U.S. needs heath reform for all of us

intact insurance

To the Times:

Excerpts from a letter recently sent to U.S. Sen. John McCain, R-Ariz.:

(I) am from UFCW Local 152. In June 2002 you sent me a thank you letter for correspondence I had mailed to you relating to health and prevention (and) not to hesitate to be in further contact with you on this or any other matter. This is very good timing, please read on!

We truly need health-care reform now. For a good 10 years UFCW has been fighting for health-care reform on behalf of its members and, indirectly, everyone else.

Contracts are becoming more and more difficult to get the workers a decent wage increase due to the ever-exploding cost of health care. The piece of the pie for wages just keeps shrinking. We need to fix this for everyone.

Since 1999 family health-care premiums have doubled. In 1993, 61 percent of small businesses provided some kind of health insurance for their employees; it’s down to 38 percent, as quoted by Secretary of State Hillary Clinton recently on “Meet the Press.”

When I was hired by UFCW almost 10 years ago, we created a prevention, health and nutrition program. We set out to offer a well-rounded packet of information to a member’s specific condition. That person having the information in print could reference the material indefinitely — in turn, a member with an illness or injury that is better informed and understands the condition, stands a better chance at a more rapid recovery. Their employer won’t need a replacement as long; the worker may return earlier and may avoid a chronic health problem. If recovery is sooner than later, the health fund itself benefits, everyone benefit.

In 2002, I had sent you health information in regards to melanomas when you were personally dealing with it. You had received first-hand an idea of what we were doing on a personal level in regards to prevention, health and nutrition. I was very pleased seven years later your platform as presidential candidate had a health and prevention plan that was a key point in the health-care reform you suggested.

Today I am an “Occupational Safety and Health Rep./Political Legislative Rep.” We’ve been ahead of the curve, and going out proactively addressing safety, that in turn may prevent injury.

We have a Mobile Health and Wellness Unit, a van that services our members of UFCW Local 152, Local 1360 & 27.

With this service, we hope to prevent major health problems before they start health issues. All this, shows there is potential for real health-care reform that we need now.

Is it not the ideal moment for you to read this letter and take a look at what we do, how it may have possibly fit in to the health reform you were seeking as presidential candidate? Looking at the preventive measures we offer, could you possibly apply some of the ideas to the healthcare reform situation that is presently upon us. Please consider the possibilities.

n n n

Excerpts from a letter received from Sen. McCain on Sept. 29:

Any new reform must also encourage prevention initiatives that work. Medicare and Medicaid payment systems must also be reformed to promote prevention.

I believe our health-care system should use health information technology to improve efficiency and quality in health care, and that we should find ways to reduce the number of medical malpractice lawsuits, which drive up the cost of health care and make coverage more expensive.

n n n

Sen. McCain believes we should find ways to reduce the number of medical malpractice lawsuits. I agree, but medical malpractice lawsuits should not be eliminated altogether.

In the auto insurance industry, a driver hits the side of the roadway and is seriously injured. The insurance industry makes payouts to those injured. The insurance industry/company goes after the state involved and makes the state remedy the problem with proprietary roadside safety devices like portable water-filled barriers or a guard rail, etc. This equals less in future payouts, safer roads and less human injury. It is in a sense, a self-checking system.

An argument can be made that a medical industry kept on its toes by leaving carefully reformed malpractice intact is a safer medical industry. Safer care that will continually search for advances in procedures, medical devices, prosthesis and drugs.

The worry that lessened competition will not bring forth advances, I believe is false. Do some want to end malpractice lawsuits or weaken them to the point that the industry won’t fear them at all?

I believe a proposal should be made to abolish class-action lawsuits.

These actions in most cases only place tens of millions of dollars into the pockets of the filing law firm, and the claimant on average gets $100 to $1,000 due to thousands of claimants on a nationwide list of the class-action suit. Class-action should be abolished.

And last but not least, on the possibility of taxing the health-care benefits our members receive from their employer is absolutely unfair and outright wrong. Our members have sacrificed contract after contract and have accepted less in wage increases to pay for the out-of-control costs of medical insurance. It would be devastating to then tax these hardworking people again and again.

We need health-care reform that works for all Americans.

