Recently, many major American insurers have looked to international markets for new customers. Thus far, major insurers have primarily targeted the booming expatriate market as their source for international customers, often times establishing field offices to better serve them. A prime example of this trend is in China, where household names such as Aetna, UnitedHealth Group and Wellpoint have all recently established field offices.
The main reason for a growing expatriate segment in China is that various multi-national corporations are setting up shop to take advantage of China’s booming economic growth. According to Martha Temple, president of Aetna global benefits, China is “…a real hotbed place for large U.S. multinational or multinational corporations [from other nations] to open or expand their offices.” As a result, Insurance companies are cashing in by aggressively targeting expatriates.
However, with the slowdown of the US economy, and China experiencing social changes such as a booming middle and upper class, insurers are now pondering the decision of whether or not to offer insurance to Chinese citizens. More and more Chinese are looking for western “luxuries” such as private health insurance as they experience and enjoy their newfound wealth. Even though China has a basic national health insurance plan, many of the middle class and well-to-do nationals would opt to supplement the national insurance plan with private insurance to have a wider range of coverage. And with a population over 4 times the size of the United States, China may be a much needed supplement to insurer’s US business.
Interestingly, foreign insurers within China must have a field office open in the country for two years before it may start selling its products, as required by the Chinese government. Aetna, which only recently opened its China office, needless to say, will have a lot to think about in this period. Possibilities of what to sell are diverse. Insurers could opt to sell non-insurance products such as wealth management plans, or offer abbreviated services such as case management or diseases management insurance. In any case, the outcome of these insurers’ decision will be an interesting one.
The Health Insurance Industry Convention is currently well underway in San Francisco this week and even though its only been one day record numbers of protesters are showing up to rally against the current healthcare system in the USA. This is occurring in the same week as the American Medical Association released its health insurance report card to individual insurers. All in all, it’s been a difficult week for American insurance companies.
Among the insurers rated by the report are companies like Aetna, Anthem BCBS, CIGNA, Coventry, Health Net, Humana, United Healthcare (UHC), and Medicare; and while the report has no ‘grades’ per-se, it does reveal some interesting facts about some of the country’s top insurance providers. The major focus of the report is with relation to how quickly doctors are receiving payment form insurers for services rendered to policyholders and the consensus is that most insurers are too slow.
According to some AMA members physicians are spending approximately 14% of their annual income simply to receive payment from insurance companies. And in the current economic climate, this is simply an issue that will not stand with the AMA. Paying out claims is a key issue, and failure to complete payments in a timely and efficient manner is resulting in a large amount of unrest among primary caregivers.
According to the AMA the worst offender when it comes to paying claims at the contracted rate is United Healthcare (UHC), with only 62% of all claims being paid, while Medicare was the best with a 98% completion record. While some insurers are able to follow through on Doctors payments with limited hassle many insurance companies are simply dropping the ball.
This is leading to a number of Doctors starting ‘boutique’ medical clinics in an effort to remove themselves from the world of insurance. With boutique clinics patients will typically pay a monthly, or annual, retainer under which they are entitled to 24/7 access to their caregiver. In addition to this Boutique medical practices are focusing on a more personalized form of medicine by only working with a limited number of patients, something which is paying off as many people in the
There is a problem though, Boutique practices, due to the level of attention and care provided are only accessible by patients who are relatively wealthy, meaning that the majority of the American population is unable to use these services, which brings us back to the insurance companies. As mentioned previously, the Health Insurance Industry Convention has been rocked by large numbers of protesters clamoring for a single payer healthcare system. Single payer healthcare was supported by a number of politicians running in the presidential primary elections, most notably Senator Hillary Clinton, however with John McCain and Barrack Obama sealing their relative party nominations this proposal has a very limited chance of being established.
