Who was Willie Sutton? Many of our younger citizens may have never heard his name. People of my generation may remember him as one of the 20th century’s most infamous bank robbers.
In addition to his bank theft record, Willie is also remembered for a famous quote that is usually attributed to him. Supposedly, when he was asked WHY he robbed banks, Willie quipped "because that's where the money is."
Willie was a somewhat simple man, but he knew how to succinctly answer a question.
Here’s another interesting fact – did you know that Aetna, one of the largest health insurance companies in the US, started life as a Life Insurance company way back in 1850? In fact, Aetna remained a one of the major life insurance carriers for almost 150 years – quite a feat for any business,. Then, starting in 1996, Aetna started to acquire health care insurance companies, rapidly building this business. By 1999, after acquiring Prudential HealthCare for $1 billion, Aetna became the largest provider of health insurance in the U.S., with more than 21 million members. In 2000, Aetna sold its core financial services and international businesses to ING for $7.7 billion, ending an era that lasted over 150 years.
Another major health insurance company, CIGNA, has even a longer history then Aetna does. Founded way back in 1792, CIGNA started offering health insurance in the early 20th century. In the year 2000, when CIGNA sold off the last of its traditional businesses, it became solely a provider of health insurance benefits.
This begs the question “Why did Aetna and CIGNA abandon their core businesses, ones that thrived for hundreds of years, to become solely purveyors of Health Insurance?
Before you answer, here are some more interesting factoids: In 2006, when Aetna CEO and executive chairman John Rowe ended his 65 month reign, it was calculated that he was paid an estimated $225,000 A DAY for his tenure. And, FYI, this daily rate was calculated at 7 days a week, 365 days a year.
CIGNA’s CEO at the time, H. Edward Hanway, did not fare nearly as well as Mr. Rowe. According to Forbes magazine, poor Mr. Rowe pulled in just under 29 million in 2005. (I wonder how did he manage to make ends meet?)
OK, so back to my original question – why did Aetna and Cigna make the switch from life insurance to health insurance?
Too bad Willie Sutton passed away in back in 1980 – I bet ‘ole Willie could give us a very succinct answer to this question as well!
***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/
(I normally do only two of these posts a week, but I came across these clips and had to share them with you. I know that anyone who has ever worked in a medical office or dealt with an insurance company will enjoy them. But be forewarned – as hysterically funny as they are, they are no laughing matter.
I don’t know a lot (yet) about the group California OneCare, but you have to admire Lily’s dedication to them. Supposedly, AT&T once offered her a cool half million to perform as ‘Ernestine’ in one of their commercials. She turned them down because it would compromise her artistic integrity. Yet, she did these promos for little or no money.
God Bless You, Lily!
***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/
Last Friday night, I happened to catch an interesting show on the Boob Tube called “What Would You Do?”. This soft news program airs on ABC television, and presents soft ‘news’ stories in a hidden camera morality play format. Basically, the have a contrived situation that examines a current event topic, and judge’s people’s reactions as the drama plays out. Kinda like John Stossel meets Alan Funt.
In this week’s episode, an elderly woman (actually, an actress) tries to purchase her diabetes medication at the pharmacy. Unfortunately, she learns that her co-pay has gone from $20 to $150, and she cannot afford to purchase the medicine that she needs to live.
Behind the hidden camera, reporter John Quiñones then judges the reaction of the other people in the pharmacy. Some rise to the occasion and offer to pay some money towards the woman’s prescription – others sit by mutely, and ignore her plight. John Quiñones then asks all of us “What Would You do?”. Of course, if you were thinking that you wouldn’t or couldn’t intervene, you are made to feel that you are morally bankrupt and lower then a snake’s belly.
What a fun thing to do, Mr. Quiñones….can I play too? I can? Great! Now, you’re on the hidden camera. Here’s the set up….
