It's hard to dis-intermediate insurance salespeople

 The WSJ has the story:

How Life Insurance Agents Beat Back a Tech Onslaught. Startups tried to bypass salespeople but now embrace them.  By Leslie Scism

"A decade ago, technology startups were planning to steamroll the stodgy life-insurance industry.

"They thought the glad-handing life-insurance agent who cornered customers at Little League games and closed deals at the kitchen table was a relic. Snazzy websites and sophisticated analytics would replace the one-on-one sales pitches and tedious application process that often involved a medical exam.

"The agents won the battle, and now the tech firms are courting them. Of seven startups that together raised more than $1.2 billion to sell life insurance directly to consumers, at least five now promote services to help agents sell policies, according to Coverager.com, which tracks so-called insurtech activity. One of the startups, five-year-old Sproutt, last month bought an insurance brokerage.

...

"Many of the tech firms now better appreciate an old industry adage: Life insurance is sold, not bought.

...

"Glenn Williams, president of life-insurance and financial-services firm Primerica Inc., said his company’s more than 135,000 full- and part-time agents are in people’s homes, “drinking your coffee, eating your brownies…getting the sale done.” 

Towards greater gun safety in San Jose

 The mayor of San Jose, CA, has some thoughts on making guns and gun ownership less dangerous, in a  NY Times opinion column:

400 Million Guns Aren’t Going to Just Go Away. In San Jose, We’re Trying Something New. By Sam Liccardo (Mr. Liccardo, a Democrat, has been the mayor of San Jose, Calif., since 2015. He is a former federal and local prosecutor.)

"Amid the rising tide of firearms, reducing gun deaths and injuries requires new solutions. In San Jose, Calif., where I am mayor, we’ve embarked on two approaches untried in any other city or state: We’re imposing an annual fee on gun-owning residents and investing the revenues in violence prevention efforts. And on Jan. 1, the city will begin requiring gun owners to carry liability insurance to compensate victims harmed by the negligent or reckless use of a firearm.

...

"Most gun-owning residents can comply with the insurance mandate with little or no additional cost under standard homeowners’ and renters’ policies. As more jurisdictions adopt an insurance requirement — legislators in New Jersey and California have recently proposed them — we expect that the insurance industry will become increasingly invested in reducing gun-related harm. Premiums will reflect the risks of gun ownership and will adjust accordingly, in the same way that auto insurers offer “good driver” discounts or how they incentivized the installation of anti-lock brakes and airbags in the past.

"Of course, in the realm of gun regulation, no good deed goes unlitigated. Three groups sued San Jose after the ordinance imposing the fee and insurance requirement passed. A Federal District Court declined their pleas for an injunction to stop the ordinance from taking effect, finding no unconstitutional burden on Second Amendment rights where “there are no means by which a San Jose gun owner may be deprived of his or her firearm.”

Gay couples, surrogacy, IVF and health insurance

 The Guardian has a story about the obstacles consulting a married gay couple in New York. They have an ongoing lawsuit regarding discrimination in health insurance for IVF. (Much of the article is also about the debate over whether surrogacy is ethical or exploitative):

‘We are expected to be OK with not having children’: how gay parenthood through surrogacy became a battleground  by Jenny Kleeman

"That’s when they first became aware of the eye-watering cost of biological parenthood for gay men. Maggipinto reels off the price list in a way that only someone who has pored over every item could. There’s compensation for the egg donor: no less than $8,000 (£6,600). The egg-donor agency fee: $8,000-10,000. The fertility clinic’s bill (including genetic testing, blood tests, STD screening and a psychiatric evaluation for all parties, sperm testing, egg extraction, insemination, the growing, selecting, freezing and implantation of the resulting embryos): up to $70,000. And that’s if it all goes well: if no embryos are created during a cycle, or if the embryos that are don’t lead to a successful pregnancy, they would have to start again.

"Then there’s the cost of a surrogate (called a “gestational carrier” when they carry embryos created from another woman’s eggs). Maggipinto and Briskin were told agency fees alone could stretch to $25,000, and the surrogates themselves should be paid a minimum of $60,000 (it is illegal for surrogates to be paid in the UK, but their expenses are covered by the intended parents). “That payment doesn’t include reimbursement for things like maternity clothing; lost wages if she misses work for doctors’ appointments or is put on bed rest; transportation; childcare for her own children; [or] lodging.” It takes 15 minutes for Maggipinto to run me through all the expenses they could incur if they tried to have a child genetically related to one of them. The bottom line? “Two hundred thousand dollars, minimum,” he says.

