A Look Forward To Health Care In 2017: Top Five Trends

The new year is already underway and we expect both a new Republican-dominated Congress and President Donald Trump to bring ambitious policy changes to health care. With significant pent up energy among the Republicans and a limited 18-month window for legislation, lawmakers will be in an immediate all-out policy-making mode. This is particularly true for health care, which many in Congress consider a top issue on the docket. With an eagerness for change, health care is in flux, and difficult decisions will need to be made that will directly affect Americans both socially and economically. In this world, many are left wondering what to expect in 2017. Here are the top five health care trends to watch in the New Year. ObamaCare, Interrupted In all likelihood, legislation to repeal to the Affordable Care Act (ACA) will be sitting on Trump’s desk in short order. But a replacement plan will be missing and will require the balance of the year or later before it is complete. Despite all the rhetoric around “repeal and replace,” the governing realities are much more complex. For one, Republicans have a lot of finer points to work out. Five lawmakers and two conservative think tanks have introduced different health care blueprints and Republicans will work to get at least a handful of Democrats to sign onto their proposal, meaning we’re in for a year of consensus building as essential questions are answered and final proposals are built. For 2017, that may not be too much of an issue. Open enrollment closed on January 31 and those that have ACA coverage will keep it, but the clock is ticking. Insurers will need certainty around the law so they can design plans, set rates and premiums, and decide where they want to participate before some or all of the ACA exchanges phase out. If no replacement is forthcoming, the consequences could be significant, particularly for hospitals and health systems that must provide care regardless of insurance status, with reduced overall payments to offset the expense. And the pressure is on for lawmakers, as well. Millions of people now depend on the ACA’s benefits — from those who have gained coverage through the marketplaces and Medicaid, to children that can stay on their parents’ plans until age 26, to those receiving no-cost preventive services. A total overhaul could mean taking those benefits away completely, or shifting people into the ranks of the underinsured. Similar to an elaborate game of Jenga, our health system is made of interconnected pieces that if pulled at the wrong time or the wrong way, may result in the collapse of the entire structure. No question, change is needed. But we also can’t return to the days of millions of uninsured, coverage lock-outs due to pre-existing conditions, emergency rooms as the site of primary care, an unmanaged population that is invisible to the health care system, and ever-escalating costs. In the end, 2017 will be the year that we move beyond some of the partisan stand offs that have tainted the ACA. One hallmark of these reforms will be moving away from the top-down federal mandate approach toward one that prioritizes customization and state-led innovations. Health Care Hunger Games Each choice has implications, some more advantageous than others. Letting the markets figure it out is in line with Republican ideology about getting government programs out of the way of private sector innovation and consumer choice. And it could be accomplished with Medicare Advantage (MA) plans — a favorite of Republicans because they provide private plans with fixed amount for care, allowing the plans themselves to push providers into alternative payment models (APMs) if that is effective at reducing costs and risk. But to date, such a push has been slow to materialize, with CMS finding that most MA providers remain in fee-for-service (FFS) and focus on cutting rates, not incenting the redesign of care. Moreover, even if MA plans embraced APMs, only about one-third of beneficiaries are covered in these plans, with even lower adoption in some states (2 percent in Wyoming). This means the status quo of FFS payment in Medicare for most providers, which keeps the system tied to volume-based payments that could lead to unsustainable cost growth and budget overruns. The second option is to alter the current APM through rulemaking to favor physician-led approaches and physician-owned hospitals and outpatient clinics. These approaches could lead to greater employment and consolidation of physicians, as well as a temptation to avoid caring for the highest-risk populations. This in turn would lead to some patients delaying care or turning to emergency rooms for ambulatory treatments. The last and most advantageous choice is to build on the APMs that are currently in place, with improvements to ensure they work to their full potential. Significant provider sector investments have already been made in these models, and any reversal of the current movement toward value-based care would cost the sector billions. Moreover, they are bearing the predicted fruit. Today, about 30 percent of all Medicare reimbursements are now flowing through an alternative payment model, and just in the Medicare Shared Savings Program, participants have generated $1.29 billion in savings since 2012, while improving quality in 84 percent of all quality indicators. Premier’s experience with our ACO collaborative has actually been even better, delivering three times the return as all the other ACOs in 2015. Rather than throwing the baby out with the bathwater, I think Republicans will largely keep the current value-based care models in place today, while creating new options that give physicians greater choice. This is the only antidote to perpetual cuts to fee-for-service (which we can most definitely expect in any repeal and replace plan), as well as rising costs for medical devices and drugs. We will see substantive policy changes, such as added use of legal waivers, changes to the measures and benchmarks, fixes to the risk adjustment methodology, and potentially changes to the savings shared back with providers. But no matter how it’s organized, the writing is on the wall — we are long past the days of rewards based on consumption. In 2017, value becomes the new economy and measurement its currency. 50 Shades Of Health Care While the ACA was predominantly a federal program pushed down to the states, the opposite dynamic is likely to be central to the Republican replacement plan, instead pushing greater control to the states to design their Medicaid programs as they deem fit. This will likely make Medicaid expansion more palatable to conservative Governors and legislatures that previously rejected it, as they will now be given the freedom to structure programs to include personal responsibility requirements such as employment, co-pays, or lifestyle changes. But, to gain the best results, providers need to find more efficient and innovative ways to care for Medicaid recipients. And to make the most of what is likely to be reduced federal financial support, states will need to explore delivery system reforms that improve the health of communities and control costs. Tapping new advancements in data and enlisting health systems that share the same goal to align their performance to benefit all residents, more providers may push states to pursue Medicaid waivers, particularly those that test delivery system reform. These programs align well with the