Health Policy, Business, & Innovation
Recommended: A touching story by Perri Klass, M.D. in the New England Journal of Medicine about how it feels to carry a doctor’s responsibility. In the case of Dr Klass, a pediatrician, that means weighing a decision that’s probably trivial - but might be a matter of life and death … for a child.
It’s particularly useful for health management execs and health policy wonks like yours truly. It helps to keep the endgame - health, life, death - clearly in focus.
Rep. Henry Waxman lacerated the Pentagon’s workers’ compensation program for civilian workers in Iraq and Afghanistan, saying it was a “flagrant abuse” of taxpayer dollars. He directed his wrath toward AIG and three other carriers not named in this CNN report.
From a business perspective only, and not speaking as an American citizen, if I had been an AIG underwriter I would have priced this program high in the first couple of years. From an underwriting perspective, they were going into a high-risk work zone with a lot of unknowns and no historical data. But according to the report, the carriers had been achieving 40% profits on these civilian employees for over five years. This, in an industry whose revenues declined last year and whose profit margins at home are shaky at best.
It’s fine to rip the carriers for not adjusting their rates to reflect experience. But there number of other questions should be asked, too, like: Who was minding the store? Were these costs a straight pass-through from Blackwater, Halliburton, et al.? That removes the incentive from these companies to push back on pricing. After all, the more irresponsible their purchasing practices, the more money they make.
And what about the government’s own civilian employees? Where were the Procurement Officers who are supposed to act as risk managers in this sort of situation? It seems to me a lot of people dropped the ball on this one, since it went on year after year.
Sounds like this was a classic seller’s market, and yet another story of government mismanagement. The carriers may not have been admirable corporate citizens, to say the least. But, at least in economic terms, they were ‘acting rationally.’ Too bad we can’t say the same thing about the people who were paying them. Our troops in harm’s way deserve better than to have the military budget managed so irresponsibly.
A lot of attention is being given to yesterday’s New York Times piece about doctors and hospitals who apologize, ‘fess up, and correct their mistakes when they make medical errors. For medical professionals who have been trained to “deny and defend,” the whole idea seems counterintuitive. It’s a natural instinct for people to want to hide their mistakes. And as Michael O’Hare points out, it’s also something attorneys have been telling their medical malpractice clients to do for a long time.
I’ve written about the Sorry Works! Coalition before, and they’re mentioned in the Times article. That’s the group that’s dedicated to becoming “the nation’s leading advocacy organization for disclosure, apology (when appropriate), and upfront compensation (when necessary) after adverse medical events.” The Times suggests that there is now a data trail for the medical disclosure movement. Reporter Kevin Sack writes:
Despite some projections that disclosure would prompt a flood of lawsuits, hospitals are reporting decreases in their caseloads and savings in legal costs. Malpractice premiums have declined in some instances, though market forces may be partly responsible.
O’Hare tells an anecdote about working with a hospital whose in-house counsel promoted a similar policy 25 years, with very positive results. That sounds right: During my years inside the insurance industry I saw similar examples of the seemingly counterintuitive. Sometimes ‘fessing up is the best defense.
And there’s a political movement to institutionalize medical disclosure. Sack quotes the director of Sorry Works! as saying that “34 states have enacted laws making apologies for medical errors inadmissible in courteven require that patients be notified of serious unanticipated outcomes.” He observes that Democratic Presidential candidates Clinton and Obama cosponsored a similar resolution in the U.S. Senate, only to see it die in a GOP-controlled committee.
This should be an ideal topic for bipartisan support, given the Republican penchant for criticizing excessive med mal settlements. So why would Republicans kill a bill like this one? I don’t get it.
Join Together, Boston University’s addiction research and advocacy program, reports that lobbying efforts from Mothers Against Drunk Driving (MADD) persuaded the governor of Maryland not to sign a bill that provided favorable financial treatment to “alcopop” drinks. Alcopops are heavily flavored alcoholic beverages that the alcohol industry uses to target young people (they prefer to call them “entry level” drinkers.) The early alcopop brands included “Zima” and “Mike’s Hard Lemonade,” but new products are leveraging the popularity of youth-oriented energy drinks.
MADD might find the insurance industry a useful ally in its efforts to restrict the sale of these drinks. I wonder if anyone’s thought of that yet?
Recent products have been packaged to resemble youth-oriented energy drinks. The Marin Institute prepared the photo shown above to demonstrate how drinks like “Sparks” and “Rockstar 21″ (”party like a rock star”) resemble teen-oriented caffeine beverages like “Monster” (with its “BFC” designation for “big “f**king” can.”) They’re being priced more cheaply than non-alcoholic energy drinks to exploit that market. And, as one teenager reports in the Marin Institute study (warning: pdf), “… my mom found it, but she had no idea and thought they were just energy drinks.”
MADD and other advocacy groups have targeted laws that allow alcopops to be designated as beer rather than alcohol. Beer is typically taxed at a much lower rate than other alcoholic beverages, and can be sold in many places where others can’t. The Marin Institute describes a three-point plan to target kids as a market for alcohol:
The Maryland bill addressed taxation only, not sale, and the governor agreed only to delay it. The bill was pushed by the alcohol lobby, which is politically well-organized. That’s why a strategic alliance between MADD and the insurance industry might make sense. After all, when teens are injured or killed as a result of alcohol-related accidents, it’s insurance companies who typically pay the bill. Their pockets are deeper than MADD’s, and their political connections are better.
The etiology of alcohol addiction is still unclear, so it can’t be said definitively that ‘alcopops’ contribute to alcoholism rates. But it could certainly be argued that they contribute to increased episodes of drunkenness, and therefore injury and death. It could also be argued that kids with a predisposition to alcoholism might experience an earlier onset of the condition as a result of these drinks and their marketing strategies.
MADD and America’s Health Insurance Plans, plus MADD and the American Insurance Association: Two matches made in heaven? It could cut into teen death and injury, and the health insurance industry might want a little good publicity right now.