ARTHUR MANOS

Folcroft

UFCW Local 152

Political Legislative Rep/Occupational Safety & Health Representative

Abortion focus of debate on health bill

intact insurance

SACRAMENTO — The decadeslong battle over abortion has emerged as a minidrama in the larger debate on a health care overhaul, and Central Valley lawmakers are divided.

U.S. Rep. Doris Matsui, D-Sacramento, has joined at least 40 other House Democrats in vowing to oppose health care legislation if the abortion limits included in an amendment to the bill passed by the House survive, said spokeswoman Mara Lee.

The amendment, inserted to win needed votes from reluctant Democrats, would extend the ban on using federal money to pay for abortions. It could restrict abortion coverage for those who buy coverage through a proposed government-run insurance exchange, regardless of whether they receive a government subsidy.

This exchange would be one of the main ways for the uninsured to obtain coverage, choosing from a government-run public option and competing commercial plans. The government would provide subsidies to help those too poor to purchase insurance.

Matsui voted against the abortion amendment but gave her support to the overall bill. The Senate is working on its version of health care legislation, and the abortion issue could pose another hurdle for Democrats' hope to implement the Obama administration's top domestic priority.

"If we're going to have an abortion debate, let's have a separate abortion debate," not a "back-door" one, Lee said. "We are undoing years of work to protect a woman's right" to make reproductive decisions.

Rep. Dan Lungren, a Republican whose district includes Calaveras County, voted for the abortion limits and opposed the broader health care bill.

"This is not a question of Roe v. Wade. It's about forcing taxpayers to pay for abortions," Lungren said, referring to the Supreme Court case that legalized abortion.

Republicans point out that the amendment would not outlaw abortions.

"It just says it prohibits federal money to be used for abortions," said Rep. Tom McClintock, R-Elk Grove, adding that anyone who wants abortion coverage could purchase that on their own.

Republicans could have exploited Democratic tensions by keeping the House bill intact, McClintock said. With little room for error — the bill's margin of victory was five votes — House leaders might have then seen a major defeat of the broader health bill.

The abortion amendment passed with support from 64 Democrats, including Democratic Reps. Jim Costa of Fresno and Dennis Cardoza of Merced.

Costa and Cardoza, so-called Blue Dog Democrats who represent conservative-leaning districts, ultimately voted for the final overhaul package, including the abortion amendment.

Planned Parenthood's Mar Monte office, which covers 27 California counties and parts of northern Nevada, sent a letter Monday expressing dismay to the pair of valley congressmen.

The letter was signed by Deborah Ortiz, vice president of public affairs for Planned Parenthood's Mar Monte region.

"Given our long friendship and history of working on behalf of those who have little to no access to health care, I welcome an explanation of your vote," her letter said. "Absent an explanation, I can only assume that the decision was a political, rather than a policy, decision."

Neither Cardoza nor Costa returned calls requesting interviews.

Abortion rights advocates argued that the amendment would have a disproportionate effect on poor women, because they are more likely to lack insurance and to seek coverage through the exchange.

Intact Has Third-Quarter Loss on Storm Claims

intact insurance

Nov. 11 (Bloomberg) -- Intact Financial Corp., Canada’s largest property and casualty insurer, had a net loss of C$8 million ($7.6 million) on higher claims for storm damage on homes.

The third-quarter loss of 7 cents a share compares with profit of C$57.3 million, or 47 cents, a year earlier, the Toronto-based insurer said today in a statement.

Intact, which until May was controlled by Dutch bank ING Groep NV, said it had an underwriting loss of C$53.2 million, compared with a year-earlier profit. The insurer said last month that earnings would be lowered by C$115 million before tax due to “severe weather events” that led to higher claims in Alberta and central Canada.

Before one-time items, Intact said it earned 18 cents a share, topping the 11 cent-a-share median estimate of five analysts surveyed by Bloomberg News.

Direct premiums rose 4 percent to C$1.14 billion in the quarter. Intact reported higher average premiums “as industry pricing continued to firm up, primarily in Ontario.”

Intact said it expects home insurance premiums to rise on higher water-related damage claims. Car insurance rates may climb on increased medical costs, the company said.

Intact rose 20 cents to C$35.63 in 9:31 a.m. trading on the Toronto Stock Exchange. The shares have risen 13 percent this year.