...

"Briskin used to work for the City of New York as an assistant district attorney, earning about $60,000 a year. His employment benefits had included generous health insurance. But when they read the policy, they discovered they were the only class of people to be excluded from IVF coverage. Infertility was defined as an inability to have a child through heterosexual sex or intrauterine insemination. That meant straight people and lesbians working for the City of New York would have the costs of IVF covered, but gay male couples could never be eligible.

...

"There’s a stark contrast between American and Ukrainian surrogates, Maggipinto says. “Here you have to be a woman who has already had children, who is over a certain age, who can prove that she is independently financially capable of sustaining herself without her surrogate compensation. You effectively cannot be a poor surrogate.” He is referring to the American Society for Reproductive Medicine’s guidelines, but with no official regulation in the US, there’s no compulsion for anyone to follow them.

...

"The EEOC will rule on whether the terms of Briskin’s health insurance were discriminatory within a few weeks. The City of New York has so far defended its policy. The couple’s attorney, Peter Romer-Friedman, tells me: “They say their healthcare plan doesn’t provide surrogacy for anyone, so it’s not discrimination to deny it to Corey and Nicholas.” Just like everyone else, the city’s first response was to assume this was all about access to surrogacy."

Are sociology and economics coming closer together? Philippe Steiner in Acta Oeconomica

 Professor Philippe Steiner, of the Groupe d’Etudes des Méthodes de l’Analyse Sociologique de la Sorbonne, thinks that these days sociology and economics may be coming closer to each other than they have for some time.

New economic sociology and economic theory by Philippe Steiner, Acta Oeconomica 72 (2022) S1, 23–40  DOI: 10.1556/032.2022.00017

"Abstract: The paper begins with a brief reminder of the origin of economic sociology. It then surveys research by economic sociologists from the 1980s to the present, with a focus on their relation to political economy, which ranges from close to arm's length. Finally, beyond any differences between economic theory and economic sociology, the paper considers how both approaches can be connected in the socio-historical and economic study of economic inequalities by Thomas Piketty, and the use of matching markets by Alvin Roth."

...

"In the final part the paper seeks to show that economists have developed approaches that permit a fruitful combination of sociology and political economy, even using some of the more technical aspects of modern economics.

...

"After the 1930s economic sociology lost its appeal for economists, as well as sociologists, and gave way to the “Parsonian peace” according to which economists deal with value, while sociologists deal with values (Stark 2009: 7).

...

"There was a revival of economic sociology during the 1970s on both sides of the Atlantic. In the United States, this began with Mark Granovetter’s work on the labor market (Granovetter 1974), and then with a new interpretation of the social embeddedness of the market (Granovetter 1985). This was something that Polanyi had stressed in his book, noting the catastrophic consequences that follow the management of humanity, nature and politics as if they were market goods (labor, land and money) regulated by “supply and demand” in their respective markets. In the same period, Viviana Zelizer (1979, 1985) brought the sociology of culture closer to the sociology of economic life. In Europe, Pierre Bourdieu proposed a new interpretation of the market for cultural goods (or symbolic goods), to explain the functioning of the art market (Bourdieu 1971).

"As regards the relation to economic theory, the new economic sociology unfolds along four axes: (i) Granovetter established a close and direct relationship between economic sociology and the neo-classical theory of job search, together with the theory of transaction costs; (ii) Zelizer distanced herself completely from economic theory, although her sociology of economic life deals with central economic phenomena such as insurance, money, and law; (iii) Neil Fligstein developed an economic sociology close to institutionalist political economy, focusing on key institutions of the market, notably those regulating competition; finally, (iv) Bourdieu employed an original conceptualization of fields in order to explain the functioning of the markets of symbolic goods (fashion, painting, literature), while at the same time developing a methodological criticism of economic theory.

...

