Exploring Human Potential

Non-Real Work: Eliminating Private Health Insurers From Primary Coverage. Single Payer Time Has Come.

Posted on | April 26, 2017 | 2 Comments


Mike Magee

Economist Herbert Stein, WSJ contributor, AEI senior fellow, and economic advisor to Richard Nixon, famously said, “If something can not go on forever, it will stop.”

When it comes to the health insurance industry in America, we may be approaching that point. Obamacare, and those opposed to it, have managed in the heat of battle to accomplish what others have tried and failed to do over the past century.

As the Republican’s Freedom Caucus head fakes another run at ACA repeal, an overwhelming majority of Americans now believe that access to quality health care is a right rather than a privilege. And as we’ve seen in the past month, attempts to reintroduce regressive policies that would discriminate and target the most vulnerable in America have met a stiff public rebuke. It’s hard to turn back time when it comes to social policy, especially when income disparity has reached stratospheric levels.

The debate is beginning to shift from how do we get private insurers to participate to how do we move toward a single payer system. The public conversation is no longer either/or, but rather what kind of single payer. Should a state like California with its huge economy go it alone, with Medicare and Medicaid waivers from the federal government? Should we have “Medicare for All” as Bernie Sanders advocates? Or should we expand on the success of the Medicaid extensions featured under the ACA?

At the core of all these solutions is simplicity, cost and trust. On all three scales, health insurers, and their lobbyists, and state and federal government protectors have failed us. The only reason it has taken this long for us to look elsewhere is because the facts have been so well hidden within the cracks of the Medical Industrial Complex. Until now.

The U.S. insurance industry as a whole consumed 11.28% of our total GDP in 2015, roughly $2 trillion of our $18 trillion financial output. By comparison, Canada consumed only 4.4% of its’ GDP. Roughly 1/3 of the $2 trillion we spent went to Health Insurers. They function in a separate universe from Life Insurers and Property/Casualty Insurers who each consumed about 1/3 of the spend.

There are approximately 2.6 million Americans who work in the insurance fields. 1.5 million work for companies, and the other 1.1 million are local insurance agents/brokers living in our communities. About 500,000 Americans are employed selling and managing health insurance plans. They work for one of the 859 health insurance companies in America.

Over 50% of the money collected from U.S. citizens in health insurance premiums by private firms goes to just 10 companies. Here they are with the premiums they collected last year: UnitedHealth Group ($67B), Anthem ($55B), Humana ($51B), HealthCare Service Corp ($33B), Aetna ($24B), Centene Corp ($20B), Independence Health Group ($14B), WellCare ($12B), Kaiser ($12B), Molina ($12B). Anthem and HealthCare Service Corp are BC/BS derivatives.

The private companies by some accounts consume at least .20 cents on every health care dollar. Roughly 50% of their spend goes to employee wages and salaries. Their back-offices from actuaries to claims processors, from marketers to strategic planners, consume much of the rest. But of course, there’s ample room for profit, as we learned last week when UnitedHealth Group CEO, Stephen J. Helmsley, reported a 35% 1st Quarter profit, largely tied to adding over 1 million Medicare and Medicaid customers in the quarter, after he stiff-shouldered ACA plans. Some of UnitedHealth Group’s profit came from their own customers. But much of it came from their role as silent partners for large self-employed corporations and the federal government. Much of the money was “passed-through” these middle men claim managers.

Consider the fact that in 2015, here was the breakdown on health care claims payments by primary source: Private Insurers (33%), Medicare (20%), Medicaid (17%), DOD-VA-CHIP (4%), Government Public Health programs (3%), Other 3rd Party Payers (8%), Self-Pay (11%). Point being that private insurers have been at the trough of public insurance for a long time.

Costs of course have been skyrocketing. Complexity and inconvenience is legendary. In one recent audit of private insurer managed Medicare Advantage plans more than 50% of denials were not accompanied by “adequate or accurate rationale”. The cost of such intentional complexity quickly multiplies through a Byzantine and financially corrosive series of feed back loops that demand ever more coders, billers and financial analysts in hospitals and doctors offices across our land. There are now 16 non-clinical health care workers for every one physician in the U.S.  Administrative costs in U.S. hospitals consume 25% of their budgets compared to just 12% in Canada.

As for trust, the politics of Obamacare managed to expose a wide range of bad behavers who overplayed their hands.

