Private Health Insurance, Care Health, Student Health, Health Plans

California farmers, ranchers struggle over health care costs

2009-04-06T08:46:00.003-07:00

California’s farmers and ranchers are struggling with health care bills that, in some instances, threaten the viability of their family businesses, according to a report Wednesday by the Access Project and funded by the California Endowment.

The report finds that while almost all farm and ranch operators have health insurance, one in five says that California insurance premiums and other out-of-pocket health care costs are causing financial difficulties for themselves and their families.

These families report spending 37 percent of their income on health care coverage and medical costs.

“A better term for health insurance that leaves nearly one in five purchasers in financial jeopardy might be called ‘product failure’,” says Carol Pryor, a report author and policy director for the Access Project.

The survey also found that more than three in 10 farmers and ranchers (31 percent) are spending at least 10 percent of their annual income on health insurance premiums, prescriptions and other out-of-pocket medical costs. Spending this much on health care is a commonly used indicator of financially burdensome health care costs, the report’s authors say.

Farm and ranch operators are especially hard hit because they are often forced to buy insurance on the individual, non-group market, where insurance generally costs more and covers less, says the report.

The study shows that on average, those farmers and ranchers purchasing insurance in the non-group market spent almost twice as much on health care as those who got their health care coverage through off-farm or off-ranch employment. The median amount spent by farmers and ranchers who got insurance on the non-group market was $8,500 a year (including premiums and out-of-pocket costs), compared to $4,630 spent by people who got insurance through employment off the farm or ranch.

Three in 10 of the study’s respondents purchased health coverage directly on the open market. Nationally, only 8 percent of Americans obtain their health insurance this way.

“Right now farmers are faced with increasing costs for everything – fuel, feed, fertilizer. Adding exorbitant health care costs on top of these expenses is simply not sustainable and threatens the viability of family farm operations,” says Lynn McBride, director of the California Farmer’s Union.

One-fourth of those surveyed (26 percent) report having to draw on other financial resources to cover the costs of care. Of these respondents, 70 percent dipped into family savings and nearly one in three (29 percent) incurred credit card debt or increased existing debt. Others took out a loan, borrowed against their farm, withdrew money from a retirement account or turned to friends and family for help.

ABC's Dr. Tim Johnson, 15 Years of Shilling for Universal Health Care

2009-04-06T08:46:00.001-07:00

ABC's liberal medical editor, Dr. Tim Johnson, appeared on Wednesday's "Good Morning America to boost Barack Obama's universal health care plan and critique the more market oriented proposals of John McCain. Co-host Robin Roberts began the segment by seriously asserting, "We're not endorsing one plan over the other. We're just showing the differences between the two."

But after she mentioned Obama's assertion during Tuesday's presidential debate that health care is a right, Johnson marveled, "But, I'm struck by the language of the right to life, liberty and the pursuit of happiness. Without good health, and that usually means without good health care, it's hard to have those other rights." Johnson, despite being a doctor, adopts the standard, liberal positions of most journalists and has a 15 year-plus history of advocating universal health care, including once asking if Republicans who opposed the policy were "immoral."

Regarding Senator McCain's idea to give people the opportunity to buy individual plans, even if they don't have an employer, Johnson criticized, "That's a difficult thing to do because there are so many different plans marketed." Accentuating the negative, he added, "So, you've got to do a lot of work on your own and read the fine print. It's a very difficult job for an individual."

Johnson found no such criticisms for Senator Obama's proposal. After describing the various health insurance plans the Democrat would offer, he approvingly observed, "But these plans will have been vetted by the government, just like they do for federal employees...But you know they've been vetted for basic care and coverage and that the cost is fair."

California Health Coverage Costs are a Bit Lower

2009-04-06T08:45:00.004-07:00

Cost increases for California health insurance premiums are lower this year, and although California’s are higher than some other states, they are also still lower than in previous years.

The Kaiser Family Foundation and Health Research and Educational Trust confirm what news wires also are reporting: nationally, the rise in cost of health care premiums is about 5 percent. This continues a trend from 2007, when a similar small cost increase was instituted.

However, according to Randy Jones of Hometown Insurance Services in Solvang, in California premiums are somewhat higher: “Ours in California, the rate went up higher than that. We’re getting a 10 percent rise,” he said.

Although the national increases were reported at the end of September, California’s current insurance rates are more difficult to come by. Insurance industry and regulatory agency figures found on the Internet indicate the 10 percent rise is in the ballpark.

“If increases aren’t as bad this year, they were pretty horrendous last year,” Jones continued. One reason California’s premiums are not shooting up, he said: “We’re healthier.”

Another reason that California’s health insurance premiums have stayed relatively low, according to Jones, is the result of a ballot measure from about 15 years ago. That measure was approved by voters, capping punitive damage amounts. “So insurance companies don’t have to approve every little thing for fear of being sued,” Jones said. “But the quality of California health care hasn’t changed.”

The Kaiser study showed that not only insurance premiums have shown a steady increase. “Cost sharing for medical services has also increased in recent years. The percentage of employers sponsoring insurance and the percentage of workers covered by employer-sponsored insurance remained stable over the past year.”

California Legislature Drops Some Health Cuts From Budget

2009-04-06T08:45:00.003-07:00

Early this morning, the California Legislature approved a budget proposal for fiscal year 2008-2009 that avoided some cuts to health care and other programs, the San Jose Mercury News reports. Democrats widely opposed the proposed cuts (Zapler, San Jose Mercury News, 9/16).

The proposal does not eliminate dental services for adult Medi-Cal beneficiaries or impose new restrictions on Medi-Cal services for undocumented immigrants. Medi-Cal is California's Medicaid program (Halper/Rau, Los Angeles Times, 9/16).

Beyond those already introduced by Senate Democrats, the budget agreement does not include cuts to California health care, human services or education programs, according to information Ventura County officials received from the California State Association of Counties (Biasotti, Ventura County Star, 9/16).
Healthy Families, Medi-Cal

The budget retains a provision to increase monthly premiums for Healthy Families, California's version of the State Children's Health Insurance Program (Los Angeles Times, 9/16).

The proposal would restore most of the 10% cut in Medi-Cal payments to health care providers beginning in March 2009 (Lin, AP/San Francisco Chronicle, 9/16). California's Medicaid reimbursement rates will remain the lowest in the U.S. even after the cuts are restored, according to the Los Angeles Times.

California Children at Risk of Losing Health Insurance Coverage

2009-04-06T08:45:00.001-07:00

Thousands of California children could lose health insurance coverage in the coming months as a result of changes in Medi-Cal rules and decreased funding for local efforts that have provided coverage to children, the Los Angeles Times reports. Medi-Cal is California's Medicaid program.

State lawmakers will require parents of children enrolled in Medi-Cal to renew their enrollment every six months.

The administration of Gov. Arnold Schwarzenegger (R) projects that the requirement will contribute to a drop in Medi-Cal enrollment over the next two years of about 196,000 children.

State lawmakers also have increased monthly premiums for Healthy Families, California's version of the State Children's Health Insurance Program, by $2 to $3 per child.

As a result, the state estimates that the parents of 19,000 children no longer will receive coverage through the program by July 2009.

The changes to Medi-Cal and Healthy Families were approved as part of a larger effort to address the state budget deficit.
Local Efforts.

Beyond changes to Medi-Cal and Healthy Families rules, children also could lose coverage because of funding challenges faced by local initiatives operating in 30 counties. The efforts target children who are ineligible for Medi-Cal or Healthy Families because of income or citizenship requirements.

The initiatives are funded largely by private philanthropies and local First 5 commissions, which disburse funds from a state tobacco tax for early childhood health care and education efforts.

Wendy Lazarus, co-president of the advocacy group Children's Partnership, estimates that enrollment in the efforts has dropped by 8,000 over the past two years.

California health insurance ambition narrows

2009-04-06T08:44:00.003-07:00

Seeking to salvage two years of efforts to completely remake California's health insurance system, Gov. Arnold Schwarzenegger and Democratic legislators are nearing deals intended to rein in costly, meager medical insurance policies sold directly to individuals.

In the final weeks of the legislative session, they are negotiating measures that would limit insurer profits on California individual insurance plans, require plans to provide a minimum set of benefits and restrict insurers' ability to cancel policies retroactively.

The new focus reflects how far Schwarzenegger remains from his original healthcare goal: to orchestrate medical insurance for the 5 million Californians who lack it. Despite a year of strenuous campaigning for his vision, which garnered attention nationwide, the state Senate rejected that $14.9-billion plan in January.

Many of the concepts now under discussion were included in that proposal. Although most California insurers supported the governor's broader effort because it would have created millions of new customers, the industry is uniformly resisting the current push to circumscribe some of its most lucrative products.