"In the case of the creation of the life insurance market in the United States, Zelizer started from the following paradox: while changes in social structure – fewer landowners, less mutual aid between neighbors – made it increasingly rational to insure one’s life to avoid leaving one’s wife and children destitute in the event of premature death, the life insurance market remained sluggish during the 19th century compared to what it was in Great Britain and in France. How do we explain this apparent lack of self-interested behavior in American male breadwinners? Zelizer’s answer employed several cultural arguments, including one based on the relationship to religion. During this period there was a widespread idea that to insure oneself against premature death was to oppose the will of God, even to not trust his wisdom. This was the reason for the reluctance to accept this new market product, the life insurance contract. A strength of her argument is also that she is careful not to oppose social behavior and self-interested economic behavior head-on. In fact, two phenomena directly linked to religion intervene to modify this cultural relationship to life insurance. First, she points to the fact that the religious sects that sent pastors to frontier regions took out life insurance on them so that the sect would not have to take care of their families if they died – a financial interest played its part in religious institutions. Second, she notes a reversal in the religious discourse on life insurance. In the beginning of the 20th century not only preachers, but also the rhetoric of insurance salesmen emphasized that the good father is he who takes precautions against premature death, hence this good father must be insured. Both culture and the economy began to structure behaviors that promoted a developing insurance market.

...

"While economists continued to employ the hypothesis of rationality, this is no longer central to the discourse of economic sociologists; the idea that economists are remote from the historical and social dimension has also lost its intensity. Instead, other criticisms have emerged, especially associated with the idea of performativity. At present there is neither conflict, or mutual indifference. Indeed, in several fields there are signs of an explicit or implicit rapprochement. I would like to mention two in particular.

"First of all, given the capacity of modern computers to process large databases, economists can deploy econometric tools in ways that accurately account for historical and social facts, as Thomas Piketty (1998, 2013, 2019) does. Second, by pursuing the strategy of economic engineering proposed by Alvin Roth (2002), economists take up the practical work of constructing institutions of exchange, exemplified by design economics and matching markets economists, developing what sociological economists have called the economic performation of the economy by economics (Callon 1998; MacKenzie et al. 2007)"

**********

Earlier

Thursday, January 6, 2022

The design and performation of markets: a discussion, by Michel Callon and Alvin Roth in the AMS Review

Pharmacy Benefit Managers--Alex Chan on NPR's Planet Money podcast

 Alex Chan is interviewed on the role of pharmacy benefit managers, their role in drug pricing, and some problems with the market design.

Alain Enthoven on fragmented American health care

 Writing in Health Affairs, Alain Enthoven notes that most American workers insured through their jobs work for self-insured employers, i.e. employers who themselves pay for the health care of their covered lives. This means that many of them are relatively small buyers of health insurance, which leads them to deal with fee for service providers, rather than big health maintenance organizations, which might be a better model for a national health care system.

Employer Self-Funded Health Insurance Is Taking Us In The Wrong Direction by Alain C. Enthoven

"The 2020 Kaiser Family Foundation Survey of Employer Health Benefits reports that 67 percent of employed, insured workers are covered under self-insured, or self-funded, arrangements. Under these arrangements, the employer, not an external insurer, directly bears the financial risk for the cost of employee health care.

Self-funded arrangements have grown steadily as a share of the insurance market over the past 15 years and now include many employers with less than 200 employees. While this may be the most cost-effective decision for individual employers under the current regulatory framework, it has the effect of locking in uncoordinated, open-ended fee-for-service (FFS) and locking out comparatively economical Integrated Delivery Systems (IDS)."

The complex economics of dialysis and insurance, in Freakonomics

 Freakonomics peeks under the rocks to see what crawls out:

Is Dialysis a Test Case of Medicare for All? (Ep. 457)  by Stephen J. Dubner

"But as he dug into their business, he discovered what looked like a suspicious relationship between the two dialysis chains and a charity called the American Kidney Fund, whose mission is to provide financial support to needy patients.

CHANOS: So, the American Kidney Fund will help various patients pay for private policies. 

Private insurance policies, that is, instead of Medicare.

CHANOS: The patient is strongly urged because of quality of care, convenience, whatever the case might be, that they will be treated better as a commercial-policy patient rather than a government-policy patient and that the American Kidney Fund could help them pay those premiums.

On its surface, that does not sound like a terrible thing for a kidney charity to do. But Chanos looked at it from the perspective of the dialysis industry.

CHANOS: If the dialysis companies could push people that would normally be eligible for Medicare into commercial policies, private policies, they could charge those companies often two to four times what the going Medicare reimbursement rate was.

And Chanos believed that pushing people onto commercial insurance is exactly what the American Kidney Fund was doing. It’s helpful here to follow the money.

CHANOS: It will come as probably no shock that the two largest donors to the American Kidney Fund are the two largest dialysis companies, Fresenius and DaVita. 

In 2018, DaVita and Fresenius reportedly donated a combined $247 million to the American Kidney Fund — or about 80 percent of the charity’s revenues.

