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Poll #s tanking, Props. 45 and 46 go on offense

As the Field Poll shows Proposition 46 all but done for and Proposition 45 struggling, backers of both those controversial, health-related measures went on the offensive Thursday by filing official complaints against their foes and challenging a big insurance company’s spending.

Prop. 46 author Bob Pack of Danville, whose two children were killed in 2003 by a drugged driver, filed a complaint with the state’s Fair Political Practices Commission claiming the No on 46 committee violated state laws that require disclosure of major funders.

Insurance companies have contributed $42.8 million of the $56.5 million given to the No on 46 campaign, Pack says, and state law requires campaign committees to describe in descending order their major donors. Yet the No on 46 campaign committee is officially known as “No on 46 – Patients, Providers and Healthcare Insurers to Contain Health Costs.”

“How dare the insurance industry claim the mantle of ‘patients’ after blocking life-saving patient safety reforms for decades,” Pack said in a news release. “No on 46’s misleading attack ads, funded by mostly insurance industry money, pretend that they are a public campaign for patients. California’s TV and radio stations have a duty to the public to take these ads down until voters are told the insurance industry is really behind No on 46.”

Proposition 46 would raise the $250,000 cap on “pain and suffering” damages in medical malpractice cases; require random drug tests for doctors; and force doctors to use an existing prescription database to weed out drug abusers.

The campaign for it is being run by Consumer Watchdog, a lawyer-funded nonprofit advocacy group that’s also behind Proposition 45, which would give the state insurance commissioner power to reject health-insurance rate hikes.

Consumer Watchdog President Jamie Court filed his own FPPC complaint Thursday arguing the No on 45 campaign’s name and radio ads don’t identify “health insurance companies” – the source of the $37.5 million to the campaign – as a major donor. But several insurers are listed by name, including Kaiser Foundation Health Plan Inc., Wellpoint Inc. and Blue Shield of California.

My read: This is a small-ball attempt to further publicize insurers’ role in the campaigns, a role that’s already been widely reported. Court said it himself in today’s story, describing why he believes Prop. 46 isn’t a lost cause despite cratering poll numbers among likely voters: “All we have to do is tell them that it’s the insurance companies on the opposing side lying to them.”

Court, California Nurses Association members and other Prop. 45 supporters will be rallying at 1:30 p.m. Thursday outside Blue Shield’s headquarters on San Francisco’s Beale Street to deliver 22,000 petition signatures decrying the insurer’s purchase of a costly luxury skybox at the new Levi’s Stadium in Santa Clara.

Blue Shield’s decision to spend money on the skybox underscores the need for Prop. 45, they argue, so the insurance commissioner can reject excessive rate hikes that then pay for such luxuries.

2

Blue Shield criticized for Levi’s Stadium skybox

The campaign for a ballot measure to let the state insurance commissioner veto health insurance rate hikes is pointing to Blue Shield of California’s pricey luxury skybox at the new Levis’s Stadium as a sign that insurers’ spending is out of control.

Levi's Stadium luxury suiteConsumer Watchdog and the Yes on 45 campaign sent a letter Tuesday to California Attorney General Kamala Harris urging her to investigate “Blue Shield’s abuse of its non-profit status” and crack down on its spending.

The letter cites a San Francisco Chronicle article which said suites of the type that Blue Shield got at the San Francisco 49ers’ new home are “priced at between $250,000 and $400,000 a year and require a 10- or 20-year commitment. That puts the price at anywhere from $2.5 million to $8 million.”

“We urge you to investigate Blue Shield’s abuse of its non-profit status and use your authority to impose a ‘charitable trust’ on Blue Shield’s assets and block any additional wasteful spending that robs taxpayers and average California patients of their financial health,” Consumer Watchdog President Jamie Court wrote to Harris.

Proposition 45 “will ensure that companies like Blue Shield are not increasing premium charges to patients to fund excessive executive compensation, lavish entertainment and excessive reserves,” Court wrote. “Under current law, the California Department of Insurance does not yet have the authority to block excessive rate increases that funded Blue Shield’s skybox. Before November, only you have the power to protect California taxpayers.”

Neither the No on Prop 45 campaign, known as Californians Against Higher Health Care Costs, nor Blue Shield of California answered e-mails seeking comment Tuesday. Blue Shield spokesman Sean Barry told the Chronicle over the weekend that the luxury box’s primary purpose “is to interact social with some of our larger membership groups,” and it won’t be available to executives for “their personal use.”

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More reactions to Obama’s health insurance delay

We’ll be posting a full story about reactions to President Obama’s plan to delay cancellation of some individual health insurance plans that don’t meet standards set by the nation’s new law, but here are a few pols for whom we didn’t have space in that article.