alternative payment models in MACRA, are budget neutral, and have been shown to align financial incentives with evidence-based best practices in population health management. Using these waivers, states are able to foster a locally driven move away from the fee-for-service mindset that focuses on treating the sick, to a system that emphasizes prevention and wellness — and saves a lot of money in the process. Take Alabama, which last year won a waiver to provide care to 60 percent of the state’s Medicaid beneficiaries through regional care organizations (RCOs) that receive a set per member, per month fee for all care delivered. Similar to other payment programs, if quality is maintained and the care delivered costs less than what was allotted, the providers keep the remainder. If it costs more, the providers are at risk for the overage. Although Alabama is still working to set this program up, other states, such as Colorado, Maryland, and Washington, with similar experience with these types of waivers have reported strong health care cost and quality gains. Still other states, such as Ohio and Arkansas, have applied for and won grants to test episode-based bundled payments for certain high-cost acute care episodes, with providers eligible to receiving bonus payments for cost savings if outcome goals are met. In 2017, I expect many more of these innovative programs to produce results, and states that have been waiting to see the returns will follow with applications modeled on the most successful programs. I also expect that 2017 will be the year that providers increasingly leverage these programs through the creation of provider-sponsored Medicaid managed health plans that contract directly with the state, aligning the financial risk directly with performance across the continuum of care. Year Of Living Competitively With this election, many pharmaceutical companies may have thought they would get a reprieve on pricing, but escalating drug costs remains a huge issue on the table. Drug price increases affect consumers in a number of ways, including insurance premium costs and higher co-pays for therapies. In fact, Blue Cross Blue Shield of Idaho recently increased costs for its plans by 49 percent, attributing 41 percent of the increase to escalating drug costs for beneficiaries. Similarly, in 2016, the top 10 Medicare Part D prescription drug plans increased their premiums by an average of 8 percent, with five of the plans raising premiums by double digits, the highest rate of increase in the program’s history. Driving some of these price increases are anti-competitive economics. A recent Senate Special Committee on Aging Report found several market dynamics that contribute to the problem, including sole source drugs that allow for monopoly pricing power, small markets that do not provide enough competitive leverage, and closed distribution channels that prevent new competitors from accessing the drug for necessary generic or bioequivalence studies. We expect 2017 to be the year where Congress, the states, and the courts focus less on price controls and more on closing loopholes and market anomalies that have to date worked to prevent competitive forces from modulating prices. At the regulatory level, we expect bipartisan support for new legislation that would require the Food and Drug Administration (FDA) to fast track new generic drug applications in cases where there are two or fewer manufacturers in the market, levying a decision within 150 days, as opposed to the four plus years it can take today. It’s also safe to assume we’ll see action on efforts to ease closed distribution regulations to allow generics competitors to gain appropriate access to samples that would enable testing of therapeutic equivalence. In the courts, state, and federal attorneys will take up a myriad of anti-competitive dynamics that have been used for years to extend patents or prevent competition in the marketplace. Suits have already been filed to challenge the biosimilar 180-day waiting period, which today requires biosimilar competitors to notify the brand maker of their intent to market after they have FDA approval, as opposed to in tandem with their filing. This can delay market entry by six months or more. And we can expect more scrutiny of pay-for-delay deals where branded manufacturers reach agreements with generic companies to delay market entry for new products in exchange for cash or other payments of value. Through The Looking Glass Consumerism has been on the rise in health care for the better part of a decade, but it hasn’t truly materialized as many would have envisioned. Consumers today have more cost and quality information than ever before, but it can still be difficult to uncover meaningful differences between the various options. In other cases, the information is not personalized to them, providing information on total costs as opposed to their individual out-of-pocket expenses. Moreover, even in cases where consumers have a clear choice, they may not be able to act on it due to health plan or other restrictions. But as we move into a post-ACA world, we can expect more consumers to become directly exposed to costs through health savings accounts (HSAs) and high-deductibles, meaning that they are going to seek care choices that provide the most value and convenience to them. The net is that providers need to start thinking more broadly in this new world — not just about how they deliver care, but about the total experience. Is the website easy to use and mobile friendly? Can patients book lower cost FaceTime appointments for non-emergency consults? Does the organization provide enough parking? Do patients understand costs up front, before receiving prescribed care? Can you describe your quality in terms that patients can really understand? Is the billing system easy to understand and straightforward? On the policy front, that could involve some substantial changes, particularly at the state level, where new laws could be enacted to protect or empower consumers that are increasingly becoming the payers for health care services. Already, four states (California, Florida, Connecticut, and Utah) have passed legislation that would cap the amounts that can be collected from “surprise billing” or the practice of billing for out-of-network costs that the individual had no knowledge of receiving. Still more passed laws requiring disclosure of out-of-network costs and billing estimates. And five states (California, Florida, Maryland, Oregon, and New Jersey) have comprehensive sites that allow consumers to compare the prices and charges for common procedures. Going forward, it’s reasonable to assume that there will be greater transparency around cost, quality, and co-pay data to enable consumers to make more informed choices. Not only is care going beyond the four walls of the provider organization, but so is the entire buying experience. For 2017, clinicians need to stop thinking exclusively about just performing better than their local competitors and start thinking about providing a customer experience that rivals the top consumer brands. Without question, 2017 is going to be a year of change. But through it all, we must remember the larger purpose. Republican or Democrat, we’re all aligned behind designing a health care system that is coordinated, innovative, cost-effective, high-quality, available, and affordable for all Americans. If we keep the end goals in focus, this could be the year of tremendous promise and progress.