With the presidential election coming up in November the issue of healthcare is becoming ever more important to the American Public. With a number of proposals being floated to address the current problems in the system it is clear that there will have to be a fairly radical reassessment of healthcare in the
With a number of insurers failing to meet their requirements towards primary healthcare providers it is clear that something must be done to address the system. When the domestic insurer who has the best record in settling claims is the one that is administered by the government then maybe it is worth looking at initiatives that would see the government prop up the local market. All that remains clear at the moment is that this crisis of care will not end anytime soon and that everyone in the American healthcare industry needs to be looking at viable options for the future. Whether this is in regards to improved claims handling, better insurance policy coverage, subsidies for prescribed medicines, or simply looking to lower the cost of healthcare, something must be done, otherwise there may not be the standard of quality healthcare that exists in the
You know it’s going to be a bad day in the healthcare industry when the chairman of the Federal Reserve, Bernard S. Bernanke, is predicting a massive rise in the cost of healthcare in the
With the primaries over, and the presidential elections just round the corner, Barack Obama and John McCain are going to have to convince the voting public that they will be able to address the current healthcare crisis, and it may not be as easy as you think. Both these candidates know that their ability to offer a suitable solution may be the difference between winning and loosing a state. With that in mind we’re going to give you a brief rundown of the options and what they could mean if implemented.
The two main options on the table are:
Barack Obama’s Proposal
1. A move to a paperless healthcare system where all patient records and health insurance documents would exist only in electronic form. This would be implemented along with quality disease prevention (as opposed to disease management), and ensuring portability of health insurance should a policyholder loose their job, and consequently their coverage.
John McCain’s Proposal
2. Create tax breaks of up to $2,500 for individuals, and $5000 for families, who have purchased private health insurance. These tax breaks will occur each year, and while this would have a relatively limited impact on the number of uninsured individuals in the
These two proposals aim to solve the current healthcare and insurance crisis in radically different ways. By removing paper from the healthcare industry Obama aims to eliminate one of the major sources of spending (namely paper) by moving everything to an electronic format. It’s easy to see how this simple proposal would save quite a bit of money, but there is a problem.
Electronic conversion is moving at a snails place in the
By far the most promising part of this proposal, at least in the eyes of the American public, is the issue of health insurance portability should an individual loose his job, and subsequently their employment backed insurance. However, it is important to note that with the HIPPA and COBRA legislations the
Citing immediate results may get Obama votes on this issue, but analysts are warning that even if these proposals are accepted by the government, the earliest changes to the system will happen approximately 5 years after the institution of the plan. This means that the
In terms of immediate impact the winner is clearly the tax break initiative proposed by John McCain. Creating a system whereby individuals would receive tax credit for any health insurance policy that they have purchased could be instituted immediately, which could give strength to the proposal in the eyes of the voting public. In addition to this McCain is not planning on upsetting the current free market system of healthcare in the
Critics of the McCain plan claim that this proposal would seriously undermine the American public’s ability to access healthcare as the policy would involve the removal of employer backed health insurance coverage. However, this is not the case at all. Under the tax break system suggested by McCain employees would still be entitled to job-sponsored insurance and this initiative would simply give a dollar for dollar tax rebate to any individual who had purchased medical insurance.
This would, in McCain’s eyes, give the American public an incentive to go out and buy health insurance, which would in turn reduce corporate spending, and improve the overall quality of health insurance plans which in turn would increase the availability of healthcare. If there truly was a free and open market for health insurance established in the
Both arguments have their critics and supporters, and both proposals recognize that there is a fundamental problem in the American healthcare system. With rapid medical inflation, millions of uninsured and underinsured citizens and pharmaceutical prices skyrocketing this is an issue that may play a very important role in the upcoming elections. But it’s up to the voting public to inform themselves and understand the subject. Is one of these plans the way forwards for healthcare and insurance in the
A recent study by Civic Exchange, a Hong Kong-based think tank, estimates that poor air quality is accountable for nearly 10,000 deaths a year in Hong Kong. Furthermore, pollution costs the city billions of Yuan each year in loss of productivity, sickness, pressure on medical beds and premature death. With findings like these, air pollution can no longer be viewed as only a nuisance. In fact, air pollution in Hong Kong is approaching a health care crisis with huge public health and public spending implications.
On most days in Hong Kong, the air quality is so poor that views of such landmarks as Victoria Harbor, Central’s skyline and The Peak are hampered or not visible as a result of thick, grayish smog. Where is this smog coming from? Many negligent citizens like to attribute the harmful smog to the many factories just outside of Hong Kong, dotting the Pearl River Delta. While this idea holds some weight, a look into published research findings shows that over half of the pollution in Hong Kong comes from local sources. Hong Kong is heavily reliant on coal-fired power plants, old diesel trucks and diesel powered ships. If you’ve walked around any district in Hong Kong, you know what I mean. New construction seems to be eternally on-going. And all of these activities bring dangerously high levels of nitrogen oxide and particulate matter to Hong Kong’s air.