1.  UnitedHealth Group Inc. boldly announced their intended exit from the ACA Exchanges in 2015 in coordination with a Republican discreditation campaign to “death spiral” the program in the lead-up to the 2016 Presidential election. As they exited the admittedly challenging federal program, they made sure to be clear they were all in on the the low-hanging federal fruit like Medicare Advantage. When they pulled out of the Virginia exchanges, they boldly declared that this action “in no way impacts our small and large group businesses, or Medicare or Medicaid programs in the Commonwealth.”

2. Then there’s Aetna: Their chief executive, Mark Bertolini, loved the term “death spiral” and used it repeatedly before and after conferring with Trump in the White House. Their attempt at a megamerger with Humana was blocked on anti-trust grounds. Aetna took it to court and got a slap down from the judge who believed the company had “attempted to strong-arm the DOJ into approving the merger by threatening to exit from several insurance exchanges if the DOJ filed suit”. So much for public integrity.

Aetna has pulled out of 11 states, even though Standard & Poor’s and CBO says the exchanges will turn a profit next year. U.S. District Court Judge John D. Bates says they did it “to avoid antitrust scrutiny” and improve chances of an Aetna-Humana merger. It didn’t work. 

3. Anthem, an historic BC/BS carrier, now is the second largest private health insurer in the U.S., selling exchange insurance to 839,000 members in 14 states, accounting for nearly 9% of their total revenue. It’s threat to leave Tennessee health exchanges uncovered in a third of the states counties reduced the state’s insurance regulator, Julie Mix McPeak, to begging, “The message I’m conveying is, ‘We’ll do whatever we can to make this area attractive to you on the individual exchange market,’”

4. Let’s not forget a number of truly regressive state leaders from Kansas to Oklahoma who fought Obamacare tooth and nail, and are complicit with the insurance lobby. Consider for example Oklahoma insurance commissioner, John D. Doak, the former insurance agent from Tulsa, whose red Trump-style cap reads “Make Health Insurance Great Again”, and who admits to Okie insurance agents far and wide, “I was never for Obamacare from the beginning.” Oklahoma Governor Mary Fallin, who rejected $3.6 billion in funding in 2012, apparently agrees with her northern neighbor, Gov. Sam Brownback of Kansas, that taking her state down in financial flames is the way to go. Rather than participate in the ACA and with Doak’s full-throated support, she just announced a 25% cut in the state Medicaid budget which will close multiple rural hospitals, lead to a wholesale exodus of physician providers from the state’s Medicaid programs, and leave $8.6 billion in federal dollars on the table over the next decade. Her state ranked 49 out of 50 states on the 2017 Commonwealth Fund Health Performance Scorecard.

And I could go on. This is America’s health insurance industry – a network of “non-real” jobs that add remarkable cost, but no clinical care. Let the John Doaks of the world focus on life insurance and property and casualty insurance. That’s fine. But they, and their corporate patrons and lobbyists need to get out of health care, except for supplemental policies as in Canada. We as a nation can figure out how to provide primary coverage under a single payor model. It’s not that complicated, especially if everyone is covered, there’s no cheery-picking, and we don’t have to compensate CEO’s like Helmsley and Bertolini.

Climate Change + Migration + Turmoil = Disaster

Posted on | April 21, 2017 | No Comments

There are 64 million UN “Persons of Concern” in the world.


They are in danger because of climate change.


Climate change creates instability and economic hardship and….


Drought, desertification, crop failure, famine and urban crowding.


All the above lead to human displacement and warfare.


12% (500 million) currently say weather disaster may put them on the move.


Doctors in the Top 5% – Not The Top 1% by Income. Oh, and Canadian doctors make more than U.S. doctors.

Posted on | April 20, 2017 | 4 Comments


What are the average 2017 earnings of U.S. doctors?

Primary Care – $217,000  Specialties – $316,000

What is the salary span for doctors by specialty?

Pediatricians make the least ($202,000), Orthopedists the most ($489,000).

How much have salaries grown in the last six years?

43%, from an average $206,000 in 2011 to an average $294,000 in 2017.

Who made more, salaried or self-employed doctors?

Self-employed. 4% more in Primary Care, and 32% in Specialties.

Do men and women make the same?

No. Men make 17% more than woman. But 22% of women work part-time compared to 11% of men.

Do doctors on the East and West Coast make more than everyone else?

