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States define health care

By | August 12, 2010, 9:07 AM PDT

With the passage of health reform the cost containment battle shifts to the states.

Many people were surprised to learn, during the debate, that state insurance commissioners define what services health policies must contain. This has not changed.

Most states appoint insurance commissioners but some, like my own state of Georgia, elect theirs. Our current commissioner’s gubernatorial campaign was scuttled by a tongue-in-cheek review of his ties to those he was regulating. (That’s him, from Johnoxendine.com.)

In short there is a pressure point here ripe for exploiting.

A recent Los Angeles Times piece on this expressed hopelessness. Consumer advocates claimed regulatory capture, that insurers define through politicians whatever terms they wish and get rich in the process.

The focus was on the lack of prior approval authority for rate hikes, but commissioners can be challenged on other grounds, like what they’re covering and not covering:

  • Why are insurance contracts covering homeopathy, which doesn’t work?
  • Why are some covering prayer, which whether it works or not is not a medical procedure?
  • Why aren’t some states covering medical tourism, which can lower costs? Especially since companies that self-insure their risks can offer it.

Rather than creating non-insurance insurance, catastrophic plans that don’t kick in until patients are broke, affordable policies can be created by beginning a dialogue on what should be covered and what should not.

Advocates could focus on one state, one that defines coverage in a way to make it unaffordable. Focus on what’s covered that shouldn’t be. Emphasize the savings and organize alongside business interests.

Such an alliance could, if successful, then take on the more contentious question of mandating cost-effective care, requiring the use of best practices, implementing the results of comparable effectiveness studies.

The power to say no is the only force we have to control health care costs. States have it, just as insurers have it. Insurers are starting to use their power. State regulators need to join them.

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Dana Blankenhorn

About Dana Blankenhorn

Dana Blankenhorn was a contributing editor for SmartPlanet from 2009 to 2010.

Dana Blankenhorn

Dana Blankenhorn

Contributing Editor, Healthcare

Dana Blankenhorn has written for the Chicago Tribune, Advertising Age's "NetMarketing" supplement and founded the Interactive Age Daily for CMP Media. He holds degrees from Rice and Northwestern universities. He is based in Atlanta.

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Dana Blankenhorn

Dana Blankenhorn

Dana Blankenhorn has been a technology reporter since 1982, a business reporter since 1978, and a writer for as long as he can remember. His Schwab IRA has a few tech stocks in it, most notably some Intel and Applied Materials bought over 10 years ago. But the vast majority of his tiny fortune (emphasis on the word tiny) is invested in mutual funds. He presently writes for no one else but ZDNet, SmartPlanet and himself. But if you've got an opportunity let him know. If he takes the gig he"ll first add it to this disclosure page.

He writes for SmartPlanet and is not an employee of CBS.

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0 Votes
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Best practices are tough to spread in health care...
Federal regulations get in the way of the states. After being challenged by governor Romney to improve the quality of care while lowering costs, several Boston hospitals got together and put together a list of best practices.

Based on proven techniques and policies used at the hospitals in attendance they showed substantial gains could be made in preventing post surgery infections and the associated cost of treatment with the implementation of best practices across all hospitals in the state. Romeny backed the idea as revolutionary.

Just as the training was wrapping up and the project was to be implemented the FDA stepped in and ordered the hospitals to stop their plans and apply for a trial study to prove their concept. The fact each contributing hospital could already prove the effectiveness of their idea, some bureaucrat in Washington said that viewed as a whole it was a new treatment and had to be proven.

When the study paperwork was submitted the FDA shot it down as unproven science not ready for human trials. What idiot looks at this and sees all of these practices currently in use at separate hospitals, but together says they are not ready for human trials?

3 years later they are still fighting for study approval while millions of dollars have been spent treating postoperative infections that could have been prevented.

Tell me again how the federal government can run health care better?
Posted by Hates Idiots
12th Aug 2010
0 Votes
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Hates Idiots
It's very true when government is run by people with contempt for
government, the result is contemptible government.

