THE ECONOMY AND HEALTH CARE (what else is new?)

THE ECONOMY

Mixed news on the US economy

1. http://www.ft.com/cms/s/0/cf328fb2-8d99-11de-93df-00144feabdc0.html

2. Greetings from RGE Monitor! Below you will find a preview of our views on the short- and medium-term outlook for the U.S. economy.

Rebalancing Growth
A number of economic and financial variables have exhibited signs of improvement recently even if macro indicators are still mixed. The pace of economic deterioration has slowed significantly, and after four quarters of severe contraction in economic activity, RGE Monitor now forecasts that the U.S. will display positive real GDP growth in the second half of 2009. As discussed below, however, that does not mean that the recession in the U.S. is already over, as many analysts have argued. Indeed, all the variables used by the National Bureau of Economic Research (NBER) to date recessionary periods will continue to contract or display sub-par growth. However, RGE Monitor now anticipates that policy measures and other factors will boost real GDP growth, albeit in a temporary manner, in the second half of 2009. Yet the shape of the recovery (will it be V, U or W?) and other challenges will influence the U.S. economic outlook going forward. According to RGE Monitor, growth will remain well below potential in 2010, while the shape of the recovery will be closer to a U. Some of the so-called “green shoots” observed in the economy in recent months can be defined as green shoots only if compared with the economic picture painted at the beginning of the year. The contraction in some indicators, such as industrial production, is still comparable to the recessions in the 1970s and 1980s. The July 2009 employment report displayed “only” 247,000 non-farm payroll losses—hardly qualifying as a green shoot in any other post-war recession. (See Easing Job Losses Don’t Change Weak Prospects for U.S. Recovery).

However, given how close the U.S. was to entering a depression, even 250,000 payroll losses seem capable of cheering up investors. H2 2009 Pick-Up in GDP Growth a Temporary Phenomenon In H2 2009, as the economy bottoms out from a record contraction (the worst in the last 60 years), adjustments, such as slower inventory destocking, will occur, while policy measures such as “cash for clunkers” will boost auto production and induce continued spending brought on by the stimulus. According to RGE Monitor, these factors will likely bring U.S. real GDP growth back to positive territory in Q3 2009. However, the NBER is not likely to call the end of the recession until at least late 2009 or early 2010.

In addition to GDP growth, the NBER looks at four variables in making recession calls: real personal income less transfer payments, real manufacturing and wholesale-retail trade sales, industrial production and payroll employment. While all of these indicators might perform better in H2 than in H1 2009, they are likely to remain in contraction or register sub-par growth. With the labor market now a leading indicator for the recovery in private consumption and the wider economy, trends in payrolls will definitely influence the NBER's call. Lower Trend Growth Will Characterize the Recovery The inventory adjustments will largely be over by the middle of 2010 as will the impact of the stimulus. But since the recovery in private demand will be weak, the economy is poised to slip back to anemic growth (well below potential) in 2010, posing the risk of a double-dip recession. Exhausting most policy measures now means that there will be little room for additional fiscal and monetary stimuli in the future. Policy measures entailing long-term fiscal costs can only provide temporary stimulus to growth. Any sustained economic recovery will ultimately have to come from the revival in private demand—i.e. through consumption and investment—both of which will be constrained by structural factors. Preceded by a financial crisis, this is the most severe and prolonged recession since the 1930s. Avoiding the short-term pain of private-sector deleveraging by socializing private losses and re-leveraging the public sector with large deficits and debt accumulation will spur long-term costs and crowd out private spending. The drivers of the previous economic boom—consumers, the housing sector and easy credit—will remain under pressure even after the economy is out of recession. Structural weaknesses will persist. Until the economy finds new sources of growth, it will grow below potential for several years. Potential GDP growth might also take a hit, falling from around 2.8% during 1997-2008 to around 2.25% in the coming years. Productivity growth has held up—on a temporary basis—during the current recession, not due to innovation or productive investment, but due to aggressive cuts in labor and labor hours by firms. In the coming years, productivity growth will remain under pressure as workers age, structural unemployment rises, labor skills deteriorate, and investment and innovation slow.

3. Brighter signs in Europe

http://www.ft.com/cms/s/0/52947306-8cdd-11de-a540-00144feabdc0.html

4. Long-term (and scary) view of the crisis, comparing the Great Depression to the Great Recession -- long article, but very interesting

http://www.voxeu.org/index.php?q=node/3421

ON HEALTH CARE

Have the Republicans pushed the envelope too much?

1. Senator Grassely and townhall meetings

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/19/AR2009081004125.html?wpisrc=newsletter

2. The end of bipartisanship?
http://www.nytimes.com/2009/08/19/health/policy/19repubs.html?_r=1&ref=health

3. The Health Insurance Industry according to a free-market supporter


Health Care War! by Martin D. Weiss, Ph.D.

Dear Subscriber,

What you're witnessing in the U.S. today is not a health care debate. It's a health care WAR.
But it's too soon to take sides: Neither has defined its territory; both are escalating the battle with weapons of mass disgrace. In the meantime, millions of Americans are potentially innocent victims of the collateral damage — both financially and physically. But if you're among those upset at the Obama administration for trying to ram through a health reform bill, wait till you see what most health insurance companies are doing — and have been doing for many years!

They routinely overcharge you on premiums when you're healthy and deny your claims when you're sick.
They welcome your policy when you don't need it and shred it when you do.

Adding financial insult to personal injury, they take the savings you've worked so hard to earn and throw it into high-risk investments you'd never touch with a ten-foot pole.

