Still Don't Think The Senate Health Care Bill Is An HC Industry Bailout ??? - From DailyKos

[WillyT]

Experts Say Health Insurance Industry Is Doomed
by bernardpliers
Sat Feb 27, 2010 at 03:49:45 PM PST

<snip>

A friend of mine attended in a panel discussion with a Blue Cross VP, people from big pharma, and the biotech industry, and the consensus was that health insurance companies are in a financial death spiral.

During the day, insurance industry flacks described the devastating effects of health care reform, and reconciliation would reverberate "for generations." But to everyone else, the insurance companies were carrying the scent of doom.

During the panel discussion, everyone treated the Blue Cross VP like an outcast. One of the pharma industry people pointed out that as the healthy young people go without insurance, the insurance companies are left with sicker and less profitable patients. Another panelist pointedly said the insurance companies "no longer have a viable business model." Even fencing out the pre-existing conditions only gives them an ever smaller slice of the customer base. The big pharma rep noted that prescription drugs are only a small part of the cost of a hospital stay, and this part of the equation that is rarely discussed. The biotech people seemed remarkably sanguine, since they deal with big pharma rather than the insurance companies.

The panel's attitude towards the Blue Cross VP was "He didn't come with us, we don't know him."

But one of the panelists had an interesting assessment - that if we do not make rational reforms, we are heading for a catastrophic financial failure of the health care system in the next 24 months. However, he did not think that health care reform would pass, and that the health insurance system would move rapidly into the financial collapse scenario. That is to say that reform would come one way or the other, but he figured it was likely to come with chaos, needless financial loss, and various types of suffering.

But what about innovation? It seems the writing is on the wall and that we are headed towards a European system with the highest rates of reimbursement for innovative drugs. The "me too" drugs that have dominated the pharmaceutical industry will be reimbursed at a lower rate. As a result, biotech startups are expected to fare pretty well as big pharma partners up to obtain novel drugs. This seems to be part of the Obama's "secret deal with Big Pharma," and in this regard sounds pretty darn good.

Update II

Kudos to fly (uid 488!) for this link to the NY Times, and a pox on the whingers.

In statements and letters, Anthem and WellPoint have explained what the industry calls a recessionary death spiral: as unemployment and declining wages prompt healthy people to drop their insurance, the remaining risk pool becomes sicker and more expensive to insure, which in turn forces up prices and pushes more people out of the market.

A study released this week found that the five largest health insurance companies collectively lost 2.7 million customers last year, including 1.4 million by WellPoint. Yet they reported record profits of $12.2 billion.

The death spiral "highlights why we need sustainable health care reform to manage the steadily rising costs of hospitals, drugs and doctors," Anthem, which is based in Los Angeles, said in a statement.

Update

As always, it's worth looking in on the paste eaters at Redstate who always worked up over something.

President Obama has launched an all-out attack on the insurance companies in his new healthcare plan. Unfortunately for Americans, the private insurance industry is the last thing standing between us and socialized medicine — and as a result, socialism.

Well, too bad nobody in the health industry had declared themselves to be the ramparts of liberty, because that would be some pretty cool marketing. They could even hire the same ad agency that does those recruiting ads for the Marines. "We looking for a few good actuaries...." And too bad nobody in the GOP has been making that case at the health care summit. But surely the health insurance industry must be happy to know they have ascended to the sacred status enjoyed by Massey Coal.

<snip>

Link: http://www.dailykos.com/storyonly/2010/2/27/836901/-Experts-Say-Health-Insurance-Industry-Is-Doomed

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And... if you want to get really deep into this...

A Look Inside the Health Insurance Industry Death Spiral
by D Wreck
Sat Feb 27, 2010 at 09:01:02 PM PST

<snip>

I thought I might be able to bring some additional insight into the death spiral discussion in bernardpliers' diary. The phenomenon is happening in the group market as well. This is adapted from my post of August 12, 2009

Ezra Klein interviewed Lindsey Graham back in August 2009 about GOP objections to Democratic health care reform proposals. In the interview, Graham conceded the need for Medicare and Medicaid to cover the elderly and the poor, but that the private insurance market was best suited to cover “the middle.”

But if Graham took the time to honestly examine the health insurance market, he'd see that the "success" of the private health insurers is an illusion built upon consolidation rather than organic growth. The hefty profits of these companies and the generous compensation of its CEO's create a facade of corporate health that masks reality - private insurance is losing a staggering number of customers and will collapse of its own weight without drastic changes.

<snip>

Much more: http://www.dailykos.com/storyonly/2010/2/28/841466/-A-Look-Inside-the-Health-Insurance-Industry-Death-Spiral

:shrug:

[stray cat]

1. So Daily Kos endorses the status quo over passing the bill - like the GOP?

[WillyT]

3. That's Disingenuous... And You Know It !!!

Either that, or you don't know DailyKos AT ALL.

Try it... you'll like it!

:evilgrin:

[Donnachaidh]

4. is this the meme of the week handed down by the Rahminator?