No. Doctors in the North Central states ($317K) and Great Lakes states ($303K) make the most. Northeast doctors ($296K), Western Coast doctors ($290K), and Mid-Atlantic doctors ($282K) rank in the bottom half.

Did the ACA play a role in elevating physician salaries?

Yes. 52% of Primary Care and 38% of Specialists saw a large influx of new patients under Obamacare.

Which physicians, on average, make more – U.S. or Canadian?

Canadian. Their physicians on average earned 9% more than U.S. doctors in 2017.

Would most doctors chose Medicine again if given the chance?

Yes. More than 3/4’s would chose Medicine again.

SOURCE MATERIAL: Medscape Physician Compensation Report, 2017.

Trumpian Coal Quiz – True or False

Posted on | April 19, 2017 | No Comments


Being a U.S. Health Insurer Means Never Having To Say You’re Sorry.

Posted on | April 18, 2017 | 1 Comment

UnitedHealth Group CEO

Mike Magee

It has been roughly a month since Americans witnessed that “the health care emperor had no clothes”. For seven long years, the Republican leadership waged an unending and relentless battle to collapse the Affordable Care Act, insisting that Americans in large majorities hated it and that it had to go. But when push came to shove, they discovered that, in large majorities, Americans liked it, as opposed to going back to the health care free market free-for-all.

In pursuing their campaign and sowing their lie, Republicans had no more loyal allies than the health insurance industry. And within that industry, none was more deceptive than UnitedHealth Group Inc. This week the company proudly announced that its first quarter profit had soared upward by 35 percent. This included a hike in profits from insurance sales for the quarter of $2.1 billion on total revenues of roughly $49 billion even though it covered fewer individuals.

UnitedHealth Group Inc. you might recall is the same company that gave Republicans a big lift on November 19, 2015 by alarmingly announcing their intentions to abandon the Obamacare exchanges in 2017. At the time they were covering only a half a million citizens across 34 states and claimed that they would lose $700 million in the coming year. Of course, they were happy to continue with the government’s Medicare Advantage plans which have been a bonanza for them. They’ve signed up over a million new Medicare and Medicaid customers in this quarter alone.

Their CEO Stephen J. Hemsley, whose total annual compensation is in the range of $50 million, solemnly announced at the time that his free market colossal was under siege. He said, “We can’t sustain these losses. We can’t subsidize a market that doesn’t appear at this point to be sustaining itself.” He further predicted a rise in premium costs for the ACA silver plan of 7.5%.

With remarkable coordination, Republican chairman of the United States House Committee on Oversight and Government Reform, Jason Chavetz (R-UT), chimed in that day. He said, “Premiums are up and ultimately, health care is more expensive. The consequences we see from this hastily and poorly conceived legislation were entirely foreseeable and not at all surprising.” The race was on.

But what Chavetz and his fellow Republican leaders could not foresee or conceive at the time was that Donald Trump would be their President and that the American people would demand to know what their exact plan was to replace the coverage they already had.

UnitedHealth Group Inc. on the other hand experienced no regret and little if any blowback. Even though their well coordinated announcements set off an election year fire, and their lobbyists proudly applauded the Republican landslide, there has been no day of reckoning – at least not yet.

California Dreaming – The World’s 8th Largest Economy Is Not Waiting Around For Trump.

Posted on | April 7, 2017 | 1 Comment

Mike Magee

Health policy experts generally agree that applying taxes to unhealthy products or behaviors can reliably deliver public health benefits. We have learned from the nation’s battle with tobacco that taxes not only discourage consumption but also provide funding for beneficial programs like public health education. In some states and locales, this approach has been embraced as well in the battle against obesity through the use of soda taxes.

California extended healthy taxation within another domain this week – energy. They successfully approved new taxes on gasoline. That action will likely dampen use of carbon creating fuels, accelerate use of high mileage and electric vehicles, and in funding much needed infrastructure for bridge and road repairs decrease injuries related to motor vehicle accidents.

This latest action signals that California, the world’s 8th largest economy at $2.5 trillion Gross State Product, is not waiting around for Congress or Trump’s America to catch up. They have no interest in facilitating his immigration policies or wasting money building walls. Last week, they took the serious step in the early exploration of a single payer health program that would cover all citizens, including documented and undocumented immigrants. And now, they’ve decided to not wait around for the Administration to follow-through on promises of a “huge “ infrastructure bill.

