Paul Krugman: The Health Care Racket

[cal04]

Is the health insurance business a racket? Yes, literally — or so say two New York hospitals, which have filed a racketeering lawsuit against UnitedHealth Group and several of its affiliates.

I don’t know how the case will turn out. But whatever happens in court, the lawsuit illustrates perfectly the dysfunctional nature of our health insurance system, a system in which resources that could have been used to pay for medical care are instead wasted in a zero-sum struggle over who ends up with the bill.

The two hospitals accuse UnitedHealth of operating a “rogue business plan” designed to avoid paying clients’ medical bills. For example, the suit alleges that patients were falsely told that Flushing Hospital was “not a network provider” so UnitedHealth did not pay the full network rate. UnitedHealth has already settled charges of misleading clients about providers’ status brought by New York’s attorney general: the company paid restitution to plan members, while attributing the problem to computer errors.

The legal outcome will presumably turn on whether there was deception as well as denial — on whether it can be proved that UnitedHealth deliberately misled plan members. But it’s a fact that insurers spend a lot of money looking for ways to reject insurance claims. And health care providers, in turn, spend billions on “denial management,” employing specialist firms — including Ingenix, a subsidiary of, yes, UnitedHealth — to fight the insurers.

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[JanMichael]

1. Health Care and War...Both rackets.

And who do these rackets benefit?

[Cleita]

2. It's about time they were called on the carpet.

They all lie to get your business and then you find out you've been had. It's especially pervasive with the Medicare HMO's and PPV's. I have a story that I won't tell here of what they did to my late husband that almost caused him to die.

[antigop]

3. I'm sick of insurance companies.

Medicare for All-- NOW!

[barb162]

4. I think the war is sucking so much out of our economy

that health care for all is an idea that can't be done anymore.

[antigop]

8. I think they purposely ran up the debt to try to kill off Medicare and Social Security

They couldn't eliminate these programs outright because public outrage would be so high -- so they ran up the debt to make it difficult, if not impossible to honor the trust fund bonds when they come due.

[barb162]

11. They are doing that as we speak and for the last 6 yrs.

The truly rich don't like those programs as they suck a lot off corporate profits.

[Cleita]

9. Actually, it's a matter of harnessing the money that the

insurance companies are getting and diverting it to single payer universal real health care. Since Medicare's administrative costs are only 2% to 3%, it would be essential that any health plan be like Medicare and the extra savings would go into covering those who aren't covered now.

Right now I am more in favor of states creating these programs like the Kuehl bill in California that our terminator guvornator terminated so he could present his own plan written by the insurance companies. However, we are doing a referendum to push it through.

It's because the Federal government under Bush is creating this huge deficit that I would just as soon do this at the state level until we can get rid of the criminals in the White House and then pull it all together under one hat.

[barb162]

14. You have a point but then again you'll se some states getting

it and other states floundering, especially in the poor states where they probably need federal medical insurance the most, where the most uninsured live. CA gets a lot of federal tax dollars as I recall. My state ships a lot of federal tax dollars out and never sees the money again. BTW, I don't know which states have the highest % of uninsured, but I suspect it's the poorest states with the fewest well-paying jobs.

[Cleita]

15. True, but we have to start somewhere.

This is how Canada got their's. It started in Saskatchewan and spread from province to province. If California can get the Kuehl bill instated, it's a start. If it weren't for Arnold and the Republic cheating machine that brought us Arnold we would already have it and other states would be looking at us saying we want that. Of course the poor states would have to start petitioning the federal government to help subsidy their program and the federal government would have to address this because they wouldn't be able to ignore it.

[barb162]

16. good points

[antigop]

17. Hey, Cleita -- if CA gets single-payer universal coverage, guess where I'm moving? n/t

[Cleita]

18. Welcome all. It's a big state and it has the most money, I believe,

of any state of the union. It does cost more to live here though, so make sure you have all your ducks in a row before you make the big step. Let me know when you do.

:hi:

[antigop]

19. Hey, if I have to live in a tent -- it will be worth it to have peace of mind n/t

[PA Democrat]

21. Check out Krugman's stats. It IS possible if someone actually

eliminated the obscene excess profiteering occurring in our current health care system. From Krugman's article:



"McKinsey estimates that the United States pays $66 billion a year in excess drug costs, and overpays for medical devices like knee and hip implants, too.

To put these numbers in perspective: McKinsey estimates the cost of providing full medical care to all of America’s uninsured at $77 billion a year. Either eliminating the excess administrative costs of private health insurers, or paying what the rest of the world pays for drugs and medical devices, would by itself more or less pay the cost of covering all the uninsured."

