Risk Managers

Unicare has announced that they are exiting the commercial health insurance maket in Texas.

Their press release states “While UniCare continues to be financially secure, competitive pressures have made it increasingly difficult for us to maintain our high standards for excellent customer service and affordable, quality benefits that you expect from us.”

UniCare has entered into an agreement to transition existing business to Blue Cross Blue Shield of Texas.

Editor’s Note: United HealthCare seeks new business:  

UnitedHealthcare Strongly Positioned with Recent Health Insurer Exit  UnitedHealthcare is ready to help you and your clients - today. The recent announcement of a health insurer to exit the Texas market makes this an ideal time for you to consider UnitedHealthcare for your clients and prospects. UnitedHealthcare serves over two million residents in Texas by consistently delivering: Broad Access to Affordable, Quality Health Care with more than 460 hospitals and 34,000 physicians. Personalized Client and Broker Support with Texas-based representatives to serve you and your clients’ every need. Broad Product Portfolios from medical plans to specialty products, all designed to meet a wide variety of client needs. Including UnitedHealthcare PlanBienSM – popular health plans enhanced with bilingual materials and services for our Spanish-speaking members. New Product Introductions like our soon to be released PacifiCare SignatureEliteSM Plus HSA plans. A Stable and Growing Network with more than 460 hospitals and 34,000 physicians in Texas. For more information on how we can immediately assist your clients with their health care coverage needs, please contact your UnitedHealthcare representative today. Thank you for your consideration of UnitedHealthcare.

http://m.brownsvilleherald.com/brownsville/db_15631/contentdetail.htm;jsessionid=AD9F92F8BAAD8297528F094CF6898B40?contentguid=85uPFAkK&src=cat&full=true#display

“It might be argued that because hospitals initially bill all of their patients at their chargemaster prices, they do not engage in price discrimination – the practice of charging different customers different prices for identical goods and services. Invoices at chargemaster prices, however, are insincere, in the sense that they would yield truly enormous profits if those prices were actually paid. The reality is that hospitals accept different payments from different payers for identical services, and that can proberly be called price discrimination.”

“Price discrimination is sometimes decried as unfair, and it may be so. It is, however, commonly practiced by the hotel, airline, pharmaceutical, and telecommunications industries; by public utilities; and by universities, where different classes of students are granted widely varying discounts off full tuitiion, partly as a reward for intellectual acumen, or on the basis of the family’s ability to pay. Price discrimination also is a perfectly natural phenomenon in any health system not subject to price regulation.”

“All of these industries have several things in common: They have high annual fixed costs relative to the incremental cost of producing additional services; they can segment their markets into distinct classes of customers, each with different degrees of price-sensitivity; and customers cannot resell their products among themselves, because it is either technically impossible (such as for physician or hospital treatments) or illegal (such as for pharmaceutical products).”

Source:  The Pricing of U.S. Hospital Services: Chaos Behind A Veil of Secrecy – by Uwe E. Reinhardt

Editor’s Note: Read full article here – http://content.healthaffairs.org/cgi/reprint/25/1/57?maxtoshow=&HITS=10&hits=10&RESULTFORMAT=&author1=reinhardt&fulltext=Chaos+behind+a+veil+of+secrecy&andorexactfulltext=and&searchid=1&FIRSTINDEX=0&resourcetype=HWCIT

http://www.cbsnews.com/video/watch/?id=5419844n&tag=related;photovideo  – Video

http://www.cbsnews.com/stories/2009/10/23/60minutes/main5414390.shtml?tag=contentMain;cbsCarousel - Article

Once upon a time, Molly Mulbrier hired a general contractor to help her build her house. The General Contractor came highly recommended with impeccable credentials. And, he was only going to charge her a flat fee of $48,000 to help her build her $40,000,000 dream home. Molly was ecstatic.

The General Contractor promised Ms. Mulebrier that he would bid out all the subcontractor jobs to get the very best deal for her. He bid out for the foundation work, electrical, plumbing, painting, dry wall, etc. on her behalf.

