Health Care
Last night, the House had its annual speaker's dinner ('50s theme). This is always a great opportunity in the middle of the session to take a break from our battles and remind ourselves that we like each other and that we are part of a big team trying to work out solutions to tough issues for the good of our citizens.
Speaking of tough issues -- a Senate committee struggled this morning with SB 61 (Gross Receipts Tax on Privately Owned Health Care Organizations) and took no action on the bill. This might be regarded as a companion bill to SB 34 (Patient Access Reform), which I wrote about in the entry of February 1, 2005. Both are aimed at addressed perceived market dominance (and alleged control) by IHC.
There was a very impressive showing on the hill against SB 61 (probably a couple thousand people). They were lined up outside the capitol with loudspeakers broadcasting the hearing. It always impresses me that we can debate important topics in a peaceful (but passionate) manner.
As I wrote in the earlier entry, I'm not ready to implement either of these bills (because I'm not sure what the effects will be). But, it definitely would be a good thing to study the issue of IHC's place in the market (wonderful integrated health care system v. monopolist). I wouldn't mind if we passed something requiring separation of health care and health insurance ownership or even taxation of a unified system, as SB 61 proposes, as long as it the measure has a delayed implementation date allowing us to study the issue in more detail. When an entity has such market place dominance and political power (as shown by the impressive rally), it is an important move to make sure they are at the table in a substantive way, rather than just a political way. A delayed implementation measure would assure that.
UPDATE (evening): SB 34 shot out of the Senate like a cannon (19-8). As the D-News says, "The House now gets to wrestle with the question." The D-News also has an article on SB 61, which was substituted in committee to make it so that owning both a health care insurance business and a health care delivery business is an unfair business practice act; however, action was not taken on that substitute to pass it out of committee. SB 61, obviously, is now pointed toward the forced separation approach I mentioned above. As I wrote earlier, if we're going to do anything, this is the correct way to approach it.
However, whether we should do anything this session or whether we should first study the issue in more detail is the decision we face. Having discussed this issue several times with the maker of the substitute bill, I'm confident he would agree with that statement. Not knowing he was going to make that substitution, I had told Sen. Peterson (a great friend and legislator) before the meeting, "It doesn't matter a whole lot to me what happens in the Senate. I'm going to work to push this issue into a task force." The Senate is a tough-minded bunch, but I wonder if they won't end up agreeing we should study this issue. This is one dog-fight I'm happy to get in the middle of -- because legislative process might just do something great for health care in this state by addressing this issue head on.
A friend and constituent e-mailed me the following in response to my above entry.
I agreed with most of the comments posted on www.steveu.com today, with one exception. It seems very wrong to me to pass questionable legislation with extended implementation dates and then study it. If it's questionable legislation, defeat it. Then study the issues and pass good legislation. I do respect your opinion, however, and am interested why you would suggest passing these bills given their lack of study and doing the study afterward.
Does anyone care to help me with the response?
UPDATE II (02/13/05): I really am surprised by the attention SB 34 and SB 61 are generating. Today, all Utah dailies have major articles on the bills. Also, check out the excellent analysis in the comments below by Chris Barker and on 2/1/05 by Chris Barker and by Charley Foster -- who has a really fine blog on Utah happenings.
Speaking of tough issues -- a Senate committee struggled this morning with SB 61 (Gross Receipts Tax on Privately Owned Health Care Organizations) and took no action on the bill. This might be regarded as a companion bill to SB 34 (Patient Access Reform), which I wrote about in the entry of February 1, 2005. Both are aimed at addressed perceived market dominance (and alleged control) by IHC.
There was a very impressive showing on the hill against SB 61 (probably a couple thousand people). They were lined up outside the capitol with loudspeakers broadcasting the hearing. It always impresses me that we can debate important topics in a peaceful (but passionate) manner.
As I wrote in the earlier entry, I'm not ready to implement either of these bills (because I'm not sure what the effects will be). But, it definitely would be a good thing to study the issue of IHC's place in the market (wonderful integrated health care system v. monopolist). I wouldn't mind if we passed something requiring separation of health care and health insurance ownership or even taxation of a unified system, as SB 61 proposes, as long as it the measure has a delayed implementation date allowing us to study the issue in more detail. When an entity has such market place dominance and political power (as shown by the impressive rally), it is an important move to make sure they are at the table in a substantive way, rather than just a political way. A delayed implementation measure would assure that.
UPDATE (evening): SB 34 shot out of the Senate like a cannon (19-8). As the D-News says, "The House now gets to wrestle with the question." The D-News also has an article on SB 61, which was substituted in committee to make it so that owning both a health care insurance business and a health care delivery business is an unfair business practice act; however, action was not taken on that substitute to pass it out of committee. SB 61, obviously, is now pointed toward the forced separation approach I mentioned above. As I wrote earlier, if we're going to do anything, this is the correct way to approach it.
However, whether we should do anything this session or whether we should first study the issue in more detail is the decision we face. Having discussed this issue several times with the maker of the substitute bill, I'm confident he would agree with that statement. Not knowing he was going to make that substitution, I had told Sen. Peterson (a great friend and legislator) before the meeting, "It doesn't matter a whole lot to me what happens in the Senate. I'm going to work to push this issue into a task force." The Senate is a tough-minded bunch, but I wonder if they won't end up agreeing we should study this issue. This is one dog-fight I'm happy to get in the middle of -- because legislative process might just do something great for health care in this state by addressing this issue head on.
A friend and constituent e-mailed me the following in response to my above entry.
I agreed with most of the comments posted on www.steveu.com today, with one exception. It seems very wrong to me to pass questionable legislation with extended implementation dates and then study it. If it's questionable legislation, defeat it. Then study the issues and pass good legislation. I do respect your opinion, however, and am interested why you would suggest passing these bills given their lack of study and doing the study afterward.