CHANOS: So, they are basically putting money into the charity. The charity is turning around and using that money to help pay premiums to enroll patients in commercial insurance. And then, the commercial insurers are charged a huge premium to what the dialysis companies are charging the government. 

It’s estimated that for every dollar that DaVita or Fresenius send to the American Kidney Fund, they receive $3.50 in return from private-insurance payments.

CHANOS: And that’s the problem. 

One especially interesting part of this arrangement is who’s losing money: the insurance companies! It’s not often you hear about insurance companies on the losing end — and maybe you don’t have much sympathy.

CHANOS: “Well, it’s the private sector, right? So, why should we care if the insurers make less profits?” Well, the fact of the matter is it’s raising premiums for everybody in the exchanges.

That is, the insurance exchanges, the marketplaces created by the Affordable Care Act, also known as Obamacare.

CHANOS: And the head of California Blue Cross Blue Shield was on the record saying that the dialysis in California was driving up private policy rates dramatically"

De-adopting zombie medical procedures

What happens to medical procedures that are found to be no more effective than placebos?  Some live on for quite a while. One thing that works is to stop paying for them.

Here's an article in JAMA:

De-adopting Low-Value Care--Evidence, Eminence, and Economics

Brian W. Powers, MD, MBA1; Sachin H. Jain, MD, MBA2,3; William H. Shrank, MD, MHSA1   JAMA. Published online October 2, 2020. doi:10.1001/jama.2020.17534 

"An often cited shortcoming of the US health care system is the slow pace with which new innovations are adopted into routine clinical practice.1 A parallel problem receives comparably less attention: the US and other countries are slow to abandon practices that provide little or no benefit to patients. Despite robust research cataloguing common practices that confer little or no value,2,3 these practices remain widespread, accounting for an estimated $67 billion in spending annually.4 For example, estimates suggest that the Centers for Medicare & Medicaid Services (CMS) spends more than $274 million annually on carotid artery disease screening for asymptomatic patients and more than $111 million annually on cervical cancer screening for women older than 65 years.2 The concept of de-adopting these and other low-value services is embedded in the Less Is More series in JAMA Internal Medicine5 and in the Choosing Wisely campaign from the American Board of Internal Medicine.6"

Vic Fuchs considers healthcare organization going forward, in JAMA

Vic Fuchs has a lot of insight into American healthcare. Here are his proposals for after the pandemic (or perhaps for a new administration in Washington). It is worth reading it all (I'm just excerpting some lines...)

Health Care Policy After the COVID-19 Pandemic
Victor R. Fuchs, JAMA.  June 12, 2020. doi:10.1001/jama.2020.10777

"This is a time to think more boldly about the future of the US health care system. The health care system is dysfunctional for many individuals in the US; it is too costly, too unequal, and too uncertain in its eligibility and coverage, with an increasing number of uninsured. ... In exploring the challenges and difficulties ahead, it is useful to distinguish between those that are primarily technical issues (although these are not exempt from politics) and those that are political obstacles to significant reform

...[Technical issues:]

"how to raise the nearly $4 trillion each year to pay for US health care; and how to organize and deliver the care and compensate those who provide it. The experience of other high-income countries indicates that the most efficient and equitable method to finance universal coverage is through a flat tax on consumption, such as a value-added tax, collected from businesses but passed on to consumers via higher prices.1 An alternative is a retail sales tax, which is more cumbersome and costly to collect than a value-added tax, but makes the connection between the tax and health insurance more apparent to the public.

"Those who object to a flat tax (the same rate for everyone) because they think it is not progressive are mistaken. High-income individuals pay more because they consume more, but everyone gets similar health insurance regardless of income. The combination of the tax and the insurance is quite progressive. If it were not, left of center governments in the Organization for Economic Cooperation and Development would not eagerly embrace a value-added tax. In contrast, employment-based insurance sets essentially the same price for any given policy regardless of income. High-income individuals only pay more if they choose a more expensive policy, but that does not help pay for care for low-income or unemployed individuals.

...[Political issues:]

"Distrust of the government is difficult to dispel, but it is possible to do so as President Roosevelt proved with his New Deal reforms in the 1930s. Even though it has seemed that major reform of health care would only occur in the wake of a major war, a depression, or large-scale civil unrest that changed the political balance, it now appears that the COVID-19 pandemic may provide the dynamic for major political change.8 If that occurs, major health care reform will be more attainable."