Finally the day came when the General Contractor laid out his bid spreadsheet for Mrs. Mulbrier and her banker. “The best overall bid package” he explained,  ”will cost you $40,000,000. But, one of my subcontractors, the electrician,  has promised to give you a credit for $1 million, so your net cost is only $39,000,000. This beats all the other bids we got for you. Of course, you must pay the full $41,000,000 up front, then I will carefully monitor the money flow and make sure you get back the $1 million at some point in time”.

“Hmmmmm”, mulled Molly, “I see nothing in your contract with me that references this. Can I see your contract with the electrician?” …………….”Unfortunately Ms. Mulebrier, I cannot show you that contract because of my Confidentiality Agreement with the electrician, but just trust me, I will make sure that he lives up to his end of the bargain!” sneered the snarling  and sinister contractor.

And so the house was built.

Editor’s Note: This is a fictional fairy tale (as opposed to a true fairy tale). Any similarities with a real life scenario is purely coincidental.  Molly Mulebrier is our in-house private detective who has agreed to allow us to use her real fictional name.

If this article is disturbing to you, then your completely normal.

http://www.john-goodman-blog.com/some-american-hospitals-already-have-price-and-quality-transparency-with-package-prices-quoted-in-advance-%e2%80%94-so-long-as-you%e2%80%99re-a-foreigner-that-is/#

http://www.northamericansurgery.com/

Bill, you can share the following if you’d like:

 Last fiscal year (Oct-08 through Sep-09), TISDs Medical Benefit Plan paid 22.1% of billed medical charges.  Total charges were $28,985,140.10, total payments were $6,393,165.45.  And that was including a >$600K premi claim.

Direct contracting works… I’d like to see anyone match these discounts.

David Herbert, M.D.
President, Medical Administration
GM&A
(325) 224-3245

Editor’s Note: Dr. Dave and his partner, Michael Jeneke assist employers throughout the United States in contracting with medical care providers. The Tyler Independent School District is a stunning representation of what can be accomplished by directly contracting with medical care providers. They have proven that hospitals and doctors will compete for business if given the opportunity. For more information go to www.gma-usa.com

http://www.tdi.state.tx.us/consumer/cpmmediation.html

Readers of this weblog will know that we are investigating the recent award of a $40,000,000 health insurance contract at the Brownsville Independent School District.  We have requested information from the BISD through the Open Records Act and to date have received very little from the district – BISD has refused to provide us with all the information we have requested and has asked the Texas Attorney General to intercede.

One of the items requested from BISD are copies of all contracts with vendors associated with the self-funded health plan. Various vendors include the third party administrator (TPA), pharmacy benefit manager (PBM), preferred provider organization (PPO), and stop-loss carrier. 

We know that the BISD has signed a contract with the TPA because we have obtained a copy of that contract (see posting below). So, we assume that the BISD has signed all the other contracts as well. But, did someone in the BISD read these contracts before signing, and did anyone, including the hired consultant for BISD, compare the contracts to original and final proposals submitted by vendors during the RFP process?

Do any of these contracts include a stipulation that the BISD will not compete with the vendor? For example, should the BISD wish to directly contract with area medical providers, will they be able to do so or will they be prevented from doing so for a two year period upon termination of the vendor contract? If that is the case, which we are confident is the case, then the BISD will be prohibited from negotiating directly with interested medical care providers for the next three years.

An example of a non-compete clause in contracts can be found in the San Benito ISD contract with an on-site medical clinic for employees. Several years ago the SBISD contracted with a third party to administer their on-site clinic. But, the contract contained a non-compete clause prohibiting the SBISD from retaining the on-site clinc physician upon termination of the contract. After two years on board with SBISD, the physician became extremely popular with SBISD patients who developed a strong trust with him. A change in clinic administrators last year brought the non-compete section of the contract to light. Although SBISD wanted to retain their beloved physician, they were prevented from doing so and had to go out and find a replacement.

So, is anyone reading the contracts at the BISD, or just signing them without question?