Yes, if health care is run by the same crew that was running
FEMA at the time of Katrina, it will be a fiasco.

But it's not. True, responsibility for making sure it remains that
way is with the people, but that's just a feature of democracy.
And, based on the nature of the medical profession, there is
more reason for hope than in many other fields.
Posted by DanaBlankenhorn
13th Aug 2010
0 Votes
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RE: States define health care
"Why are insurance contracts covering homeopathy, which doesn?t work?"
Says who?

People should be allowed to use whatever treatments they want. And when you have a insurance run by PRIVATE companies without government interference some companies will insure for any type of treatment.

Who among us is so knowledgeable or omnipotent they alone can decide what works for someone.
Even Western medicine is called "The ART of Medicine" it is not a science.
Posted by Albee_Freeoneday
13th Aug 2010
0 Votes
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Huh?
It's very true when government is run by people with contempt for
government, the result is contemptible government.

No, I'd say that when government is run by people with contempt for
other people, the result is contemptible government.

And I don't remember a government which has more contempt for
it's people than the one we have right now.
Posted by JohnMcGrew@...
13th Aug 2010
0 Votes
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Some Corrections Needed
"Yes, if health care is run by the same crew that was running FEMA at the time of Katrina, it will be a fiasco.

But it's not."
That's true, the group running is is far, far, far worse.

"True, responsibility for making sure it remains that way is with the people,"
Then government should get out of the health care, and leave it to the individual person.
Leave choices on each individual's health care and treatment to that individual.
Not some government bureaucrat.

Leave paying for each individual's health care up to that individual.
Not coercing and stealing from their neighbors to support them when they abdicate their personal responsibility.

That is called Freedom, Liberty, and living up to the US Constitution

And people who are afraid of accepting responsibility for their actions deserve ridicule, and to be laughed at every opportunity for their greed. Their greed needs to be pointed out to everyone. Too bad they can't face it themselves.

Love to all,
Albee
Posted by Albee_Freeoneday
13th Aug 2010
0 Votes
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Cost cutting is extremely simple... really!
Let's pretend you were going out to dinner, and the restaurant REQUIRED you to pay $200 for the meal, no matter what you ordered or wanted

Do you think they would have much business?

This is EXACTLY what health insurance - and the state's Dept of Insurance(s) - does. "Requiring" something is offered as an option is not the same as requiring that you purchase it.

Fixing this minor detail - letting you select the parts you want will make insurance affordable for everyone.

I was a part-time health insurance agent for many years. Did you know that most policies have an annual limit of $2M? The insurance companies have to be prepared to make that payout for each policyholder, which means they have to keep a certain percentage of funds in reserve.

The average heart attack costs $100,000 to $250,000. The only way you'll ever reach $2M is to have an organ transplant or a child born with half a heart or something really unusual.

I worked for only one insurance company that offered policies with an annual payout cap of $150,000. It drastically reduced the cost. Someone who had been paying $500/mo for a policy only had to pay about $89! There was no deductible or co-pays, either - they covered the 1st dollar up until you ran up to the limit!

Allowing policies to be "a la carte" rather than "all you can eat" will fix the problem forever.

Maybe --
* You're sterile or over 40, so you don't need pregnancy coverage.
* You only want to be covered for 5 or 10 doctor visits a year.
* You only want labs & drugs, no doctor visits at all.
* You want your "doctor" to include your "dentist", too, with a $100 cap per visit.
* You only want ER coverage and 2 doctor visits.
* Skip "regular illness" visits completely - cover only hospitalization, labs & drugs.

Think about it, folks... this is exactly how auto insurance works! Have you noticed that auto insurance companies run ads all the time and are competing with each other? When was the last time you saw an ad for health insurance?
Posted by alternateangle
13th Aug 2010
0 Votes
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Albee_Freeoneday
Here's your problem. If a state's insurance commissioner says
homeopathy must be covered, because he (or the person he was
appointed by) just got a check from the homeopathy association, it's
going to be covered. Same thing with Christian Science.