Three million Californians buy health insurance on their own rather than through employers. Insurers keep health insurance premiums low -- and profits high, their critics say -- on some individual policies by limiting the services they cover. Such plans may exclude prescription drugs and maternity services, for example; others may cover only hospital visits.

Many of the policies have big deductibles and require patients to pay large portions of their expenses, costing them much more than coverage obtained at workplaces.

California Takes Another Crack at Insurance Reform

2009-04-06T08:44:00.001-07:00

After a failed attempt to pass a universal health plan early this year, California is now looking to rein in the notoriously consumer-unfriendly market for California individual health insurance.

States face a Catch 22 when it comes to health policies that people buy on their own. Require plans to provide certain benefits or bar them from rejecting individuals for health insurance coverage, and the result will be that the insurance gets more expensive. Give insurers lots of latitude about who and what to cover, and cheaper plans are available — but often not for the older and sicker patients who need coverage most.

So California is trying a balancing act. A proposal being considered in the legislature would require insurers to cover physician services, hospital care and preventive services, and would set a maximum amount patients would have to pay each year toward their bills, the Los Angeles Times reports. State regulators would sort policies into categories based on the health care benefits they offer and establish minimum benefits for each category, presumably making them easier to compare.

But Gov. Arnold Schwarzenegger wants to limit it to categorizing plans and not order insurers to offer specific benefits. Daniel Zingale, the governor’s senior advisor on health, told the Times that although “we need to make the insurance market more user-friendly,” too many benefit requirements could lead to price changes for people who already have coverage.

Sen. Darrell Steinberg, the bill’s Democratic author, told the Times he was “always willing to consider compromise” but that he also would like “the bill to be meaningful to consumers.”

Other ideas being negotiated include limiting limit insurer profits on individual insurance plans and restricting insurers’ ability to cancel policies retroactively.

California Governor Signs Health Care Protection Bill

2009-04-06T08:43:00.002-07:00

California Governor Arnold Schwarzenegger signed AB 1150 by Assemblymember Ted Lieu (D-Torrance) which bans health insurance companies from rewarding their employees for canceling or limiting a patient's health insurance. While the Governor signed AB 1150 because of the urgent need to protect consumers from unfair health care rescissions, he continues to believe that health care reform must be comprehensive.

To that end, he has proposed legislation that would be the building blocks of comprehensive health care reform and is working with the legislature on a joint solution that will protect consumers, control costs and promote prevention.

"Until we achieve comprehensive health care reform, stopping unfair health care rescissions is an urgently needed consumer protection," Governor Schwarzenegger said. "This terrible practice further illustrates the erosion of the California health care system and the need for comprehensive health care reform. Today we are standing up for consumers by putting an end to a deplorable practice, and I will continue working with my partners in the legislature to stop unfair health care rescissions once and for all."

The Governor's goal of comprehensive health care reform would make health care rescissions a problem of the past. The Governor's AB x1 1, the Health Care Security and Reduction Act, would have required that all Californians take responsibility for their health coverage while guaranteeing that no Californian is turned away from buying Calfiornia health insurance based on their age or medical history.

Insurance Cancellation Questions Could Spread Beyond California

2009-04-06T08:43:00.001-07:00

Today’s Health Blog jargon of the day is rescission, the California insurance industry’s practice of revoking individual insurance policies because of health-related mistakes or omissions on the application for coverage.

The companies say this is a key step for fighting fraud, but they’ve come under criticism in California by those who accuse them of going over applications with a fine-tooth comb after members who’ve been enrolled for a while get sick or injured and start submitting claims.

Now it looks like the push-back against rescission may be spreading. Henry Waxman, a Democratic California Congressman, held a hearing on the subject yesterday and said his oversight committee plans to investigate the issue nationally.

“I understand that California insurance companies need to protect themselves from fraud,” Waxman said in his opening statement. But “insurers are using technicalities or trumped-up ‘misrepresentations’ to rescind policies after individuals get sick and accumulate hundreds of thousands of dollars in medical bills.”

The health insurance industry supports third-party review, established by the states, for rescission decisions, Stephanie Kanwit, special counsel to the trade group America’s Health Insurance Plans, said at yesterday’s hearing.

Kanwit said the practice is very rare. And, she said, collecting accurate information on applicants’ health history is essential for the insurance market to function. “When individuals wait until they are ill before purchasing health insurance, costs are increased for other policyholders who pay into the system on a regular basis,” she said.

Meanwhile, back in California, the industry’s rescission problems are rolling on. The state’s Anthem Blue Cross and Blue Shield yesterday agreed to pay the state $13 million in fines and to offer new coverage to more than 2,200 Californians the companies dropped after they became ill, the Los Angeles Times reports. As part of the agreement the companies didn’t admit wrongdoing.

And earlier this week, Los Angeles’ city attorney announced a lawsuit against Blue Shield over the rescission issue. The city attorney launched an investigation into the issue earlier this year, and has already filed lawsuits against a few other insurers.

Another Look: The Wal-Mart and E-ClinicalWorks Deal

2009-03-28T20:38:00.001-07:00

By David E. Williams

The New York Times reported this week (Wal-Mart Plans to Market Digital Health Records System) that the company’s Sam’s Club division will bundle eClinicalWorks electronic medical record software, Dell computers, installation, maintenance and training to offer to small physician practices. Pricing is about $25,000 for the first physician in an office, and $10,000 for each subsequent physician. Annual maintenance and support costs will be about $4,000 to $6,500 (though it doesn’t say whether that’s per physician or per practice).

Wal-Mart says its package deal of hardware, software, installation, maintenance and training will make the technology more accessible and affordable, undercutting rival health information technology suppliers by as much as half…

Dell will be responsible for installation of the computers, while eClinicalWorks will handle software installation, training and maintenance. Wal-Mart is using its buying power for discounts on both the hardware and software.

This program has promise, but it isn’t revolutionary and is by no means certain to succeed. Interestingly, the Wal-Mart PR people, who usually send me a heads up about any new Wal-Mart move in health care, didn’t tell me about this one. It makes me wonder what’s really going on. There are a couple of very promising aspects of this program:

Continue reading "Another Look: The Wal-Mart and E-ClinicalWorks Deal "

I shake my fist at Clay Shirky!

2009-03-28T20:37:00.002-07:00

By Matthew Holt

Last week (Tuesday to be precise) Chris Rauber, the health care journo at the SF Business Times calls me to talk about health care IT. But he ends with a question that’s not about Health care or IT, but aimed at me as a blogger. He says “what do you think is the future business model for journalism”

I’ve been mulling this a little bit and my response went something like, media is now disaggregated. Craigslist and Google have destroyed the advertising model for most media, and blogs and social networks have democratized the commentary/opinion playing field (to some extent—I’m not as rich as Tom Friedman yet!). The problem is that not many “new” media outlets—such as THCB—can afford to take on the interesting part, which is paying real investigative journalists to investigate. Something I would love to be bale to do—as there’s lots of muck to be raked in health care.

Continue reading "I shake my fist at Clay Shirky!"

A Sticky Solution to a Sticky Problem

2009-03-28T20:37:00.001-07:00

By ALISTAIR ROCK

“Don’t pull the knot tight,” the philosopher Ludwig Wittgenstein once warned, “before being sure you have got hold of the right end.” Those who hope to sort out the tangle of health care spending would do well to heed his advice.

Clearly, there’s been no lack of solutions put forward since the Clintons first put health care atop the national agenda more than a decade ago. But with health care spending still rising at twice the rate of inflation, few have made any real and lasting impact.

Employers (who still pay the lion’s share of health insurance premiums here in the U.S.) know, of course, that keeping employees from getting sick in the first place—and minimizing the severity and duration of their illness when they do—is the first step in reducing this unwelcome “growth sector” of our economy. They understand, for the most part, that healthier employees equal not only lower healthcare costs but reduced absenteeism and greater productivity for the economy as a whole.

Continue reading "A Sticky Solution to a Sticky Problem"

For whom the HITECH Bill Tolls?

2009-03-28T20:36:00.004-07:00

As part of a sweeping effort to address the woes of the current US economy, the government has placed $19 billion on the table for HIT, aimed at containing healthcare costs and creating new jobs. The ultimate instruments for implementing this HITECH bill are America’s physicians and there is much confusion and apprehension in the physician community regarding the net effects of this bill on doctors in particular and healthcare in general. The HIT stimulus effort will not reach its stated objectives without voluntary adoption by our doctors. The government and the HIT community must find a way to draw physicians all over this country into the process of defining and implementing the stimulus package.