[dysfunctional press]

5. overhaul medicare first, then.

i have medicare, and it isn't always the best thing.

[barb162]

7. But it's way better than being uninsured

like so many in our economy these days

[Cleita]

12. I do too, but it's a helluva lot better than the catastrophic

insurance policy I had before. Also, when Medicare was signed into law, my father was insured under it and it took care of his medical needs as good as any private insurance did at the time. It's been the years spent that the Republics have been underfunding and complicating it, reducing benefits, that has made it need an overhaul.

[mainer]

25. Medicare is actually pretty efficient

Health care providers I know would much rather deal with Medicare than with private insurance companies. I don't know why we don't use it as our model for universal health care. Just expand it to cover more and more segments of the population.

[Cleita]

28. There is a movement to do just that.

Also, I have been writing my reps suggesting that Medicare be sold on the open market for everyone under 65. The reason would be to compete with the insurance carriers. The fact is that Medicare could be sold for a lot less in premiums than insurance today. It would be an attractive alternative for employers and unions, not to mention individuals who find themselves without insurance coverage when they turn fifty.

Since it is non-profit, it would undercut the insurance and HMO greedy pigs, who would have to get out of the business. It's free market too so the DLC'ers, Republicks, and other conservatives can't scream socialism. Once the insurance companies and other for profits leave, we can talk about true single payer universal insurance. Most of the administration would be in place and funding it properly would be the next step.

[barb162]

6. Krugman for President. I love this guy.

[Selatius]

10. Look, all of these companies are for-profit entities.

These corporations, by law, must generate a profit for the shareholders who are the owners of these enterprises. The result is patient care is subordinate to profit margins. Where the two conflict, health care is sacrificed in favor of profit.

[Cleita]

13. Not only that insurance is coverage for something that might

happen, like a disaster or accident, but that no one is expecting to happen. Health care shouldn't even be sold as insurance because it's a totally different entity. Not only are we going to get sick, we are going to get old and our health care needs are going to increase. Now this is about the time that insurance dumps you. So they should get out of the business altogether.

[frustrated_lefty]

20. Krugman for Secretary of Finance

or any office which serves the purpose. He's a true, blue American hero. He looks into the mess that's been made and tries to find solutions.

[Vinca]

22. When arguing with a Republican about universal health care,

he made a good point about why hospital/doctor bills are so high. He said since insurance companies negotiate fees based on a percentage, medicals bills are upped by providers in order to make more money. If insurance pays 10%, the provider will up the bill from $100 to $200 to double their take. It's all a racket and millions of us are paying the price in pain, suffering and premature death because we can't afford to play the game.

[bleedingheart]

23. I was told by my pediatrician that United Health was dropped by them

because they would not pay.

So what happens to the patients that had United Health...they have to find a new pediatrician. While I understand the pediatrician's perspective, how is that fair to patients? You pay for insurance but if you pay for bum insurance (without knowing it)..you will find yourself searching for someone to help you.

[mainer]

24. This was what Hillary didn't get

It angered health providers no end that when she was exploring ways to provide health care to Americans, she invited the health insurance companies into the planning -- but didn't include ANY DOCTORS. She gave the middlemen all the power -- the very same middlemen who scoop up enormous percentages of the health care dollar.

I think -- I hope -- she's learned her lesson.

[Cleita]

29. She got it backwards.

It's the doctors and other health care providers that should have been invited, not the insurance carriers. This is one of the reasons $Hillary will not have my vote in the primaries.

[PA Democrat]

26. UnitedHealth Group CEO William McGuire will cheat policy holders to earn his obscene salary

The whole board of directors of this criminal empire has profited nicely from cheating people out of health care and shady stock option deals. They belong in jail. Read about their criminal activities here:

http://www.startribune.com/1069/story/386343.html
http://www.startribune.com/535/story/751910.html


But they have been protected because they have many powerful politicians in their pockets. Check out McGuire's campaign contributions:

http://www.newsmeat.com/ceo_political_donations/William_McGuire.php

[lapislzi]

27. No one should be surprised by this

As long as health care is operated as a "for profit" BUSINESS, this kind of thing is just going to continue, with no peace for the wicked and no rest for the weary.

Providing a high standard of health care--the standard one would expect from a wealthy industrialized country--and making profits are not necessarily mutually exclusive, but in our economic climate of rampant greed, extremely unlikely. Guess which one is going to be sacrificed? Hmm...here's a clue...the Decider said something similar the other day, only it was about peace and profits. Why should health and profits not follow the same model?