Does anyone care to help me with the response?
UPDATE II (02/13/05): I really am surprised by the attention SB 34 and SB 61 are generating. Today, all Utah dailies have major articles on the bills. Also, check out the excellent analysis in the comments below by Chris Barker and on 2/1/05 by Chris Barker and by Charley Foster -- who has a really fine blog on Utah happenings.
posted by steve u. at 2/11/2005
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33 Comments:
What about passing SB34, and leaving SB61 (or the proposed substitute) for further study?
SB34 certainly would not kill IHC in a sudden way.
Some smaller health care organizations may not be able to endure the new requirements as well as IHC, but it would not be the firing squad for IHC. As I posted in the SB34 thread - it is possible, given its size - that IHC could actually benefit from SB34 – where more business may end up at IHC facilities.
I believe that SB61, and the proposed substitute each would implement a quick death for IHC as the institution it is today.
I commend Senator Darin G. Peterson for his honesty in the proposed substitute bill.
He says straight up what some of the legislators want to do. As I read his proposal, and the sections of the Utah Code that he refers to – I understand it to say:
“It is not legal for a party to own a health plan, and a hospital”.
That sounds like pretty risky legislation to me. Have I missed something here?
Even if SB34 were to be a win for IHC, it would still lessen their power base, as the citizens of Utah would hold more power (choice) in their own hands.
Will it cost more? I think yes.
Will it be worth the price - I don't know.
But apparently, that is a price that many in Utah, and their legislators want to pay (or at least take a risk that it is the best course).
With SB34 in place, IHC would have less power - something that was clearly on the mind of Senator Waddups, I don't recall the exact words, but that is the message he relayed, as I listened to his comments at the committee meeting this morning.
Next year (or in the mean time, using a legislative task force?) the question of dismembering vertically integrated systems (only one in actuality) could be tackled with much more information, study and real-world results.
Personally, I feel that having an efficient, vertically integrated system, such as IHC is a tremendous asset to Utah.
Many others around the country, and the world also think we have a VERY good thing here.
We can retain some of the benefits of the integrated system we now enjoy, and those who believe that IHC is the 'dark-side' can get some relief too.
I do agree with you, that SB34 should be approached very carefully – but it would appear to have far less potential to do significant harm to Utah Health care – compared to SB61 and its proposed substitute.
I am not an advocate of SB34, but perhaps taking this less traumatic step first, may enable everyone to come closer together, and enable all the parties to work together in a more productive manner.
Thanks again for all you are doing!
Poor planning premotes poor performance!
These plans should be studied fully before any decisions are made. Either of these plans will hurt the people of Utah in the end.
Yes IHC is large. Has anyone considered that IHC also does more charitable care than most others in the State. What will happen when that is gone? IHC insurance has no requirements or guidlines that other insurances have not been doing for years.
What is the real reason for all of this. There is always someone out there wanting to destroy success. SB-61 is a hidden tax on the people of Utah, the small business owners, employers. The premiums will go up. This will be passed on the the employees or the insurance will be dropped because the owners will not be able to afford to provide insurance for the workers. Health care costs will go up. They are already devastating. IHC will not be able to provide charitable care as they do now. I see so many people who would be devastated by illness if not for IHC.
IHC strives to bring in new programs needed to help provide better health care for the people of Utah. (Cardiac program in Dixie)These programs are not cheap, however they have improved life for many in southern Utah.
Please reconsider breaking up a good thing because a few people have an axe to grind.
The issue of patient access has has been studied for many years (at least a decade)...including two previous attempts to pass even broader legislation by Senator Mike Dimitrich and Former Senator Chuck Stewart. SB34 has undergone many iterations after listening carefully to many constituencies. The issue was one of intense study by the Utah Medical Association for the past year; including a task force and retreat. It has been passed out of the Senate Labor and Business committee twice (the first time unanimously) for the past two years and has had extensive interim study this past year in that committee.
While some would like the paralysis of analysis, we’ll not know anything more in two more years than we know today. Without real competition, our health care system is headed off a cliff of uncontrolled costs. It is past time to act. Shooting another shot across the bow of IHC won't do anything. Real reform and legislation will.
The genius of this legislation is that it can functionally separate IHC, without interfering with their core corporate structure. Patients with IHC insurance (or one of their many brokered affiliates) will be able to find other willing providers, if IHC has slow or poor service. Patients by their choice will decide. This will be market driven reform. If IHC is really so cost effective and gives quality care, then no one will swing away from them. The status quo will continue. If they are inefficient, uncompassionate, and more costly that other providers, their market share will diminish one patient at a time. This is a far more controlled change in the market than immediate separation of IHC. SB34 provides immediate relief to the oppressed, but it doesn't throw the baby out with the bath water.
Now that the substitute bill is the one that passed the committee (5-1) the Senators are at least being completely honest about their intentions.
I'm still not sure what their motivations are.
Last night on the evening news, Senator Waddups stated that it is his belief that health care costs may temporarily rise in Utah (due to this bill), but that they will eventually become lower than they are now.
He also said that the only way we can tell if we have a problem is to dismantle IHC.
What is this bill trying to accomplish?-Increase the quality of care?--IHC is already top of the heap.
--The Mayo Clinic, among others, looks to IHC when reviewing quality health care.
-Lower premiums?--Their health plan is already among the lowest available.
--Utah has among the VERY lowest health care costs in the nation.
-Make it a better organization?--Just last week, IHC earned 'the best integrated health care system in the nation'.
--They had hundreds of competitors, but came out on top - again.
