinion of how much health care should cost someone. It's not free and Baucus will get specific.
  
• Reward the right medical practice: Medicare will pay a 10% bonus to primary care physicians or surgeons who practice in an area with a health care shortage. This is funded by a 0.5% cut everywhere else. Primary care is considered to be underfunded and other areas of care (like imaging) are probably overfunded. It's a nice way to reward primary care for being considered the best value in health care.
• Rewards quality, prevention, wellness, good outcomes and gives ice cream and warm puppies to nice boys and girls: There are also a whole host of pilot projects and funds for new innovations in care, preventive services, and making quality data more readily available so you actually know if you are less likely to die in your local hospital. These are general provisions that we can all agree on like the fact that we like ice cream and kids like puppies.

The Bad

• Co-pting the word co-op to replace a public plan: I have blogged repeatedly on how the public plan option is a bad idea since the federal government has little experience with administering health plans and it would introduce a new mediocre government-sponsored plan. While Obama backed off the public plan, Baucus is now calling it a Health Care Cooperative. Only difference is the government would pay someone else to start multiple public plans. If they are really interested in a cooperative, have a real cooperative where members volunteer 2 hours per month and pay claims or answer phones. If members use less services than anticipated and costs are lower, everyone gets a dividend. Baucus's idea is not really a co-op. When everyone sees through the rebranding, I'm waiting for Health Care Cooperative to be replaced by Health Care Communes or Health Care Sewing Circles.
• Talk about Torte reform or talk health care costs, stop mixing them: Republicans and physicians have focused on malpractice reform as a key to reducing health care costs. However, there is little evidence that malpractice reform will significantly impact medical costs. Texas enacted malpractice reform in 2003 with no drop in medical costs and has some of the highest costs areas in the country. A Harvard study also finds few frivolous law suits or lower costs with malpractice reform. If we want to talk about torte reform in general to prevent law suits, that's fine as I have no interest in preserving a litigious environment. However, holding up torte reform as a solution to lower medical costs is like me claiming that switching to diet soda is the solution to my weight loss plan.
• Selling Insurance across state lines or a solution looking for a problem: This was in the Baucus proposal and it's an example of clean coal. Sounds good but doesn't really exist. In my current role, I make strategic decisions about individual insurance plans and I would have no interest in this opportunity. Insurance costs more in certain states because medical costs are high not because of state mandates (except maternity coverage). Mandated mental health benefits add $2/month and mandated acupuncture could add $1/month. If we tried to sell a $210 Oregon insurance plan for a 35 year old in New Jersey where it costs $320, we would probably have to charge closer to $300. That would be less than a 10% discount for a plan with a smaller network and no brand awareness. Medical costs in New Jersey are simply higher. We could subsidize our New Jersey business with our Oregon business but than our prices would rise in Oregon. The only opportunity that emerges from selling insurance across state lines and ignoring a state's legislation is that males could get cheaper plans in states that don't mandate maternity coverage. The main result of this legislation would give males a way to avoid contributing towards pregnancies (except by causing them).

The Ugly

• Potential loss of an industry: Many of the reform proposals feature health exchanges which facilitate the purchasing of insurance plans through a web site or government entity. The goal is to make it very easy to compare and research insurance plans. This would remove business from insurance brokers who currently are paid quite well. While not all brokers create the same level of value, I don't begrudge their profession or ability to make a living. The health exchanges would take a lot of business away from brokers and we won't know if they will provide the same level of service.
• Republican's best contributions to the health care debate was Joe Wilson's lack of ability to control his mouth: With the complexity of the health care system, it lends itself well towards a vigorous debate and solutions across the political spectrum. The Republicans have stopped taking the debate seriously. Their contributions have been to reclassify the number of uninsured from 46 million to 12-15 million by offering a new methodology. Or they would rather talk about torte reform instead (see my 2nd bad idea). They're even demonizing undocumented immigrants rather than talk about health care (as if the fact that some percent of 10 million undocumented immigrants receiving a health care service outweighs designing a system that can help 300 million Americans). Their only idea of selling insurance across states lines was my 3rd bad idea. As a result, I turn to the different factions of the Democratic party to forge a solution since the Republicans are probably more interested in finding Iphone fart applications than health care reform.