Healthcare Insurance: America’s Collective Action Nightmare

Across the country, ugly confrontations are occurring between Republican lawmakers who pledged to repeal Obamacare and Americans who are afraid of losing their healthcare coverage. The protesters’ fears are understandable. The cost of medical services can be devastating. The chief selling point for Obamacare was that, between the guarantee of coverage on the exchanges and the expansion of Medicaid, the vast majority of Americans would be protected. And the main difficulty that Republicans face in repealing Obamacare is the widespread concern that tens of millions of people might be tossed off the rolls. The confrontations are the unavoidable consequence of a collective action dilemma. The dilemma is this: To achieve good collective outcomes, government must often prevent people from doing what they think is best for themselves. Individually, I might like to be free to dump trash in the most convenient place, to pollute the waterways and skies, to fish and hunt without limit, to drink and drive, or to use other people’s property and possessions without their permission. Millions of other people might want these liberties too. But collectively, we’re all vastly better off when everyone’s freedom to do these things is constrained. One of the benefits of government is that it can prevent people from acting in ways that are individually rational but that, when practiced widely, make us collectively worse off. In healthcare, the collective action dilemma stems from the fact that comprehensive coverage—by which I mean all forms of third-party payment, including Medicare and Medicaid, as well as private insurance—is the main driver of the healthcare cost spiral that gone unchecked since the mid-1900s. The problem is a vicious circle. The more insurance a person has, the less the cost of health care figures in individual decision making. The less costs matter, the more willing people are to use healthcare, especially healthcare that is expensive. The more people consume, the more society spends and the pricier healthcare becomes. As healthcare costs increase, the more people want insurance and the more they want insurance that covers everything. Return to step #1. In short, third-party payment got the healthcare cost spiral going and has fed off it ever since. The cycle ends when millions of people start going bare because insurance has become too expensive for them to afford. By that point, of course, healthcare is prohibitively expensive too, and people who are uninsured or at risk of becoming so are worried to death that they’ll be ruined financially should they or a loved one get sick. That is the situation today. The connection between third party payment and healthcare spending will be obvious to anyone who bothers to look. In the figure below, the red line shows the ratio between the total amount that consumers paid out of pocket for healthcare and the amount that was spent by Medicare, Medicaid, and private insurers. The line declines steeply, showing that, since 1960, an ever-increasing fraction of healthcare dollars has been routed through third-party payers. (The decline is especially pronounced in the mid-1960s, when Medicare and Medicaid were introduced.) The blue bars show annual healthcare spending per capita. As the red line falls, per capita spending rises inexorably. The logic is simple. The more we rely on third party payers, the more we spend because the less each of us worries about costs when deciding how much healthcare to use. The segment of the healthcare market in which people buy goods and services directly provides more evidence. There is no cost crisis in this segment and never has been. Prices for Lasik surgery, in vitro fertilization services, abortions, plastic surgery, and other treatments that aren’t covered by insurance are reasonable and often decline. The same is true for over-the-counter drugs. Hospitals can sell aspirin tablets for $10 apiece because insurers pay their bills. The corner drugstore can charge only pennies because you do. Often, the self-pay sector and the insurance sector operate side by side, and when they do the self-pay sector is always cheaper. The prices that insurers and government agencies like Medicare pay for blood tests, MRIs, wheelchairs, vasectomies, and other medical goods and services greatly exceed those paid by patients who foot their own bills. The reasons are simple. Self-pay patients seek out bargains and force providers to compete. Insurers don’t. Providers can also serve self-pay patients more cheaply because they don’t have the administrative burdens that third party payment imposes. To solve the cost crisis, then, America must transfer as much responsibility for healthcare purchasing as it can from Medicare, Medicaid, and other third-party payers to consumers. Ideally, consumers would pay for everything except services that are required to meet catastrophic needs, for which insurance will always be essential. The problem is how to get from where we are to where we ought to be, despite the hysteria that is gripping the nation. There must be a transition, a sustained program of education, and a safety net for the poor. A transition is needed because Americans will have to learn to save money to meet the predictable costs of healthcare and to feel comfortable buying services themselves. Today’s seniors didn’t save as much as they should have during their working years because they expected Medicare to take care of them. Today’s workers aren’t saving either. They’re relying on their employers to withhold the money needed to cover their premiums and they’re hoping that when they retire, Medicare will take care of them too. Both seniors and workers are also relying on third party payers to negotiate prices instead of shopping for good values themselves. It will take time, probably a generation, to replace these bad habits with good ones. Education is needed because Republicans have promised to replace Obamacare with something better, but for the vast majority of Americans “better” means as much insurance coverage as they currently have (or more) for a lower price than they currently pay. No one can deliver that because, as private insurance, Medicare, and Medicaid drive prices and spending higher and higher, premiums and taxes have to increase. Only when Americans realize that insurance is the problem, not the solution, will a program better than Obamacare be feasible politically. A safety net is needed because there will always be people who are too poor to purchase their own medical treatments, just as there will always be people who are too poor to buy their own housing, transportation, or food. The safety net will have to provide for them—but it should do so by giving them money or vouchers, not by providing insurance or Medicaid. Food stamps aren’t insurance. They’re vouchers that people use to buy what they want. The Earned Income Tax Credit isn’t insurance either. It is a source of funds that poor people use to cover their needs, and studies have repeatedly shown that it helps them immensely. We should give poor people money to buy healthcare too. In the short run, the education program is the most urgently needed. Republicans will have to teach fearful Americans that healthcare is expensive because it is insured. This will be hard to do. Democrats, most of whom want universal insurance coverage for everything and all of whom want to kick the Republicans out of office, will do what they can to stoke voters’ fears. Health care businesses will too. They know that private insurance, Medicare, and Medicaid are their cash-cows, so they will say and do what they must to protect them. Worst of all, Republicans have undermined their ability to teach anyone anything by cultivating a reputation for being stupid, dishonest, and corrupt. They have sided with superstition against science, have embraced the least educated portion of the electorate, have repeatedly lied about things like “death panels” and defensive medicine, have cried “rationing” whenever any effort has been made to rein in healthcare spending, and have sold their souls to drug companies and other industry interests. No wonder millions of Americans think they’re mendacious. I don’t trust them, and I am aligned with them in this debate. If we can’t get from where we are to where we need to be, it will be partly because so few Republican officeholders have the credibility to lead.