.....
How Americans Are Routinely Bullied, Cheated, And Abused by Their Health Insurance Companies

The business battles I fought with insurers are inconsequential in comparison to the life-and-death struggles fought by millions of Americans with their insurance companies every day.
All I lost was time and money. In contrast, a young mother with bone cancer who fought against the same company that sued me lost a lot more: her life.

In a trial after her death, the jury read internal memos that revealed a sinister plot: To reduce their costs, not only did the company's executives pursue extreme measures to deny her the treatments that could have saved her life ... they also discussed the cost benefits of hastening her demise. The jurors were so outraged, they awarded her family the largest punitive damage award in the history of health insurers. Think these are just isolated cases? Think again!

Here are just a few of the rampant abuses that continue to this day:

Abuse #1Denial machines ...

Most health insurers spend substantial sums in order to develop computer programs and systems that automatically and repeatedly deny and delay claims payments;
hire doctors specialized in poking holes in legitimate claims; and give extra bonuses to employees who can successfully deny the most claims. In sum, health insurers build massive machines designed with the sole purpose of denying and delaying your claims. They know that few policyholders will take legal action. Plus, even though policyholders do win judgments, the companies can earn a lot of extra income on the funds they hold back with delayed claims payments. The longer you or your doctor has to wait for reimbursement, the more income they can make on your money.

And unfortunately, this is not just about a few bad apples in the industry. According to the National Association of Insurance Commissioners (NAIC), in 2008 alone, policyholders filed 195,669 complaints against insurance companies. That excludes complaints in many states which do not compile comparable data and, needless to say, it also excludes the millions of Americans who do not file a formal complaint.

The two most common types of complaints of all: delays and denials.
"All too often," says New York Attorney General Cuomo, "insurers play a game of deny, delay, and deceive." And, I might add, all too often, people are bankrupted by the expenses or die waiting for the care.
But it gets worse ...

Abuse #2 After-the-fact policy cancellations ...

Just last Tuesday, the U.S. Department of Health and Human Services released a study demonstrating that, in most states:
Insurance companies can retroactively cancel individual policies if any condition was not disclosed when the policy was obtained. More to the point, insurers can cancel the policies even if the medical condition is unrelated and even if the person was not aware of the condition at the time. (Italics are mine.)

Coverage can also be revoked for all members of a family, even if only one family member failed to disclose a medical condition.

And again, companies institute sophisticated systems and procedures that maximize the savings with these underhanded tactics, including special compensations for employees who can deploy them most effectively.
Two major insurers have admitted to Congressional committees that they automatically investigate the medical records of every policyholder with certain conditions, including leukemia, ovarian cancer, brain cancer, and becoming pregnant with twins.

For example, in one case, after a Texas resident was found to have a lump in her breast, the insurance company investigated her medical history and concluded that she had been diagnosed previously with osteoporosis. Although that condition was unrelated to breast cancer, the company used it as an excuse to cancel her policy.

No, I don't support the notion that underwriting — the process of denying coverage or charging higher premiums due to known risks — is somehow evil. Quite the contrary, if insurers do NOT protect themselves from those risks, they may not be financially capable of fulfilling their promises to all other policyholders. But systematically leveraging contract loopholes to cancel policies after a condition is diagnosed fails to pass the most basic of smell tests.

The most insidious abuse of all: Direct interference with medically recommended procedures ...
"One of our big frustrations with insurance companies," says GOP Congressman Tim Murphy, "is they control the market place, they control what's done," and what doctors decide.
Indeed, in 50 out of 300 U.S. metropolitan areas, a single health insurer controls at least 70 percent of customers. And in many more areas, just two health insurance companies dominate the market.

That puts both you and your doctor at a great disadvantage.
End result: Your doctor's decisions about what's best for your health are frequently overruled by the insurer's decisions about what's best for its bottom line.
Most patients don't realize how widespread this is and how deeply it can impact the quality of care. Most doctors, meanwhile, are so sick and tired of insurance company interference, they've given up complaining.

Which Companies Are the Worst Offenders?
For the most part, government officials are loathe to give you straight answers. But I do. Based on my review of customer complaint data compiled by key states, here's my partial list:
Some Major Health Insurers and HMOs WithThe MOST Frequent Customer Complaints American International GroupAtlantis Health Plans, Inc.Celtic Insurance CompanyCIGNA Healthcare of NY, Inc.Fortis GroupGHI HMO Select, Inc.Mutual of Omaha GroupOxford Health Plans of NYUnitedHealth Group

Not all insurers routinely resort to bad business practices. In fact, some bend over backwards to pay claims promptly and avoid customer complaints ...

Some Major Health Insurers and HMOs WithThe LEAST Frequent Customer Complaints CNA Insurance GroupMass Mutual Life Ins. Co.Northwestern MutualSun Life Assurance Company of CNUniversal American FinancialUNUMProvident Corp. Group

My Recommendations Are Very Straightforward ...
First and foremost, do everything within reason to avoid the worst providers and stick with the best. My lists above are not complete, but I'm confident in my conclusions for each company cited. Second, be sure to keep all your medical records and correspondence with insurers.
Third, if your insurer tries to stiff you for bills you feel should be covered, file a formal complaint. Some states let you file your complaint online. Others require you do it via mail. Either way, do not let insurance companies get away with behavior that you feel is unfair or abusive.
Fourth, if you can't get satisfaction, seriously consider legal action. The good news: Most of the time, plaintiffs with good documentation do win.