Healthcare con artists keep costs up


You see them on the sidewalks of cities like New Orleans and New York. They're cheerful but streetwise, urging you to bet on the "right card," or engage in a similar activity that is neither friendly nor a wager.

They're playing the "short con," engaging in deception to snatch a dead president from your pocket and cram it into theirs.

One evening in Union Square in San Francisco someone bet me they knew where I got my shoes. I had learned the correct answer from a Mike Royko column decades before, and actually had an opportunity to put it to use. Never has someone so shady turned on their heels more quickly after midnight in a major American city when confronted by as big a dork as myself. Knowledge is power, I guess.

As to that correct answer? I'll get to it later.

Here's a far more serious question: what if the same spirit possessing the three card monte and shoe hustlers swept the expansive acres of cubicles and corner offices that are the staples of corporate healthcare in America? And what if every day they were snatching dead presidents by the freight car load--a con game with no prospects of ending?

Such a scenario was recently postulated by a report by the Healthcare Performance Institute. It's conclusion: insurers and benefits consultants were an impediment to cutting healthcare costs.

"Insurers and brokers have little incentive to help their clients reduce spending on health benefits," said George Pantos, the HPMI executive director. "After all, most brokers and consultants are paid on commission--so the higher the cost of the policy they sell, the more money they make."

I don't exactly remind anyone of Claude Rains, but all I can say is that I'm shocked, shocked, to hear that something like that is taking place on the premises. The only difference is there's no croupier handing me my winnings to make it humorous.

As far as I can tell, the only provision in the Affordable Care and Patient Protection Act that addresses broker/consultant commissions directly is the Cadillac Tax, which is intended to discourage higher-cost plans--and therefore, commissions.

But as David A. Harvey wrote last week in Agent's Sales Journal, "the ... (PPACA) of 2010 is a tremendous marketing opportunity for brokers who can communicate certain elements of the legislation to clients and proactively help them respond." Given the HPMI report, I can only wonder what that might mean.

Harvey's article did discuss ways to cut healthcare costs, but also cautioned everyone to not panic about the Cadillac tax. "2018 is several years from now, and a lot can happen before then," he wrote. Oh boy.

 As admirable as the criticism leveled by HPMI, the games it discussed are being played by nearly every major face of the industry.

The American Medical Association sputters with outrage whenever the Centers for Medicare and Medicaid Services tries to enforce the sustainable growth rate formula. Meanwhile, it shells out its members' money to poll seniors on the issue, even though they're often asked politically loaded questions to skew the results. The AMA acknowledges Medicare fraud exists, but blames most of it on physician identity theft and often remains mum whenever a doc gets busted for running a scam.

Then there's the American Hospital Association--an institution seemingly preoccupied with cost containment and whose people appear so sober they make Cotton Mather look like Kanye West. Yet, according to its tax returns, it has three executives who earn seven-figure annual compensation, and 17 whose earnings average well above $600,000 a year. Many of them--and even some of their spouses--fly first class or on charter jets as a matter of course. Ditto for its board of directors. I can't imagine AHA's tax return makes inspiring reading to the CEO of a tiny critical access hospital trying to make next week's payroll.

Then there's the peculiar institution of the payers once again. Not only do their executives earn vastly more than their already well-compensated brethren on the provider side, plans like Health Net have paid tens of thousands of dollars in bonuses to employees for ferreting out sick policyholders in order to rescind their coverage.

Given the United States may be the only country in the world that has financially rewarded the denial of access to care, it's no surprise healthcare delivery costs twice as much as anywhere else on the planet, with absolutely nothing to show for it in terms of improved outcomes or longer lifespans. With so much money at stake in maintaining the status quo, it's not surprising any serious discussions of a single-payer system are derided as the dreams of starry-eyed, twinkle-toed socialists.

Speaking of toes, here's the answer to that first question: I got my shoes on the sidewalk. So do a lot of other people. If we can ever figure out how to vote with our feet, we may be able to end some of those con games once and for all. - Ron

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