With the rent-a-mobs creating made-for-cable-TV incidents; with the insurance industry spending 1.4 million dollars a day to stop reform; and with insurance lobbyists declaring premature victory in the pages of Business Week, it is easy to forget what the health care debate is all about. It’s about a broken system where cancer patients can’t get treatment, and where the insurance bureaucrats who block access to surgery, chemotherapy and other expensive treatments are handsomely rewarded for denying proven, effective care to those in need.
The health care debate is about people like Robin Beaton. Beaton is a Texas nurse who was diagnosed with breast cancer. According to CNN, Blue Cross claimed that a previous case of acne made Beaton’s cancer a pre-existing condition. They rescinded her policy; without insurance, and the $30,000 deposit the hospital required for her treatment to go forward, Beaton delayed her treatment. Beaton’s cancer spread, and the once-treatable cancer could now kill her.
Blue Cross, Beaton’s insurer, rewarded employees who blocked cancer patients like Beaton from receiving treatment with glowing performance evaluations. According to the LA Times, the House Energy and Commerce Committee found:
"that one Blue Cross employee earned a perfect score of "5" for "exceptional performance" on an evaluation that noted the employee’s role in dropping thousands of policyholders and avoiding nearly $10 million worth of medical care."
This is part of an effort by the insurance industry to please Wall Street by reducing the medical loss ratio, and thereby artificially increasing their profits. The LA Times reported on Health Net’s practice of setting rescission quotas for their actuaries:
"The documents show that in 2002, the company’s goal for Barbara Fowler, Health Net’s senior analyst in charge of rescission reviews, was 15 cancellations a month. She exceeded that, rescinding 275 policies that year — a monthly average of 22.9.
More recently, her goals were expressed in financial terms. Her supervisor described 2003 as a "banner year" for Fowler because the company avoided about "$6 million in unnecessary health care expenses" through her rescission of 301 policies — one more than her performance goal."
When Fowler exceeded her "goal" Health Net rewarded her with $20,000 in bonuses. The reality is that the greed of people like Fowler creates a system where the chronically ill–the people who most need medical care–can’t find health insurance. In our current system there are 11 million chronically ill Americans who lack health insurance. Some chronically ill patients lack coverage because their policies were canceled by insurance bureaucrats chasing after the next bonus. Other patients lack insurance because, after they came down with a serious illness and filed expensive claims, the insurance company purged their employer. Former CIGNA Vice President Wendell Potter described the pathetic process of purging companies who employ chronically ill workers to the Huffington Post:
"What that means, is that when a business customer of an insurance company…when the employees of that business file claims that are above what the insurance company’s underwriters expected, then that will trigger a review, and very often and very likely when that business comes up for renewal, the underwriters will jack the premiums up so much, so high, that the business has no alternative but to drop the insurance for their employees. And it can sometimes take just one claim from one employee for this to happen."
Uninsured chronically ill patients skip out on their treatment. Their stories are stories like that of Marianne Falacienski. According to the Wall Street Journal Falacienski is a thirty-something uninsured Crohn’s patient who owed $3,000 for a blood transfusion. Because she couldn’t afford the bill from the blood transfusion, Falacienski was putting off the expensive tests she needed to keep an eye on her disease. Flacienski told the Journal:
"I’m just trying not to get sick again."
Falacienski isn’t alone; a recent study found that twenty-seven percent of multiple sclerosis patients are choosing not to fill their prescriptions. Patients who do not receive proper treatment inevitably end up in emergency rooms with serious complications. These treatments can cost the system hundreds of thousands of dollars. And, even with expensive last-ditch treatments, many people who put off seeking treatment die from preventable complications.
While the system is broken for chronically ill patients and the doctors who seek to heal them, it works just fine for insurance executives. They’re all bringing home at least seven figure salaries. One of them, former United Health Care CEO Bill McGuire, was paid $1.5 billion over the course of his 19 year tenure.
Health care reform isn’t about the President of the United States. Health care reform isn’t about the rent-a-mob McGuire and his ilk are throwing crumbs to. It is about reducing greed and bad incentives. It is about empowering patients to seek proper treatment. And it is about eliminating the scourge of discriminating against the chronically ill from our society.
The House bill, and its sister in the Senate, achieve this through banning denials due to pre-existing conditions and the absurd practice of rescission. The House bill, and its sister in the Senate, create a public option in order to force the insurance companies to compete on the basis of providing quality service to their employees, instead of competing on the basis of how much can be saved through bogus denials. And the House bill, along with its sister in the Senate, ensure that chronically ill patients can afford treatment by placing an annual out-of-pocket cap on medical bills.