-Invite more competition?--IHC Health plans covers about the same amount of Utah citizens as Blue Cross (both between 400K-500K)
--IHC has 19 of Utah's 53 hospitals
--Of all Utah hospital visits, IHC accounts for just over 50%
---There is already diversity, and competition.Is it enough?
If not then SB34 may be a solution, but SB61 is a new, bigger problem - not a solution.
Supporters of this bill have made it well known that Utah health care premiums have risen 66% over the past few years.
I believe that number. But why has it?
Due to economic forces, Utah employers have shifted more of the financial burden to the employees - thus increasing the out-of-pocket expense to consumers. The percentage we pay now is more inline with national averages than it was previously.
Even with those increases, Utah is still among the very lowest in the nation.
Should this bill pass, what factors and forces will it introduce that will lower our health care costs when they are already much lower than the national average?How would this bill have lowered that 66%?
Will making the most effective competitor become less effective (possibly much-less) help to lower costs?
Senator Waddups has stated that he is afraid that IHC is acting as a for-profit, and breaking them up is the only way we can figure it out.
So, he wants to destroy something that is by prominent measures, the best of the best at what they do.
Will he then be left to do forensic analysis to determine if he made the right choice?
At that time it will be far too late to repair what has been destroyed, should that analysis prove that IHC was acting appropriately.
He has taken issue with a large 'income surplus' that IHC took in last year.
Large is relative.
IHC reported that they budget for 2.5% over expenses.
IHC pays its bills as they go, paying cash rather than financing.
It takes quite a lot of money to keep health facilities modern, and buy new equipment.
When there is a surplus, IHC's unpaid board gets nothing from it.
IHC leaders do not get an incentive when they make a profit.
Those surpluses simply go back into providing Utah with low-cost health care.
Personally, I would rather see a financially secure system, than one whose solvency is continually in question.
I see it as sound business.
IHC reports that the surpluses do not mount year after year.
If this financial information is not true, then they (IHC)need to be dealt with in a strong manner.
If they are true, then I don't see where the issue is with the surplus.
IHC as a system has passed the not-for-profit test several times. Their Health Plan is currently paying taxes.
If the not-for-profit status is no longer true, the Legislature (or Attorney General?) should prove that it is not true.
The plan, according to Senator Waddups is 'we have to dismantle this so that we can see if there is a problem'.
That approach is a problem!
I am very concerned by that line of thinking.
I looked forward to hearing from Senator Waddups today - KSL radio tried to get him on the air this morning - but Senator Waddups was busy with SB77.
Hopefully he will make room in his schedule to explain why he is doing this - why he is willing (eager?) to destroy something, and then determine if he made the right choice.
Representative Urquhart, please do what ever it takes to make sure that this is evaluated by an impartial entity, and studied for a period of time warranted for an issue so significant to all of Utah.
Thanks again for being level headed about this.
Since I posted last week - about who has responsibility for monopolistic behavior - I have read a great deal in the Utah Code, the FTC regulations, the Dept. of Justice, the US Constitution, and the Utah Constitution. I have had difficulty finding the amendments to the Utah Constitution...
(Yeah, I also read 1600 page tech manuals for fun too!)
Now that Substitute bill 4 has passed reading two.
I'm not sure that I really understand where Senator Waddoups (pardon my incorrect spelling in previous posts) is coming from; he seems to change his comments and reasons almost daily.
Senator Waddoups said:
2/11 it is not our role to break up a business
2/14 IHC must be broken up to see if it was a problem
2/18 "IHC Health Plans is no different than Blue Cross, they should be taxed"
If his issue is taxation and non-profit - there are already laws in place that govern that. Why is he pursuing to break it up, then evaluate if they made the right choice?
Representative Urquhart, I admit that as a Computer Software Engineer, I am not nearly as familiar with the process as you are, and I am sincerely looking for answers to following questions, which I turned up as I researched.
To date, I have found nothing that indicates that it is the role of Legislature to:
-Determine if a monopoly exists.
-Pass judgment for adherence to existing law.
I have found evidence to make me wonder if the wrong people are looking at this.
The Utah constitution clearly defines the separation of powers, stating that:
"Section 1. [Three departments of government.] The powers of the government of the State of Utah shall be divided into three distinct departments, the Legislative, the Executive, and the Judicial; and no person charged with the exercise of powers properly belonging to one of these departments, shall exercise any functions appertaining to either of the others, except in the cases herein expressly directed or permitted."
The legislature passed the laws in question (Antitrust - though much of what I found in the Utah antitrust legislation points to Federal law).
Now the Senate is taking upon themselves the role of evaluating the adherence to those laws.
Section 26 of the Utah constitution states:
Sec. 26. [Enumeration of private laws forbidden.] The Legislature is prohibited from enacting any private or special laws in the following cases:
In all cases where a general law can be applicable, no special law shall be enacted.There are existing general laws (Antitrust, and Charitable non-profit requirements) which already cover this (proposed) specific law.
Why is this law constitutional?
Again- the authors have stated many times, that IHC is a monopoly... And they must do something about it.
Title 31A says that there is a special litigation fund set up to handle cases like this - so the Attorney General can do his job - bring Antitrust issues to court.
According to everything that I have found (so far)- it is the role of the Attorney General and the Courts to determine violation of antitrust, not the Legislature.
These are honest questions, to which I hope you can enlighten me.
Please point me to the Titles, Sections, Articles and Code, which define this as a Legislative function.
Given the distance this has already come, I am guessing that such material exists.
I applaud you for your stating we need a task force, long before the Senate realized (publicly) a need for it.
This substitute bill is still way off the mark - it enacts a punishment (which is also not in keeping with what I found in the Utah Constitution), and then sets up a task force to study it.
I agree with your other poster who asked, why this approach is the right one.
Thanks again!