Kidnapping insurance

Preston McAfee points me to the following interesting article:

The weird world of kidnapping insurance, by Jeff Spross

"A private market for insuring and dealing with kidnappings might sound, at first blush, like a terrible idea. A kidnapping is already a fraught situation; a mix of fear, greed, violence, and coercion that occurs outside the bounds of the law. And private insurers often have a reputation for being cold-blooded and predatory themselves. The average person could be forgiven for balking at the idea of combining the two.

"Yet not only does a private market for insuring kidnappings and advising the negotiations exist — by all accounts it's quite effective. If you're the victim of a kidnapping where professional insurers and negotiators are involved, the chances that you'll come back alive are roughly 97.5 percent.

"The K&R market consists of 20 or so firms, all operating out of Lloyd's of London, an international marketplace based in Britain, where insurance providers, clients, brokers and underwriters can all find one another. The K&R firms compete for business, and provide their clients with both insurance to backstop potential ransom payouts and consultants who help guide and strategize the actual negotiations with the kidnappers. While some wealthy individual families do occasionally buy the services of K&R providers, the vast majority of customers are companies insuring their employees who work in risky areas. Roughly three-fourths of Fortune 500 companies have some sort of policy, with total premiums reaching $250 to $300 million a year.
...
""The only way that kidnapping can work as well as it does is that the kidnappers understand that they're in a repeated business," Anja Shortland, an economist at King's College London, who's written a book on the K&R insurance market, explained to The Week. "They keep their promises this time and they treat the hostages well this time because they know that if they don't then their business will decline in the future."

That's where the private firms who provide the consulting and the insurance coverage come in: "It's a one-off transaction between the family and the kidnapper, but it's a repeated interaction for the insurance market," Shortland said."

Vic Fuchs on the problems of employment-based health insurance, in JAMA

Vic Fuchs, the dean of American health economists, argues that employment-based insurance has an assortment problem focused on high income consumers (he compares it to Whole Foods versus Walmart) and a related high cost of administration.

May 9, 2019
Does Employment-Based Insurance Make the US Medical Care System Unfair and Inefficient?
Victor R. Fuchs, JAMA. Published online May 09, 2019. doi:10.1001/jama.2019.4812

"In the United States, the interests of high-income individuals dominate decisions about what medical care is offered and how it is financed. The result is a less efficient and less equitable medical care system than in other high-income countries. Employment-based insurance plays a key role in determining the production and financing of US medical care.
...
"Emphasis is on specialty and subspecialty care, expensive technology, extra capacity to facilitate access (US hospitals have an average occupancy rate of 65% compared with an average of 76% according to the Organisation for Economic Co-operation and Development), and more and better-quality amenities, including space and privacy in the hospital.3 Architects who build in many countries suggest that design for US hospitals must also include better space for visitors and professional staff. This more costly product mix (specialty care and hospital amenities) is appreciated by patients at all income levels, but higher-income patients would and sometimes do pay extra for them. Many low- and middle-income households would be better off if medical care was less costly, and they had more money for other public and private goods and services.
...
"The preference of high-income patients for a costly product mix also adversely affects the efficiency of research and development in the choice of projects because market size influences the direction of investment in innovation. Almost all private medical research and development is directed toward extending the product mix with few attempts to discover new lower-cost interventions with truly disruptive innovations. The interests of high-income patients not only result in inefficiency in medical care production and innovation, but also adversely affect the way the United States finances health care. The present system, which is a mix of employment-based insurance, other private insurance, numerous government programs, including Medicaid and Medicare, each with its own eligibility rules and payment schemes, and out-of-pocket payments, is extremely costly to administer.4,5 The large role played by private insurance in the United States helps high-income households because the price of the insurance is the same regardless of income, whereas government plans typically require higher-income individuals to pay a larger share of the nation’s medical care bill."

Insurance, privacy, surveillance, algorithms, and repugnance

The NY Times is on the case:

Insurers Want to Know How Many Steps You Took Today
The cutting edge of the insurance industry involves adjusting premiums and policies based on new forms of surveillance.
By Sarah Jeong

"Last year, the life insurance company John Hancock began to offer its customers the option to wear a fitness tracker — a wearable device that can collect information about how active you are, how many calories you burn, and how much you sleep. The idea is that your Fitbit or Apple Watch can tell whether or not you’re living the good, healthy life — and if you are, your insurance premium will go down.
...
"artificial intelligence is known to reproduce biases that aren’t explicitly coded into it. In the field of insurance, this turns into “proxy discrimination.” For example, an algorithm might (correctly) conclude that joining a Facebook group for a BRCA1 mutation is an indicator of high risk for a health insurance company. Even though actual genetic information — which is illegal to use — is never put into the system, the algorithmic black box ends up reproducing genetic discrimination.