(Intact will hold a conference call at 10 a.m. Toronto time. To listen, dial +1-416-644-3426 or +1-800-732-1073)

Falling Far Short of Reform

intact insurance

Reduce the growth of health care costs. Bend the curve. Find the game changers. Reform the delivery system.

Yawn.

Health care reform has always had two main goals. The first — insuring the uninsured — carries grand overtones of social justice. The second — making the health care system more efficient — can seem abstract, technocratic and a bit nerdy.

Just listen to Rahm Emanuel, President Obama’s chief of staff. He recently dismissed critics who say the current bills don’t do enough to change health care by referring to them as “the executive board of the Brookings Institution” and “people sitting in the shade at the Aspen Institute.” The goal, Mr. Emanuel told my colleague Sheryl Gay Stolberg, is to pass a bill through Congress, not to figure out what the ideal bill may look like.

Certainly, a bill that can’t pass Congress won’t help anyone. But I think it’s important to step back and understand precisely what health experts mean when they argue for reforming the delivery system.

It is not simply about bending the curve, or slowing the growth, of Medicare’s projected spending. It’s also about preventing thousands of needless deaths from hospital infections. It’s about making sure you get the best cancer treatment, even when that treatment is not the most profitable one. It’s about keeping health costs from denying most families a decent pay increase, as has happened in recent years.

Making the medical system more efficient is, in short, about saving lives and giving Americans a long overdue raise. It is arguably the single most important step that the federal government could take to improve people’s lives.

And the bill that the House of Representatives passed last weekend simply does not get it done.

That is not a judgment based on some civics class ideal, either. The House bill falls far short when compared with a bill that passed the Senate Finance Committee last month. It also fails to live up to Mr. Obama’s campaign proposals and recent speeches. As Representative Jim Cooper, a Tennessee Democrat, told me: “The president and the White House have been much better than Congress on these issues. The Congressional challenge is to live up to presidential rhetoric.”

You can argue, however, that these comparisons are actually reason for optimism — that the very existence of the Senate Finance bill suggests that Congress still has a good chance to live up to the challenge.

Jonathan Gruber, an economist who helped devise the universal coverage plan in Massachusetts, says the Senate’s version of health reform does considerably more to control costs than he expected. A panel of experts led by Mark McClellan, a doctor and economist who used to run Medicare (and now happens to work at the Brookings Institution), concluded that the Senate Finance bill would help “slow long-term spending growth while building the high-value health care system our nation urgently needs.” That panel also suggested some smart changes to the bill.

All along, Mr. Obama’s aides have said they knew that Congress might pass bills with serious flaws. The White House strategy was to stand back and work with Congressional leaders to fix those flaws once the legislation entered its endgame.

The endgame is here.

•

For anyone who cares about reducing medical costs and improving outcomes, there are probably six big issues to follow in the coming weeks. Let’s take them one at a time:

THE EASY STUFF Each year, about 100,000 people die from preventable infections they contract in a hospital. When 108 hospitals in Michigan instituted a simple process to prevent some of these infections, it nearly eliminated them.

If Medicare reduced payments for the treatment of such infections, it would give hospitals a huge financial incentive to prevent them. The Senate bill takes a small step in this direction by cutting payments to hospitals with high infection rates by 1 percent. The House bill merely requires hospitals to report their rates publicly. There are also other basic patient safety areas in which the bills can do much better.

WHAT WORKS? Earlier this year, I used prostate cancer as an example of how our fee-for-service medical system leads to higher costs and worse outcomes. There are a handful of possible treatments for early-stage prostate cancer, and the fastest-growing are the most expensive. But no one knows which ones work best.

Modern medicine is full of such uncertainty. Again, the federal government could make a big difference here by giving Medicare a moderate amount of money for research, which would pay for itself many times over. The stimulus bill began paying for such research, but the health reform bills fail to pick up where the stimulus leaves off.

A FED FOR HEALTH Twice a year, an outside advisory board sends Congress a list of suggestions for Medicare payment rates, based on the available evidence. Congress generally ignores them, in deference to the various industry groups that oppose any cuts to their payments.

We already have a wonderful model for how to avoid such interference. It’s called the Federal Reserve. The Fed is charged with setting interest rates based on economic conditions, not politics. The Senate bill would create such a commission for Medicare. Unfortunately, it initially applies to doctors and home health care providers but not hospitals, thanks to a deal between the hospitals and the White House. It expands to include everyone in 2019. The House bill has no such commission.