In very broad terms, interoperability standards will be defined, Electronic Health Records (EHR) technologies will certify compliance with the standards and physicians will be provided financial incentives to acquire, and meaningfully use, those EHR technologies. The assumptions are that use of these standardized EHRs will reduce costs by reducing medical errors, reducing duplication of tests, improving quality of care and encouraging evidence based clinical decisions. Jobs will be created as the EHRs are deployed across the nation. Experts are already at work “on the Hill”, in the White House, in the boardrooms of HITSP, NIST, CCHIT and other acronym organizations. Technology vendors are feverishly doing their part, from creating websites devoted to the HITECH bill, to making products available at Wal-Mart, to sudden revelations that HIT is really their main business. Everybody is actively involved in making this bill a success. Well, maybe not everybody.

Continue reading "For whom the HITECH Bill Tolls?"

Jonathan Cohn on the internal politics of Obama's health care plan

2009-03-28T20:36:00.003-07:00

By Matthew Holt

Jonathan Cohn has started blogging almost daily on the politics of health care at The Treatment. And it's a treat to read. Jon is a member of the recently exposed vast left wing conspiracy (so am I, but that’s because Ezra’s soft), but the difference is that instead of being a San Francisco based ranter with an unfocused cynicism, Jon actually knows the inside Obama players and cares what they do. And he’s an optimist.

His latest piece at TNR, Stayin' Alive describes the inner story of why the Administration decided to come up with the $65bn a year number in the budget for health reform, rather than just brushing it under the rug. And the somewhat surprising (to me) answer is that the member of the Obama team who would not let health care die was Obama.

Now I know I’m very cynical about both the chances of any reform passing and the value of said reform, but there is the (ever so slight) chance that I might be wrong. So paying attention to Jonathan is a smart idea.

CODA: BTW, why are health care reform costs always quoted as “$1.5 trillion” or whatever. Why are they not quoted like everything else, in annual terms?. After all $1.5 trillion over 10 years is a pretty small fraction of the $30+ trillion we’re going to spend on health care in the next 10 years.

Pharma vs. Devices – FDA, Supreme Court and Liability Whiplash

2009-03-28T20:36:00.001-07:00

By TOBIAS GILK

Whiplash. I don’t know what else to call it when the US Supreme Court does a near 180° reversal on a decision from just a year ago on medical product liability. Consider the following…

On February 20th, 2008, the US Supreme Court ruled in favor of Medtronic in the case Riegel v. Medtronic. The case involved a cardiac catheter, which ruptured during surgery. Medtronic asserted (and the Court agreed) that, because the company had received premarket FDA approval for the device, the company was immune from suit in state courts. The prevailing argument was, in essence, that the rigor of the federal review and approval process trumped the individual’s right to seek judgment using the state courts.

Many supported the notion of keeping federally-regulated medical devices above the reach of state courts, but at the same time questioned whether the FDA was really capable of the safety rigor that the Court attributed to it.

Continue reading "Pharma vs. Devices – FDA,
Supreme Court and Liability Whiplash"

Tom Epstein, Blue Shield of California, on the hot seat

2009-03-28T20:35:00.003-07:00

By Matthew Holt

A couple of weeks ago the PR company for Blue Shield of California contacted me asking if I wanted their take on health reform. I somehow suspect that the PR flack concerned wasn't as familiar with the California rescission issue as I am, or hadn't checked on THCB's extensive coverage of it

But Blue Shield of California is an odd case. CEO Bruce Bodaken has been a leader among health plans in looking towards a regulated utility model, and supporting both Arnie-Care and now Obama/Baucus-care. On the other hand, as we've discussed numerous times on THCB, Blue Shield has not only been as bad as the rest in terms of bad behavior in the individual market--but has also been the most aggressive of all insurers in defending its right to that behavior in the courts.

Tom Epstein, is an old Clinton White House hand who's now running Public Affairs at Blue Shield of California. Tom was brave enough to come on THCB, discuss the good, the bad and the ugly, be frank about what they want to happen and to forecast what he thinks might happen in terms of reform, and the potential role of health plans in it. Here's the interview and I think you'll find it very interesting.

Those Goody Goody Canadians Not So Good

2009-03-28T20:35:00.001-07:00

By MICHAEL MILLENSON

C’mon admit it: you’re sick of hearing how those goody-goody Canadians provide comprehensive health care to all, while we let an estimated 22,000 Americans die each year (http://www.urban.org/publications/411588.html ) because they don’t have coverage. Or the way their cost of prescription medications is so much lower than ours that Congress finally threw up its hands and legalized the equivalent of small-scale (prescription) drug smuggling. Heck, Canadian provinces even do comparative effectiveness research without anyone calling them Nazis.

Now comes word from the Fraser Institute in Toronto that Canadians are not so goody-goody after all. The institute puts out a peer-reviewed and risk-adjusted report card comparing hospitals in Ontario, the nation’s largest province. Last year, the first for the report, just 43 of 136 acute-care hospitals agreed to participate. This year, though, the number of participants plunged 60 percent, to just 17 hospitals, according to a story in Healthcare IT News.

Don't think anything is certain on the reform front

2009-03-28T20:34:00.004-07:00

By Matthew Holt

And in more from the "is it really bad enough out there to guarantee health reform?" front...

Pew Research is out with a poll showing that the numbers in favor of a major health care system reform are growing abut nowhere near as large as they were in 1993.

For those of you who are real survey geeks it's (almost) worth noticing that Harris, which asks a similar three questions about appetite for reform never got above 40% for its “rebuilding” category back in 1993. I’m not sure why these are different numbers, but the last one I saw from Harris in favor of “complete rebuilding” was at 33%.

But the answer is that support from the public is no more a dead cert than it was in 1993–4.

Bluementhal is new health IT czar

2009-03-28T20:34:00.003-07:00

By Matthew Holt

David Blumenthal, known slightly more for being a policy wonk than a geek (or perhaps known best for being a wonk about geek issues!), has been appointed the new Director of the Office of the National Coordinator for Health IT. No official word on Rob Kolodner's new role, although John Halamka suggests that he'll stay on to run the stimulus package. Don’t forget that ONC gets $2 billion as part of the HITECH bill, so someone needs to be there to manage the bureaucratic part of that.

And no, none of the five candidates pimped on THCB by Kibbe and Klepper got the job…I’m sure we’ll hear from them about Blumenthal shortly.

Health Wonk Review, up and intense at HealthBlawg

2009-03-28T20:34:00.001-07:00

By Matthew Holt

David Harlow did a great job, go see.

Commentology

2009-03-28T20:33:00.003-07:00

JR wrote to us with an interesting question:

"Given the attempt to recover bonus payments to AIG, can you envision a scenarios where CMS attempts to recover payments from physicians that they retroactively deem too high? What if a new national standards board establishes a rate for hip replacements that is lower than what it is today? Similar situation? Not at all? I’d like to see a discussion on this."

CCHIT President Mark Leavitt likes the Obama administration's pick for National Health IT Czar. He left this comment on Matthew's post on the selection.

I had the opportunity to work with David Blumenthal recently when I served on an expert panel for the health IT adoption studies. He has a deep understanding of applied health IT and, even more important, how clinicians interact with these systems in the real world. This is great news for everyone interested in advancing the use of health IT to improve quality, safety, and cost efficiency.

Commentology regular Christopher George thinks the courts missed the underlying point in both of the cases that Tobias Gilk discusses. "Pharma vs. Devices – FDA, Supreme Court and Liability Whiplash"

"In both of these [instances] the product was mis-administered. The Medronic balloon was inflated above the pressure for which it was rated; the drug was mis-administered by the nurse. In both cases, the fault lay with the doctor or nurse using the product, not the product. There is no "failure to warn" here. The balloon was over inflated. Every balloon, when overinflated enough will burst. The injection was made into an artery."

The Public Program Impasse: A Proposal

2009-03-28T20:33:00.001-07:00

By ROGER COLLIER

Health care reform proponents could find encouragement in recent Obama administration comments on the issue of taxing health care benefits. The President, having adamantly rejected the concept during last year’s campaign (thereby violating a cardinal rule of politics: “never say anything you can’t later on claim was misinterpreted by your enemies”) indicated through White House budget director Peter Orzsag that he considered the issue very much on the table.

Since passage of health care reform is likely to require almost unanimous support by the fifty-eight Senate Dems—or maybe fifty-nine, depending on the eventual emergence of a winner from the long Minnesota winter—the President’s willingness to back down is a positive step (although sophisticated financial thinkers will note that shuffling funding sources will do nothing to reduce total costs).

What the administration’s openness to compromise also does, however, is move the spotlight onto another issue with the potential of sinking health care reform: the inclusion or otherwise of a public program option in a reform structure.

Narrow Networks - Part II

2009-03-28T20:32:00.002-07:00

By CHARLIE BAKER

For the past six years, Harvard Pilgrim has offered a limited network product to our New Hampshire members called “New Hampshire NetOption.” Simply put, all New Hampshire providers are Tier One providers - lowest co-pays - and so are all Massachusetts community hospitals. Tier Two providers are MA-based teaching hospitals (members have a higher co-pay for services there). That’s it. Two tiers - one for NH hospitals and MA community hospitals, and a different one for MA-based teaching hospitals.

