Healthcare Reform, Texas Style
Texas governor Rick Perry wants the citizens of his state to believe that the reason so many of them do not have access to healthcare--and it is the state with highest number of uninsured in the nation--is because of LAWYERS.
So this is what gets posted on the governor's official web site.
Gov. Rick Perry has laid out a series of corrective measures to fix the medical lawsuit abuse crisis that is hurting doctors and hampering Texans' access to quality, affordable health care. Health care providers across the state have recounted troubling stories of malpractice insurance rates soaring as much as 400 percent in one year and of insurance carriers refusing to renew policies for some doctors – even those who have never had a malpractice claim filed against them.http://www.governor.state.tx.us/divisions/press/initiatives/malpractice/The governor's plan includes a call for meaningful lawsuit reform for the health care profession that caps non-economic losses to plaintiffs at $250,000. More than 20 other states have capped non-economic damages, resulting in lower liability insurance rates. California, for example, limits non-economic damages to $250,000 and has the third lowest medical liability rates in the nation.
Mr. Perry's facile solution to the healthcare crisis: Blame the lawyers.
This is wrong. And Mr. Perry is wrong.
Here's what Stateline.org reports about healthcare misery in Texas.
Texans are more likely than citizens in any other state to be living without health insurance. Women in Wyoming have the least earning power compared to men, and more Mississippians on average live in poverty than anywhere in the country.http://www.stateline.org/live/details/story?contentId=137851
And again, from Stateline.org:
With a quarter of its population lacking health insurance, Texas held on to the dubious distinction as the state with highest rate of uninsured residents in the country, followed by New Mexico, where 21 percent of residents had no coverage.
It's pretty clear that Governor Perry believes reining in trial lawyers makes Texas a model for the nation--he says it himself:
Texas has already become a model for the nation. Today, a doctor in a malpractice case is liable for no more than $250,000 in non-economic damages, such as the often ambiguous “pain and suffering” award. Total liability for non-economic damages for a specific incident, including hospitals, cannot exceed $750,000. Patients harmed by medical negligence maintain unlimited access to economic damages, like lost wages or medical expenses.
Promoters of tort reform as the solution to our American healthcare crisis also support the other myth du jour which weaves the fantastical idea that consumer-driven healthcare will solve all our problems.
According to proponents, by making patients more aware of health care costs, consumer-directed plans (also known as consumer directed-healthcare CDHC) hold great promise for cutting health care spending. But what these myth-weavers do not say is that CDHC will also remove the healthiest patients from the comprehensive insurance risk pool; raise individual patients’ out-of-pocket expenses, reduce access to preventive and other needed health care, and, ultimately, increase both the number of uninsured individuals and total health care spending.
Most damaging, consumer-driven health plans would offer little benefit to many of the currently uninsured. U.S. Census Bureau data shows that one-third of uninsured people earn less than $25,000; another third earn between $25,000 and $50,000 a year. These people do not have financial resources to set aside even tax-deferred money for a consumer-driven plan.
To understand the American healthcare crisis, you also need to know about medical loss ratios, a critical number relied on by our for profit health insurance industry.
Medical loss ratios are the proportion of total operating revenue spent for health care.
The medical-cost ratio - also called the medical-loss ratio or medical-care ratio - is the key number for health plans in terms of their level of profitability. That ratio, simply, is the percentage of dollars the companies spend on health care.
Insurance companies monitor these ratios carefully to keep them from surpassing predetermined targets.
As medical loss ratios dip, health insurance company profits explode.
The same is true of administrative expense ratios. Low medical loss and high administrative expense ratios have become political hot buttons.
If physicians needed any more indication of tightening reimbursement, how about this - not only did profits for the biggest health plans go up last year, but those plans also continued to cut the percentage of revenue they spend on care.
The bottom line is that out-of-control and unaffordable healthcare is not about trial lawyers, it's about insurance company profits. Period.
Americans--all of us--have health needs that directly conflict with the bottom line profit realities of insurance companies.
Americans--every one of us--are at war with the insurance industry. They want our money. They want our bodies. Then, if we get sick, they want us to just give up and die.
Whereas 10 years ago many plans had medical-cost ratios in the high 80s or 90s, now the highest percentage among large, publicly traded health insurers is Health Net, at 83.9%. Aetna, which had a medical-cost ratio well into the 90s when CEO John Rowe, MD, took over in 2000, recorded a ratio of 76.9% in 2005, Dr. Rowe's final full year before his retirement. That was the lowest medical-cost ratio for the nation's largest publicly traded plans.
Physicians for a National Health Program recently compiled the medical loss ratios of the largest for profit insurers. These are the medical loss ratios for the top five for profits insurance companies for 2005:
Medical-loss ratios for 2005 (Source: Company 10-K, year-end filings with the Securities and Exchange Commission):
76.9% - Aetna
82.3% - Cigna
83.9% - Health Net
83.2% - Humana
78.6% - UnitedHealth Group
80.6% - WellPoint
Tort reform and consumer-directed health plans do nothing to address these realities.
Insurance companies do not wish you well. Many politicians do not wish you well either.
Beware of politicans making untruthful claims.