Congratulations

Congratulations on your continued progress in gaining commitments from insurance companies to step away from the Ingenix Prevailing Healthcare Charges System (the database most health insurers use to determine “usual and customary rates” for out-of-network reimbursement rates). Most individuals inside and outside of the industry recognize the potential conflict of interest as well as the likelihood that what Ingenix defined as “reasonable” was probably less than reasonable by a significant margin.

And Then I Read…

My understanding of your settlement with each insurance Carrier (such as Wellpoint and Aetna) is based on the following excerpt::

…WellPoint will end use of the [Ingenix] database [to determine out-of-network reimbursements] and pay $10 million to help finance the development of a new independent database administered by a not-for-profit group. Cuomo, who reached similar agreements with five other health insurers earlier this year, said that his office hopes to have the new database operational in six months and estimated that the effort will cost about $100 million (Bray, Wall Street Journal, 2/19).

Without question, I applaud your efforts and commitment to create a not-for-profit entity that ensures objective, transparent and reasonable out-of-network insurance pricing. Spot on, sir. But an estimated cost of $100 million?! Good grief, I was caused to pause and try digest such a staggering expense for an informational tool that shouldn’t, nay, couldn’t cost that much.

A Drop In The Bucket

I then came across a New York Times article (2/18/09) entitled “For Uninsured Young Adults, Do-It-Yourself Health Care.  I contemplated the plight of New Yorkers but also people across the nation and noted that Gov. Paterson of New York proposed allowing parents to claim young adults as dependents for insurance purposes up to age 29. Unfortunately, this approach merely supports what I consider “a drop in the bucket“, as the article pointed out…

If Governor Paterson’s proposal is approved, an estimated 80,000 of the 775,000 uninsured young adults across New York State would be covered under their parents’ insurance plans. That would leave hundreds of thousands to continue relying on a scattershot network of improvised and often haphazard health care remedies.

And then the final straw smacked me in the face via yesterday’s (2/24/09) Washington (Associated Press) causing me to draw a deep breath while reading:

A new government report on medical costs paints a stark picture for President Barack Obama, who is expected to call for a health care overhaul in a speech Tuesday night to a joint session of Congress.

Even before lawmakers start debating how care is delivered to the American people, the report shows the economy is making the job of reform harder.

Health care costs will top $8,000 per person this year, consuming an ever-bigger slice of a shrinking economic pie, says the report by the Department of Health and Human Services, due out Tuesday.

As the recession cuts into tax receipts, Medicare’s giant hospital trust fund is running out of cash more rapidly, and could become insolvent as early as 2016, the report said. That’s three years sooner than previously forecast.

Based on current events and the state of our economy … The Offer

I would like to offer the LIVE and fully accessible healthcare consumerism change:healthcare platform, which currently is processing claims from multiple clients as a vastly less expensive, already HIPAA compliant and available TODAY for data connection to the carriers.

In fact, I would also be so bold as to say that we would offer our platform and Carrier integration for $3 million a year OR our annual operating/staff support cost (whichever is less) and we would immediately engage whichever University or not-for-profit entity you prefer for database auditing and oversight purposes.

I am offering you and the carriers an immediately available, already proven and secure platform that is currently used by employers and their employees to save money (30%) on their healthcare expenses and make informed decisions.  I’d rather you and the Carriers leverage our platform at “cost” than to unnecessarily spend $100 million to build something that already exists.  We would be doing this for the public good, but that’s in line with our company values and founding principles!

Why do we care?

I have been holding back on this proposition for several months, but my blood was brought to a “I’ve got to do something now” boiling point due to the February 19th USA Today article by Julie Appleby regarding double-digit premium increases on the individual insurance market (est. at 17 million people):

At a time when more people are forced to buy their own health insurance because of job losses, costs for many individual policies are soaring…

Among this year’s large rate increases on the individual market:

• Anthem Blue Cross in California has notified about 80% of its 800,000 individual policyholders of double-digit increases, many above 30%. Spokesman Ben Singer says rising medical costs are prompting the increases.
• Blue Cross of Michigan is seeking state approval for a 56% increase in individual premiums. Spokesman Andy Hetzel says the company needs to offset losses stemming from state rules making it the sole insurer required to take all applicants.
• Regence Blue Cross Blue Shield of Oregon will raise rates for approximately 10,000 Washington state customers by 27.1% on March 1.

Another Washington insurer, LifeWise, raised rates 17.6% on Jan. 1, according to the Office of the Insurance Commissioner in Washington state…Some insurers say increases this year for individual policies aren’t out of the ordinary. Aetna, for example, says individual policy increases nationwide range from 8% to 22%.

…The average deductible, the amount paid before coverage begins, was nearly $2,000. Family coverage ranged from $219 to $494 a month with an average $2,600 deductible.

Insurers face shrinking enrollment in group plans because employers are shedding jobs. They also have deflated investment portfolios and higher costs as patients use more health services, says a report out last week from ratings agency A.M. Best. Those problems could lead to “higher rate increases than in the past,” says Sally Rosen, a managing senior financial analyst at Best.

Now it would be foolish of me to urge insurers to restrain premium increases. They are merely operating as businesses as any stock shareholder would expect (though I find a great deal of irony regarding these potential increases that will fall on the heels of the government’s COBRA subsidy plan for the recently unemployed). Yet, due to these decisions, there will be an immense welling of pressure on individuals to pay more for their premiums, swallow higher deductibles, and therefore urgently need help to understand and know where EVERY dollar is being spent and what their choices are.

As the tidal-wave of healthcare cost and utilization drowns individuals bearing the full weight of those costs, a dire need is raising it’s ugly head: The need for access to easily understandable negotiated prices for providers and the services they offer, allowing consumers to make informed decisions as well as save money that most of these people do not have. It’s rather simple, we need to enable a more transparent market for purchasing healthcare services. It’s not THE silver bullet, but rather one of many support mechanism that needs to be put into place.

Not a Perfect Solution, but it’s a start…

So there you have it. The wheels have begun rolling forward and what I am offering may seem trivial or naive but at least let us do something that would help you provide people with an easy to use tool at a fraction of the cost… in fact, at OUR cost.  I am offering our platform to support healthcare transparency combined with your choice of University or not-for-profit entity to ensure that out-of-network pricing remains independent and avoids (in your words) “manipulation”… all for $97 million dollars less than you anticipated. And yes, I really do stand behind this offer. Please feel free to contact me or my team to coordinate further discussions about our platform.

Sincerely,

christopher parks

CEO | co-founder
change:healthcare, Inc.