Let’s pretend that you are a ‘reporter’ on a prime time news magazine program….oh wait…you are! You have just presented last Friday’s show. Now, here’s the moral dilemma:
A) Do you start asking the HARD questions, like “Why did this woman’s co-pay jump by $130 in just one month’s time? How can her prescription carrier get away with abusing the elderly who are on a fixed income? Why does her medicine cost so much in the first place? “ Or,
B) Do you remember that Health Insurance companies and Pharmaceutical companies probably drop close to a billion a year in advertising on your network… do you then try to ignore the real issues and corporate abuses that are having a negative impact on the lives of millions of Americans?
Now, Mr. Quiñones – WHAT WOULD YOU DO?
Well, we all already know the answer, Mr. Quiñones, you hypocritical rat bastard corporate toady.
***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/
It’s a warm summer evening. You’ve had a long day at work. You sit down in your favorite chair. The ballgame is on the TV, You think ro yourself “I need a cold beer”. But do you?
Probably not. Sure, you may WANT a beer, maybe even DESIRE a beer, but unless you are an alcoholic you probably don’t actually NEED a beer.
Makes sense, doesn’t it?
There are actually many things that we all think we NEED, but upon closer analysis, it turns out that we really don’t NEED them at all. It may come as a surprise to many of you that one such perceived NEED is Health Insurance.
Well, let me back up – this is not entirely true. With the high costs of health care and prescription drugs that we have nowadays, very few of us can afford to be without health insurance. But, this was not the case just 20 or 30 years ago.
Way back in the 1970’s and early 1980’s, ,most of us did not have health insurance like what we have today. Back then, the well insured had something called ‘Major Medical’ or ‘Hospitalization’ which covered catastrophic events. Practically no one had health insurance that covered doctor visits or medications – and there was no real need to have such insurance. Back then, basic, front line health care was affordable. Prescription drugs cost maybe $10 or $15 for a 30 day supply. A Doctor’s visit might set you back $30.00. Even when you had insurance that covered a doctor’s visit, chances are the doctor’s office did not get involved with filling out and submitting your claim – you paid the doctor up front, filled out and submitted your claim, and then waited for your carrier to reimburse you. If your carrier did not want to pay for a particulate procedure, that was between you and the carrier and it did not affect the doctor’s office. (Of course, if they did not pay you back, you were less likely to renew your policy with them, so it behooved them to reimburse most claims at the billed price.)
Back then, there was no ‘health care crisis’. Then things started to change.
Health insurance started to evolve into the lucrative business that it is today, and the evolution started with the HMO. Instead of paying $35 to see a doctor, you could now pay as little as $2 for your visit. The doctor was convinced (or coerced) to participate in this HMO plan as a way to ensure that their business would still remain viable. If they didn’t, all of their existing patients who signed up for an HMO would leave them for a doctor who did participate with the HMO. You see, Americans love a bargain, so almost everyone wanted to join the HMO for the low per visit fee. By the way, HMO’s were not a cheap insurance – the premiums were as high if not higher then traditional plans – but the low per visit outlay was what appealed to most people.
This rise of the HMO caused a fundamental shift in medical practice economics. Offices soon became overloaded with non-essential visits – people would see their doctor for things that they never would have bothered them about before – things like sprained fingers and cuts from shaving. Hey, it was only $2, so why not. Facing a drop in their income, doctor’s started to compensate by raising the rates of their non-HMO patients. Soon, it became necessary to have full-spectrum health insurance for everyone, since the cost of a doctor’s visit doubled or tripled I just a few years time. In order to retain these non-HMO insurance patients, doctor’s started to process insurance claims for the patient, and wait for the carrier to reimburse them. Doctor’s now needed to hire extra staff to handle the increase in paperwork. In order to pay for these new salaries, they had to raise their rates even more. Soon, their were Preferred Provider Plans (PPO’s) where a doctor would agree to a fixed lower rate per visit, and patients would pay a lower, fixed amount per visit – perhaps $35.00. Soon, HMO plans raised their copays up to a present average of – you guessed it – around $35.00 a visit.