There is, however, one catch. All NH hospitals and their physicians and all MA hospitals and their physicians are “in network” for this product - except Partners. When we set the product up, Partners chose not to participate because the plan design treated teaching hospitals differently than it treated community hospitals. That’s their call. NBD, as my kids would say.

Drug war lunacy--Connecting the Dots

2009-03-28T20:32:00.001-07:00

By Matthew Holt

Next month the Supreme Court will be given the chance to redress one minor the lunacy of the last thirty years of the so-called “war on drugs”. It will get to decide whether in the name of "zero tolerance" a thirteen year old girl can be strip searched in the quest to find some OTC ibuprofen. Oh, and she was an honor student falsely accused by a former "friend". Given the current make-up of the Supreme Court—yes Clarence Thomas still gets a vote—we can probably expect nothing sensible.

On the other hand nothing sensible, and much worse, is going on south of the border. My former colleague Paul Saffo points out that Mexico is on the verge of collapse. He notes a major signal—the cops are wearing masks while a major drug dealer stands proud.

Health Care Reform: Ideology, Self-Interest and Rhetoric

2009-03-28T20:31:00.002-07:00

By Humphrey Taylor and Ian Morrison

Thirty years ago, one of us asked the retiring CEO of one of the largest drug companies what was the worst mistake he had made as CEO. Without hesitating he said, “Opposing Medicare. We were so ideologically hostile to a big new government program that we lost sight of our own self-interest. All the major drug companies except Syntex opposed it. Luckily we lost. We have made billions of dollars because of Medicare.”

The White House “summit” on health care reform was a nice start but as the as the reform debate unfolds, public and congressional opinion and the positions of the powerful interests involved - pharmaceuticals, insurers, device manufacturers, physicians, large and small employers, and technology companies - will be swayed by their ideology, perceptions of self-interest and the rhetoric used in the debate.

At one level, there is a broad consensus in America that we need to reform healthcare to expand coverage, improve quality, and make healthcare affordable. Public opinion polls show broad agreement and large majorities in favor of fundamental change. Even among specific stakeholder groups, from employers to hospitals and doctors, there seems to be widespread agreement that healthcare needs to change. But, the combination of a deep ideological divide, self-interests that are mutually exclusive, and rhetoric that is capable of turning public opinion against change may end up creating an environment of inaction.

A Healthcare IT Primer

2009-03-28T20:31:00.001-07:00

By JOHN HALAMKA

Now that Healthcare IT is part of the stimulus and newsworthy, I receive many questions from reporters about the fundamentals of healthcare IT. Here's a primer with the Top 10 questions and answers:

1. Can you define EHR, EMR, PHR and PM in simple terms?

Electronic Medical Record - An electronic record of health-related information on an individual that can be created, gathered, managed, and consulted by authorized clinicians and staff within one health care organization.

Electronic Health Record - An electronic record of health-related information on an individual that conforms to nationally recognized interoperability standards and that can be created, managed, and consulted by authorized clinicians and staff, across more than one health care organization.

Personal Health Record - An electronic record of health-related information on an individual that conforms to nationally recognized interoperability standards and that can be drawn from multiple sources while being managed, shared, and controlled by the individual.

Practice Management - An application used to manage the physician business operations including scheduling, registration, and billing ...

Two Birds With One Stone: Covering the Uninsured by Fixing Medicare

2009-03-28T20:30:00.002-07:00

By Victor M. Sandler, MD

As a nation, we are in a heap of trouble. Our medical system is a disaster—overly expensive and ineffective. On average, we spend two to three times more per capita on health care than other developed countries. Yet on measures of quality, we rank 22nd out of 23 among those same countries, according to the World Health Organization. Not only that, Medicare, our national insurer for the elderly and disabled, is facing more than $30 trillion in unfunded liabilities over the next 40 years. We have 50 million people who are uninsured in this country and millions more who are underinsured because employers have shifted a larger percentage of premium costs to them and increased deductibles and coinsurance payments, causing some to forgo medical treatment because of the expense.

The bad news is that we are on a path that is much too costly and clearly not sustainable. The good news is we can get off that path by cutting medical costs dramatically without negatively affecting quality. The way to start is by acknowledging the fact that we don’t have the best health care in the world, as former President George W. Bush and others have touted.

What we have is the most health care in the world.

The Causes of Medical Waste
The factors that feed our obese medical system are manifold. But three are especially troublesome. First, there is an unfortunate ethos within American medicine and society at large called “heroic positivism.”¹ Essentially, it is the idea that the more we do to and for our patients, the more they gain.

Karen Ignagni lie of the day, part 68

2009-03-28T20:30:00.001-07:00

By Matthew Holt

The big insurers now seem to be doing anything they can to prevent a Medicare-equivalent public plan being launched to beat them up. Yes AHIP has apparently decided to throw the schlockmeisters off the boat, and more or less agree to end medical underwriting.

Those of you who listened to my interview with Tom Epstein of California Blue Shield will recall the cognitive dissonance he was suffering when he had to defend Blue Shield and other insurers’ behavior in the individual insurance market (hey, it’s the man’s job), while at the same time calling for policies that would essentially end the individual market and create a near-universal purchasing pool. By definition, that would require some level of uniformity of benefits and some risk-adjustment mechanism, and consequently it would put several currently profitable lines of insurers business out of business—yes I am talking about Tonik and Mega Life & Health among others. In general this might be a good trade for the bigger plans as they’d add a bunch more younger healthier lives at a higher price point (although what Wellpoint’s actuaries and accountants really think about it is yet to be determined—note their opposition to the similar ArnieCare legislation).

A Research Agenda for Participatory Medicine and the Connected Medical Home

2009-03-28T20:29:00.002-07:00

By DAVID C. KIBBE AND JOSEPH KVEDAR

  Recently, in a blog post published December 22, 2008 in The Health Care Blog entitled "The Connected Medical Home,” we described the synergy between the efforts of proponents of Participatory Medicine and the Medical Home. Our main purpose was to suggest that both providers and patients are longing for a synthesis that takes the best features of Health 2.0 as consumer-generated health care, and combines these with a primary care medical home model offering personal relationships with health professionals who understand the power of the Web and are willing to use the Internet to improve patient care.   

Since our earlier writing, which received mostly positive commentary, a new President has been elected and Washington is on fire with talk of health reform and economic stimulus. Health IT and the medical home are primed to take center stage in the evolution of health reform, most observers would agree. However, there are still many details to be worked out. It is not entirely clear what constitutes the best uses of health IT inside the medical home model, nor how to hold these uses accountable for improved care and lower cost of care, let alone how to connect these with consumer-based technologies and bring both to market at a reasonable price, certainly a prime consideration during a recession and if we expect efficient widespread use.   

CLASSIFIED: Valida Primary Care - Investors in Primary Care Practices

2009-03-28T20:29:00.001-07:00

The healthcare marketplace is changing dramatically - at Valida Primary Care we believe these changes create significant and exciting opportunities for primary care practices. We are a group of healthcare executives and investors with years of experience growing and improving provider organizations. Currently, we are seeking mid to large size primary care practices in New England in which to make majority equity investments. To learn more about Valida Primary Care visit. www.validapc.com

Interested in reaching a national monthly audience of 75,000 healthcare-obsessed readers? Drop us a line. We'll get back to you with rates and options. Want to impress your boss and amaze your friends? Consider becoming a THCB corporate supporter.

The Hawaii Health 2.0 Chapter meeting

2009-03-28T20:28:00.004-07:00

Indu & Matthew traveled to Hawaii (tough gig but someone’s got to do it) to take part in the Hawaii Health 2.0 chapter on Online Care, held on Thursday March 26. The chapter meeting was rather more fancy than the average Health 2.0 local meeting, with the dolphins in their own lagoon at the Kahala resort being a few steps away from the meeting.

HMSA, American Well and Kaiser Permanente hosted the meeting which focused on online care. David Kibbe kicked off the meeting with a little reprise of the Great American Health 2.0 Motorcycle Tour. Jay Sanders “father of telemedicine” gave a great presentation going back to future showing the “radio doctor” in a picture from 1924, which looked pretty much like what online care looks like now! Jay was very provocative about the potential of telemedicine and the role of physicians in the future—for example, if you have a physical and you don't check the doctor's hearing first, how do you know that they’re reporting is correct? Indu & Matthew followed with the introduction to Health 2.0 and putting online care in place within the wider technology change….but you’ve all heard way too much about that (slides to come)

CLASSIFIED: Yale School of Management’s Healthcare Conference 2009

2009-03-28T20:28:00.003-07:00

“Where is the Value? Managing Cost and Quality in a Healthcare System Facing Reform.” April 3rd at the Omni Hotel in New Haven, CT. A full-day summit of industry leaders, students, and academics discussing current topics of industry concern as Obama attempts to usher in reform. Our 16 breakout sessions will focus on answering how to unlock additional value in the current system. Our 2 keynote addresses will feature Samuel Nussbaum, MD, Chief Medical Officer of WellPoint, and Helen Darling, President of the National Business Group on Health. Registration and further details can be found at: www.yalehealthcare.com.