Whether one ends up in the final bill will be a good test of Mr. Obama’s endgame leadership.

THE MCALLEN PROBLEM Both bills would create some promising voluntary programs meant to reward doctors and hospitals that provide good care rather than more care. But the doctors and hospitals providing the most expensive, wasteful care — like those in McAllen, Tex., described by Dr. Atul Gawande in a recent New Yorker article — surely will not sign up for these programs.

And the language in the current bills suggests that Medicare officials cannot make the programs mandatory without new legislation from Congress, which is an invitation for lobbying from places like McAllen. Giving Medicare the authority to expand even a single successful program would be a big improvement.

CHOICE Last week, the Democratic leaders in Congress sent out another e-mail message bragging that for people who didn’t like their insurance, health reform would provide “affordable choices for you that can’t be taken away.” That isn’t true. The bills would do nothing to expand the choices of people with employer-provided insurance.

Senator Ron Wyden, an Oregon Democrat, has been obsessively trying to change this — to give even a small slice of people with the most expensive employer plans a chance to buy insurance on the exchange for small businesses and the uninsured. It’s not yet clear if he will succeed.

THE CADILLAC TAX Along with the Medicare commission, this tax is the biggest single difference between the Senate and House versions. Right now, health insurance — unlike income — is not taxed, effectively creating a subsidy for the costliest plans and health care providers. Labor leaders have helped persuade the House to keep the tax exclusion intact, largely because many of the most generous insurance plans are held by older unionized workers, who, in turn, have a lot of influence in their unions.

But the tax exclusion is terribly costly for the rest of us. If it were to disappear, employers would have an incentive to sign up for well-run insurance plans, leaving more money available for workers’ salaries. If the Senate’s tax on so-called Cadillac plans were enacted, the average household would be making an additional $1,000 every year (in today’s dollars) by 2019, according to an analysis of Congressional estimates by Mr. Gruber. In my house, $1,000 a year counts as real money.

Are Congress and the White House likely to succeed on all six of these issues? Of course not. But if the final bill were just moderately better than the Senate Finance version, it would be a major victory. Even that Senate bill, as it is, would be worth celebrating. It has the potential to reduce cost growth significantly and to improve health — in spite of all the recent criticism on those counts.

And if the final bill ends up looking like the House bill? Well, then the criticism will have been far too tame.

Winners and losers in Ontario's insurance reform

intact insurance

The auto insurance reform package that the Ontario government released Monday is, on the whole, a favourable development for the country’s property and casualty insurers, and that should be good news for shareholders of Intact Financial Corp.

Intact, which was known as ING Canada before it was spun off by its Dutch parent earlier this year and listed on the Toronto Stock Exchange, is the biggest home, auto and business insurer in Canada. Its shares rose 1.06 per cent, or 35 cents, Monday after the news, which is still being digested by the market.

Roughly one-quarter of all of the property and casualty insurance premiums paid in this country come from auto insurance in Ontario. And yet no insurer has managed to turn a profit by selling coverage to the province’s drivers over the past year. (The industry lost $390-million on the business last year).

Insurers have been complaining that the generous minimum insurance benefits that drivers in the province must carry were causing the system to “get fat.” i.e., with every driver carrying at least $100,000 in medical and rehabilitation insurance for car accident injuries, insurers say they were routinely paying out close to that amount for people who had relatively minor injuries.

On Monday, Ontario’s finance minister, Dwight Duncan, unveiled 41 changes to the auto insurance rules (the business is strictly regulated because the product is mandatory for drivers), many of which could help restore profitability to the business for insurers. They include a reduction in the minimum basic medical and rehab coverage to $50,000, reductions in other types of coverage, and a higher deductible for basic insurance.

It might not seem obvious that a reduction in the mandatory basic coverage will be a good thing for insurers’ profits. They should be charging premiums that reflect the amount of coverage they’re offering, right? But, as in any highly regulated business, the pricing is somewhat distorted. Auto insurance premiums are regulated by the Financial Services Commission of Ontario, and between now and next summer each of the P&C insurers will have to apply for approval of their rates for the new insurance packages. FSCO has to strike a balance between ensuring that the companies still have an incentive to offer auto insurance in the province (they’re not required to), and ensuring it’s cheap enough that most drivers can afford it. In order to meet the first goal, FSCO has recently been approving higher premiums in the province.