U.S. Sen. Barbara Boxer, D-Calif., called the president’s proposal a “good step” that’s “very helpful in the implementation of the law.” She also spoke on the Senate floor Thursday about Republicans’ constant opposition to this law.

“This is typical of Republicans through the generations. Every time we’ve tried to expand health care, they’ve opposed it and opposed it and tried to derail it,” she said, adding that the new insurance law can be fixed “but that’s not good enough for my Republican friends. They just want to tear it down, just like they wanted to tear down Medicare.”

Rep. Sam Farr, D-Santa Cruz, said in an email that he supports the president’s fix, which “continues to provide more choices without undermining the strengths of the new health care law. Implementing any new law creates a few bumps. We should be look for minor tweaks that strengthen the law rather than return to the old system that left millions of Americans without quality coverage.”

Rep. Mike Thompson, D-Napa, issued a statement calling Obama’s proposal “a step in the right direction towards fixing issues with the health care law. This was a promise that was made and it is a promise that should be kept.”

“I’ve said from the beginning that the health care reform law isn’t perfect,” Thompson said. “But instead of engaging in partisan bickering and playing blame games, I want to work to make health care reform better. … If we quit the partisan games, we can build on the reforms made in Obamacare, work out the imperfections, and make sure every American can get quality, affordable health insurance. That is a goal worth fighting for.”

2

Backers say insurance ballot measure will qualify

Advocates of the “2012 Automobile Insurance Discount Act” ballot measure funded by Mercury Insurance Chairman George Joseph say they’ve gathered and are about to submit more than 800,000 signatures they gathered in 10 weeks to qualify the initiative.

This is well short of their Jan. 9 deadline to gather at least 504,760 signatures.

“This was an easier effort than expected,” Mike D’Arelli, executive director of the American Agents Alliance, said in a news release. “People understand that this discount is good for consumers. The fact that this discount is already allowed in most other states, and allows Californians to shop their insurance loyalty discount with other companies for the best prices, appeals to voters.”

The alliance, which is sponsoring the measure, acknowledges it’s similar to the Mercury-funded Proposition 17, which voters rejected last year, but with some “significant improvements to be inclusive and to reach those who do not have insurance.”

Current law only allows insurance companies to offer consumers a continuous coverage discount, for maintaining automobile insurance if the consumer stays with the same company. This proposal will allow consumers control of the discount so they can take that discount with them to shop for a better price with other companies.

This time, they say, military personnel receive the discount; people who’ve lost their job for a period of up to 18 months also qualify for the discount, as do those who lapse coverage for 90 days for any reason; children living with a parent will receive the same discount available to their parent; and consumers will get a discount for each year they were insured in the previous five years (e.g.. if you had four years of insurance you will get 80 percent of the discount).

“The present system is broken,” D’Arelli said. “It is ridiculous that the consumer loses the discount they have earned if they go to a new insurance company. We strongly believe that allowing the consumers to control their discount will create a more competitive and cost effective insurance market.”

Consumer Watchdog is dead set against the measure, saying it would repeal the voter-approved Proposition 103’s ban on considering a driver’s insurance coverage history when setting rates and premiums, thus letting insurers start surcharging customers. The group estimates those surcharges would increase premiums by as much as 40 percent or more for millions of Californians.

Mercury Insurance had spent more than $15.9 million on its unsuccessful attempt to pass Proposition 17 last year. Now its chairman has spent more than $8.2 million out of his own pocket to back this new measure.

“Mercury is using the resources and influence of its billionaire chairman to buy its way onto anther ballot, hoping to fool the voters of California,” consumer advocate Brian Stedge said earlier this month. “This measure is an abuse of our ballot initiative process by a single corporation that refuses to play by the rules.”

4

Blue Shield, Boehner and ballooning deficits

A trio of California House members expressed concern today about Blue Shield of California’s announcement of a significant increase – averaging 30 to 35 percent – in health insurance premiums for many of its policyholders, a hike the Democratic lawmakers say will force many Californians to choose between health insurance and daily necessities such as food and rent or mortgage payments.

(Yep, that would be the same Blue Shield of California that gave $15,000 to outgoing Gov. Arnold Schwarzenegger’s officeholder account late last week, days before he left office; it also gave $10,000 Monday to the California Republican Party and $3,568.83 to Democratic state Senate candidate Ted Lieu.)

Reps. Pete Stark, D-Fremont; George Miller, D-Martinez; and Henry Waxman, D-Los Angeles, said the increase underscores the danger of repealing last year’s health care reforms, as House Republicans have vowed to do.

