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One of the most frustrating aspects of the Affordable Care Act is that those earning over 133% of the poverty line -- who are under 65 -- will be forced to purchase -- some with government money -- flawed insurance policies from mega-profit companies like Aetna, Cigna or WellPoint. Those earning under 133% or below the poverty line will be lucky enough to receive Medicaid, which as Paul Krugman recently argued, is actually a pretty good program.

Basically, health insurance lobbyists armed with a fancy iPad app (how many doctor's visits would these lobbyist iPads pay for?) will go to Congress to paint themselves as Romney-style victims of out-of-control health care costs instead of evildoers who punish acne-afflicted teenagers with retroactive rescissions of their insurance policies when they get cancer.

In those discussions, health insurers rarely come across in a positive light. One survey back in the late 1990s had people say whether various industries do “good jobs.” Health insurers came in third-last, with 48 percent of Americans thinking they did a good job. Even oil companies came across as better, although insurers did beat out tobacco manufacturers.

During the health reform debate, insurers often found their premium increases playing foil to the president’s call to pass the Affordable Care Act.

Moving into a potential debate over deficit reduction, health insurers want to carve out a different role in Washington. Namely, they don’t want to be the bad guys anymore. To that end, they’ll soon start arming their lobbyists with data that argues that other health care sectors are actually the ones to blame.

“For a number of years, when people talk about health care costs the debate has focused exclusively on premiums,” said Association of Health Insurance Plans president Karen Ignagni. “If you’re going to have a debate and discussion about what’s driving health care costs, you have to get under the hood.”

The problem is that if indeed health insurers are not to blame for rising health care costs -- and it's certainly arguable that the bureaucracy that the multi-payer system demands does cost a lot of money (just ask the person at your doctor's office whose entire job exists to call 1-800 numbers to get claims paid) -- then private health insurers are actually unilaterally failing at their jobs. Let's borrow from this article describing Aetna hospital negotiations:
Walt Cherniak, a spokesman for Aetna, said the company is duty-bound to hold down costs, and could not meet UNC Health Care's demand for a double-digit increase in the rates the insurer pays on behalf of its customers.

"As a health insurer, we have dual obligations," Cherniak said. "One is to provide broad access to quality hospitals and doctors for our customers. We also have an obligation to try to contain rising health care costs, which have been a major problem to employers and patients."

So, OK, AHIP morons, your entire lobbying strategy is to admit that you are absolutely incapable of meeting your core obligation for patients and the broader health care system? Say what?!
“When our lobbyists go up to the Hill, this is going to be at their finger tips in an easy to use format,” said Robert Zirkelbach, AHIP vice president for strategic communications.
They also will have charts that show how much other sectors account for health care costs. That’s what this chart is all about: It charts the cost of insurance administration (the orange section) against all the other actors in the system. This includes hospitals, physicians and spending on prescription drugs.
Right, so what is the purpose of any private 'insurance administration' if those very corporate administrators are absolutely incapable of achieving lower systemwide costs?

Could it be that the reason America pays more for health care as percentage of GDP than any other nation on Earth is because it is the only nation on Earth that allows a role for hundreds of different corporations to use tens of thousands of different health insurance policies to finance basic patient care? Hell yes.

And, with an Affordable Care Act-mandated turn to paying for outcomes over paying for care on a fee-for-service basis, insurers in an ObamaCare America will have less risk than ever before, but lousy administrative costs will remain constant.

One suggestion the AHIP lobbyists will propose is that all hospitals charge the same price -- to all insurers -- for the same procedure. Good idea -- I agree. But, again, if hospital prices are regulated as such, then what is the point of having hundreds of private insurers existing with the mission of 'negotiating' lower prices? Then their administrative costs -- as minimal as AHIP likes to boast they are (and they're a heckuva lot higher than Medicare) -- have absolutely no reason to exist at all, because, again, the private insurers themselves should not exist at all for financing basic care.

So, to review, private health insurance lobbyists are planning to descend on Congress like locusts in order to argue that they deserve to be admired and respected because they have failed at doing that which is the only reason for their existence: supposedly making health care cheaper for patients.

Single payer advocates should be thanking AHIP for the free support.

I have two words for AHIP: please proceed.

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Comment Preferences

  •  yep, they're bill-paying agencies (3+ / 0-)
    Recommended by:
    james321, Pluto, bluezen

    Their only real value is paying doctors and hospitals, and they get an incredible mark-up for that service.

    The government is better at negotiating prices, so they can't even claim to be effective price agents.

      •  james321 - your diary is about prices (0+ / 0-)

        There is nothing here about the actual cost of providing care, but only about the prices that various parties pay. The insurance companies may not serve any useful purpose, but their margins have been squeezed by the ACA so they aren't the big issue any more. The issue is why is the cost (not the price) of providing care for someone in the US so much higher than someone in Germany? That's the question that should be receiving the focus because that could lead us to how to bring down healthcare costs. Having a single payer program isn't the answer. A single payer just dictates prices but if we don't understand the cost then we can't understand how single payer would impact the ability of patients to access care.

        In your diary you talk about the expanding number of patients who will be on Medicaid. In my community it is hard to find physicians who will even take new Medicare patients and there are a very small percentage who will treat Medicaid patients. No one wants to take care of Medicaid patients because physicians lose money on those patients. Medicaid is a good example of a government program that is being expanded but will result in the frustration of new members finding out that accessing care will be problematic because no one is trying to understand costs.  

        "let's talk about that"

        by VClib on Fri Nov 09, 2012 at 12:15:47 AM PST

        [ Parent ]

  •  Same diagnosis, different day: (4+ / 0-)
    Recommended by:
    james321, ferg, highacidity, bluezen

    A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

    by Pluto on Thu Nov 08, 2012 at 01:16:12 PM PST

  •  They're hardly to blame for cost control problems. (1+ / 0-)
    Recommended by:

    If anything, PPACA made the matter even worse by mandating coverage for all manner of things.

    Basically, the government has made it impossible to control costs in the name of the war on "junk" insurance.  

    "Controlling Costs" and "Denying Care" are essentially the same thing.

  •  I believe in capitalism and the profit motive (2+ / 0-)
    Recommended by:
    highacidity, james321


    In most markets, the profit motive drives efficiencies.  I think of the profit that companies make as the price society pays for those efficiencies.

    This does not happen in the health insurance market.  As far as I can tell, health insurers tend to make things work.

    We are paying health insurers a profit for a negative societal "benefit.

    I do not think that we will move to medicare for all or another single payor system any time soon, so the health insurance industry does have another chance to prove that they can be of use, but I'm not optomistic about their chances.

    Numbers are like people . . . Torture them enough and they'll tell you anything.

    by Actuary4Change on Thu Nov 08, 2012 at 02:11:37 PM PST

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