Here we are, now, twenty some years down the line, and we are paying the same amount per visit that we used to pay, but now we are paying huge monthly premiums to our health insurance carriers on top of it. Where we used to pay perhaps $200 a month for our ‘major medical’ coverage, we now pay perhaps ten times that amount. Doctor’s income, adjusted for inflation, is about the same or less as it was way back then. The only clear winner here are our friends the insurance carriers.
It’s really too bad – like alcoholics, we all got ‘hooked’ on something we really didn’t need, but now we are all addicted to it, and can’t easily change, even if we wanted to. But we got to start somewhere, so I think I am going to start having meetings, 2 or 3 times a week, in the church basement. All are welcome, but it’s your turn to bring the coffee (we drink a lot of coffee). Just tell them at the door that “I’m a friend of Rick’s”
(Please bear in mind that this is an oversimplification of what has happened in medical economics over the past 20 to 30 years, but it should give everyone somewhat of an answer to the question “Why is health care so expensive?”)
I don’t know about you, but my head is spinning from all of this. I think I NEED a beer!
***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/
If you can’t beat ‘em, join ‘em. Wiser words are rarely spoken. No one embraces this philosophy better than GlaxoSmithKline, makers of the prescription drug Lovaza.
High Cholesterol is big business. In 2008, the best selling prescription was Lipitor, a cholesterol-fighting drug that racked up an impressive 5.9 Billion in retail sales. Sadly, Lipitor’s sales figures fell by almost 5% from their 2007 totals. But why?
This can partially be attributed to competition from similar medications like Crestor, which came in at #17 in 2008 with almost 1.7 billion in retail sales. Unlike poor Lipitor, Crestor’s 2008 sales were up an impressive 22% from their 2007 totals. But. also-ran statin pharmaceuticals are not the only thing contributing to Lipitor's slide.
More and more people, it seems, are getting disenfranchised with these statin medications, as they are very expensive and often have very undesirable side effects. As an alternative, they are turning to other methods of fighting heart disease. Many are following the lead of Nanook of the North.
It turns out that Eskimos eat a really high fat diet, yet they don’t suffer from heart disease. This is widely attributed to the fact that they eat a lot of fish, which is high in Omega 3 Fatty Acids. And, it turns out, these Omega 3 Fatty Acids are very effective in preventing heart disease.
Meanwhile, us poor schmucks in the lower 48 don’t eat nearly enough fish. Making matters worse, our meat stock is mostly fed on corn, which is devoid of these needed Omega 3’s. In the olden days, our grass-fed beef fed on Omega 3-rich grass, and passed them onto us in that cheeseburger. Today, our diet of choice does not provide us with nearly the amount of Omega 3’s that we need, and as a result, our cardiovascular health suffers.
So, we can be healthier by eating grass-fed beef (which tastes funny to us) and oily fish (which tastes fishy to us) or we can take Omega 3 supplements. A good quality supplement, one with good quantities of EPA and DHA Omega 3 Fatty Acids, would run you around 10 bucks a month at your local discount store. This solves the problem for unhealthy Americans, but causes problems for pharmaceutical companies who watch their billions in annual sales start to slip slide away.
Enter GlaxoSmithKline, and their prescription drug Lovaza. Lovaza is essentially a high quality, concentrated Fish Oil Tablet, available only by prescription. Lovaza takes fish oil, concentrates it with the good Omega 3 fatty acids, and sells it through your local pharmacy. In fact, Lovaza is so concentrated that you might need to take 2 Over the Counter Fish Oil capsules in order to get the same amount of Omega 3’s as you do from one capsule of Lovaza. . With Lovaza, GlaxoSmithKline has decided to follow the ‘if you can’t beat ‘em, join ‘em’ philosophy with one little twist – Lovasta costs around 18 times more per dose then generic, non-prescription Fish Oil.