Respectfully,
Chris Barker
In response to Dr. Gibby: You talk about wanting "real competition" when in fact, Dr. Gibby, real competition is here and you can't measure up to it. Your fear is that IHC is TOO GOOD and if you break them up they won't be as good, and you therefore will look better. You talk about the future being one of uncontrolled costs if you don't do something about IHC NOW. Dr. Gibby!! IHC IS controlling costs and you can't stand it because it means that you have to control your own costs in order to compete with IHC. Here's an example for you. IHC used to have a hospital in Idaho Falls. When they pulled out of Idaho and nobody had to compete with them anymore, health care costs, on a DRG to DRG comparison, rose 50-70% I know you would like your income to raise even half that, Dr. Gibby, and it will if IHC takes the hit from SB61 that you want them to.
Regarding SB34 & SB61, I am an insurance agent. I have been selling Individual and small group health plans for over 25 years. Many of the small employers I work with are on the verge of doing away with their group benefits due to the cost. If SB34 and or SB61 pass this will increase the cost of health care in Utah. The end result of an increase is more uninsured Utahans. Do not pass these bills.
dave olson said....SB34 is not about IHC, this bill is bad for every health care consumer in Utah. This bill eliminates choice of the least expensive insurance options in the state (HMO's and PPO's). This happens because provides no longer have a reason to discount in order to obtain or retain volume. It immediately costs insurance companies more claim dollars, because they are required to pay out-0f-network providers at 80% of a 95% allowable fee, rather than 60% of the "swing out of network existing benefit. Nat'l studies have proved these because premiums increase 9% to 28%.(The National Conference of State Legislatures',12/31/03). This bill protects competitors,not consumers. In addition, because premiums increase, the number of uninsureds will increase. This is a bad bill for everyone except a few providers anxious to build their practice through this mechanism. Please urge everyone to vote no on SB34.
When one gets elected a representative, they are to stive to do what's best for the State of Utah as a whole not use the legislative process to take care of "personal vendettas". SB34 and SB61 seem much more like a "personal vendetta" than what's best for Utah as a whole.
IHC currently has the best pricing in most cases for the most comprehemsive coverage. They don't limit the lifetime benefit to an individual like BCBS does. IHC is truly doing what they can to control costs to the average Utahn.
Don't fix it if it ain't broke and stop doing things that are going to increase my healthcare costs to satisfy your "personal vendetta".
That's how I feel. Health care costs increase rapidly enough without you causing it to increase more quickly.
IHC Health Plans is running an amazing campaign to get insurance brokers to defeat the spin off of the IHC Health Plan. Why would brokers care - well because IHC pays the highest commissions and overrides (contingent compensation - look up the Marsh suit by Spitizer)of all the carriers in Utah. IHC also gives brokers trips to sell their plans. Just yesterday, IHC sent out an annoucment to brokers annoucing a week long "sales bonus" trip to Mexico for those brokers that sell IHC plans. All the retoric about increasing health care cost is a ploy. The real reason is so the IHC Plan can keep their monopoly and the employees can keep their cushy jobs and brokers can keep their sweet commission deals. Utah needs more competion in the health insurance industry and breaking up the IHC monopoly is good for Utah.
dave olson said...If 4SB61 passes the government is forcing the break-up of one of the most effective health care organizations in America. The is anti-business and would result in higher health care premiums for business and consumers.Competing insurance companies admit that IHC Health Plans helps keep everyones' premiums lower, because it's good and providers have been willing to discount. The data exchange that the integrated system allows between providers and IHC Health Plans permits more effective health care delivery and proven "best practice medicine" in many areas. If sale to another insurance company happens, it could decrease competition, increase premiums from a for profit carrier, and lose jobs and local services to agents and consumers. Please ask everyone to defeat 4SB61.
Why should we tax the sick? I am sick of hearing this. Why should we charge the sick, but we do. It's not a tax on the sick its a tax one of the most profitable companies in Utah. I think any perosn with health insurance would love to have only a 3% increase in premium, but when was the last time that happened?
By the way, isn't it interesting that IHC buys an advertisement for all the independent insurance agents? Why didn't IHC disclose that on the ad?This is very complex argument with a very, very simple answer. Anyone that would get the emotion, profit motive out of the way would realize a simple economic fact. More fair competition means more choices and better prices. It is a true economic principle. Breaking IHC up into different companies can only help today’s insured’s in the long run. Sure some IHC insured may pay a little more, but they would have more choices and in the long run a more competitive market to shop for health insurance.
If all the hype about IHC is right, then giving a patient the choice of doctor will result in even more patients going to IHC, but let the market determine that not the hospital and clinic that own the insurance. Let the patient and doctor decide what is best for the patient.
This garbage that allowing a patient to choose will raise health care prices is insane. How will IHC paying an independent doctor 95% of what IHC pays there own doctors cost more? Is that Utah math? The only ones that will loose will be providers that don't provide patients with good, comprehensive health care because their patients will leave them.
It is amazing to me that in a state so many republicans that a major corporation like IHC will stoop to democratic scare tactics to protect itself and so many of you are biting hook, line and sinker.The only ones that may get hurt are the big wigs at IHC that get paid half a million or more to run this so called non-profit company. I know a lot of hard working Utahans in for profit companies that have gross payroll what one IHC executive gets a year.
IHC is the biggest of big businesses in Utah and don't kid yourself, they are very profitable.
If IHC really wants what is best for Utah, they would separate willingly, and not wait to be forced.
As an insurance agent I am very interested in both SB 61 and SB 34 and feel that neither one of them is needed. I have been involved in the health insurance industry, as an agent and employee of an insurance company, for over 20 years. Utah has some of the best health care available and at some of the lowest premiums of any state. It is my understanding that both IHC and Regence Blue Cross Blue Shield are opposed to SB 34. If these two competitiors are both opposed to a bill that many feel will only hurt one of them (IHC) then maybe we better take a closer look. They are both opposed to the SB 34 for many good reasons.