Insurers say they’ve had no choice but to jack up rates. Rising abuse of the auto insurance system in Ontario was only one of the problems that they have been struggling with in the past two years. Others include losses in many of their investment portfolios due to the financial crisis, and wacky weather that’s forced them to pay hundreds of millions to fix damaged roofs and basements.

The situation was bad enough that Robin Spencer, who was chairman of the Property and Casualty Insurance Compensation Corporation, said this summer that the industry was in the eye of a storm from a solvency perspective. The Office of the Superintendent of Financial Institutions, which regulates about 200 property and casualty insurers, said it was worried about capital levels in the industry, and had specifically mentioned auto insurance in Ontario as a problem confronting the industry.

And so, Ontario’s government and regulator have recognized a need to restore some profitability to the province’s auto insurance business. As a result, it’s a reasonable guess that, while many drivers will opt to save some money by opting for the new lower benefit packages next year, their premiums won’t fall by quite as much as some people might expect. Mr. Duncan said yesterday that he hopes the government’s reforms will lead to flat pricing over the next few years.

Drivers will still have the option of paying for more than the minimum coverage, and that too should help insurers, who will have more flexibility to tailor products and pricing.

The provincial changes also include a number of other measures designed to lower insurers’ costs by reducing complexity, red tape and paper work in the system.

On the flip side, it’s possible that a few of the measures, including a yet-to-be-drafted new definition of what constitutes a “catastrophic” injury, could still turn out to be unfavourable for insurers. And there is expected to be some opposition to the changes from within the legal and medical community. Drivers with basic coverage could wind up having to pay out of their own pockets for much of their rehabilitation, these opponents argue.

Insurers say the opposition just proves their point that many professionals were milking the system. Ontario’s drivers were paying more for coverage than those anywhere else in the country because medical costs for an average injury in a no-fault accident in the province were amounting to more than $40,000, compared to about $4,000 in Alberta where those benefits are capped. And yet, the industry claims, Ontarians weren’t getting better care.

Outside advice: Don't burn bridges

intact insurance

EVANSVILLE — Fire officials in three cities contacted by the Courier & Press question Evansville's plan to close two hose houses and reallocate assets to keep an Insurance Services Office (ISO) rating intact.

"It is a very contentious decision, especially when that is driven by a third party. It's not a government regulatory agency. It's an insurance industry-based organization," said Holger Durre, assistant fire marshal in Fort Collins, Colo.

"I would never choose to make an impactful thing like that to my fire stations in Aurora merely to gain an ISO rating for one point," said John Lehman, deputy chief of the Aurora, Ill., Fire Department. "It doesn't track that way. There are other things at play."

It starts getting dicey. What do those people in those areas think about that? Would they rather pay a little more on their property insurance and have a three-minute quicker response time?"

Holger Durre, assistant fire marshal in Fort Collins, Colo.

The Fort Collins and Aurora departments were among those Evansville Fire Chief Keith Jarboe compared Evansville's to last week when he announced plans to close Hose Houses 10 and 14 and move personnel and resources to other existing stations.

Jarboe said the move was being made because an ISO review found problems, including some deficiencies in coverage on the city's East Side.

The station reallocations are the most contentious part of a broader plan to keep the ISO rating, which is used to determine certain insurance premiums, from worsening.

Jarboe contends stations surrounding No. 10 and No. 14 will be able to shoulder a heavier load once those hose houses are shut down.

In defending that plan, he has noted Evansville has only one engine that makes more than 1,000 runs a year, while agencies in Indianapolis, Rochester, N.Y., Madison, Wis., Fort Collins, Colo., Shreveport, La., Aurora, Ill., Murfreesboro, Tenn., and Independence, Mo., all have at least several.

The Courier & Press on Thursday attempted to contact all of those fire departments to learn about their experiences with ISO reviews and to their general reactions to Evansville's plan.

Durre at Fort Collins said any decision about closing stations or moving resources for an ISO rating shouldn't be made lightly. He said it should be a process that involves the community and the firefighters and includes a detailed analysis of the costs involved.