Health coverage: Are you overinsured?

Many Singaporeans complain about paying high premiums for health insurance plans, especially after last year's rather steep rise in premiums, with some premiums more than doubling.

But what most of them don't realise is that they are probably forking out such high premiums because they have over-insured themselves and are paying for a level of insurance they are unlikely to need.

Today, more than two million Singaporeans and permanent residents are paying for higher medical insurance coverage than offered by the basic MediShield. They are on Integrated Shield Plans or IPs, which ride on the basic MediShield, but offer higher payouts based on private hospital rates or the equivalent of being treated as private patients in a public hospital.

This is good since the basic insurance is pegged at subsidised B2 and C class rates and will not offer enough coverage for those opting for a higher ward class, such as B1 or A class in a public hospital.

What is surprising, however, is that more than half of those on IPs, or 34 per cent of all Singaporeans and permanent residents covered by MediShield, have opted for the most expensive plans - those pegged at treatment in private hospitals. This does not reflect the actual usage of hospital care today, with less than 20 per cent of local residents opting for private hospitals and the rest going to a public hospital.

Do one in three Singaporeans require private hospital medical insurance when fewer than one in five are treated at private hospitals?

Why do so many buy insurance plans they are unlikely to use?

They do so partly because it is easier to downgrade a health insurance plan than to upgrade. Four of the five insurers - NTUC Income, Great Eastern, AIA and Aviva - have plans in all three IP categories. Prudential no longer offer IPs for public hospital B1 wards.

Also many buy into the plans when they are young and when the premiums are highly affordable. Up to the age of 49, Medisave can fully cover the premiums charged for these private plans, so policyholders do not feel the pinch of out-of-pocket payments

But from age 50 onwards, policy holders will have to top up their premium payments in cash, as the premiums all exceed the $800-a-year cap for premiums paid with Medisave. Each year, up till the official retirement age of 62, they will need to top up their premium payments with cash amounting to several hundred dollars. But again, as many are still working, the amounts appear affordable.

But beyond the age of 62, premiums rise steeply, averaging $4,000 a year for those aged 75. The highest premium currently charged, at the age of 100, is $8,483 a year.

Today, on average, men can expect to live to the age of 80 and women 84.5 years. A man aged 65 in 2012 can expect to live to the age of 83.5 years and a woman to 86.9 years. And life expectancy is still going up.

Already, there are more than 10,000 people aged 90 years and older and close to 1,000 who have passed the century mark.

Based on current premiums, people on private hospital plans will need to pay between $120,000 and $180,000 in premiums for those 30 years after retirement, depending on which insurer they are with.

Unless they buy riders, which pay for the portion of their hospital bill which they will still need to pay in spite of insurance, they will also need to pay thousands, perhaps even tens of thousands of dollars, for their hospital treatment.

Riders which start at about $30 a year for children, go up to about $2,000 a year for seniors.

The actual amount people will need to put aside is likely to be far higher, as health inflation has always been higher than general inflation, and premiums will rise as cost of medical treatments goes up.

So those who opt for insurance pegged at treatment in private hospitals must ask this basic question: Can they afford the thousands of dollars in premium payments in their post-retirement years?

Different people have different priorities, as well as different levels of savings. After doing my maths recently, I've decided to downgrade my medical insurance plan.

One reader wrote to me to say that she opted for the top plan, and pays extra for a rider, so she will not need to pay any out-of-pocket expenses should she need to be hospitalised. She said: "Even though the premium and rider are costly, I am determined to continue with my plan for as long as I can. In the worst-case scenario, I am willing to cut down on my transport and food to service my plan, including the rider."

She has considered her options and made her choice. But not many people have given as much thought to their IPs.

I prefer to downgrade and spend more on living healthily and getting regular health screening to stay healthy and out of hospital.

And should I fall seriously ill in my old age, I will turn to public hospitals, which have excellent doctors and whose bills I can probably afford on my downgraded health insurance plan.

Comparisons of premiums alone may be misleading

We refer to senior health correspondent Salma Khalik's commentary ("Help! I'm confused about health insurance plans"; Dec29 last year) and Mr Sia Cheong Yew's letter ("Clear air over confusing health insurance plans"; last Sunday).