After cutting through all of the "rhetoric", much of which is complete nonsense... what is best for Utah? Is it dismantling a successful, integrated health care system (Ranked #1 in the USA in 2004) that provides over $80 Million per year in charity care for those that are unable to afford it on their own? This "dismantling" would result in higher costs due to elimination of the "discounted" fees that IHC is currently able to pass on to their patients that use a health plan that is contracted with IHC's doctors and facilities. We have already experienced mutliple years of "double digit" insurance premium increases... WHY WOULD WE WANT TO ENSURE THAT THOSE INCREASES WILL CONTINUE???
SB61 is bad for Utah Business... bad for Utah Consumers... just plan bad for Utah.
I wonder why anyone would take anything an insurance agent would say about this as credible? If the above posts are correct and IHC paid for a "independent insurance agent" ad, then we know who is on who's side.
A couple of points to consider:
1. Will double digit increases stop if these bills don't pass?
2. Where is all the double digit cash going? Its not going to the doctors?
3. If these bills pass it won't mean higher rates for all of Utah's insureds just the one's insured by IHC.
4. Why is IHC health insurance based in the Cayman Islands. Why isn't it based in Utah?
5. How can a "non-profit" company that pays its top executives over $500,000 a year complain about being looked at like a large for profit business?
6. When the Federal government broke up "Ma Bell" who did it help?
7. If having one integrated health care system in Utah is such a great idea, then lets kick all the private insurance companies out and go to a universal health care run by the government.
8. If things are so good at IHC and in Utah, then why are so many good doctors leaving the state?
9. When do our lawmakers have to disclose how much IHC and other insurance companies gave to their campaigns?
10. Where is Gov. Huntsman in all this, what is his opinion?
11. In politics, you can usually just follow the money to see what is happening. So ask yourself, who really stands to loose if these bills go through? Its not us poor Utah folk.
12. When was the last time you tried to get an individual policy from IHC? My insurance agent told me that we had a 50/50 chance of getting covered. What is IHC's placement of individual insurance policies? Remeber that sick people get turned down and have to go on the state paid insurance plan. That costs the state taxpayers more than what IHC gives in "charitiable" care.
I hope people really educate themselves instead of believing what their insurance agent or IHC executive tells them. We all deserve choice!
Did you know that your insurance agent gets up to 15% of your premium each month! Not to mention vacations and perks from the insurance companies for selling more policies. Hmmm.....food for thought.
Name calling is the refuge of a scoundrel. Relying on class warfare to make a point is speciuos at best. Can we have a real debate without resorting to throwing insults as a substitute for real dialogue?
I am an insurance agent. I have seen first hand the frustrations that people have purchasing and maintaining health plans. It is becoming cost prohibitive for employers to offer plans. I also work with many physicians and hear their frustrations with IHC. BUT, These bills are not a good solution.
I have been in the trenches helping consumers navigate the maze of health plans options features and benefits. I have had good clients with poor health declined for coverage. But the one thing I see without exception is the impact government regulation imposes on the cost structure of any insurance plan. It is a minefield for an agent to help a client with the enmity felt toward insurance companies of any stripe.
I have received commissions from health plans, this is simply to compensate me and my staff for the economic value I have provided to the health plan, my client and to the insurance company. The professinals that I work with care about people. What we do isn't easy and those that do this only for money don't last long.
Both physicians and executives make a good living. They do so as a natuaral consequence of economic forces. Good executives running an effecient and well respected company deserve what they make. Petty bitterness about that falls before any rational economic theory. Doctors make a good income too,isn't earning a fee for a service just another way of saying "commission". Almost without exception the physicians I know are honest hard working small business owners that take some pretty tremendous economic risks and should be compensated accordingly. So what's the real issue? THESE BILLS AND THE IMPACT ON THE AVERAGE GUY.
It is not about being republican or democrat. It is most importantly a fundamental debate about the cost and quality of health care in Utah. I talk to insureds and brokers from out of state. I belong to a health plan from my large national company, and I wish it was as affordable as an IHC plan. I pay double for my group plan what I would on an IHC group plan. I know what the alternatives are in other states and our costs in Utah and with IHC are very attractive. If these bills pass, ironically enough, the people that will continue to earn a good living are the same people making a good living now-the doctors and the executives (and that is ok!) But you and I will still loose. Isn't that really what everyone cares about. Representative Urquhart, I urge you to vote against these measures as they are bad for business and bad for the consumers that are my clients.
I love it when they say that IHC gives away $80 million a year in charity. How much do they get each year in tax free donations? How much would they "give" away if they weren't a "non-profit"?
Would one of you agents confirm or deny that IHC paid for an ad that looked like it came from you? I don't begrudge anyone making a commission. I think the post was referring to the money behind the independent agent ad.
Darin, it is IHC that is engaging in class warfare. They claim this is a tax on the sick, the poor. And yes, I am sure the million dollar CEO of IHC doesn't have to worry about covering his health care costs.
I am sorry but paying someone $500-700,000 a year to run a "non-profit" company just doesn't sound right. From what I saw in a Tribune article, several executives at IHC make over $400,000 a year with the top, if I remember right, at nearly $700,000 a year. I don't think that is moral or right. How many of us pay insurance premiums with our hard earned money just to support these over paid execs? I have no problem with a for-profit company paying their execs what ever they want, but a non-profit should be a bit more judicious with the donations and money they receive. What does that tell us when a company makes you file bankruptcy over a $3-5,000 medical bill when that company's top executive makes that in a day. It just doesn't seem right. And don't forget, these aren't even the doctors that spent dozens of years in school and generate all the income, these are the pencil pushers.
