The Oval Office Tone At the Top and the Temptation for Consumers to Lie About Income on the Health Insurance Exchanges

According to this CNN article, it's naïve for the Disease Management Care Blog to expect U.S. Presidents to never lie. From time to time, political realities force occupants of the Oval Office to use falsehoods to advance a greater good and/or protect the integrity of their office.  What's more, when they're found out, voters tend to be remarkably forgiving. So, When Mr. Obama repeatedly reassured Americans that "you can keep your health insurance," the DMCB should conclude that this was business-as-usual statecraft and that it will all work out.

But even if many Americans sign up for health insurance and the President rebuilds his approval ratings, the contrarian DMCB has a deeper concern.

It thinks a dishonest "tone at the top" can have a corrosive effect on how Americans will access their premium subsidies. 

In the business world, it is well known that the misbehavior of corporate boards and C-suite leaders can infect an entire company. The Board Chair's or the CEO's dubious financials, revenue schemes, stock manipulation, predatory behavior or just plain arrogance can roll right through the managerial ranks and destroy a company in a matter of months. When leaders lie to serve some other business need, you can be sure that others in the company will also lie.

The same may be true for the government of the United States. It's one thing to lie about Japan's military might (Roosevelt), trading arms for hostages (Reagan) or Iraq's weapons of mass destruction (Bush), it's quite another to lie about buying health insurance. The DMCB suspects that "tone of the Oval Office" is subtly signaling to regulators, insurers and ultimately consumers that it's OK to manipulate the truth when it comes to buying health insurance.

Recall that as part of health reform, the health insurance exchanges prompt applicants to estimate future income. It's also temptingly easy to misrepresent projected 2014 income.  A mild "fudge" that lowballs income can make the difference of thousands of dollars in subsidies.

Long before the President landed in hot water over his "you can keep it" promise, Americans had a huge incentive to lie about their income. That has been especially true for low income earners who really need the insurance. Now that everyone - including Mr. Obama - has admitted that he stretched the truth, the DMCB suspects Americans now have one more reason to do the same when it comes to getting health insurance subsidies. Once that pattern of insurance fraud becomes established in the marketplace, the DMCB thinks it will never go away and hundreds of millions of dollars will go to where it's not intended year after year after year.

The DMCB predicts tens of thousands of Americans who purchase insurance on the exchanges will succumb to lying in 2014.

You read it here first. 

Coda: The good news is that when it comes to the health insurers who are responsible for signing up the millions of Americans, there's no evidence that they're helping enrollees lie.  The DMCB suspects that in the battle to capture market share, it's just a matter of time until one of them has a renegade employee or two who channel the President and likewise help prospective customers to lie. We'll see.

Preauthorization vs. Retroactive Audits for Patient Safety

"If you're telling the truth, hit 1; if not,
hit 2.  If you're not sure, please wait on
the line....."

If the Disease Management Care Blog accepted the common wisdom about commercial health insurance, it'd believe that the businessis is an evil empire controlled by pirates who 1) use weenie print to fool unwitting patients and 2) rely on opaque decision-making to deny coverage for life-saving treatments.

Once again, the DMCB eschews common wisdom:

The reason why insurers have used small fonts in their coverage documents has been because their state regulators likewise use small font in their rule making and require full word-for-word disclosure to the beneficiaries. Think of lawyers run amok and you'll understand the main reason for the arcane language.

The good news is that new regulations promise easy-to-understand "labeling." The DMCB thinks that's a step in the right direction, but that doesn't mean that a lack of preciseness won't lead to misinterpretation and wrong assumptions. Time will tell.

As for the opaque decision-making, check out (for example) Aetna's and Humana's open-access coverage documents. Yet, despite a high level of on-line transparency, critics may point out that commercial insurers will still require a hassle-laden preauthorization process.

That may be true, but the DMCB says who can blame them? There is literature here here and here that point out that physicians will readily resort to deception get a proposed treatment covered.

To really make the point, check out this just published Health Affairs article. Using a validated survey on a representative sample of physicians (obtained from the AMA's masterfile, which contains all practicing docs, not just AMA members), about 10% of the respondents indicated that, in the past year, they had lied to a patient. A whopping 50% admitted telling a patient that their prognosis was better than warranted.

Egads. This is not only driving medical costs, it's increasing variation and exposing patients to unnecessary and potentially dangerous treatments.

Keep in mind that the fee-for-service Medicare program does not engage in "preauthorization" that can lead to a refusal to pay for a treatment.  Rather, Medicare generally pays all claims and then relies on retroactive audits to "claw back"any improper payments.

While that has shielded the Medicare program from being lumped in with all the allegedly evil commercial insurers, the DMCB asks two rhetorical questions about the few bad apples who are hurting the profession:

Which would you rather have for you, your parent or your child: an insurer that scrutinizes a proposed treatment ahead of time and doesn't necessarily take the doc's word for it, or an insurer that lets things happen and uses hindsight after the damage is done?

And last but not least, how will the new payment mechanisms, like bundling and shared savings, reduce the likelihood of bad behavior?