"A ZIP code might become a proxy for race; a choice of wording in a résumé might become a proxy for gender; a credit card purchase history can become a proxy for pregnancy status. Legal oversight of insurance companies, which are typically regulated by states, mostly looks at discrimination deemed to be irrational: bias based on race, sex, poverty or genetics. It’s not so clear what can be done about rational indicators that are little but proxies for factors that would be illegal to consider.
...
"A. I. research should march on. But when it comes to insurance in particular, there are unanswered questions about the kind of biases that are acceptable. Discrimination based on genetics has already been deemed repugnant, even if it’s perfectly rational. Poverty might be a rational indicator of risk, but should society allow companies to penalize the poor? Perhaps for now, A.I.’s more dubious consumer applications are better left in a laboratory."

HT: Julio Elias

Payments for kidney disease in the U.S.

Medpage Today has the story:

Kidney Disease Payment System Draws Medicare Scrutiny
'We do not think the state of kidney disease care is acceptable'

"Medicare needs to change the way it pays for kidney disease treatment in order to get better results, Adam Boehler, director of the Center for Medicare & Medicaid Innovation, said here.

"We do not think the state of kidney care is acceptable," Boehler said Wednesday at the annual meeting of the Healthcare Information and Management Systems Society. "Right now, we're at a place where 10% of patients in Medicare [with kidney disease] are seen at home, while you have Hong Kong, with a 70% rate. That's not OK. The level of transplants is not OK."

"What happens is that end-stage renal disease (ESRD) is siphoned out and [effort is] focused there, instead of viewing the whole spectrum, instead of thinking about chronic kidney disease before ranging from diagnosing it in the first place, to integration of later-stage chronic kidney disease, to ESRD," he said. "Because what you really want is the prevention of ESRD from developing," he said. "If it develops, you want [it] to be transplant wherever possible; if not, [treatment at] home wherever possible, and it should be a last resort that people go to a dialysis center."

...

"Boehler said he wasn't trying to demonize dialysis centers. "It's our fault; we set the incentives," he said, referring to Medicare. "You need to change those incentives. If we want people to do what's best for patients, if we want them to lower costs and improve quality for patients, they need to make money for doing that -- we'll look specialty by specialty to set it up like that."

"Medicare spends about $120 billion a year on kidney care, Boehler noted. "The first thing you may think about in ESRD is dialysis centers ... but that is not the majority of spend. The majority of spend is in other places -- hospitals, complications arising from them, et cetera. That doesn't mean we have to cut the spend there; it means you have to change around the way people make money." Right now, he said, for the dialysis centers, "if somebody gets a transplant, that's a lost customer."

Universal health coverage under siege from both the right and the left, in the U.S. and Mexico

Here's a commentary in The Lancet, comparing attacks on the Affordable Care Act in the U.S. and on Seguro Popular in Mexico.

A dark day for universal health coverage, by Julio Frenk, Octavio Gómez-Dantés, and Felicia Marie Knaul

"Dec 14, 2018, was a dark day for universal health coverage (UHC). To begin with, a federal judge in Texas, USA, ruled that the Affordable Care Act (ACA) is unconstitutional.1 That same day, the new President of Mexico, Andrés Manuel López Obrador, announced his intention to abolish the country's largest public insurance programme, known as Seguro Popular (People's Health Insurance).2 The ACA and Seguro Popular have extended health coverage to millions of previously uninsured families, most of them among the poorest in their respective countries. Signed into law in 2010, the ACA roughly halved the number of uninsured, from 46·5 million then to 26·7 million in 2016, towards the end of the Obama administration.3,  4 Following legislative approval, Seguro Popular began full-scale implementation in Mexico in 2004. Public expenditure increased to finance coverage for non-salaried workers and their families, approximately half of Mexico's total population, who were excluded from employment-based social insurance. By 2018, 53 million beneficiaries had access to 290 essential and 65 high-cost interventions.
...
"The challenge to the ACA has been headed by the right wing of the US Republican Party, whereas the attack to Seguro Popular comes mostly from the far left factions of the President's Morena party. This is an example of the way in which opposing political extremes can converge in their attack against centrist positions.
...
"Seguro Popular is one of the most thoroughly evaluated programmes in the world. A 2006 Lancet Series set out the evidence base for the design of this innovative initiative.7,  8 A comprehensive review9 published 8 years into implementation identified a large body of peer-reviewed articles, including one of the few randomised assessments of a large-scale social intervention.10 The evidence strongly points to major benefits of Seguro Popular in terms of financial protection and effective coverage,11 without labour market distortion.12 In a recent cover article on UHC, The Economist featured Seguro Popular among the most successful efforts in low-income and middle-income countries, noting how “studies suggest that Seguro Popular has drastically reduced the number of Mexicans facing catastrophic health costs and reduced infant mortality”

Insuring your whiskey collection

A word to the financially prudent: don't forget to insure your whiskey collection.
Bloomberg has the story, about American International Group Inc.’s private client group.