As compared to ‘traditional’ cholesterol medications, Lovaza is still a real bargain. A 100 capsule bottle retails for as little as $150.00. A similar, traditional Fish Oil supplement is available from vitamin-giant Puritan for about $4.25. Remember, you might have to take 2 of the Puritan capsules in order to get the same level of beneficial Omega 3’s as one Lovaza capsule, so factoring this in, we can see that Lovaza costs over 18 times as much as the Puritan dose.
Not a pretty picture, is it? And yet, we still wonger: "Why is our healthcare so expensive?"
There are many well-documented nutritional supplements that can be used to replace or augment pharmaceutical therapy. This makes sense, since many pharmaceuticals are based upon naturally occurring compounds. And with success stories like Lovaza leading the way ($417 million in sales in 2008, with a 65% increase from the prior year) you can bet that other ‘prescription supplements’ will be coming your way. However, I suspect that many people, like me, will find that the overpriced prescription version of our favorite supplement is going to be hard to swallow.
***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/
In my last post, I questioned the rationale behind pharmaceutical companies issuing ‘coupons’ for their expensive wares, when they could, instead, just charge a more reasonable price. Upon further reflection, I can now see two reasons for their doing this.
First and foremost, unless they made the drug significantly cheaper, it would not affect the price to people like me who depend on their prescription coverage. Chances are, the $40 discount would benefit my insurance carrier, and I would still have to pay the same ridiculously high co pay. The high co pay might affect my decision to use the drug, but with the $40 discount passed on to me, I am more likely to stick with it. This makes sense to me, and this is probably why most manufacturers issue coupons in the first place – to entice people to try their products when they might not do so under normal circumstances.
The second reason is much more nefarious – they are using the information you provide when you are applying for the coupon for marketing and other purposes.
Again, this is a reason why other manufacturers offer rebates on their products. When you fill out that rebate card, you identify yourself, and categorize your lifestyle, your preferences, and provide other demographic information, which is a valuable commodity. They can then use this information for marketing other products and services to you, or sell your name and information to other companies for marketing purposes.
For example, let’s say you send in a rebate for a stack of CD’s that you purchased at Staples. This identifies you as a computer user, and most likely, a fairly sophisticated one. If Staples is having a sale on printers in the future, they surely want to include you on the mailing list. In addition, a company like Dell would also like your name so that they can promote their products to you. Because of this, Dell would gladly pay Staples for your name and contact information.
Applying this model to health care, companies would pay doctors, insurers, and hospitals for lists of their patients with diabetes, for example, and then use these lists to market diabetic-related products.
The wholesaling of your private medical records has much more serious consequences than mere marketing. Companies might want to have this personal information before they conduct business with or perhaps even hire you.
For example, a bank may not wan to issue you a loan if you suffer from a life-threatening illness, or a potential employer may pass on your application if they discover that you suffer from chronic low back pain. In effect, publishing your private medical records would have great value to many different businesses – and dire consequences to you.
Fortunately, HIPAA put and end to this industry before it really had a chance to take off.
HIPAA, (Health Insurance Portability and Accountability Act) is a multi-faceted federal law that was enacted in 1996. One of the most important aspects of HIPPA is patient privacy. In essence, HIPPA says that health care providers cannot give out your health-related information without your specific permission. HIPPA is why every doctor’s office makes you sign a ‘Notification of Privacy Practices’ whenever you enroll as a new patient.
It seems that these coupons are a way of bypassing the HIPAA laws. For example, if you use a coupon for Lipitor, you are identifying yourself as a person with high cholesterol, and companies can now market lifestyle products and services, or even other pharmaceuticals, to you directly. This type of ‘targeted marketing’ is much more effective then ‘mass market’ advertising like a TV commercial. It’s more of a rifle shot then a shotgun blast – they know that you have a specific interest or need, and they can now do a full-court press on you. More seriously, a company might decide not to hire you because you have a perceived higher risk for heart disease.