It is definitely not "the contract" that decides what is covered. It's
government. Has been since 1945.
Posted by DanaBlankenhorn
13th Aug 2010
0 Votes
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alternateangle
I see ads for health insurance all the time. And the ads say the
policies are affordable. Trouble is, when you get through the fine
print you find that the "a la carte" menu doesn't cover what you're
likely to have. And even with standard policies, it doesn't cover
what you indeed have.

If a hypertense person tried to get a new job before reform, they
couldn't get insurance, because the condition was "pre-existing."
Now you can't be refused.
Posted by DanaBlankenhorn
13th Aug 2010
0 Votes
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Dana
"It is definitely not "the contract" that decides what is covered. It's
government. Has been since 1945."

That... government dictating what can be sold, to whom, for how much... is the problem.

It's not the free market. It's not free enterprise. It's another case of government dictatorship. And unfortunately, in the USA... the public has become numb to government doing that.
Posted by Albee_Freeoneday
13th Aug 2010
0 Votes
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RE: States define health care
"If a hypertense person tried to get a new job before reform, they
couldn't get insurance, because the condition was "pre-existing."
Now you can't be refused."

No, they could get a policy. It would just be very expensive.
Posted by Albee_Freeoneday
13th Aug 2010
0 Votes
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RE: States define health care
Dana states: "Yes, if health care is run by the same crew that was running FEMA at the time of Katrina, it will be a fiasco. But it's not."
In that, you are correct, Dana. But, like JohnMcGrew said, the problem is that those in charge now are worse, much worse.
I am a single male in my early 50's, but due to "government regulation", I am forced to pay for a policy that include procedures I will never be able to use, namely mammograms, pap smears, etc. because my policy is classed as a "family plan"!! Now, how much sense does THAT make?!?
Posted by JTF243@...
13th Aug 2010
0 Votes
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RE: States define health care
The insurance concept is one which Libertarians can not comprehend because of their ideology (religion); it?s too much like government and of course, government isn?t the solution, it?s the problem according to the Libertarian ideology. By the way, President Reagan used that as an effective campaign slogan but he never took it to the extremes many of you have; I?m a Democrat but President Reagan was a breath of fresh air after the Carter presidency, he was a good president. Back to insurance, the concept is NOT that you are paying for something you expect to use, but for something you hope never to have to use. The concept is that you are paying into a pool that will be used to prevent those in the pool, including yourself, from becoming destitute due to some terrible illness or accident. Saying that you shouldn?t have to pay for something you don?t need is juvenile, at best (as if anyone could now their future needs). Libertarians, who gravitate to the right wing of the Republican party because the Libertarian party has never gotten any traction with the voters, are ideologically incapable of comprehending Insurance. Heaven help us if the Libertarians get to run Insurance! happy We saw the effect of their influence on the Republican party in the Health Care Reform debate; the Republicans couldn?t address the two core problems, cost and coverage; their proposal was laughable.
Posted by GarryGR
14th Aug 2010
0 Votes
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RE: States define health care
To Hates Idiots, John McGrew, and Albee Freeoneday:
You guys may as well cease arguing with Dana. He thinks we live in a Democracy. Apparently he hasn't discovered that we live in a Constitutional Republic. Like all good little progressives, Obama, thinks that a strong, central federal government is much more capable of deciding things for us poor dolts than we ourselves are. It's amateur hour in D.C. and the lemmings all mistake the BHO's platitudes for wisdom. I hope the country can recover from his "leadership."
Posted by psquare11
14th Aug 2010
0 Votes
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RE: States define health care
If anyone finds a state that allows me to define my chiropractor as my primary care physician under Medicare, let me know. Many chiros would make good triage docs AND this one step would reduce medical costs for all. Medicare needs to address the ridiculous lack of coverage for chiro. The AMA lobby is very effective but is it cost effective?
Posted by dberg581@...
15th Aug 2010
0 Votes
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RE: States define health care
I'm going to step out on a limb here and suggest to all those who object to paying for coverage they'll "never use," that the reason for _insurance_ is to spread the risk, so that those things that they'll "never use" are more affordable for those people who _will_ use those procedures. Spreading the risk - that's true of auto insurance, life insurance, any kind of insurance. Making something that individually is unaffordable, manageable.