What the Rise in Whisky Insurance Tells Us About the Super Rich
AIG’s head of global collections sees younger generations eschewing the collectibles of their forebears.

“Whisky collectors now number in the many hundreds, closing in on 1,000 individual collectors of all stripes and values,” says Fiamma of AIG customers highlighting whisky within their insured collection. “When auction houses are holding two or three whisky auctions a year, with some whisky going for a million or half a million dollars, clearly it warranted attention.”

Vic Fuchs on desirable health insurance overhaul

In JAMA (gated:(.  Vic isn't optimistic about the political prospects of large scale reform of health insurance, but he has some thoughts about where we've gone wrong, and where we might try to go.

November 27, 2018
How to Make US Health Care More Equitable and Less Costly
Begin by Replacing Employment-Based Insurance
Victor R. Fuchs, PhD1
JAMA. 2018;320(20):2071-2072. doi:10.1001/jama.2018.16475

"With few exceptions, employment-based insurance is administered by health insurance companies. In consultation with employers, many of whom are self-insured, the insurance companies design benefit and premium schedules, negotiate reimbursement rates with hospitals and physicians, and approve or disapprove medical center, physician, and patient claims. There are only a few very large health insurance companies and many small ones, but none has been successful in restraining expenditures. The inability of large insurance companies to bargain more effectively with hospitals and physicians is a systemic problem.

"Most health care is delivered locally and, partly as a result of mergers and acquisitions, a predominant or premier hospital and affiliated physicians in a local market may have more bargaining power than even the largest insurance company. In some markets, a large insurance company is forced to pay more than twice the Medicare fee in part to retain a popular health care system on its plan.
...

"Box 1.

Characteristics of an Alternative Approach to Employment-Based Insurance

• Universal eligibility: Unlike employment-based insurance and many of the special government programs with sharply defined eligibility criteria, everyone would be insured for comprehensive health care, including hospital care, physician and other professional services, and prescription medications.
• Funding: This would come from a broad-based tax dedicated to health care.

...

Box 2.

Suggested Guidelines for an Alternative Approach to the Organization and Delivery of Medical Care

• Rely as much as possible on private-sector responsibilities and initiatives
• Limit the government’s role to broad decisions that do not require a large bureaucracy to implement
• Give consumers a choice of health care plans at annual enrollment. In contrast, giving insured patients a choice for individual hospitals and physicians leads to higher not lower expenditures. Choice should also include the right of individuals to buy more than the basic plan that would be paid for with their after-tax dollars.
• Provide for competition among health plans; this will be more valuable than competition among individual physicians.⁷ Competition should focus on service and quality of care.
• Develop reimbursement methods other than fee-for-service. Some economists maintain that risk-adjusted capitation payment to plans is the best way to achieve cost-effective care. Plans receiving capitation payment could offer productivity incentives to physicians if desirable."

Five approaches to the opioid crisis, by pharmacologists, doctors, insurers, prosecutors, and legislators

Five very different approaches to the opioid crisis--by
1. pharmacologists/biologists, 2. physicians, 3. payers,  4. prosecutors, and 5.legislators:

1. From PNAS:
Safer opioids may be on the horizon, but mitigating addiction is a long shot, by Jyoti Madhusoodanan

2. From Science:
Opioid prescribing decreases after learning of a patient’s fatal overdose, by
Jason N. Doctor, Andy Nguyen, Roneet Lev, Jonathan Lucas, Tara Knight, Henu Zhao, Michael Menchine

3. From the Chicago Trib, and from Stat:
Chicago limits opioid prescriptions for city employees

Tapered to zero: In radical move, Oregon’s Medicaid program weighs cutting off chronic pain patients from opioids

4. From Reuters:
New York sues OxyContin maker Purdue Pharma over opioids

5. From the NY Times
Congress Is Writing Lots of Opioid Bills. But Which Ones Will Actually Help?


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And here's an article from the NY Times on the magnitude of the crisis:

Bleak New Estimates in Drug Epidemic: A Record 72,000 Overdose Deaths in 2017: Fentanyl is a big culprit, but there are also encouraging signs from states that have prioritized public health campaigns and addiction treatment.