Why has the insurance "industry" even inserted itself into the medical profession? They are nothing but parasites.

Give me universal single-payer health care--the sooner, the better.

[cosmicdot]

30. Donna Shalala is on UnitedHealth's Board of Directors

the person Bill Clinton chose to be his/our Health and Human Services Secretary - isn't it special that she's aiding, abetting and profitting off our healthcare mess/crisis?

Also, on the Board of Directors is 911 cover up expert Tom Kean

it's a nonpartisan world in corporate america ... they get along just fine in the Board rooms

Board of Directors

James A. Johnson
Douglas W. Leatherdale
William W. McGuire, M.D.
Mary O. Mundinger, Ph.D.
William C. Ballard, Jr.
Richard T. Burke
Stephen J. Hemsley
Donna E. Shalala, Ph.D.
Thomas H. Kean
Robert L. Ryan
William G. Spears
Gail R. Wilensky, Ph.D.

http://www.sec.gov/Archives/edgar/data/731766/000119312506075892/ddef14a.htm

side note:
Medicare Rx 'choices' are limited when UnitedHealth IS the AARP plans, has it own UnitedHealth plans, includes the PacifiCare plans (bought out by UnitedHealth in 2005) http://milwaukee.bizjournals.com/milwaukee/stories/2005/12/19/daily17.html?from_yf=1 ... United Health had merged with Humana (1998) ... of course, Humana has its plans ... http://www.unitedhealthgroup.com/news/rel1998/0713HumanaDate.htm (don't know if they're still part of the same group or not) ... the SecureHorizon ads being shown on TV belongs to Unitedhealth (the backdoor privatization of Medicare https://www.securehorizons.com/)



happy faces

“After contributing to Medicare over the years, people deserve a quality health plan that is affordable. I love helping people find the right plan for them. It’s not just health care information. It’s people’s lives. And, I care.“ — Kathryn Wilson, SecureHorizons Customer Service Representative

There's that 'affordable' word that's tossed about a lot.

Bart Starr has been a SecureHorizons member for over a year the website says.


Mr. Ballard has been Of Counsel to Greenebaum Doll & McDonald PLLC, a law firm in Louisville, Kentucky, since June 1992. In 1992, Mr. Ballard retired after serving 22 years as the Chief Financial Officer and a director of Humana, Inc., a company operating managed health care facilities. Mr. Ballard is also a director of Health Care REIT, Inc.

(Health Care REIT, Inc. is a self-administered, equity real estate investment trust that invests across the full spectrum of senior housing and health care real estate including independent living / continuing care retirement communities, assisted living facilities, skilled nursing facilities, hospitals, long-term acute care hospitals and medical office buildings.)

Mr. Burke has been a member of our Board of Directors since our inception and was Chief Executive Officer of UnitedHealthcare, Inc., our predecessor corporation, until February 1988. From 1995 until February 2001, Mr. Burke was the owner, Chief Executive Officer and Governor of the Phoenix Coyotes, a National Hockey League team. Mr. Burke is also a director of First Cash Financial Services, Inc., and Meritage Homes Corporation.

Mr. Hemsley is our President and Chief Operating Officer and has been a member of the Board of Directors since February 2000. Mr. Hemsley joined the Company in May 1997 as Senior Executive Vice President. He became Chief Operating Officer in September 1998 and was named President in May 1999.

Mr. Johnson has been the Vice Chairman of Perseus LLC, a private merchant banking and investment firm, since April 2001. From January 2000 until April 2001, Mr. Johnson served as the Chairman and Chief Executive Officer of Johnson Capital Partners, a private investment company. From January 1999 until December 1999, Mr. Johnson was the Chairman of the Executive Committee of Fannie Mae, a federally-chartered financial services company providing products and services related to home mortgages. From 1990 until January 1999, Mr. Johnson served as the Chairman and Chief Executive Officer of Fannie Mae. Mr. Johnson is also a director of Gannett Co., Inc., The Goldman Sachs Group, Inc., KB Home, Target Corporation, and Temple-Inland, Inc.

Shalala is a Director of Gannett, too.