Patient-based Health Reform or "Fannie Med?"

2009-03-28T20:28:00.001-07:00

Set against the backdrop of the $787 billion stimulus bill and deficit spending that dwarfs the federal outlays of FDR's New Deal and LBJ’s “Great Society,” the idea of spending hundreds of billions - or even trillions of tax dollars - to buy universal health care coverage for all Americans isn't much of a stretch anymore.

Faced with $30 to $80 trillion in unfunded healthcare liabilities ($110,000 to $300,000 per American under the age of 65) “health care reform” discussions are underway between President Obama and members of Congress in the 111th Congress to spend even more on health care, and Americans are beginning to hear more and more about "patients’ rights" and similar jargon.

The problem is that “universal health care” and “patients’ rights,” while sounding harmonious, are in direct conflict. The path to effective health care reform must be approached from the perspective of individual patients and their relationship with their doctors, and not from a top-down, big government perspective. Anything that interferes with an individual’s freedom to consult their doctor of choice to make health care decisions defeats the purpose of meaningful health care reform.

True health care reform centers on four "pillars" of Patient's Rights:

Health 2.0 Meets Ix--The Great Debates

2009-03-28T20:27:00.000-07:00

On April 22–23 in Boston, two ideas are going to come together. Health 2.0 has been defined in different ways, but is most often considered to be the use of lightweight online technologies which allow consumers to access and exchange health information via the now familiar search, communities and tools. Information therapy (Ix or information prescriptions) involves the proactive delivery of the right information to the right person at the right time, usually as part of the care delivery process.

However, while both Health 2.0 and Ix are focused on improving patients' participation in care, they tend to come from different backgrounds. Ix tends to be “prescribed” to the patient, often by a clinician (although system-triggered Ix and consumer-prescribed -- either "self-prescribed" or recommended by a peer, caregiver, etc. is also part of the definition). Ix innovations have had the greatest penetration in organized systems of care with robust provider and patient HIT applications like Kaiser Permanente and Group Health Cooperative in Seattle.

Student Health Records: Feds Provide Guidance

2009-03-25T11:15:00.000-07:00

The federal Departments of Health & Human Resources and Education have issued a joint document providing guidance on the applicability of the Family Education Rights and Privacy Act (FERPA) and the Health Insurance Portability and Accountability Act (HIPAA) to student health records. Both laws deal with privacy rights of students and their families, as does the main federal special education law, IDEA.

Because a number of our readers deal with student health records in various respects, and because it is unusual to find two powerful agencies of the federal government agreeing upon a document, I bring this publication to your attention.

http://.hhs.gov/ocr/hipaa/HIPAAFERPAjointguide.pdf

How Alcohol Causes Mental And Moral Changes

2009-03-25T11:01:00.000-07:00

The transforming power or alcohol is marvelous, and often appalling. It seems to open a way of entrance into the soul for all classes of foolish, insane or malignant spirits, who, so long as it remains in contact with the brain, are able to hold possession. Men of the kindest nature when sober, act often like fiends when drunk. Crimes and outrages are committed, which shock and shame the perpetrators when the excitement of inebriation has passed away. Referring to this subject, Dr. Henry Munroe says:

"It appears from the experience of Mr. Fletcher, who has paid much attention to the cases of drunkards, from the remarks of Mr. Dunn, in his 'Medical Psychology,' and from observations of my own, that there is some analogy between our physical and psychical natures; for, as the physical part of us, when its power is at a low ebb, becomes susceptible of morbid influences which, in full vigor, would pass over it without effect, so when the psychical (synonymous with the moral ) part of the brain has its healthy function disturbed and deranged by the introduction of a morbid poison like alcohol, the individual so circumstanced sinks in depravity, and "becomes the helpless subject of the forces of evil, "which are powerless against a nature free from the morbid influences of alcohol."

Different persons are affected in different ways by the same poison. Indulgence in alcoholic drinks may act upon one or more of the cerebral organs; and, as its necessary consequence, the manifestations of functional disturbance will follow in such of the mental powers as these organs subserve. If the indulgence be continued, then, either from deranged nutrition or organic lesion, manifestations formerly developed only during a fit of intoxication may become permanent , and terminate in insanity or dypso-mania. M. Flourens first pointed out the fact that certain morbific agents, when introduced into the current of the circulation, tend to act primarily and specially on one nervous centre in preference to that of another, by virtue of some special elective affinity between such morbific agents and certain ganglia. Thus, in the tottering gait of the tipsy man, we see the influence of alcohol upon the functions of the cerebellum in the impairment of its power of co-ordinating the muscles.

Certain writers on diseases of the mind make especial allusion to that form of insanity termed 'dypsomania', in which a person has an unquenchable thirst for alcoholic drinks a tendency as decidedly maniacal as that of homicidal mania ; or the uncontrollable desire to burn, termed pyromania ; or to steal, called kleptomania.

Homicidal mania

The different tendencies of homicidal mania in different individuals are often only nursed into action when the current of the blood has been poisoned with alcohol. I had a case of a person who, whenever his brain was so excited, told me that he experienced a most uncontrollable desire to kill or injure some one; so much so, that he could at times hardly restrain himself from the action, and was obliged to refrain from all stimulants, lest, in an unlucky moment, he might commit himself. Townley, who murdered the young lady of his affections, for which he was sentenced to be imprisoned in a lunatic asylum for life, poisoned his brain with brandy and soda-water before he committed the rash act. The brandy stimulated into action certain portions of the brain, which acquired such a power as to subjugate his will, and hurry him to the performance of a frightful deed, opposed alike to his better judgment and his ordinary desires.

As to pyromania , some years ago I knew a laboring man in a country village, who, whenever he had had a few glasses of ale at the public-house, would chuckle with delight at the thought of firing certain gentlemen's stacks. Yet, when his brain was free from the poison, a quieter, better-disposed man could not be. Unfortunately, he became addicted to habits of intoxication; and, one night, under alcoholic excitement, fired some stacks belonging to his employers, for which, he was sentenced for fifteen years to a penal settlement, where his brain would never again be alcoholically excited.

Kleptomania

Next, I will give an example of kleptomania . I knew, many years ago, a very clever, industrious and talented young man, who told me that whenever he had been drinking, he could hardly withstand, the temptation of stealing anything that came in his way; but that these feelings never troubled him at other times. One afternoon, after he had been indulging with his fellow-workmen in drink, his will, unfortunately, was overpowered, and he took from the mansion where he was working some articles of worth, for which he was accused, and afterwards sentenced to a term of imprisonment. When set at liberty he had the good fortune to be placed among some kind-hearted persons, vulgarly called teetotallers ; and, from conscientious motives, signed the PLEDGE, now above twenty years ago. From that time to the present moment he has never experienced the overmastering desire which so often beset him in his drinking days to take that which was not his own. Moreover, no pretext on earth could now entice him to taste of any liquor containing alcohol, feeling that, under its influence, he might again fall its victim. He holds an influential position in the town where he resides.

I have known some ladies of good position in society, who, after a dinner or supper-party, and after having taken sundry glasses of wine, could not withstand the temptation of taking home any little article not their own, when the opportunity offered; and who, in their sober moments, have returned them, as if taken by mistake. We have many instances recorded in our police reports of gentlemen of position, under the influence of drink, committing thefts of the most paltry articles, afterwards returned to the owners by their friends, which can only be accounted for, psychologically, by the fact that the will had been for the time completely overpowered by the subtle influence of alcohol.

Loss of mental clearness

Alcohol, whether taken in large or small doses, immediately disturbs the natural functions of the mind and body, is now conceded by the most eminent physiologists. Dr. Brinton says: 'Mental acuteness, accuracy of conception, and delicacy of the senses, are all so far opposed by the action of alcohol, as that the maximum efforts of each are incompatible with the ingestion of any moderate quantity of fermented liquid. Indeed, there is scarcely any calling which demands skillful and exact effort of mind and body, or which requires the balanced exercise of many faculties, that does not illustrate this rule. The mathematician, the gambler, the metaphysician, the billiard-player, the author, the artist, the physician, would, if they could analyze their experience aright, generally concur in the statement, that a single glass will often suffice to take , so to speak, the edge off both mind and body , and to reduce their capacity to something below what is relatively their perfection of work.