“Thanks to health reform, for the first time these rate increases are completely transparent and posted on healthcare.gov,” Stark said in their news release. “With the increased resources from the health reform law, California can work with Blue Shield to mitigate these increases and protect consumers. Unfortunately Republicans want to immediately repeal these protections, and future reforms that will prevent rate increases like this in the future.”

Miller said Blue Shield’s announcement “just shows that the status quo is not working for California’s families.”

“And Republican repeal of health reform will only put big insurance companies in even greater control of Americans’ health care,” he continued. “The Affordable Care Act, when fully implemented, will ensure real competition and accountability so that families already stretched thin by health insurance costs can find relief. Repealing the health reform law poses a real danger to middle class families.”

The Dems noted Blue Shield clearly stated its proposed increases “cover a period of more than one year and have almost nothing to do with the federal health reform law. These rates reflect trends that were building long before health reform.” The insurer also noted health reform actually will help get costs under control in the future through initiatives that make health care more efficient, the lawmakers said.

(UPDATE @ 3:50 P.M.: Rep. John Garamendi, D-Walnut Grove, a former state Insurance Commissioner, got in on the act, too. “Today’s egregious rate hike by Blue Shield of California is further proof that we can’t trust the insurance industry to stand with consumers,” he said. “As we climb out of a deep recession, the insurance companies are kicking us back down. Fortunately, for rate increases over 10 percent, the 2010 health care reform allows the Federal government to review, question, and disclose facts to the public about the increase.”

“When Congress passed the Patient’s Bill of Rights last year, we instituted important reforms that are helping to rein in the worst abuses of the insurance industry. Next Wednesday, House Republicans will attempt to repeal these vital consumer protections,” he continued. “Even with the strong consumer protections found in the Patient’s Bill of Rights, insurers like Blue Shield are still exploiting patients for financial gain. This is an argument for more consumer protections, not less. House Republicans want to replace the Patient’s Bill of Rights with the Insurance Industry’s Right to Discriminate. Let’s not start the New Year by exposing consumers to new risks.”)

For more on today’s healthcare follies, follow me after the jump…
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Medical malpractice tort reform a red herring

I’ve written or contributed to several stories in the past week on health care reform, and a few readers have e-mailed to ask why I didn’t delve into tort reform to bring down medical malpractice premiums that they believe are driving skyrocketing health care costs.

The answer: Because medical malpractice premiums aren’t driving skyrocketing health care costs.

From Bloomberg News:

(A)nnual jury awards and legal settlements involving doctors amounts to “a drop in the bucket” in a country that spends $2.3 trillion annually on health care, said Amitabh Chandra, a Harvard University economist. Chandra estimated the cost at $12 per person in the U.S., or about $3.6 billion, in a 2005 study. Insurer WellPoint Inc. said last month that liability wasn’t driving premiums.
Obama told an American Medical Association meeting in Chicago yesterday that his efforts to cut costs and increase coverage couldn’t succeed without freeing doctors from the fear of lawsuits. While that may be what his audience needed to hear, the evidence that malpractice drives up health-care costs is “debatable,” said Robert Laszewski, an Alexandria, Virginia, consultant to health insurers and other companies.
“Medical malpractice dollars are a red herring,” Chandra said in a telephone interview. “No serious economist thinks that saving money in med mal is the way to improve productivity in the system. There’s so many other sources of inefficiency.”

The Congressional Budget Office in 2004 concluded that medical malpractice tort reform wouldn’t have a significant effect on health care costs:

Malpractice costs amounted to an estimated $24 billion in 2002, but that figure represents less than 2 percent of overall health care spending. Thus, even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.

And Americans for Insurance Reform, a coalition of nearly 100 consumer and public interest groups around the country, issued a report in July which found:

    • Medical malpractice premiums, inflation-adjusted, are nearly the lowest they have been in over 30 years.
    • Medical malpractice claims, inflation-adjusted, are dropping significantly, down 45 percent since 2000.
    • Medical malpractice premiums are less than one-half of one percent of the country’s overall health care costs; medical malpractice claims are a mere one-fifth of one percent of health care costs. In over 30 years, premiums and claims have never been greater than 1% of our nation’s health care costs.
    • Medical malpractice insurer profits are higher than the rest of the property casualty industry, which has been remarkably profitable over the last five years.
    • The periodic premium spikes that doctors experience, as they did from 2002 until 2005, are not related to claims but to the economic cycle of insurers and to drops in investment income.
    • Many states that have resisted enacting severe restrictions on injured patients’ legal rights experienced rate changes (i.e., premium increases or decreases for doctors) similar to those states that enacted severe restrictions on patients’ rights, i.e., there is no correlation between “tort reform” and insurance rates for doctors.

Actually, at least 30 states already have capped medical malpractice lawsuit awards. One of ‘em is Texas; wanna see what’s driving health care costs there? This is a good read.