Integrated Shield Plans are designed to cater to different segments of the population. Individuals have diverse needs, requirements and levels of affordability.

The ever-increasing costs of health care - coupled with a rapidly ageing population that will consume more health-care services, as well as a growing segment of affluent people who wish to access premium health-care services - have resulted in a wider spectrum of health insurance plans and supplementary benefits, which cater to different budgets and market segments.

Premium comparisons on their own may be misleading as the benefits differ between insurers.

Integrated Shield Plans offered by life insurance companies are long-term financial contracts that provide additional benefits and coverage to supplement the MediShield scheme.

Policyholders of integrated plans are given guaranteed renewability throughout the tenure of the plans, regardless of their future health conditions.

In pricing Integrated Shield Plans, life insurers take into account the benefits and features of each plan, as well as the projected incidence rates and utilisation, based on market statistics and the insurers' own experience.

Similar to other medical plans, pricing of integrated plans is subject to regular reviews to reflect emerging trends and benefit modifications.

Life insurers have always been committed to being progressive and responsive, constantly looking to enhance basic benefits as well as innovate with new features to meet consumers' evolving needs and expectations. Hence, the number of plans available to give consumers choices that best suit their individual needs.

We encourage consumers to seek advice from their financial advisers about the options available for Integrated Shield Plans that best fit their needs and means.

Pauline Lim (Ms)
Executive Director
Life Insurance Association Singapore
ST Forum, 12 Jan 2014

Insurers should treat customers better
If they can't explain premium increases and policy changes plainly, they need closer regulation
By Han Fook Kwang, The Sunday Times, 12 Jan 2014

Like thousands of other Singaporeans, my annual health-care insurance letter came in the mail last month.

It was time to renew my insurance plan.

I usually don't give it a moment's thought because the premium is automatically deducted from my Medisave account. No action needed - so no need to fuss over it or read the fine print.

Or so I thought.

But this year's letter was different.

It started by saying there were going to be improvements to my MyShield plan, in line with the recent announcement by the Health Ministry.

That's when I knew it wasn't going to be business as usual.

The new premium was now $1,589.08, and since the maximum I could use from Medisave was $800, a payment of $789.08 was due, the letter stated.

It was the first time in years I would need to use cash to renew the plan.

But how much more was it compared to last year? There was no mention in the letter, and since I couldn't find last year's, I had no idea.

A quick call to the company revealed the answer - $800, fully paid by Medisave.

So, my premium had doubled, give or take a few dollars.

Now, if you are asked to pay twice as much for a product, you would expect some nifty new additions or improvements to justify the hefty increase.

There was something about the letter, though, that made me lower my expectations.

I think it was this line: "These revisions are necessary in order for us to stay aligned with the latest claims experience, so we can keep up with Singapore's changing healthcare landscape."

That was it?

Because health care was now a landscape - and changing - I now had to pay double?

Wait, there was a four-page annexe listing details of the changes.

But try as I did, I could not find anything in the list relevant to me. In fact, only two items sounded like anything new: the improved plan now covered cornea transplants (how many corneas get fixed this way every year?), and Accident and Emergency (A&E) treatment within 24 hours prior to hospitalisation.

The rest read like very minor tweaks and clarifications to the original plan.

One other item on the list made my blood pressure rise - my deductible had now gone up. That's the amount you pay in cash before the insurance kicks in. In my case, it went from $3,000 to $3,500.

So, to recap: My premium doubled and my deductible amount increased by $500, for some very small additions to my original plan.

I believe most other Singaporeans received similar letters, were asked to pay more, and had their deductible raised.

But because I had opted for an A Class ward plan, my increases were probably among the steepest.

Can insurance companies raise their charges this way without asking their customers whether they wanted these changes?

Since MediShield is a national health insurance scheme, do they need government approval to do so?

Who regulates their business to make sure what they do is in the public interest?

These questions are especially pertinent now because there is a government-appointed committee looking at how best to implement a new scheme called MediShield Life that is being touted as the next big thing in health-care financing.

The new approach is meant to give Singaporeans "greater peace of mind", according to Health Minister Gan Kim Yong.

That's a heroic promise to make, but I didn't get much of it from my insurer's latest moves.

How then to make good on the pledge and ease Singaporeans' health-care worries?

Here are my three suggestions for the MediShield Life committee to consider.

First, there has to be some degree of stability and predictability to the premiums to be paid.

It would be unrealistic to expect them to be frozen in time. But premiums should not be allowed to be doubled arbitrarily from one year to the next without reasonable justification.

For those approaching retirement, it is a big worry. Would we be able to afford these premiums and deductibles over the next 20 years or so, if they keep rising?

Second, what about having an incentive built into the plan for those who stay healthy and have not made any claims, similar to the no-claim bonus scheme in motor vehicle accident insurance?

In the latter case, premiums can go down by as much as 50 per cent for those with accident-free records.

And what about even lower amounts for those who are health-conscious, exercise regularly and take their medication religiously?

Third, there has to be greater transparency in the way insurance companies operate and conduct their business.

My colleague, Salma Khalik, wrote last week in this newspaper how premiums can vary by as much as 100 per cent, from one insurer to the next, even when they involved exactly the same plans.

Because most people don't really understand health insurance and whether one plan is better than another, they depend on insurers to be open, accountable and honest about their products and how they work.