A train was driven carelessly into one of the principal London stations, running into another train, killing, by the collision, six or seven persons, and injuring many others. From the evidence at the inquest, it appeared that the guard was reckoned sober, only he had had two glasses of ale with a friend at a previous station. Now, reasoning psychologically, these two glasses of ale had probably been instrumental in taking off the edge from his perceptions and prudence, and producing a carelessness or boldness of action which would not have occurred under the cooling, temperate influence of a beverage free from alcohol. Many persons have admitted to me that they were not the same after taking even one glass of ale or wine that they were before, and could not thoroughly trust themselves after they had taken this single glass.

Impairment of memory

An impairment of the memory is among the early symptoms of alcoholic derangement.

"This," says Dr. Richardson, "extends even to forgetfulness of the commonest things; to names of familiar persons, to dates, to duties of daily life. Strangely, too," he adds, "this failure, like that which indicates, in the aged, the era of second childishness and mere oblivion, does not extend to the things of the past, but is confined to events that are passing. On old memories the mind retains its power; on new ones it requires constant prompting and sustainment."

In this failure of memory nature gives a solemn warning that imminent peril is at hand. Well for the habitual drinker if he heed the warning. Should he not do so, symptoms of a more serious character will, in time, develop themselves, as the brain becomes more and more diseased, ending, it may be, in permanent insanity.

Mental and moral diseases

Of the mental and moral diseases which too often follow the regular drinking of alcohol, we have painful records in asylum reports, in medical testimony and in our daily observation and experience. These are so full and varied, and thrust so constantly on our attention, that the wonder is that men are not afraid to run the terrible risks involved even in what is called the moderate use of alcoholic beverages.

In 1872, a select committee of the House of Commons, appointed "to consider the best plan for the control and management of habitual drunkards," called upon some of the most eminent medical men in Great Britain to give their testimony in answer to a large number of questions, embracing every topic within the range of inquiry, from the pathology of inebriation to the practical usefulness of prohibitory laws. In this testimony much was said about the effect of alcoholic stimulation on the mental condition and moral character. One physician, Dr. James Crichton Brown, who, in ten years' experience as superintendent of lunatic asylums, has paid special attention to the relations of habitual drunkenness to insanity, having carefully examined five hundred cases, testified that alcohol, taken in excess, produced different forms of mental disease, of which he mentioned four classes: 1. Mania a potu , or alcoholic mania. 2. The monomania of suspicion. 3. Chronic alcoholism, characterized by failure of the memory and power of judgment, with partial paralysis generally ending fatally. 4. Dypsomania, or an irresistible craving for alcoholic stimulants, occuring very frequently, paroxysmally, and with constant liability to periodical exacerbations, when the craving becomes altogether uncontrollable. Of this latter form of disease, he says: "This is invariably associated with a certain impairment of the intellect, and of the affections and the moral powers ."

Dr. Alexander Peddie, a physician of over thirty-seven years' practice in Edinburgh, gave, in his evidence, many remarkable instances of the moral perversions that followed continued drinking.

Relation between insanity and drunkenness

Dr. John Nugent said that his experience of twenty-six years among lunatics, led him to believe that there is a very close relation between the results of the abuse of alcohol and insanity. The population of Ireland had decreased, he said, two millions in twenty-five years, but there was the same amount of insanity now that there was before. He attributed this, in a great measure, to indulgence in drink.

Dr. Arthur Mitchell, Commissioner of Lunacy for Scotland, testified that the excessive use of alcohol caused a large amount of the lunacy, crime and pauperism of that country. In some men, he said, habitual drinking leads to other diseases than insanity, because the effect is always in the direction of the proclivity, but it is certain that there are many in whom there is a clear proclivity to insanity, who would escape that dreadful consummation but for drinking; excessive drinking in many persons determining the insanity to which they are, at any rate, predisposed . The children of drunkards, he further said, are in a larger proportion idiotic than other children, and in a larger proportion become themselves drunkards; they are also in a larger proportion liable to the ordinary forms of acquired insanity.

Dr. Winslow Forbes believed that in the habitual drunkard the whole nervous structure, and the brain especially, became poisoned by alcohol. All the mental symptoms which you see accompanying ordinary intoxication, he remarks, result from the poisonous effects of alcohol on the brain. It is the brain which is mainly effected. In temporary drunkenness, the brain becomes in an abnormal state of alimentation, and if this habit is persisted in for years, the nervous tissue itself becomes permeated with alcohol, and organic changes take place in the nervous tissues of the brain, producing that frightful and dreadful chronic insanity which we see in lunatic asylums, traceable entirely to habits of intoxication . A large percentage of frightful mental and brain disturbances can, he declared, be traced to the drunkenness of parents.

Dr. D.G. Dodge, late of the New York State Inebriate Asylum, who, with. Dr. Joseph Parrish, gave testimony before the committee of the House of Commons, said, in one of his answers: "With the excessive use of alcohol, functional disorder will invariably appear, and no organ will be more seriously affected, and possibly impaired, than the brain. This is shown in the inebriate by a weakened intellect, a general debility of the mental faculties , a partial or total loss of self-respect, and a departure of the power of self-command; all of which, acting together, place the victim at the mercy of a depraved and morbid appetite, and make him utterly powerless, by his own unaided efforts, to secure his recovery from the disease which is destroying him." And he adds: "I am of opinion that there is a "great similarity between inebriety and insanity.

"I am decidedly of opinion that the former has taken its place in the family of diseases as prominently as its twin-brother insanity; and, in my opinion, the day is not far distant when the pathology of the former will be as fully understood and as successfully treated as the latter, and even more successfully, since it is more within the reach and bounds of human control, which, wisely exercised and scientifically administered, may prevent curable inebriation from verging into possible incurable insanity."

General impairment of the faculties

Dr. Richardson, speaking of the action of alcohol on the mind, gives the following sad picture of its ravages:

"An analysis of the condition of the mind induced and maintained by the free daily use of alcohol as a drink, reveals a singular order of facts. The manifestation fails altogether to reveal the exaltation of any reasoning power in a useful or satisfactory direction. I have never met with an instance in which such a claim for alcohol has been made. On the contrary, confirmed alcoholics constantly say that for this or that work, requiring thought and attention, it is necessary to forego some of the usual potations in order to have a cool head for hard work.

"On the other side, the experience is overwhelmingly in favor of the observation that the use of "alcohol sells the reasoning powers, "make weak men and women the easy prey of the wicked and strong, and leads men and women who should know better into every grade of misery and vice. If, then, alcohol enfeebles the reason, what part of the mental constitution does it exalt and excite? It excites and exalts those animal, organic, emotional centres of mind which, in the dual nature of man, so often cross and oppose that pure and abstract reasoning nature which lifts man above the lower animals, and rightly exercised, little lower than the angels.

It excites man's worst passions

Exciting these animal centres, it lets loose all the passions, and gives them more or less of unlicensed dominion over the man. It excites anger, and when it does not lead to this extreme, it keeps the mind fretful, irritable, dissatisfied and captious.... And if I were to take you through all the passions, love, hate, lust, envy, avarice and pride, I should but show you that alcohol ministers to them all; that, paralyzing the reason, it takes from off these passions that fine adjustment of reason, which places man above the lower animals. From the beginning to the end of its influence it subdues reason and sets the passions free. The analogies, physical and mental, are perfect. That which loosens the tension of the vessels which feed the body with due order and precision, and, thereby, lets loose the heart to violent excess and unbridled motion, loosens, also, the reason and lets loose the passion. In both instances, heart and head are, for a time, out of harmony; their balance broken. The man descends closer and closer to the lower animals. From the angels he glides farther and farther away.

A sad and terrible picture

The destructive effects of alcohol on the human mind present, finally, the saddest picture of its influence. The most aesthetic artist can find no angel here. All is animal, and animal of the worst type. Memory irretrievably lost, words and very elements of speech forgotten or words displaced to have no meaning in them. Rage and anger persistent and mischievous, or remittent and impotent. Fear at every corner of life, distrust on every side, grief merged into blank despair, hopelessness into permanent melancholy. Surely no Pandemonium that ever poet dreamt of could equal that which would exist if all the drunkards of the world were driven into one mortal sphere.

As I have moved among those who are physically stricken with alcohol, and have detected under the various disguises of name the fatal diseases, the pains and penalties it imposes on the body, the picture has been sufficiently cruel. But even that picture pales, as I conjure up, without any stretch of imagination, the devastations which the same agent inflicts on the mind. Forty per cent., the learned Superintendent of Colney Hatch, Dr. Sheppard, tells us, of those who were brought into that asylum in 1876, were so brought because of the direct or indirect effects of alcohol. If the facts of all the asylums were collected with equal care, the same tale would, I fear, be told. What need we further to show the destructive action on the human mind? The Pandemonium of drunkards; the grand transformation scene of that pantomime of drink which commences with, moderation! Let it never more be forgotten by those who love their fellow-men until, through their efforts, it is closed forever."