I am a small business owner, and yes we provide insurance, and yes it isn't IHC. My employees wanted IHC but several of them had OB doctors that weren't covered by IHC. I had a meeting with our employees and they agreed to pay more in premium to have their regular doctors. To me, a 12% increase or a 15% increase(supposed tax on sick added to 12%) isn't much of a difference if it gives me and my employees more choices. Our insurance agent each year shows us quotes from at least three companies and our choice of insurance company has been mostly because of choice of coverage.
I really believe the only way we are going to continue to provide health insurance for our employees is if costs start to decrease and not 1 insurance company of the three has ever come back with a decrease in rates so the 3% doesn't mean anything to me.
I would even choose a plan that covers less services with more options of providers than the opposite. I have had insurance for me and my employees for over 18 years and we will probably continue for 1-3 more years. We just can't take the 15-20% per year increase for so much longer no matter who the company is.
The reason I support the break-up of IHC is to promote more companies to come to Utah and cause more competition. Even in my business, we have had 6 major competitors come into our area and my prices in the last 5 years have decreased by over 30% so that I can stay in business and compete in the market. IHC is so big and has so much power with their network that other insurance companies don't want to come to Utah because they can't compete with IHC.
I have been going to the same doctor since I moved to Utah 19 years ago. I just saw him this week and asked him about this (by the way, my wife does go to an IHC OB). He says he is about done practing medicine and is considering moving to another state because he can't make a living anymore in Utah. He says he is actually making much less than he did even 10 years ago. I said that is was full of crap because my premiums keep going up. He said that his rates have not gone up 20% in 10 years, and that he is being reimbursed even less than 10 years ago.
...anyway....STEVEif you really read your own blog, you need to get ahead of the curve and support these bills. If something doesn't change now it is only going to get worse. We need more options and more competition in Utah and breaking up IHC will start this in motion. It may hurt more over the next few years, but I think in the long run it will be better for the whole state.
I think you should also create incentives for other insurance companies to come to Utah like maybe give them non-profit status for 5 years or tax breaks for 5-10 years. I know we do it for other industries, why not health care.
I don't know why the independent doctors in Utah don't band together and unionize or associate so they can have more negotiating power. Remember that our primary care physician is our first contact and the one that can do the most good. It seems that our personal doctors are being marginalized.
Well, this has been a long rant but this is an important topic. Please do what is right for us working Utah people...break up IHC and spur expansion in the health care industry.
Amazing dialogue regarding SB34 and SB61 and unfortunately, far too often, mis-statement of fact.
First of all, let me say I am an insurance agent and therefore not credible according to many of the posts here. I am also a former insurance company executive which probably makes me even less credible.
Let me see now, that would probably be because I have an understanding of how insurance companies operate and I have numerous individual and small group clients who are concerned about the premium cost of healthcare. Oh, and by the way, I earn a living providing expertise and assistance to the clients I serve.
Now, to the point, SB34 hurts every consumer purchasing health insurance in the state of Utah regardless of the health plan or insurance company from whom they purchase.
It does this by eliminating the savings created by preferred provider network contracts.
It actually does not hurt the insurance companies as much because they will have no choice but to pass this cost on to the consumer.
Therefore, pertaining to SB34, IHC, BCBS and others are actually fighting to keep premium increases to a minimum to the greatest extent possible and continue to provide quality health care.
The primary benefactor of this bill would be providers of health care because they would have unlimited access to patients and, over time, insurance carriers ability to contract for discounts would virtually disappear.
The increase in cost would go directly to the premiums paid by Utah employers, employees, and individual policyholders.
Currently:
1)Employers are charged with the task of providing benefits that help them attract and retain employees. They have a choice to pay higher premium for larger provider networks or choose more restrictive networks for greater savings. Many of the plans chosen offer both in-network and out-of-network access to providers of healthcare.
2) Employees must then choose how to take care of their family's health care needs. This is both an economic and health based decision as well. FYI, greater than 80% of those who have an out-of-network option choose to stay in-network with both factors considered.
Fortunately in Utah and the U.S. we have many excellent providers of health care.
Regarding SB61, I am not certain this would have a long-term negative impact to Utah. If IHC were forced to divest, the Utah Insurance Department and FTC would certainly not allow IHC to be sold to an existing competitor in Utah. More than likely, any entity purchasing IHC would likely keep much of the structure and personnel intact because they do an excellent job.
The reality is Altius and/or UHC would probably want to purchase IHC and agree to sell their current membership for marketshare reasons, but we would likely not see and decrease in competition.
The primary impact would be the separation of payor(IHC Health Plans) and provider (IHC Hospitals and staff physician practices). This just may help level the playing field in the Utah marketplace and relieve independent phycians of what they feel amounts to heavy handed negotiating practices.
FYI - IHC Health Plan does not provide charitable care, IHC Hospitals do and their ability to do so would not be hampered significantly by this legislation.
Change is needed!!!! IHC claim that there is market competition is a joke. They control the hospital beds and give their health plan discounts no other insurance company could dream to get. When IHC can only name three other competitors in a state the size of Utah it should become apparent that there is a need to break up the monopolist practices of IHC. We need to level the playing field so more insurance carriers would be willing to do business in Utah and create more competition. The consumer and the business community would be the ultimate winner with lower health care costs.
Those posting anonymously - do you really think you can be taken as seriously as you hope?
The process of signing up is painless.
If you want your voice to be believed - put your (real) name with it.
I challenge the anonymous poster to provide conclusive evidence that IHC Health Plans is based in the Cayman Islands (while you are at it, provide evidence that the alleged charter of IHC Health plans in Utah is false)- all that you have said will look as untruthful as that statement appears, until you have provided evidence otherwise.