"There is a value to ISO," said Durre, whose city roughly equates to Evansville's size and population. "Third party oversight is always good. But it's got to be taken in stride and with a certain measure of reason. Don't let ISO make more significant, impactful decisions than the citizens or the council."

In terms of the cost, local officials have said the ISO rating falling from a level 3 to a level 4 likely would impact commercial premiums more than residential ones, but that the specifics are unknown.

Durre said that's basic information that's absolutely necessary to make an informed decision one way or the other.

"If you're saying we're going to make a decision based on ISO, I think you've got to say we're doing it because it's having 'X' financial impact on our community — not just because three sounds better than four," he said.

There may well be changes that can be made on less significant issues that "in the end don't cause Draconian measures like relocating a fire station or closing it altogether," Durre said.

Deciding to move a fire station based on the insurance rating is a difficult position to be in, Durre said.

"It starts getting dicey," he said. "What do those people in those areas think about that? Would they rather pay a little more on their property insurance and have a three-minute quicker response time?"

The Aurora Fire Department has six engines that make more than 1,000 runs a year, compared to Evansville's one. It has had an ISO rating of 2 since 2006.

Lehman stressed that he is not familiar with the specifics of Evansville's fire protection system or its ISO review and said he was not by any means criticizing the agency.

But speaking generally, he said the difference in premiums between one ISO classification and the next up or down could be "minuscule" to an average resident.

He said many departments are moving away from ISO toward an international accreditation process because it provides a more in-depth, complete analysis.

Mark Puknaitis, the fire chief in Naperville, Ill., is a major proponent of accreditation in addition to ISO reviews. He said ISO focuses only on personnel, equipment, water supply and communications while disregarding important elements of fire service such as EMS, vehicle or machinery extrication, hazardous materials, technical rescue, fire prevention and education and other miscellaneous calls.

There is a danger, then, in making a sweeping change such as a station consolidation based solely on ISO because it isn't all-encompassing, he said.

"It shouldn't be done based just on ISO," Puknaitis said. "There's other impacts on the other risks in Evansville."

Attacks on Baucus health bill signal intact reform effort

intact insurance

WASHINGTON - On the surface, it appears no one is happy with Sen. Max Baucus (D-Mont.) - and that may be the best news President Barack Obama has had in months.

Within minutes of release of the Senate Finance Committee chairman's health-overhaul bill Wednesday, the attacks started flying. Liberal Democrats, particularly labor unions, fumed. Republicans denounced the work as pure partisanship.

But behind the rhetoric was a sense that the fragile coalition of industry leaders and interest groups central to refashioning the nation's $2.5-trillion health system remains intact.

Many influential players found elements to dislike in the 223-page document, but not necessarily reasons to kill it. Most enticing, they saw the prospect of 30 million new customers.

At the White House, strategists spoke of a possible path toward success on Obama's centerpiece domestic policy goal. To keep up the pressure, Obama met personally with three lawmakers, who had warned they could not support Baucus' bill.

Sen. Jay Rockefeller (D- W. Va.), who is upset that Baucus failed to include a public health insurance option, tempered his criticism after a private meeting with Obama. "Nothing is clearer than the president's commitment to providing affordable and effective health care for all Americans, and he and I are united in our efforts to deliver on this promise," he said.

Lawmakers and lobbyists cautioned that Obama remains far from a White House signing ceremony - and that perhaps the greatest danger is death by a thousand legislative changes.

The goal at this point is to keep the legislation moving toward a House-Senate conference committee, in which the administration has its greatest influence over the outcome.

At the heart of the administration's strategy is a collection of deals intended to neutralize interest groups that helped defeat President Bill Clinton's health care overhaul 15 years ago. In each instance, the industry has accepted financial concessions in return for new customers or other protections.

Hospitals, for instance, have quietly accepted about $155 billion in cuts over the next decade in return for promises that they would be exempt from actions taken by a proposed new commission that would pursue additional Medicare savings.

In virtually every instance, industries facing new fees or budget cuts will be rewarded with additional revenue from legislation that could cover 30 million more people, said Emory University professor and Clinton administration official Ken Thorpe. Under Baucus' bill, businesses such as hospitals, drugmakers and insurers face $93 billion in new fees in the next decade.