"Strong synthetic opioids like fentanyl and its analogues have become mixed into black-market supplies of heroin, cocaine, methamphetamine and the class of anti-anxiety medicines known as benzodiazepines."

An open marketplace for reinsurance

Tremor Technologies Inc. has announced its new online marketplace for reinsurance.  Here's the press release:

Tremor Technologies, Inc., a venture-backed startup based in Greenwich, CT, has announced that its programmatic risk placement marketplace is fully operational with significant buyers and sellers of reinsurance protection in place.


And here's an article with a little more detail:

Tremor opens programmatic marketplace for reinsurance risk placement
by ARTEMIS on AUGUST 14, 2018

"The company has venture capital backing and has been developing its technology platform and building a team of marketplace design experts* for two years now, with the resulting smart market now available.
...
"Peter Cramton, Tremor’s Chief Economist and a recognised international expert on auction theory and practice, as well as market design, commented, “We maximize value for both sides of the market and then fairly share that value among participants with competitive clearing prices.”

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*full disclosure--I'm on Tremor's advisory board.

Gaming the Affordable Care Act (ACA)

One of the big lessons of market design is that participants have big strategy sets. Here's a new paper that explores some of what that has implied about how the Affordable Care Act is gamed by some participants.

Take-Up, Drop-Out, and Spending in ACA Marketplaces

Rebecca Diamond, Michael J. Dickstein, Timothy McQuade, Petra Persson

NBER Working Paper No. 24668
Issued in May 2018
NBER Program(s):Health Care, Public Economics, Industrial Organization 

The Affordable Care Act (ACA) established health insurance marketplaces where consumers can buy individual coverage. Leveraging novel credit card and bank account micro-data, we identify new enrollees in the California marketplace and measure their health spending and premium payments. Following enrollment, we observe dramatic spikes in individuals' health care consumption. We also document widespread attrition, with more than half of all new enrollees dropping coverage before the end of the plan year. Enrollees who drop out re-time health spending to the months of insurance coverage. This drop-out behavior generates a new type of adverse selection: insurers face high costs relative to the premiums collected when they enroll strategic consumers. We show that the pattern of attrition undermines market stability and can drive insurers to exit, even absent differences in enrollees' underlying health risks. Further, using data on plan price increases, we show that insurers largely shift the costs of attrition to non-drop-out enrollees, whose inertia generates low price sensitivity. Our results suggest that campaigns to improve use of social insurance may be more efficient when they jointly target take-up and attrition.

Japan's health insurance will pay for overseas transplants

In Japan, the national insurance will now pay for some transplants done overseas, when they cannot be done at home. The discussion reflects concern that they may be accused of organ trafficking. (Thanks to Fuhito Kojima for the link...)

海外臓器移植、一部保険給付へ　１千万円程度　現在は全額自己負担

(Google translate: Overseas organ transplantation, partial insurance benefit To ten million yen now All costs self-burden)  http://www.sankei.com/politics/news/171212/plt1712120018-n1.html

"Katsuobu Kato Kunihiro Kato revealed a policy to pay part of expenses from public health insurance to patients who are going abroad and get organ transplants because they are not provided domestically at the Cabinet meeting after the Cabinet meeting on December 12 . Consider using "overseas medical care expense system" to reimburse overseas treatment expenses from medical insurance of subscribers. The relevant patient seems to be around ten people a year, mainly children.

　"Currently, all overseas organ transplant patients are borne entirely by themselves, and in the case of the heart, since it costs several hundred million yen, there are many cases where fund raising activities are carried out. There is also an international declaration that "Organs necessary for transplant surgery should be secured in the home country", and this policy can lead to promotion of transplantation and international criticism is also anticipated. Kato Atsushi said, "It is fundamental to implement organ transplants under the domestic regime and it will not change anything."

　"The subjects to be covered by insurance are limited to patients who satisfy certain criteria such as being registered in the Japan Organ Transplant Network and being in danger of maintaining life in the standby state. When applying for overseas medical expenses, it is also necessary to prove that it is an operation not applicable to organ trafficking."
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 I'm reminded of current controversies concerning global kidney exchange, which involves cross-border kidney exchange.