Health insurance

2009-03-24T23:29:00.000-07:00

From Wikipedia, the free encyclopedia

The term health insurance is generally used to describe a form of insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a government-sponsored social insurance program, or from private insurance companies. It may be purchased on a group basis (e.g., by a firm to cover its employees) or purchased by individual consumers. In each case, the covered groups or individuals pay premiums or taxes to help protect themselves from high or unexpected healthcare expenses. Similar benefits paying for medical expenses may also be provided through social welfare programs funded by the government.

Real Wedding insurance

2009-03-24T23:25:00.000-07:00

What could possibly go wrong at our wedding?

Most of the time, most weddings go pretty smoothly. But when something unexpected does go wrong, it can be frightening how quickly the costs can add up.

For wedding couples – or their parents – who have lovingly planned every detail and budgeted down to the last penny, even a relatively small loss can feel devastating, while a large loss or liability claim can bring true financial disaster.

Since 1999 WedSafe® has helped protect wedding couples and their families from the financial consequences of mishaps large and small. These are just a few examples of real wedding couples who experienced unforeseen problems – and were able to recover from significant financial losses thanks to their WedSafe insurance policies.

Why would we ever cancel or postpone our wedding?

Ten inches of rain fell in Virginia, State Highway 10 was closed. Bridal party members and guests couldn't get to reception site. Band, food, cake, flowers, photos all had to be cancelled.
Amount Reimbursed Event Cancellation coverage – Wedding Event Cancellation / Postponement Plus: $25,000

Groom experienced chest pains and went to hospital. Newly diagnosed heart condition forced him to postpone wedding.
Amount Reimbursed throughEvent Cancellation coverage – Wedding Event Cancellation / Postponement Plus:. $28,907.45

National Health Insurance Marketplace Enters the Blogosphere

2009-03-24T22:42:00.000-07:00

eHealthInsurance, the nation's leading source for individual and family health insurance today announced its sponsorship of a new Web log, or Blog, www.HealthyConcerns.com, launched by founder and blogger Elisa Camahort.

Healthy Concerns will provide a community-oriented place for people to share and learn about the potential pitfalls and ways to work within the complex health insurance market. It will feature insight and comments based on personal experiences from a mix of bloggers and consumers, as well as industry experts.

Specialization vs Diversification in Insurance

2009-03-24T22:25:00.001-07:00

Both specialization and diversification can be successful strategies in the insurance business. In fact, diversification is one of the fundamentals of our business because it helps spread risk, which allows for the shifting of risk for reasonable pricing. Diversification can be accomplished through a variety of approaches, including line of business, product line, geographic concentration and distribution diversification strategies. Certainly no one would argue that diversification is not imperative in writing catastrophe exposed property insurance.

However, specialization is also a strategy that provides some unique benefits, primarily the accumulation of a high degree of expertise in a particular specialty area (see our prior posts here & here). This expertise can be utilized in underwriting, risk management and claims to produce improved risk selection and reduced loss costs.

A recent study provides empirical evidence that a specialization strategy can produce better results than diversification. Published in The Journal of Risk and Insurance, the study, by Andre P. Liebenberg and David W. Sommer is entitled: Effects of Corporate Diversification: Evidence from the Property-Liability Insurance Industry. The study looks at line of business diversification within the property/liability insurance industry, concluding:

Undiversified insurers outperform diversified insurers…Results indicate that diversification is associated with a penalty of at least 1% of ROA or 2% of ROE.

It would be interesting to review the companies included in each grouping to see if there are any concentrations of types of business. Examples might include reinsurers and medical malpractice insurers.

Document Retention – Boring But Necessary

2009-03-24T22:24:00.001-07:00

While maybe not the most exciting topic, document retention is actually an important issue for insurance agents and brokers and can impact insurance agents’ and brokers’ professional liability insurance (E&O). Clients may rely on the agent or broker (producer) to have copies of critical documents (read policies), and may hold their producer responsible for providing a copy in time of need.

Recent articles in Business Insurance notes the importance of document retention (see here and here).

Best practices would be to treat your insurance articles as valuable assets and not subject to any document destruction program.

Document retention is actually easier to manage with new technology. One example, which we have extensive experience with, is an imaging and processing system called ImageRight. Document imaging and storage occurs within the normal business process.

There may be regulatory requirements for insurance producers, although we could not find any with a limited web search. New York addresses the question, in part (see here). Two other pages muddy the water however (see here and here).

There is no specific prescription for customer record retention by insurance agents and insurance brokers under the Insurance Law or Insurance Department Regulations … that provide record retention requirements for customer records of insurance agents and insurance brokers. However, to the extent that an insurance agent or broker maintains customer records on an insurer's behalf, the insurance agent or broker is subject to the record retention requirements applicable to insurers in New York State…

Value Added Services for Insurance Agents

2009-03-24T22:22:00.000-07:00

What product and services do insurance agents and brokers, whether retail or wholesale, provide to their clients? Many practitioners define this narrowly – the product is insurance, the service is advice, and sell accordingly. However, some organizations have taken a wider perspective, and try to add additional value. The classic example in the specialty lines business, for an insurer, has been Hartford Steam Boiler Insurance Company, a company which provides both insurance and the expertise to significantly reduce catastrophic losses.

A recent article in Business Insurance provides a retail agents perspective on providing added value through the provision of risk management services (see here). Anderson Baker, of Gillis, Ellis & Baker Inc., advocates providing loss prevention and risk management services in order to differentiate your agency and to assist clients in preventing losses and reducing loss severity. Their experience would indicate that this can be a successful strategy in differentiating an agency.

Our own experience, first as Tennant Risk Services and more recently as part of Mercator Risk Services, indicates that differentiation is an important component of a distribution strategy. We have seen a number of retail agencies execute this extremely well. . Three examples (to remain nameless) come to mind, each of which rely on a specialization strategy to build the value component:

An agency specializing in one segment of inland marine
An agency providing highly technical risk management services in a segment of the recreation insurance business
An agency underwriting a highly specialized class of real estate professional liability insurance

Each of these examples have succeeded in building significant market shares in the chosen specialty areas through specialization and the provision of value added service. You will be able to name many others.

Risk & Syndication

2009-03-24T22:21:00.000-07:00

Insurers spread risk, primarily through reinsurance, in order to take on greater risk through their insurance polices than they could retain on their own. Syndication and subscription policies are other means to share risk which reduces an insurer's exposure to any one loss. Lloyds of London has used subscription policies for years as a means of spreading risk.

The concept of syndication, or using a number of insurers to write a risk, also makes sense for insureds in our current economic environment. A recent article, entitled Syndication for Reducing the Risk of Carrier Capsize by Joshua Stein, Chief Underwriting Officer, IronHealth, points out that insureds should be considering syndication as a means of reducing carrier risk.

From the insured’s perspective, during this period of unprecedented upheaval in the financial sector, isn’t it reasonable to assume that virtually all insurers have exposure they either aren’t aware of or aren’t yet owning up to?... If the current crisis has taught us anything, it’s that apparently bullet-proof financials can morph into near insolvency virtually overnight.

Using multiple insurers on a placement can reduce the risk to the insured from insurer insolvency, but carrier risk is more than insolvency risk. A carrier can be solvent and strong, but can tighten up underwriting guidelines or decide to stop writing a class of business. For an impacted insured, this can make renewal a tougher and more expensive proposition. Having other insurers on a program and ready to step in is a good idea.

Insurers want more premium and tend to increase their risk tolerance in a soft insurance market, which leads to larger lines and less risk sharing. As the article suggests, insureds might want to consider increasing the number of insurers on their programs. Two ways to accomplish this are subscription policies, frequently used by Lloyds, and layered programs. While this can be more work for the broker, it can also reduce carrier risk.

Insurance for Healthcare Regulations including HIPAA for Doctors, Healthcare Providers and other Medical Facilities

2009-03-24T21:40:00.002-07:00

Healthcare providers such as physicians face many risks in the United States today. They constantly have to keep up to date on the changes in their profession. Physicians also need to constantly monitor their relationships with the Healthcare Insurance providers. They have to pay close attention to State and National legislatures to see what new regulations they have to comply with. For instance, Massachusetts recently passed a new statute regulating all companies that collect and store any private information of its citizens.

The United States today is as litigious as ever, and lawyers and doctors are still not the best of friends. As new laws get passed by the legislatures, mostly lawyers, new risks are presented to physicians. Privacy is one of the biggest issues in the media. The healthcare industry is far from immune from this issue. In fact there has been numerous acts passed specifically regarding the medical and healthcare industry's regulation of private information.

