Blue Cross Committed

To "delivering" their "promises to Wall Street." They expect to continue bringing in a 15% profit. After all, they had a 22% growth rate in the past six years. Those are their priorities, not delivering quality affordable health care. Anthony Wright has direct quotes from the President of Blue Cross's parent company Wellstone, bragging about the profits and the "compelling investment opportunity" they are providing for stockholders. It is rather sickening to read and I am not just saying that because the Sicko premiere is tomorrow.

I assume that the movie will touch on something Anthony discuses and that is the "medical loss ratio".

In this health reform debate, people have been talking about the term "medical loss ratio," which is the term for how much money is spent on patient care, rather than administration, marketing, and profit. It's clearly a Wall Street term: How much money is "lost" to patient care? It shows the inverted priorities of an unrestrained industry.

It suggests that whatever insurance companies (or other companies) say to regulators, it is also important to see what they say to investors.

Speaking of health care costs. The NYT has an illuminating article today on paying for increased health care efficiency. Currently there is not a lot of incentive for the health insurance companies to cut cots, other than their "medical loss". When it rests on the doctor's there is little motivation for them to push forward changes. Take electronic medical records for example. It is bloody expensive to pay for all of the computer equipment and few direct rewards to doctors.

The path to saving can be particularly uncertain in the United States’ fragmented health care economy — a mix of risk, regulation and profit in which the incentives are often contradictory. A physician, for example, may try new approaches to trim the costs of providing care, but the results usually benefit insurers more than doctors. Strides in efficiency may be good for society, though there may be scant financial motivation for the doctors themselves.

The NYT highlight's the example of Dr. Richard Baron, who along with his three other physician colleagues spent $140,000 on computers, tablet PCs, servers, software and installation. They made the transition from pen and paper to electronic records, but it has yet to pay off fiscally.

The office’s annual technology costs, he said, were about $50,000, including maintenance and technical support, and he plans to upgrade the three-year-old computers at a cost of $54,000. Those costs do not include the lost productivity in the first year, when the staff was learning to use the new technology.

Dr. Baron’s office has saved money — in transcribing medical reports, for example — and his practice now handles its 6,000 patients with three fewer office employees. He described other benefits, mainly the ability to find information quickly for patients, hospitals, insurers and labs with a few keystrokes.

The technology, Dr. Baron said, has also helped make him become a more adept physician. But it has not yet paid off in dollars and cents: the savings in salaries is less than the costs entailed in computerization. “It is a high-risk venture,” he said, “and you do it at your own financial peril.”

Today, an estimated one-fourth of primary-care doctors use electronic health records, but only 5 percent of them are in offices with five doctors or fewer — where about half of all doctors practice.

For these smaller practices they will only be helping the Blue Crosses of the world save money, though there are real medical benefits to having accurate and timely records for their patients.

Physicians get only about 11 percent of the savings from electronic health records; the real benefit goes mainly to private and public insurers because, for one, they are paying for fewer unnecessary tests, and automated record-handling is a big cost saving for the payers, according to a study by the Center for Technology Leadership, a medical research group. “The doctors bear all the costs, and others reap most of the benefit,” said Dr. David J. Brailer, who was the national health information technology coordinator in the Bush administration from 2004 to 2006. “The incentives are totally awry.”

This is the problem the presidential contenders are hoping to solve by investing some governmental resources into moving our health system into the 21st century. We cannot simply mandate electronic records without shepherding the process. There needs to be industry standards and assistance for the smaller firms. Blue Cross will not happily subsidize the transition and upkeep, even though they benefit the most. After all, they are committed to upholding their Wall Street promises.