If insurers are unlikely to do this on their own, they need to be regulated much more stringently so that there are minimum standards of transparency and disclosure.

The funny thing about my own insurance plan is that I know I won't need to use it even though I've just paid to renew it.

Why?

It's because I'm already covered by the company I work in as part of its staff benefits.

Yet, I'm compelled to buy my own health insurance in the event I leave the company or when I retire.

If I don't, I risk not being able to get myself insured when I no longer enjoy my company's medical benefits.

Like many others, I have been dutifully paying for years, for insurance cover I don't need but will eventually do.

Who benefits from this wasteful arrangement?

You guessed it, those same insurance companies which get two premium payments - from me and my company - and then go on to promptly raise these premiums.

There should be a way to avoid this unnecessary duplication which only adds to the total health-care cost of the country.

But please do this quickly before I retire.

Why Integrated Shield premiums had to go up

There has been much discussion on Integrated Shield Plans in recent weeks.

The coverage they offer is generally comprehensive, covering the bulk of hospitalisation costs, some pre- and post-hospitalisation expenses, as well as certain non-hospitalisation charges relating to chronic disease treatments.

Importantly, the renewability of such plans is guaranteed, which means insured persons who make claims continue to be insured by paying the standard premium rate. Policyholders also get to select their level of benefits to match their choice of either public or private hospital and the ward type.

Such plans are integrated into the basic MediShield plan; the premium includes the basic MediShield plan premium. Policyholders who purchase additional "on-top-of-the-basic" coverage can claim higher benefits.

Claims made under the basic MediShield plan and Integrated Shield Plan are administered by the insurers.

Integrated Shield Plans operate in a competitive market environment, and consumers can obtain a comparison of these products in the Ministry of Health's website.

The pricing of a health plan is predominantly driven by the costs of medical health care in Singapore. The costs include doctors' charges, hospital charges and drug fees, all of which are beyond what insurers alone can effectively control. Health insurance essentially acts as a risk-pooling mechanism.

In March last year, there was an upward revision to the benefits and, hence, premium rate of the basic MediShield plan.

In turn, insurers revised their Integrated Shield Plans. This necessitated revision to the premium rates, not only to absorb the increase in the premium rate for the basic MediShield plan, but also to reflect enhanced benefits and escalating medical costs over the recent years.

On an individual level, the policyholder pays higher premiums when he moves from his current age band to the next one.

In July 2012, the Health Ministry revealed that the number of MediShield claims made per policyholder had increased by 9 per cent a year, while the average payout per policyholder had risen by about 12per cent a year.

The Integrated Shield Plan claims experience has been similarly affected. This explains the large increases in premium rates. Also, the last adjustment made was in 2008/2009.

Ultimately, the objective of delivering universal and sustainable health care to Singaporeans can be achieved only collectively, whereby inflation in health-care costs is effectively managed, the funding mechanism is optimised, and overall consumption of health-care services is lowered through improved health of individuals.

Learn More About Health Insurance - History

Health Insurance - Insurance practices, broadly, has a long history associated contracts and procedures designed to protect people from loss of property. Guarantees on loans and insurance based property attention in the distribution of goods through the shipping in ancient times is the insurance model that emerged thousands of years ago, before the year AD. And in the life insurance also has a long and distinctive history that reflect the human consciousness of his own death. In the case of health insurance also has a growing history, which was originally the standard of service indicated in the form of the exchange fee.

Beginning in Mesopotamia, under the guidance of the Code of Hammurabi, is defined that a successful health care, which is characterized by operation with a knife, get paid appropriately. That is, when the patients come from the top, then the operating cost increases to be paid in accordance with its economic capabilities. However, if the operation fails, then the physician or surgeon in charge will pay a fee to the patient. In other words compensation and liability is a form of health insurance at the beginning of human civilization.

But the agreement in the health insurance is really a vital issue and controversial in the early 20's, where health services performed in institutions and the more advanced packaging, and cost of services continues to increase. And what could be touted as a private health insurance plans first became available in the United States during the civil war going on there. Health insurance plan is an insurance that protects the individual from any accidents caused by trains and the like. Health insurance companies are Massachusetts Health Insurance of Boston, which offers insurance policies that offer benefits in 1847. The success of the health insurance plan is so successful, so that the service develops in the form of programs that are more diverse, like health insurance and disability due to illness.

Although the health insurance business in a modern first appeared in the United States, but the term used at the time the insurance company is an insurance for illness or sickness insurance. English is the first officially used the term "health insurance ". It is contained in the official rules of the UK, the National Insurance Act, in 1911, and later the term was widely known.

Unfortunately, in the period of the 1920s, most people still feel that health insurance is not important. But in early 1930, a group of teachers who teach in the city of Dallas took the initiative to cooperate with a number of hospitals there to provide both health insurance plan for its residents. In collaboration, they together determine the type of disease and duration of hospitalization will be borne by the level of health insurance premiums paid in advance by the owner. Hospital services are paid in advance is very helpful people there with the cost of their treatment, especially when the depression that hit the United States economic in the 1930's. Health insurance model is then recommended by the American Hospital Association to adopt another hospital outside Dallas. And then this model also grew to countries outside the U.S., through a variety of health insurance companies.