The moral of this story is, be careful what coupons you apply for. If they give you an option not to ‘share’ your information, by all means choose this option. And if the coupon will identify you as somebody that would be undesirable in the business or financial worlds, by all means, think twice before handing over your name. That $40 coupon could potentially cost you many thousands of dollars somewhere down the road.
***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: ***** http://healthcarehullabalo.blogspot.com/
When I was a young boy, I used to chuckle at my grandmother, who sort through a filing cabinet’s worth of coupons at the supermarket checkout, just to save 10 cents on a can of peas. I recently changed my point of view on this matter, and now, like Mickey Dolenz, I’m a Believer.
Why the sudden about face, you might ask? Well, I just saved $40 on one of my prescriptions when I searched for and found an on-line coupon.
Well, actually it wasn’t a coupon. My prescription insurance carrier would be pissed if I got a $40 discount and did not share the savings with them. Luckily, the people at the pharmaceutical company was able to work around this. The ‘coupon’ was actually set up as a free ‘prescription insurance’ policy that paid a $40 benefit for that particular drug. The ‘coupon’ is then processed by the pharmacy the same way that they would process any other insurance claim. Voila! I had an extra $40 in my pocket.
It seems that many drugs have similar ‘coupons’ that you can use to help control the out of pocket expense when you fill your prescriptions. Some are yours for the asking – others require you to fill out a questionnaire in order to receive them. Some are based upon financial need – others are available to everyone for the asking. Some drug reps actually leave ‘coupons’ at your doctor’s office, so be sure to ask for them there. Savvy consumers should search the internet for deals on the drugs that they use – a few minutes time can save you hundreds of dollars.
This is great, I guess, but it still begs a few questions. First, why are things that I need for my health and well-being retailed like a can of soup? Secondly, why go through all of this ‘coupon’ nonsense when you can just make the drug more affordable in the first place?
I don’t know if I will ever get an honest answer to either of those questions, so in the meanwhile, I will do my part to keep health care costs down by clipping coupons wherever I can find them. I also can now see how wise and frugal my grandmother was. I know that my dear grandmother, wherever she is, forgives me for laughing at her when I was a child. As she used to say, ‘Live and Learn’.
Thank goodness for health insurance. How else could I afford the prescription drugs and health care that I need to survive and thrive?
Here are a couple of real life examples:
I recently had eye surgery. After the surgery, the surgeon gave me a prescription for anti-biotic eye drops that I would need to use as a preventive measure for the first week after the surgery. When I went to have this prescription filled, I was informed that my co-pay would be $60.00 for this one prescription. As I tell everyone here, I always ask the actual retail price for all of my prescriptions, as I know that I will pay for it sooner or later (please read my post on Star Trek Economics if you haven’t done so already). Anyway, I was informed that if I did not have a prescription plan, these eye drops would set me back a whopping $67.00!
A few weeks before that, I had another prescription filled. This prescription had a co=pay of only $35.00. When I inquired what it would have cost me if I didn’t have insurance, I was told that it would have set me back $37.00.
Prescription drugs are not the only area where your expensive insurance saves you serious moolah. A doctor client recently told me that my health insurance carrier would allow me to treat at his office, and that my per visit co-pay would be $50.00. The cost per visit if I didn’t have insurance and had to pay cash? $50.00.
Earlier this year, like most small businesses, my health insurance premiums jumped a whopping 30%. However, when I see how I saved $9.00 so far this month, that 30% increase is somewhat easier to bear. NOT!
The moral of the story is simple. Tell EVERYONE to always ask what your health care products and services actually cost – not just what the co-pay is. Find out what your carrier actually pays for them, and what they would cost you if you didn’t have insurance. For your prescription drugs, find out what they would cost you in Canada (this information is just a quick Google search away). My eye drops, by the way, would have run me just $24.00 from a pharmacy in the Great White North.