Mr. Kean is the retired President of Drew University in New Jersey, where he served in such capacity from February 1990 until July 2005. Mr. Kean currently serves as Chairman of the Board of Trustees of the Robert Wood Johnson Foundation. From December 2002 until August 2004, Mr. Kean served as Chair of the 9/11 Commission, an independent, bipartisan commission which prepared a complete account of the circumstances surrounding the September 11, 2001 terrorist attacks and provided recommendations designed to guard against future attacks. Mr. Kean served as the Governor of the State of New Jersey from 1982 to 1990. From 1968 to 1977, Mr. Kean served in the New Jersey State Assembly, including two years in the position of Speaker. Mr. Kean is also a director of Amerada Hess Corporation, Aramark Corporation, CIT Group Inc., Franklin Resources, Inc., and The Pepsi Bottling Group, Inc.

(He became chairman of the board of the Robert Wood Johnson Foundation, a health-care charity, in 2005. The United Health Foundation gave it $80,000 in 2004. Back-scratching? Director Wilensky is an adviser to the Robert Wood Johnson Foundation.)

Mr. Leatherdale is the retired Chairman and Chief Executive Officer of The St. Paul Companies, Inc., where he served in such capacity from 1990 until October 2001. The St. Paul Companies, Inc. is an insurance, financial and general business corporation. Mr. Leatherdale is also a director of Xcel Energy, Inc.

Dr. McGuire is the Chairman of our Board of Directors and our Chief Executive Officer. Dr. McGuire joined the Company as Executive Vice President in November 1988 and became Chairman and Chief Executive Officer in 1991. Dr. McGuire also served as our Chief Operating Officer from May 1989 to June 1995 and as our President from November 1989 until May 1999.

Dr. Mundinger has been the Dean of the School of Nursing at Columbia University in New York since January 1986 and Centennial Professor of Health Policy at the School of Nursing since July 1994. Dr. Mundinger has also been Associate Dean, Faculty of Medicine at Columbia University since January 1986. Dr. Mundinger is also a director of Cell Therapeutics, Inc., and Gentiva Health Services, Inc.

(Gentiva Health Services, Inc. is the nation's largest provider of comprehensive home health and related services; Director Wilensky is, also, a Gentiva Board member)

Mr. Ryan is the retired Senior Vice President and Chief Financial Officer of Medtronic, Inc., a leading medical technology company specializing in implantable and invasive therapies, where he served in such capacity from 1993 until April 2005. Mr. Ryan is also a director of Hewlett Packard Company, The Black & Decker Corporation, and General Mills, Inc.


Dr. Shalala has been the President of the University of Miami in Florida since June 2001. From January 2001 until June 2001, Dr. Shalala was a Visiting Distinguished Fellow at the Center for Public Service at Brookings Institution, an independent non-partisan organization devoted to research, analysis, education and publication of certain public policy issues. Dr. Shalala served as the U.S. Secretary of Health and Human Services from January 1993 until January 2001. From 1987 to 1993, Dr. Shalala served as the Chancellor of the University of Wisconsin-Madison, and from 1980 until 1986, she was the President of Hunter College in New York. From March 1977 to July 1980, Dr. Shalala served as Assistant Secretary for the Department of Housing and Urban Development. Dr. Shalala is also a director of Gannett Co., Inc., and Lennar Corporation.

Mr. Spears has been the Senior Principal of Spears Grisanti & Brown LLC, an investment counseling and management firm, since June 1999. Mr. Spears was the Chairman of the Board of Spears, Benzak, Salomon & Farrell, Inc., an investment counseling and management firm, from 1972 until 1999. In April 1995, Spears, Benzak, Salomon & Farrell became a wholly owned subsidiary of KeyCorp, a financial services company. Mr. Spears is also a director of Avatar Holdings, Inc.

Dr. Wilensky has been a senior fellow at Project HOPE, an international health foundation, since 1993. From May 2001 to May 2003, she was the Co-Chair of the President’s Task Force to Improve Health Care for our Nation’s Veterans. From 1997 to 2001 she was also Chair of the Medicare Payment Advisory Commission. From 1992 to 1993, Dr. Wilensky served as the Deputy Assistant to President George H.W. Bush for policy development, and from 1990 to 1992, she was the Administrator of the Health Care Financing Administration (now known as the Centers for Medicare and Medicaid Services) directing the Medicaid and Medicare programs for the United States. Dr. Wilensky is also a director of Cephalon, Inc., Gentiva Health Services, Inc., Manor Care, Inc., Quest Diagnostics Incorporated, and SRA International Inc.

The Ties That May Have Tied the Directors' Hands
http://www.businessweek.com/magazine/content/06_28/b3992076.htm

[bobbolink]

31. Health insurance a racket? HELL, YES!!!

It's time for all DEMS to start shouting this!!

:applause: for Krugman!