Breaking Bad and the Healthcare System

There’s a meme floating around that the storyline of Breaking Badconstitutes a scathing indictment of the U.S. healthcare system. The latest entry is this comic strip, which says that if Breaking Bad had been set in the U.K., it would be an “entirely different story” – one that ends in just 5 panels. But it’s not just comic strips. Daily Kossays that Breaking Bad “Displays [the] Brutality of American Private Health Insurance Non-System,” while Tricia Romano at the Daily Beast says the show “Is Fully Dependent on Our Broken Health-Care System.” There are probably other examples.

The problem with this claim isn’t that the U.S. healthcare system is actually wonderful. It’s not. The problem is that it’s just not consistent with the actual TV show. I can verify this because I’ve rewatched the whole first season (and much of the second) over the last couple of weeks. 

Walter White makes his first foray into the meth business before health expenditures are even mentioned. Walter does have insurance coverage, and his HMO will cover his cancer treatment. It’s true that Walter mentions that his HMO isn’t very good at some point, but that’s as far as it goes. As it turns out, Walter doesn’t even intend to endure the treatment (as revealed a few episodes later in “Cancer Man”). It’s very clear that Walter’s overriding goal is to leave a nest egg for his wife, disabled son, and unborn baby.

Eventually, health costs do become an issue when Skyler pressures Walter to undergo treatment after all. But it’s not because his HMO won’t pay. It’s because Skyler finds an oncologist who is not just one of the best in Albuquerque, but one of the top 10 oncologists in the nation. It turns out this super-doctor with his fancy cancer treatment is not covered by the HMO, and the out-of-pocket price is $90,000. Some will say that’s the smoking gun that indicts the U.S. healthcare system. But there is no system in the world that offers high-end care to everyone. The vaunted U.K. and Canadian systems offer care to every citizen, but they don’t offer the best care to every citizen. That’s just not possible. A single-payer system is essentially a giant public HMO, and just like private HMOs, they sometimes deny treatment or (more relevant here) deny the highest-quality treatments. Citizens who aren’t happy with the coverage provided by the government system have to pay for it themselves, either through supplementary private insurance or out of pocket. Sometimes they even travel to foreign countries, like the U.S., for that care. 

To reiterate: Walter White has health insurance, and it would have covered his cancer treatment. The only reason Walter needs so much money for medical bills is because he opts out of his insurance coverage in favor of higher-quality, more expensive treatment. And even then, it’s clear this isn’t Walter’s only motivation. In the episode “Seven Thirty-Seven,” Walter calculates how much he needs to sock away, and he comes up with $737,000,not just the $90,000 for the cancer treatment. This is a story that could have been told in many countries, including both the U.K. and Canada. 

I’m not saying we can’t imagine a version of Breaking Bad that does condemn the U.S. healthcare system. For instance, they could have had Walter lose his job, and his health insurance with it, right before getting his cancer diagnosis. Less plausibly, they could’ve had his deductible and copayments be so large that he has to cook meth to pay them. (I say “less plausibly” because while those sums can be large, they’re probably not large enough to explain Walter White’s extreme actions.)

But Breaking Bad did not choose either of these routes. In fact, the show often goes out of its way to show that ultimately it’s not really about money at all for Walter; it’s about pride. Pride is why he didn’t want to have treatment in the first place. When his former colleague Elliot Schwartz offers to pay for Walter’s non-covered cancer treatment, it’s pride that makes Walter say no. And pride is why Walter continues to cook meth long after he’s achieved his monetary goals. Blaming the events of Walter White’s life on the U.S. healthcare system isn’t just wrong; it’s missing the entire point of the show.

Jockeys and Health Insurance

Recently, the Jockeys Guild has been making a strong push for someone, anyone really, other than the jockeys, to provide health insurance for riders and their families. In New York, the Governor's Office has convened a Task Force on Jockey Health and Safety to consider that issue, among others. The Task Force is chaired by NYRA Director and thoroughbred owner Anthony Bonomo and includes jockey John Velasquez, retired rider Ramon Dominguez, Jockey Club staff member Nancy Kelly and attorney Alan Foreman, who represents a variety of horsemen's groups, including the New York Thoroughbred Horsemen's Association ("NYTA").

Disclosure: I've been a member of the NYTHA Board of Directors since 2002. I also have some knowledge of health care issues at the track, through my involvement as a Director since 2009 of the BEST Backstretch health care program, which provides basic health care and substance-abuse services for backstretch workers at NYRA Tracks.

I've been told that a major item of discussion at the Task Force meetings has been: who should pay for health insurance for jockeys and their families? As I understand the Jockeys Guild position, it's that either the race tracks or the owners and trainers should bear this cost, and not the jockeys themselves, except perhaps to the extent of a very limited contribution.

Seems reasonable, right? After all, owners, trainers and track executives aren't the ones taking the risk of riding a 1,200-pound animal at 40 miles an hour in close company and under sometimes less than perfect conditions. Jockeys literally put their lives on the line every time they ride, so shouldn't they get our help?

But a closer look at the situation, at least in New York, raises some questions. Is financing health insurance for jockeys and their families really the best use of money from tracks' budgets, when many needed repairs are still waiting on limited budget funds? Is taking yet another slice off the top of owners' purses to pay for that insurance wise at a time when, despite slots-enhanced purses, most race horse owners still lose money? Why provide health insurance for jockeys when trainers, many of whom earn less than jockeys, have no insurance plan from the track and have to buy their own personal or family coverage?