Getting enough people aware of how we are getting reamed by the health care carriers and the pharmaceutical companies is going to be the first step in turning our health care system around. Hopefully, one day soon, we can re-enact this great scene from American Cinema.
http://www.youtube.com/watch?v=dib2-HBsF08
Enjoy!
***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/
Here is a way that many people are saving money on pharmaceuticals. I don’t recommend doing it, as it can be dangerous, but when faced with the rising cost of prescription drugs, many people don’t have a choice.
What people are doing is having a larger dose pill prescribed to them and then splitting the pill into the dose they really need.
For example, if a person needs to take a 40mg Lipitor pill, they could purchase a single dose at $5.23 or they can purchase an 80mg dose and split the pill in 2, taking half the pill each day. Since an 80mg pill costs the same $5,23 as the 40mg variety, they instantly save 50% off of the normal cost of their prescription.
Of course, in order to do this, you need to have the cooperation of your doctor. They not only have to agree to prescribe you the larger dose, they need to prescribe the pill to be taken ‘as needed’ instead of once daily. Otherwise, your prescription carrier may get wise and demand to share in the savings when they realize that you are refilling your 30 day prescription only once every 60 days. You also need to be careful that you split the pill evenly so that you always get the correct dose.
Even greater savings are to be had by those who require an even lower daily dose. If you need only 10mg of Lipitor a day, you could either pay the $3.83 for the single pill or you could split the $5.23 80mg pill into 8 smaller doses which would bring your cost per dose down to a mere 42 cents. Of course, splitting a pill so finely and precisely is no easy matter. You would probably need some fairly sophisticated equipment and skills to perform this type of thing reliably. But, at a $1,244.00 per year savings for this one prescription alone, it might be well worth your while to acquire this equipment and skills.
This is exactly the type of thing that your local pharmacist used to be adept at. Perhaps there is a new business opportunity here?
The real eye-opener here is that the cost of the medication really has no correlation to the retail price of these pills. Why else would the 40mg Lipitor pill sell for the same amount as the 80mg? The closer one looks at the true retail costs of these drugs, the more obvious it becomes that the entire system is out of whack. This is not a matter of supply and demand – manufacturers can make as much or as little of these drugs as the world may need. When you buy a prescription drug, you’re obviously not paying for the value of the active ingredient – you’re paying what the market will bear. That’s okay for luxury and non-essential items, but when it comes to things that are essential for one’s life and well being, it is downright criminal. What would happen if bakers sold loaves of bread for $25.00 each, and you were only allowed to buy one particular brand of bread – no comparison shopping? What if a Jumbo size loaf costs the same as a small loaf? Would you tolerate it? I don’t think so. Yet, this is exactly the type of behavior that we put up with when dealing with prescription drugs.
When our lives and health are placed on the block for the sake of corporate profit, it should be a crime – and those perpetuating that crime should be prosecuted – or at least persecuted. In any event, they should not be allowed to continue with this behavior. If they are, we all may find ourselves being unable to afford the medicines we need.
***** Found this Interesting, Entertaining or Informative? Please read the complete blog at: *****
http://healthcarehullabalo.blogspot.com/
The air is filled with wondrous aromas. Red Cardinals and tiny Hummingbirds once again visit my yard. Grey skies have been replaced by blue ones, filled with puffy white clouds.
Of course, here in New Jersey, the warm weather brings other things back to our skies, including the pretty blue and white blimp of our largest health insurance carrier.
Here’s an interesting factoid about this vanity gas bag – a Blimp has an operating cost of about $3,000 a day --- or about 1.1 million dollars a year. a year. Yet, at the same time, nearly every client’s office I visit complains how it has become nearly impossible to get one of their agents on the telephone to answer a claim inquiry or to get a patient pre-authorization for treatment.
So, maybe you have to wait a week or two before you get the authorization for that procedure that your doctor wanted you to get immediately. At least, if you are lucky, you might glance up at the sky and see a pretty blimp, which will surely brighten your day! Your health care dollars sometimes work in mysterious ways!
Posts
