Health for life

The Disease Management Care Blog is reconsidering the wisdom of agreeing to host the Cavalcade of Risk #140. The links below are a unpleasant reminder that disasters are lurking everywhere and that there is no escape.  Being a contrarian physician-blog that dwells on health care and insurance, your DMCB was confident that it could intellectually digest the topics below.  After writing this Cav of ubiquitous hazards, however, the DMCB now wants to digest some Xanax and PeptoBismol.

Who knew that so much could go so wrong out there?

Ever heard of the "Terrorism Risk Insurance Act" (TRIA) of 2002?  Neither has the DMCB, but readers can learn more about it at the Insurance Regulatory Law Blogs post on Quantifying the Unquantifiable: Some Perspective on Terrorism Risk.  It turns out the U.S. government is providing "reinsurance" (insurers can buy their own insurance) for a host of commercial companies that have to deal with a threat that is hugely expensive, quite rare and non-random, which is the very antithesis what the usual market needs to function well.  And by the way, TRIA is set to expire 2014 and it looks like it may not be renewed.  Seems some sort of budget issue has come up.

If being reminded about terrorism isnt enough to rattle you, how about cyberwar?  Thats tackled by the Risk Management Monitor Blog in this post on how UK Infrastructure Providers Accept an Unexpectedly High Level of Risk of Cyber-Threats, and the National Response Is Fractured and Incoherent.  It appears, lacking a coordinated response by their government, that the Brits businesses and banks have decided to deal with this risk on their own.  Unfortunately, theyre not dealing with it very well.  Not only have some companies been slow off the mark, others have decided to accept the inevitability of an intrusion and plan on simply dealing with it then.  How many other key industries worldwide have adopted the same cavalier attitude, asks the DMCB?

Terrorism, cyber attacks.... its enough to make the DMCB flee to the country and seek sanctuary on a farm and live simply off the land.  But wait, even that isnt safe, because Lynch Ryans Workers Comp Insider Blog points out that the risk of getting trapped, suffocated or crushed in a grain bin is increasing.  In response, the National Grain and Feed Association has a video on one more reason why our nations farmers deserve a lot of respect.  The DMCB thinks it deserves to flee back to the suburbs.

So it might be best to stay safe and stay at home, right?  Well, if you have a mortgage on that home, the canadianfinanceblog warns that your sneaky bank may try to to sell you "mortgage life insurance."  It turns out this may be a lousy deal, since the premium may not change even as the balance on the mortgage declines.  Better to get standard term life policy.  And when youve done that, you can scrutinize the rest of that small print in the mortgage documents that you signed for some other unpleasant surprises.

After you read all that fine print and discover what youve unwittingly agreed to, you may want to think about property losses from hurricanes, floods, tornadoes and earthquakes. Yes, you can buy a specific insurance policy for each of those possibilities, says the Free From Broke Blog.  On the other hand, given how uncommon hurricanes, tornadoes and earthquakes are, it may make more sense to invest in a sump pump and simply stash away an emergency fund.  The DMCB followed that game plan during the recent flooding from Tropical Storm Lee and now needs a basement mold mitigation fund and a get-rid-of-wet-carpets fund.

Plus, you may want to get "home insurance" against the possibility of a loss from a robbery.  Unfortunately, says the My Personal Finance Journal Blog, the cousins across The Pond are grappling with a daily toll of more than $3.5 million in home insurance fraud.  As a result, the DMCB calculates that honest home owners there are unnecessarily having to add a hidden tax of $1 for every $3 in insurance.

While youre putting bars on your home windows and barricading the doors, it may be smart to take that money out from under that mattress and seek some investment income, right?  If thats your plan, you may want to check out this "101" posting on the fundamentals of investment risks posted at The Financial Literates Blog.  How many things can go wrong, you ask?  "Fifteen" says the FLB!

Or if you want to avoid those 15 dreaded errors, how about an "annuity?"  This lengthy post by the Free Money Finance Blog on Why Do We All Hate Annuities explains that the fine print is perplexing, the sellers are a shady lot, their fees are high, the company (like AIG) could go belly-up, you lose control of your money and theyre still a big gamble.  One option is "laddering."  Another option, says the DMCB, is digging a hole and stashing away some precious metals.

While being attacked, hacked, crushed, ripped off or making a bad investment bet is a possibility, at least we Americans have an enlightened government that is helping us buy health insurance, right?  Think again, says Louise of the Colorado Health Insurance Insider.  She points out the feds online "healthcaredotgov" web site can be misleading.  It appears that the site reports blunt pricing underwriting statistics that fail to capture what is really going on.  While Louise makes the point that brokers can help customers navigate this complicated marketplace, the DMCB thinks that the healthcaredotgov website is a telling lection of the unsophistication of Washington DCs health insurance bureaucrats.  Good grief, and these amateurs actually want to be in charge.

Maybe you should take charge, then, and confront the risk that you may come down with a debilitating, crippling and non-curable condition and need long term insurance.  The curiously named High Yield Savings Accounts Blog  offers up a check list of what to look for in such a policy, such as excluded services, maximum lifetime benefit terms, riders and renewable guarantees.

While were struggling with hazards, perils, dangers, disasters, terrorism and disease, Hank Stern over at the Insure Blog suggests there is a way out from all this danger, at least for the fairer sex. Women may want to have a mid-day tipple because another observational study has shown that there is an association between imbibing and well being.  To that, the DMCB says "Cheers!" and points out if you end up in the hospital anyway, your physicians will know what to do.

"Gulp!" says the DMCB.  While it likes the idea of imbibing to support the DMCB spouses continuing good health, it thinks it should also look into buying an electric generator, firearms and a years stash of fresh water and vacuum-packed ready-to-eat meals.  While its doing that, itll be looking forward to Jay Norris of Insurance Shoppers hosting the next edition of the Cav.

"I wonder how I can lose less money?"

The ever resourceful HealthHombre Blog quotes an interesting academic review paper to make an important point: many of the widespread assumptions of smooth sailing for the 106 new ACOs still remain unproven.

The DMCB agrees with this important HealthHombre insight. In addition to the many "known unknowns" (including just how physician-hospital organizations will perform in managing insurance risk), there are also the "known known" year-to-year random fluctuations in claims expense.  And, as the DMCB noted, theres the "unknown unknown" "antifragile" threats to a highly protected sector of the economy that could bring the whole ACO-thing down, 2008-style.

And heres a case in point that backs up HealthHombre.  "Wellspan" is a highly regarded and well-run hospital system that is local to the DMCB. This recent news report is telling because Wellspans success and challenges probably apply to other emerging integrated institutions that have an appetite for risk contracting.

According to the press report, Wellspan garnered an excellent credit rating because...

"766 physicians — more than 75 percent of those in the hospitals market — are affiliated with WellSpan, which [was] counted as a key credit strength."

But the bad news is that the rating also....

.....noted that WellSpans physician group, which employs 411 of those doctors, generated losses of $19.6 million in 2011 and $21.4 million in 2012 (bolding DMCB).

The DMCB has heard similar statements from seasoned health system administrators both locally and nationally.  If "physician integration" is supposed to be the bedrock of ACOs, how is it that the docs are responsible for millions of dollars in losses?  What is the likelihood that these organizations will finish December 31, 2013 in the black?