Why should they? Their economy is nearly the size of Brazil (#7 worldwide), and is fueled by record tourism in the south, premier high-tech leadership in the north, and agriculture throughout. Their governor, Jerry Brown, is experienced, progressive, inventive and committed. He’s a grown-up in every way, and has his priorities straight.

Under his care this week, the legislature approved $5.2 billion in gas taxes and vehicle fees by gaining the required 2/3 majority in both the House and Senate state bodies.

In garnering support, the governor focused on the $130 billion in priority repairs and planned new construction on the books that had been accumulating since the last gas tax hike 23 years ago. Brown’s message was simple. direct, and honest: “The Democratic Party is the party of doing things, and tonight we did something to fix the roads of California.”

As we approach the third month of President Trump’s tenure, two things are clear – chaos is not the same as leadership, and the kind of progress we’re seeing in California can fuel growth, optimism and good health. Other states should follow their example.

Why Do Canadian Kids With Cystic Fibrosis Live 10 Years Longer Than American Kids?

Posted on | April 4, 2017 | No Comments

Mike Magee

At the end of WWII, Canada and the U.S. realized the necessity of focusing on health care infrastructure. There were of course the hundreds of thousands of physical and mental health casualties streaming into overflowing and over-stressed hospitals. Add to this a significant and growing explosion of chronic diseases fed by soldiers and their families embracing tobacco and alcohol, and feeding an explosion of cardiovascular disease, cancers, and psychiatric diseases codified in the first psychiatric classification system, DSM-1.

The Canadians approached the challenge as a planning exercise and ultimately focused on prevention and universal insurance coverage as their starting points. The U.S. took a different road, embracing private scientific enterprise and liberal amounts of national funding to expand scientific research and hospital bed capacity. Insurance coverage in the U.S. was not simply an after-thought. To many, it was a threat, a slippery slope toward socialized medicine, a Communist plot.

Now, more than a half century later, American health continues to suffer. We have been unable and unwilling to “walk back” these decisions, and continue to insist that American scientific brilliance, industrial might, technologic know-how, and massive medical funding will ultimately seize the day. But evidence to the contrary continues to pile up.

Trump’s attempt to dismantle the ACA and downsize Medicaid expansion has boomeranged to the extent that policy analysts have worked hard to expose the negative impacts that would result from eliminating coverage of vulnerable populations. To make their cases, analysts have been exposing some eye-popping comparisons with our neighbors to the north who are all covered under a single payer system.

Case in point: In the March 14, 2017 issue of Annals of Internal Medicine, authors compared the fate of patients followed by the Canadian Cystic Fibrosis Registry to those in the U.S.Cystic Fibrosis Registry. The study included patients from 42 specialty clinics in Canada and 110 clinics in the U.S. Their choice of disease was interesting because it has been a major target of America’s Medical Industrial Complex.

The disease is genetic and incurable, creating excess production of mucous secretions in multiple organs, but especially in the lungs where infected secretions progressively destroy a child and young adult’s breathing capacity. It effects approximately 1 in 10,000 live births in both countries. Effective treatment involves early diagnosis, hands on percussive treatments to clear the mucus, active family and community involvement, break-through pharmaceuticals, and lung transplants for some.

With America’s scientific and technologic might, one would predict that the U.S. would outperform Canada. But here is the sad truth:

1. Canadians with cystic fibrosis live approximately 10 years longer than their counterparts in the U.S. – 50.9 years vs. 40.6 years.

2. The gap in survival has been growing larger over the past two decades.

3. Canadian patients with the disease are afforded lung transplantation with much greater frequency than in the U.S. – 10.3% vs. 6.5%.

4. The factor most directly associated with morbidity and mortality is lack of insurance coverage. U.S. Medicaid patients with the disease fare substantially better than those without insurance.

5. The adjusted risk of death for a patient with the disease in Canada is 34% lower than in the U.S.

6. The newest pharmaceuticals for cystic fibrosis are substantially less expensive in Canada than in the U.S. where some are priced at $250,000 a year.

The Commonwealth Fund authors David Squires and David Blumenthal recently stated that In medical terms, we might call uninsurance a “comorbidity”—one unique to the United States among all industrialized nations, and just as deadly as pneumonia or diabetes.”

This battle with Trump over the survival of the Affordable Care Act offers a chance to America to start over on health delivery. Scientific know how can not outperform coverage and prevention. That’s been well established. Kids with cystic fibrosis and many other innocents hang in the balance. This is a fight worth having.

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