In some racing jurisdictions, where purses are low, jockeys don't have coverage for on-the-job injuries, and jockey income flirts with the poverty line, perhaps there's an argument to be made for assisting jocks with health insurance premiums. But in New York at least, that argument doesn't apply. Here's why:

First, jockeys in New York already have two forms of insurance coverage for work-related injuries. The Jockey Injury Compensation Fund provides workers compensation coverage, including ongoing medical care, for on-the-job injuries to jockeys and exercise riders. The Fund is financed by owners, through a deduction from purses, and by trainers, through a per-stall fee that is probably usually passed along to owners as part of the trainer's day rate. In addition, NYRA pays for an accidental death and injury policy that pays those jockeys who sign a waiver (agreeing not to sue NYRA) 10 times their annual earnings, up to a maximum of $1.3 million, if the jockey is paralyzed and up to $956,000 if the jockey is permanently impaired. Those payments are on top of the workers compensation payments through the Jockey Injury Compensation Fund.

Second, jockeys in New York make a pretty good living. Using statistics available from Equibase, it's possible to calculate the gross earnings of most regular New York riders. In New York, jockeys generally get 9.17% of a win purse, 5% of second-place money, and 7.5% of third-place money. Because win purses are the major element in any jockey's income, this works out to a blended rate of about 8% of total purse money won.

Using those parameters, and using the Equibase data for 2012, the first full year of slots-enhanced purses in New York, one can calculate that 22 jockeys made over $100,000, just from their rides in New York, not counting anything they earned out of state. For example, the now-retired Ramon Dominguez had purse earnings of over $19 million in New York, of which his share was in excess of $1.5 million. Other jockeys who earned over $400,000 just in New York include Cornelio Velasquez, Junior Alvarado, Javier Castellano, Irad Ortiz Jr., Jose Lezcano, David Cohen, Eddie Castro, Alan Garcia, John Velazquez, Rajiv Maragh, Joel Rosario, and Rosie Napravnik. Using the same methodology, we can conclude that the following riders made between $100,000 and $400,000 just in New York in 2012: Jose Ortiz, Wilmer Garcia, Mike Luzzi, Samuel Camacho Jr., Edgar Prado, C C Lopez, Jose Espinoza and Corey Nakatani. Adding in jockeys who earned less than $100,000 in New York but who had earnings elsewhere that would lift them above the $100,000 threshold would add the following to the list: Jose Rodriguez, Kent Desormeaux, Dennis Carr, Joe Bravo, Shaun Bridgmohan, Pablo Morales, Luis Perez, Jose Valdivia Jr., Chris DeCarlo, Pablo Fragoso, Alex Solis, Jaime Rodriguez, Mike Smith and Kevin Navarro.

Update (1/16/2014): I just ran the 2013 numbers, using the same methodology. They show that 24 riders likely earned over $100,000 just in New Yoerk. In order: (a) over $400,000 -- Javier Castellano, Irad Ortiz Jr., Junior Alvarado, Jose Ortiz, John Velazquez, Cornelio Velasquez, Joel Rosario, Jose Lezcano, Luis Saez, Rajiv Maragh; (b) $100,000-$400,000 -- David Cohen, Edgar Prado, Alex Solis, Mike Smith, Manuel Franco, Eddie Castro, Rosie Napravnik, Mike Luzzi, Joe Rocco Jr., Guillermo Rodriguez, Keiber Coa, Abel Lezcano and Angel Arroyo.

That's a lot of riders with incomes that many racegoers wouldn't mind having. True, jocks generally pay their agents 15-25% of their earnings, and their valets get 5-10%, but still, these are solid, middle-class incomes, and well above the national average.

Moreover, jockeys in New York have received a substantial pay raise as a result of the increase in purses since 2011 fueled by slot-machimne revenue. Still using our 8% methodology, we can calculate that aggregate jockey earnings at NYRA tracks increased by some 40% from 2011 to 2012, right in line with the increase in purses in that period.

In the past, jockeys had a strong argument for having the tracks and/or owners supply health insurance, because most riders would have "pre-existing conditions" that insurance companies would cite in order to deny coverage. But, under the Affordable Care Act ("Obamacare"), insurance companies can no longer use that excuse; they must make standard policies available, regardless of pre-existing conditions.

Jockeys are independent contractors. With rare exceptions, they are not employees of a particular trainer or owner (for a taste of the bad old days, when they were, listen to Slaid Cleaves' song "Quick as Dreams," about Jockeys Guild founder Tommy Luther.) Like solo practice lawyers, free-lance writers or, for that matter, horse trainers, they're responsible for themselves. Unlike those other categories, though, at least jockeys have pretty good insurance coverage for work-related injuries.

Given that on-the-job coverage, given that insurance companies can no longer deny them and their families routine health insurance, and given their level of income, at least in New York, it's hard to make a case that jockeys should be treated differently from other independent contractors and sole proprietors. Those that have high incomes -- and I was surprised by how many there were in that category in New York -- can buy comprehensive health insurance for themselves and their families in the market. Those with lower incomes can use the Affordable Care Act's insurance exchanges to obtain very acceptable policies and, if their incomes are low enough, can get tax credits and subsidies to cover part of the premium cost.

The New York Task Force on Jockey Health and Safety can do a lot of good things. Improving vests, helmets and other protective equipment would help. So would stiffer standards for licensing riders, to make sure they're up to the level of competition in New York, and ongoing continuing education programs. So would providing nutrition advice so riders can keep their weight down without destroying their bodies. So would tougher penalties for dangerous riding. Health insurance for jocks and their families? Not at the top of the list.