And given all these visible and statistical trends, air quality improvement initiatives seem to take a back seat to goals for economic prosperity and ignorance. For example, studies have shown that the Macau-Zhuhai-Hong Kong Bridge being built now will increase air pollution. Increased traffic between Macau and Hong Kong and further infrastructure development necessary to handle this increase in traffic are all contributing factors.
While many citizens complain about the pollution, little seems to be done about it. Hong Kong’s Chief Executive, Donald Tsang, clearly demonstrated ignorance to the issue when he made the following statement:
“The life expectancy in Hong Kong is among the highest in the world … you can come to only one conclusion: we have the most environmentally friendly place for people, for executives, for Hong Kong people to live.”
While Hong Kong’s life expectancy may be high, data shows that this will decline rapidly if the air pollution problem is not addressed. Tsang’s comments show that Hong Kong’s leaders are not fully committed to environmental issues. In late 2006, the World Health Organization updated its air quality guidelines and ever since then local academics have pushed to have Hong Kong meet these guidelines. Hong Kong Secretary for Environment, Transport, and Works naively stated:
“We’d rather prefer more practical and reachable targets that can be implemented with a strict timetable.”
With 90,000 hospital admissions and nearly 10,000 deaths a year being blamed on air pollution, Hong Kong will never be a truly global and modern city unless air pollution is brought down to reasonable levels.
We’ve talked quite a bit about the worrying amount of uninsured individuals in the USA, and while we’ve mentioned underinsurance the focus has more been on the plight of individuals with no insurance whatsoever rather than policyholders whose plans are not overly comprehensive. A recent study, however, has shown that the number of underinsured Americans has increased a staggering 60% from 2003 to 2007. This is equivalent to almost 25 million Americans, and in a bizarre twist, many of these individuals are in the middle to high income ranges.
But what’s the issue? Many commentators will say that these underinsured individuals, while not being comprehensively covered by an insurance policy, still have some protection, and due to their above average incomes will be able to contribute towards the cost of any medical treatment that they receive with very little trouble. This may have been true 20 odd years ago, but in the modern world this could be considered slightly delusional.
With the levels medical inflation during the 1990’s and early 21st century, specifically in the USA, it is no longer possible for moderately wealthy individuals or families to afford out-of-pocket payments for healthcare. In fact the inability to pay for medical costs has become the number one cause of personal bankruptcy in the USA. The issue is that despite the country having some of the best healthcare services in the world, a large portion of the population is completely unable to afford any treatment.
Now an onlooker may say, sure – but that’s individuals with no insurance – people who have insurance should be able to afford this coverage. And they would be right; to a point. The study defined underinsurance as anyone who has an annual health insurance but still contributes 10% of annual income towards medical costs, and whose deductibles were equal to a further 5% of their annual income. Low income individuals who spent 5% of their income on health insurance or deductibles also qualified for this bracket.
Think about that for a second, in the midst of a global credit crisis and worsening economic fortunes for the average American citizen, many of these individuals are spending between 10 and 15 % of their total annual income on healthcare, and for many of these people this is without having ever seen a doctor! Compound the actual deductibles and co-pays on top of this and the situation starts to look extremely grim indeed.
With medical inflation reaching levels never seen before many domestic insurance companies are scaling back coverage, without also scaling back premiums. This is understandable, however it leaves the average policyholder woefully unprotected. International insurance companies are realizing, however, that increased coverage is most definitely needed as the costs continue to rise. A great example of this would be seen with IHI Danmark’s travel insurance; over the last year IHI saw the increased need that travelers have for comprehensive protection and raised the overall maximum benefit of the policy to ‘Unlimited’. This means that under the new IHI travel policy there is no coverage limit, and this move has seen the company increase the number of policyholders obtaining these short term travel medical insurance policies.
Now obviously the above example would only work for individuals who are planning on being outside of their home country for a period of time, but the idea is clear. In a time when domestic health insurance companies in the USA are scaling back coverage a number of international insurers are going in the opposite direction and providing more.
The point is this, increasing premiums and healthcare costs in conjunction with lowered coverage is leading to more and more Americans finding themselves in a position where they are simply unable to access, or afford, the healthcare that they need. With a 60% increase in the number of underinsured Americans in the last 4 years, and the total number of Americans who are either uninsured or underinsured at 75,000,000, its not hard to see how this situation will worsen in the years to come.