The Cayman Islands connection, and the mountain of money there, is an urban legend.
If there is restriction of trade, there is a monopoly.
If there is a monopoly, it is a task for the Attorney General.
I do not see how this is anything other than a 'special law' being enacted when an existing 'general law' can be applied - which the Utah constitution forbids.
Please explain how this is not already covered under existing, general laws - antitrust, fair-trade, non-profit, or otherwise.
Chris,
Just because it is anonymous doesn't mean its not true. We just want people to get the information and do their own research.
Ask the doctors that IHC won't put on their panels if there is a restriction of free trade.
Here are a few links for you Chris. If the Herald printed this and its not true, how come IHC hasn't sued them to take it off their website?
http://www.harktheherald.com/modules.php?op=modload&name=News&file=article&sid=44708
“The health care giant already is saving millions on malpractice insurance through its own insurance company based in the Cayman Islands since 1987, Cowley said. IHC Insurance provides general and professional insurance for its hospitals and clinics.
Basing such a company in the Cayman Islands is a common practice among health care companies, he said.
http://64.233.179.104/search?q=cache:YoO6dDd4izIJ:www.heraldextra.com/print.php%3Fsid%3D9999+%22intermountain+health%22+cayman&hl=en
Chris, here is another for you about their structure.
The U.S. Tax Court ruling, which denied tax-exempt status for all IHC managed-care "products," does contain some interesting reading about the history of IHC. Most people know that The Church of Jesus Christ of Latter-day Saints originally owned the hospitals that have become the core assets of IHC. From 1882 to 1970, the LDS Church built or bought 15 hospitals in Utah, Idaho and Wyoming, which operated semi-independently until the formation of the nonprofit corporation which became Intermountain Health Care (IHC). In 1975, control of IHC was transferred from the LDS Church to an independent board of trustees, which began a nearly 10-year process of building new hospitals, centralizing management, and coordinating services, resulting in an integrated hospital system by the early 1980s. The Internal Revenue Service granted tax-exempt status to the IHC corporate reorganization plan in 1983. The plan included formation of IHC Health Services Inc., which became two divisions (one for hospitals and one for physicians) in 1994. IHC Health Plans Inc., founded in 1983, was to operate health maintenance organizations, and was intended to counter a potential competitive threat to IHC posed by for-profit hospitals and HMOs, which were beginning to move into Utah at that time. IHC Care Inc. (founded 1985) and IHC Group (founded 1991) are subsidiaries of IHC Health Plans Inc., which also run managed-care "products" and are no longer granted tax-exempt status, according to the recent U.S. Tax Court ruling. The opinion by the court also reveals that IHC owns and operates two for-profit firms, IHC Benefit Assurance Company (formed in 1992) and IHC Insurance Inc., which is operated on Grand Cayman Island. Perhaps IHC Chief Executive Officer Bill Nelson earns his $800,000 annual salary by keeping track of this complicated pyramid of businesses; he apparently does have to travel to the Caribbean, at least occasionally.http://216.239.57.104/search?q=cache:Ge85s857j44J:www.utahhealthalliance.org/pdf/December9_2001.pdf+%22intermountain+health%22+cayman&hl=en
Cal Van Dyke
Some years ago (about six) A baby was born to a young family in Lindon Utah,I will not use their names for privacy reasons. The baby was born with a double aorta. It was covered by an IHC health plan. The baby was taken to Primary Childrens Hospital to remedy the problem. The doctor removed the wrong aorta leaving the baby's larynx paralyzed for life. When the family met with IHC without going to an attorney they were told that even though IHC was liable they had deep pockets and it would be years before they had any relief. The Doctor moved to Switzerland. IHC health plans wouldn't pay for the care and IHC hospitals sued the family. The result is that the family which owned a good small business had to spend down to qualify for medicaid, which means that they lost their business, and the taxpayers began paying the 25,000 dollar a month health bill. If IHC was split up at least they couldn't collabarate on not paying when it is clearly not in their best interest to do so. How many more children could be served if IHC was taking care of that one baby? How many more cases are there like this one? Competition and the people of this state would be better served if the Health plans which don't pay for any charity care, and the Hospitals which do cover charity care, were divided. I have sold insurance in this state since 1978.
This law is a special law, attempting to be enacted when a general law is applicable - clearly forbidden by the Utah Constitution.
Every single item you (or all of you) have listed and discussed are covered under existing laws-enacting a special law is not constitutional.
Read the Utah Constitution, it is pretty clear.
And yes, being anonymous does cloud the picture - what are you afraid of?
Come out from behind your cloak.
Chris, you said:
"I challenge the anonymous poster to provide conclusive evidence that IHC Health Plans is based in the Cayman Islands (while you are at it, provide evidence that the alleged charter of IHC Health plans in Utah is false)- all that you have said will look as untruthful as that statement appears, until you have provided evidence otherwise.
The Cayman Islands connection, and the mountain of money there, is an urban legend."
There is a link with an IHC executive admiting they are in the Caymans. It seems the urban myth is the myth that it is a myth. Why does IHC need to hide in the Cayman Islands. How does that help Utah. Probably because it is a for profit entity within the IHC structure, and it is easy to avoid taxes in the Caymans.
Chris, it seems you need to be more educated before you venture some of your urban myth rants.
This post has been removed by a blog administrator.
It was stated that they are 'based' in the Cayman Islands - that is not true.
Is/was there a connection?
Yes.
Are they 'based' in the Cayman Islands, hardly.
Debate what that means all you would like.
"There is a link with an IHC executive admiting they are in the Caymans".