Occasionally it's healthier to take OFF the jackboots dude. :eyes:

[tridim]

2. So IYO we shouldn't pass HCR because it's a bailout?

Thing is, it doesn't matter even if it is, the status quo is still unsustainable. After passage if the death spiral continues we'll be in a perfect position for implementing single-payer Medicare. Sounds good to me.

[WillyT]

5. No... In My Opinion...

We should NOT pass the Senate Health Care Bill AS IS...

We should put in a Robust Public Option, or reduce the age requirement for entering Medicare, and pass THOSE reforms through Reconciliation!

:shrug:

[laughingliberal]

8. Exactly! We need to get something into that bill which would set the stage to move it more towards

a single payer system in the future. As it stands now, it sets the stage for privatization of Medicare which will be pushed along by the deficit commission recommendations. It is worse than the status quo. Leaving the status quo in place means the pressure for reform is still there and it will be growing.

[KoKo]

21. Agree Willy T! /eom

[laughingliberal]

7. The problem with that is the Senate bill positions does not position us to easily move to a

single payer system. In fact, it positions us to more easily move to privatization of Medicare (and that is looking more and more like the plan). Of course, the law will change over time. It will change for the worse.

[laughingliberal]

6. Very glad to see more talking about this

If we had started out this debate with the public aware of the impending death of this industry, how different would the debate have gone? Instead, we started on our knees begging the industry, who let the public think they held all the cards, to please play nice with us.

If we're going to bail this criminal industry out, we certainly need it to be more consumer friendly. If the public knew it was a bailout of one of the most hated industries in the country, would they not demand a lot more for pulling their asses out of the fire. As I've said before, passing the Senate bill in its current form is like us folding with a high flush while our opponent is holding a low pair. They have bluffed us all along and we need to call their bluff. And shame on our elected officials who participated in the bluff.

edited punctuation

[WillyT]

9. + 1,000,000,000... What You Said...

Excellent points!!!

:applause:

:hi:

[alarimer]

10. How can they be in a death spiral when they are making RECORD profits?

That is just bullshit.

I don't like this bill because it is an enormous giveaway to insurance. That doesn't mean that everything in it is bad.
First Congress needs to eliminate the anti-trust exemption.

I WANT the insurance companies to die. They provide nothing of any value.

[laughingliberal]

12. It's not bullshit

They have racked up the record profits by raising premiums by astronomical percentages meaning they have been collecting more revenue from a shrinking customer pool. They are now reaching the point of diminishing returns meaning the rate hikes are starting to result in the loss of customers in numbers too great to be made up by the higher prices. Add in more people losing jobs and employer sponsored benefits and the loss of 11 million customers, on average, to Medicare every year for the next 2 decades and the picture emerges.

They did an excellent job of bluffing us in this debate. It was urgent to get this done before the public realized it was a bailout. As long as we believed they held all the power we went along at each stage as more was given to them and less was done for us in the interest of having a bill which would help 'a little.' It was one of the most effective bluffs I've ever watched.

[WillyT]

13. From The Second Article...

But if Graham took the time to honestly examine the health insurance market, he'd see that the "success" of the private health insurers is an illusion built upon consolidation rather than organic growth. The hefty profits of these companies and the generous compensation of its CEO's create a facade of corporate health that masks reality - private insurance is losing a staggering number of customers and will collapse of its own weight without drastic changes.

:shrug:

[DisgustedInMN]

11. K & R

[laughingliberal]

14. Today's email to the White House

aka pissing up a rope.

Dear President Obama:

In watching Lamar Alexander on "This Week" this morning I was furious to hear him keep talking about "this unpopular bill." The bill which came out of the Senate is unpopular and the one thing that would turn it around to a very popular bill remains off the table. A robust public option would generate so much public approval that legislators would vote against it at their peril. We leave our most powerful weapon laying on the ground. I have been persuaded that there is some closed door deal with Karen Ignagni to keep the PO out of the bill in return for some crumbs from the industry. It is apparent this industry will die a natural death without the mandate. As an American, I think it is only a question of fairness to have some competition for the industry when we will be handing them a life raft. I want you to fight for us. If you would fight for the public option, I am convinced the votes would be there in the Senate. I am not one who believes the Senate killed the public option single handedly but, rather, that Baucus, et al were doing the bidding of the White House in killing it. The Republican talking points about the bill being unpopular are 100% correct. Add the public option and the bill becomes popular with 82% of the public. It angers me to see them winning the debate because the White House and Senate are choosing to protect the very elements that gave us this mess of a health care system to begin with.

[KoKo]

22. Good points...I sent something similar to my Senator Kay Hagan.

But...if Obama really cared he would have sent political OP's out there on the Cables to defend his Bill.

Have you seen them? Tell me have you seen them? :shrug:

[slipslidingaway]

15. knr nt

[havocmom]

16. K&R

:kick:

Big Insurance is about to lose the Boomers. They need the younger workers forced into paying tribute to make up for us Boomers switching to Medicare over the coming few years.

Problem is, the younger workers entered the market at a time when employers decided to make this a Third Wold employment market. Wages suck and are getting suckier.

[BrklynLiberal]

17. great post. To be reviewed in full later.

[gulfcoastliberal]

18. k/r.... nt

[leftstreet]

19. K&R

[saracat]

20. K+R Very good points .Great post!