It's time for us selfish people to realize that there is a social dimension that seems to have been lost in this country today. Today it's all me and mine. The upshot of the conservative resurgence. Me and mine. I've got mine, you go get yours, but if you try to take some of mine, you'll get yours, buddy. I'm sick of hearing all this talk. We used to be a country - an actual country that had as its motto "E Pluribus Unum," in English, "Out of Many, One." No one behaves as if we believe that any more.

If this is the best we can do - me and mine, to heck with yours - then we're truly doomed. And what a shame!
Posted by Den2010
16th Aug 2010
0 Votes
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Who is the risk spread too?
Here is an analogy for you. Every company that transports cargo via ships in the Indian Ocean pay insurance because of the risk of being there because of pirates near Somalia and Malaysia. When setting insurance rates that risk is not spread across the people operating boats on a lake in Texas.

Most health risks can be spread fairly across all genders and ages. For example, cancer knows nothing about those items. PAP smears or prostate tests, the bottom line is the same. Find the cancer before it kills.

But I do not want to pay extra for a guy who is a stuntman when his job puts him at a much higher risk of injury than my office job. Why should I subsidize his life style choice? He should pay more. He should pay a lot more because of the increased risk, but in some states, like Massachusetts, he pays only slightly more than I do because some politicians decided it was unfair for him to pay an amount comparable to his risk.

While the spread the risk rate plan was intended to help people with chronic diseases, it was badly written and now benefits people who do not deserve my subsidy.

And guess what folks. The federal law is modeled after the Massachusetts law which Democrats here refuse to fix.
Posted by Hates Idiots
16th Aug 2010
0 Votes
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Hates Idiots
One very important point you miss is that even people in office
jobs, in their 20s, have risks, and requirements for care that will
help prevent catastrophic impacts later in life.

I have written before here of the components of health insurance
risk. There are certainties, there are common risks which
prevention can ameliorate, and there are uncertain risks.

But the actuarial difference in risk between an office job and a
stuntman is not nearly as great as you presume, especially with
modern safety gear. Office workers can hurt themselves
exercising, they can get cancer, they can stuff themselves and
put themselves at great risk for higher lifetime costs than a stunt
man who stays in shape and breaks a leg when the safety gear
goes wrong.
Posted by DanaBlankenhorn
16th Aug 2010
0 Votes
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RE: States define health care
Dana, my urgent care physician charged $90 out of pocket total cost to save my daughter's life. He doesn't take insurance. Most medical care can be profitably delivered for a pittance. We have one insurance worker for every two doctors in the country, a result of government mandates for insurance coverage. The overhead is killing us.

Why do you keep insisting that the government can run things better when the facts show that all it does is make things worse, from insurance mandates to restricting competition across state lines, all of which raise costs? What is the love that progressives have for coercive solutions?
Posted by pranavb99@...
16th Aug 2010
0 Votes
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pranavb99@...
Most economists understand that medicine is not,and never can
be, a truly "free market" activity. Because it involves life and
death, because you lack information your doctor has, the
relationship between buyer and seller can't be what it would be
without that pressure.

Had your urgent care physician decided to charge you $9,000, or
$900,000, to save your daughter's life you would have found a
way to pay. And in our current system there is no economic
pressure on the buyer's side that keeps him from doing it.
Hospitals are the land of the $1,000 toothbrush for just this
reason.

You can't argue with facts. We pay 50-75% more than our
economic rivals do for health care, and our outcomes are on par
with those of Cuba. That's reality.

Health reform passed because the "free market" failed to provide
affordable care for the majority of our people. Not because of
some grand desire on the part of the President or progressives
for "coercive" solutions to problems.
Posted by DanaBlankenhorn
17th Aug 2010
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