Just this week, they publicly denied that they have any money in the Cayman Islands. (Doug Wright show)
Perhaps you should take them to task on that one.
Money aside, is having insurance in the Cayman Islands illegal?
If it is, then prosecute it.
Under the Utah Constitution, I see nothing that forbids the creation of a law that forbids establishing/maintaining insurance in the Cayman Islands.
Pehaps you should speak with your Senator/Representative about creating such a law.
Tell them I support you in it.
It is not constitutional to make a special law where applicable general law exists.
As compelling as you feel your stories are - point me to law, or Constitutional sections that backs up the Constitutionality of this legislation.
I am sincerely seeking that information.
But remember, as you are looking, in Utah you cannot enact a special law when an existing general law can be applied.
Again, if you don't like that one, find someone to sponsor legislation to amend the Utah Constitution so that we can enact any special law we choose, regardless of any existing general law.
However, you will NOT have my support to amend the Constitution.
What, among all that you have discussed is not covered under existing laws?
To be constitutional, you will have to take your argument to area's where a general law cannot be applied.
Or discuss how these things are not covered already.
When you do, I'll listen to your arguments with great interest.
To those who have been mis-treated by IHC:
I encourage you to bring an Antitrust suit against IHC.
You have obviously been damaged by their practices.
Your mountain of evidence surely is enough to prove that their practices are illegal, and damaging.
You will win quite a bit of money, as the antitrust law allows you to recover 3 times actual damages.
I encourage you to bring suit where other damages have occurred.
Where necessary, I encourage you to work for change in existing general laws (antitrust, fair trade, malpractice, whatever it takes) to best serve the citizens of Utah.
This Constitutional rule was established many years ago, and states simply:
In all cases where a general law can be applicable, no special law shall be enacted.
I have not found anything that has stricken it from the books. (As with any legal document, things can ben interpreted a hundred different ways by 100 people.
No doubt this could too.)
Have you?
Please share it.
SB 61 simply says that a person who owns a controlling interest in a hospital and an insurer in the state is not permitted. Just because that only applys to one company currently does not make it special to just IHC. It would effectively prevent any other such organization from setting up shop in Utah as well.
It is really sad that our legislators can become so disconnected to the public they are supposed to represent and go off on their own agenda. Each of these bills are directly tied to a personal agenda of one of our legislators and it really will not benefit the majority of Utah citizens. Costs will increase. It is a matter of simple math in the case of 34. Each time we raise rates we increase the # of uninsureds. Just look over the border. Idaho pan handle health plan members are encouraged by getting their deductible waived if they will go to Washington for care. Why do you think this is??? Higher Health Care Costs!! Washington does not have AWP! Who will keep the lid on costs if the health plan cannot??? Balance is very important...Just look at the cost of drugs in our country. This is what happens with no price controls. And as for 61 all I can say is......no good deed goes unpunished. Utahns have no idea exactly how good they have it. Crazy that in this small state we have the #1 Integrated Health Care System in the country and instead of encouraging such great care we work to destroy it. 61 the way it is written puts the horse in front of the cart. If things are so wrong what is the harm in researching the problem? The point of this bill is not to help our community but to hurt IHC. If we have a devesting clause in the bill there may not be a health plan to devest in 2008. Each day this goes on IHC suffers damage. This is wrong!!!!! VOTE NO 61
This push by doctors to create "equal access" and a special tax IHC is ludricrous. The fact is the majority of the money spent for health care pays DOCTORS and facilities, not agents and insurance companies. And that's what this is all about. Doctors who don't want to compete in the marketplace like everyone else has to want more money. If the doctors really want equal access for everyone how come public programs, Medicaid and CHIPS, are not included in the so-called access bill? Are insurance companies profitable? They better be or they'll go out of business and we'll all be paying our own DOCTOR and hospital bills. Who can afford that? Last year my son had surgery to fix a broken middle finger. I was astounded when I received the bill for the surgery, which did not include the doctor's services; $6,600 for approximately 30 minutes in the operating room. The entire procedure from start to finish was over $10,000 for a BROKEN FINGER! I was very grateful to my insurance company for picking up the bulk of the expense. So let's just dismantle IHC or make them pay a special tax that will just be passed on to the premium payers, and stick to all the other insurance companies too. Then when they go out of business we can all pay our own doctor bills and hospital expenses just to make sure that insurance companies don't make a profit.
As one that sells health insurance plans, I am very concerned should SB 34 pass. I believe this would truly increase the cost of health insurance, in turn making it impossible for many to obtain insurance. I have many people that turn down the offers for insurance due to cost alone. We have a huge population of uninsured as we stand now due to health conditions, why add to that number because of cost? Please really take time to look at what the end results may be should this bill pass. I am oppossed to this bill.
I am a local broker, and I say pass them all! All that will do is drive the cost up, and since I make my living as a percentage of premiums Health Plans receives from my clients. The more it costs them, the more money I make! GREAT!
Also, as far as whoever posted that ridiculous post that IHC pays the highest commissions has NO CLUE whatsoever they are talking about! IHC is bar-none the worst payer in the state! Us brokers HATE working with IHC! They are incredibly difficult to work with and they NEVER "think outside of the box." Every other Insurer in the state is easier to work with than IHC. The only reason I even sell IHC is because if I didn't I would lose clients who love it.
The fact of the matter is that physicians hate IHC, brokers hate IHC, pretty much everyone hates IHC, except for the people who enjoy IHC coverage. I have to say my clients that are on IHC LOVE it, and wouldn't change for the world. I hate dealing with them on claims, billing problems, submitting new groups, underwriting, and everything in between! Give me Blues, UHC, or Altius any day over IHC. They are all much easier to work with (and the ALL pay better).
So here's my take. Take it or leave it.
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