King Kong of Health Insurance

From the Denverpost.com



Christmas may come early for the shareholders and top executives of UnitedHealthcare and PacifiCare. With scant public interest and a one-day public hearing, David Rivera, the Colorado Commissioner of Insurance, will decide within the next few days whether to allow these two HMO giants to merge into the King Kong of managed care organizations. If he does approve the merger, the only remaining question will be what, if any, conditions the state might require to ensure that this big gorilla plays well with others, both patients and physicians.



Should the merger go through, these execs will receive a salary and bonus windfall larger than the total amount of 2006 Referendum C tax dollars approved by Colorado voters last month for highways, schools, and health care combined - enough money to almost single-handedly move Colorado from its embarrassingly low ranking in immunized children to the top quartile. It is more than enough money to provide prenatal care to needy, pregnant mothers who are struggling without the benefit of basic medical services. In short, United/PacifiCare will enjoy extravagant profit margins while Colorado continues its race to the bottom with a handful of southern states to see who will have the most working uninsured per capita in the country, a hidden tax we all pay.



Does HMO size matter to your personal physician? Enormously. When a managed care organization insures a quarter or more of the patients in a physician's practice, which will be the case in a merged United/PacifiCare, it can pretty much dictate how, when and where patients will be treated by how much or how little they will cover and reimburse. Your doctor cannot afford to turn down the HMO's contract, however coercive or unfair, any more than most of us could live with a 25 percent pay cut.



Like any business, health insurers weigh their success in profit, measured in terms of a medical loss ratio. What we call the patient's premium dollar is split between your health care and their profit. They view any money spent on your health care as a loss. The lower their "loss," the greater their profit. Without sufficient oversight, this ratio will tend toward the



company rather than the patient.

We do not choose to be sick or injured as though we were buying a pair of shoes. Even the most subtle manipulations by a powerful, unbridled HMO can profoundly compromise your health by restricting who can treat you, where and when you can be hospitalized, and for how long. What prescriptions you may take, how often they are changed without your physician's knowledge or consent, are all part of the business decisions a health plan can make to push that "loss" ratio in the direction of Wall Street instead of Main Street, Colorado. Unless they are reined in, they can strip-mine Colorado's premium dollars and ship them back east with little say by our regulators.



The Colorado Medical Society has urged the insurance commissioner to keep a tight leash on this big gorilla by requiring they adhere to the highest standards of transparency, accountability, fair business practices, and the protection of patient-physician relationship. Colorado's laws concerning the approval of mergers such as this have gathered dust since 1986, untouched by legislative hands. The 1986 Colorado General Assembly could not have anticipated a circumstance where two plans (a combined United/PacifiCare and Anthem/Wellpoint) would cover nearly two-thirds of our private insurance market, and generate profits the size of a small country. A great deal has been left unsaid in those statutes.



Much of the discretion in the matter of this acquisition will therefore be in the hands of the commissioner. In the absence of clear, unambiguous legislative direction, we hope he will exercise his own legal authority and not let this greatly enlarged creature loose.