CROOK ALERT! Corporate Leeches Contribute to High Health Care Costs

Doctor William McGuire--One of the Greediest Corporate Hogs

6-29-09 NY Times Editorial

Editorial

Insurance Company Schemes

Published: June 28, 2009

Congressional committees heard a lot this month about the devious schemes used by health insurance companies to drop or shortchange sick patients. It was a damning portrait — and one Americans know from painful personal experience — of an industry that all too often puts profits ahead of patients.

As health care reform moves forward, Congress must impose tighter regulation of companies that clearly are not doing enough to regulate themselves. Creating a public plan could also help restrain the worst practices, by providing competition and an alternative.

A House oversight subcommittee took a close look at a particularly shameful practice known as “rescission,” in which insurance companies cancel coverage for some sick policyholders rather than pay an expensive claim. The companies contend that rescissions are rare. But Congressional investigators found that three big insurers canceled about 20,000 individual policies over a five-year period — allowing them to avoid paying more than $300 million in medical claims.

The companies typically argue that the policyholders withheld information about pre-existing conditions that would have disqualified them from coverage. But the subcommittee unearthed cases where the pre-existing conditions were trivial, or unrelated to the claim, or not known to the patient. When executives for the three companies were asked if they would be willing to limit rescissions to cases where the policyholder deliberately lied on an application form, all said they would not. This tactic will not be ended voluntarily.

Meanwhile, the Senate Commerce Committee was getting an earful from a former head of corporate communications for Cigna, a big health insurer. He charged that the industry deliberately confuses its customers by making it hard to obtain information about its practices and issuing incomprehensible documents.

He also charged that the companies “dump the sick,” through rescissions and by purging small businesses whose employees’ claims exceed what underwriters expected. They are often hit with huge rate increases intended to force them to drop coverage.

The Commerce Committee also released a staff report elaborating on how insurance companies operating in every region of the country have used statistically manipulated databases to reduce their payments for services provided by doctors outside their networks. Patients must then pay the often considerable difference.

Any legislation to reform the health care system, and extend coverage to millions of uninsured Americans, must stop these practices.

One way to do that is by creating insurance exchanges where individuals and small businesses could buy policies from insurers that would be required to accept all applicants without regard to pre-existing conditions and charge them premiums unrelated to their health status, and would be barred from dropping them no matter what illnesses they developed.

If health care reform requires virtually all Americans to carry health insurance — as it should — industry leaders acknowledge that there would be enough healthy people paying premiums to offset the higher costs of covering the sick and the need for rescissions and other such practices would disappear.

No matter what happens, strong regulatory oversight will be a must to ensure that insurers skilled in denying coverage don’t find new ways to evade just claims.

Competition from a new public plan could provide a benchmark for judging how well private plans are performing. And clear evaluations of both public and private plans would be a boon for consumers. Senator Jay Rockefeller has proposed creating a nonprofit organization to grade all plans offered on a national exchange based on such factors as adequacy of coverage, affordability, customer and health provider satisfaction, and transparency of procedures and decision-making.

The health insurance industry has pledged to assist in the reform effort. Congress will have to be tough and vigilant to ensure that it does.

GOOD NEWS! McGuire Forced to Cough Up $618 Million

Ousted CEO of United Health Care and giant, parasitic, blood-sucking leech (please excuse my redundancy) on society, William McGuire, was forced to disgorge $418 million of his ill-gotten gains to settle charges of stealing from his shareholders, not to mention the public, by back-dating his stock options, The $418 million he was forced to cough up was on top of a prior $200 million, bringing his total disgorgement to an astounding $600 million, the Wall Street Journal reported today December 6. 2007..

Don't feel too sorry for Dr. McGuire. He was allowed to keep $800 million of his stock options! He won't be applying for Medicaid soon.

And we wonder why rising health care costs are bankrupting the nation while millions can't afford health care insurance!

Steal a loaf of bread and go to jail. Steal $600 million and return it without admitting or denying gulit.

As an old Colombian saying goes "The law is a mad dog that bites only the poor."

Here's a link to Eric Dash's article in the NYT 12-7-07 which contains all the gory details.

http://www.nytimes.com/2007/12/07/business/07options.html

 

Chief Executive at Health Insurer Forced Out in Options Inquiry

Dr. William W. McGuire, a medical entrepreneur who built the UnitedHealth Group into a colossus in its field, was forced to resign from the company yesterday and to give up a portion of the $1.1 billion he holds in harshly ciriticized stock options.

UnitedHealth, one of the nation's two largest health insurers, also dismissed its general counsel and a member of its board in what amounted to a sweeping overhaul of its governance practices and leadership ranks. The options that Dr. McGuire had been granted over the years have lead to criminal and civil investigations and public disapproval.

In a sweeping report released yesterday that was highly critical of management, a law firm hired by UnitedHealth to investigate the timing of stock options concluded that the company was riddled with poor controls and conflicts of interest. The report, which the company posted on its Web site, found that UnitedHealth had backdated options to maximize employees' compensation.

http://www.nytimes.com/2006/10/16/business/16united.html

UnitedHelath announces huge adjustment to historical earnings due to stock option scandal that resulted in the ousting of Doctor William "Hoggy Bill" McGuire.

Richard Scrushy

Richard Scrushy Settles with SEC for $81 Million

Disgraced former CEO of HealthSouth agreed to disgorge $81 million of his ill-gotten gains in order to settle an SEC lawsuit. He narrowly escaped conviction on criminal charges last year.

http://hubpages.com/hub/Richard_Scrushy__Disgraced_CEO_of_HealthSouth_Settles_SEC_Lawsuit_by_Disgorging_81_Million_of_Ill-Gotten_Gains

Rate Your Doctor Fairly

The New York attorney general, Andrew Cuomo, has negotiated an agreement with several health insurance companies that will make physician ratings more useful to comsumers and fairer to doctors. Under the agreements, if they rate doctors, the insurers can't rely only on cost but must also include quality as measured by national standards and guidelines and make public what factors are included in their ratings.

Cuomo found that various rating systems currently used are based primarily on the cost of care. Doctors may be awarded a grade or stars, much like a restaurant or movie review, if they routinely treat sick patients for less than their competitors do. With that information, employers are able to steer their workers to lower-cost doctors.

Here's a link to an editorial on doctor ratings in today's (12-8) NY Times.

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3 comments

Iðunn 10 years ago

name 'em and shame 'em. I'd like to see more of this.


pgrundy 7 years ago

I wish citizens would get out an embarrass these guys publicly. Whatever it takes. It just doesn't get much more sickening than this. Where is the grass roots campaign to keep these bastards in the public eye? That's what we need right now, to focus on the right (wrong) things.


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Ralph Deeds 4 years ago Author

8-6-12NYTimes--HCA Giant For-profit Hospital Chain Cited for Unnecessary Cardiac Surgery

Hospital Chain Inquiry Cited Unnecessary Cardiac Work - NYTimes.com

HCA, the largest for-profit hospital chain in the country, uncovered evidence of unnecessary — even dangerous — cardiac treatments at some of its medical centers in Florida.

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