Legislation such as HIPAA, EMTALA and STARK has caused many headaches for healthcare providers since their enactment. I am not going to be able to help alleviate those headaches, but I will be able to provide an insurance policy that will help those providers sleep a little easier at night. This new program provides defense cost coverage and coverage for civil fines and penalties in regards to healthcare regulations and other proceedings.

These policies offer payment of defense costs and civil fines for billing errors, including fraud and abuse, voluntary reporting, Qui Tam and commercial payor claims. They also cover HIPAA, EMTALA and STARK. The policies have limits for solo physicians up to $1,000,000 and up to $5,000,000 aggregate limits for physician groups. These policies should name the employees, directors, trustees, officers and the entity as an insured in the definitions page of the policy.

Network security and Privacy liability insurance is also a very important issue for physicians and other healthcare providing agencies. Network Security and Privacy liability is a policy which covers the company against suits due to invasion of privacy and computer hacking. We've all heard the horror stories of different corporations losing laptops, or having private information stolen. All companies that collect and store non-public information of their clients should make certain that they have certain procedures in place. For one, everything needs to be reviewed by an expert in computer security. But secondly, even the best laid plans can go awry, that is why every one of these companies also needs to have a privacy liability insurance policy. Healthcare agencies have more personal and private information than anyone other entity including the government. That is why it makes the most sense for those agencies to have the insurance.

Doctors have a bad view of insurance. They hate health insurance because they never get paid. They hate casualty insurance because it costs too much. And they are correct on both accounts. However, privacy liability insurance policies and the defense coverage for regulatory actions are reasonably priced. Underwriting for these policies is based on how many doctors are in the practice, gross revenue and what you have done to mitigate against these risks, among other things.

For a free quote, and to speak with a privacy liability insurance expert, please contact Andrew Cohn from Internet Risk Specialist, the technology division of Wilson, Washburn & Forster Insurance. Andrew Cohn has been specializing in the unique risks of the technology and life sciences industries. Andrew has had articles published by the Insurance Journal and Website Magazine regarding privacy liability insurance. Andrew will also be speaking about privacy policies and other insurance matters at the Social Network and Internet Dating Conference in Miami, January, 2009.

Directors and Officers Liability Insurance for Start-Ups and other Private Companies

2009-03-24T21:40:00.001-07:00

Venture capitalists invest millions of dollars into start-ups and small businesses hoping that they will take off and be the next Google or Facebook. From my understanding they look over the business proposals and the presentations and financials and hopefully do a lot of due diligence in selecting their investment companies. But, why don't they take a better look at the insurance?

Directors and Officers Insurance
(D&O Insurance) is insurance important for both public and private companies. Public companies all need and have Directors and Officer Liability Insurance, but many private companies do not. But private companies are exposed to securities litigation when they have investors, including venture capital investors. Directors and Officers Liability Insurance is necessary to protect the personal assets of the officers when these claims happen. D&O Insurance covers the defense costs, settlements and judgments associated with these claims.

If you are a start up firm looking for insurance, and hopefully you are talking to Andrew Cohn at Internet Risk Specialist, your agent should be asking you if you have or are looking for investors. You are out there every day and night working on your business and trying to sell it. You sell it to potential investors, you sell it to potential clients, you sell it to the media, you sell it to whoever is in the elevator with you at that moment. Doing all this selling you might slip up, or you may have an investor that perceives something different from what you are doing.

If you are a venture capitalist, requiring directors and officers liability insurance is a no-brainer. Some venture capitalists just give the money, and for you, if you have a problem with the management of the company, you have a wallet to sue in the insurance company. Think about it, if these start-ups had real money, they wouldn't be coming to you for a $100,000 investment. If they mismanage the company, and it goes under, you're out your capital. With the insurance you can try to file suit.

Other venture capitalists invest money, and also make sure that they are named a director or officer of the corporation. Now this is the really tricky spot. You invest $100,000 in Company XYZ and are put on the board of directors. Company XYZ gets other investors and eventually they mismanage the venture into the ground and everyone is upset. XYZ never had money and now has less. But you, the venture capitalist, one of the directors of the XYZ Company does have money, has money to lose. Require the coverage.

Here's the final reason to get Directors and Officers Insurance, it's relatively cheap. It really isn't very expensive for the coverage it is providing. As a small to midsized private company you really present a much lower risk in the insurance company's eyes compared to the publicly traded corporations they normally deal with. So if you're a venture capitalist giving hundreds of thousands and possibly millions of dollars to new ventures, require that they spend some of that money on their Directors and Officers Liability Insurance, and recommend that they speak to Andrew Cohn at Internet Risk Specialist.

Lastly, not all D&O policies are created the same. You need an expert like Andrew Cohn at Internet Risk Specialist to read over the definition of "insured", does it include all past and future directors, officers, international functional equivalents, members of a board of manager, employees, and advisory committees. Make sure it has Spousal and Domestic Partner Liability. Why? A lot of new ventures are started with one spouse working a "real job" and the other playing with their new venture company. Make sure the "real worker" is protected financially as well. Make sure coverage is worldwide, if you're a local entity that has no plans to branch out, they maybe this isn't a factor, but in the age of globalization most companies are now global, and it doesn't cost more for your insurance to be. You should also review the "insured vs. insured" exclusion language. Is your policy a "duty to defend" or "defense reimbursement"? Can you afford to front the bill and be reimbursed? There are a whole lot of clauses, terms and conditions to be mindful of. You really need to deal with an expert like Andrew Cohn at Internet Risk Specialist.

Andrew Cohn of Internet Risk Specialist to Speak at 2009 Social Networking Conference and Internet Dating Conference

2009-03-24T21:39:00.001-07:00

Internet Risk Specialist

(Miami, FL) - Andrew Cohn head of the Technology Insurance division of Wilson, Washburn & Forster Insurance, Internet Risk Specailist in Pinecrest, FL. Andrew has developed and runs the website, www.internetriskspecialist.com and andycohn.blogspot.com. He will be speaking at the 2009 Social Networking Conference and The Internet Dating Conference. The Social Networking Conference and Internet Dating Conference will held January 22-23, 2009 at the Miami Beach Convention Center in Miami Beach, Florida.

Andrew Cohn specializes in insuring internet and technology companies throughout the United States. He runs the website, www.internetriskspecialist.com and the blog, andycohn.blogspot.com. Andrew has written articles for various publications including "Making the Case for Internet Liability" in The Insurance Journal and "Insurance 2.0" for Website Magazine.

Social Networking Conference 2009 Miami is expected to be the largest gathering of executives from the online community industry. The event will discuss: online community business models, global business strategies, venture capital, new mobile technologies, marketing of social networks, online community software, partnerships, legal issues, background search and payment systems. You can learn more about the conference at www.snc2008.com

The Internet Dating Conference will discuss: Business strategies, new technology, online dating software, social networking software, partnerships, venture capital, legal issues, mobile, traditional marketing, background search and payments. And their link is www.idate2009.com

The technology division of Wilson, Washburn & Forster is headed by Andrew Cohn. Andrew graduated from the University of Miami. Andrew specializes in writing insurance for technology companies and marine companies. He has been published by The Insurance Journal, Website Magazine and The Pinecrest Tribune. Andrew regularly updates his blog at andycohn.blogspot.com. Andrew will also be speaking at the Internet Dating Conference in Miami, January 2009, about Contingent Bodily Injury Insurance for Internet Dating Websites. Andrew is the Vice President of the Pinecrest Chapter of Business Networking International. He also serves on the membership committee, development committee and the 20s and 30s committee at Temple Beth Am and he serves on the Real Estate Speaker Series and The Network: 20s Committee for the Greater Miami Jewish Federation. Andrew is also a member of The West Kendall Business Association and is involved with Next Miami, Refresh Miami and the MIT Enterprise Forum.

Andrew Cohn

Wilson, Washburn & Forster Insurance
Internet Risk Specialist
10301 South Dixie Highway
3rd Floor
Pinecrest, FL 33156
305-666-6636
alcohn@wwfins.com
www.internetriskspecialist.com

Internet Risk Specialist

2009-03-24T21:37:00.002-07:00

October 15, 2008, marks the launch of the new website, www.internetriskspecialist.com. Internet Risk Specialist is the new site for the technology division of Wilson, Washburn & Forster Insurance. At Internet Risk Specialist we will be able to provide the risk management and insurance solutions for technology companies across the United States. Wilson, Washburn & Forster Insurance was founded in 1961, in Miami, FL. WWF Insurance is a full service commercial insurance agency specializing in Property and Casualty Insurance including Property, General Liability, Professional Liability, Workers Compensation and Employee Benefits.

Internet Risk Specialist will be focusing on the technology industry. This includes companies that manufacture technology from computer chips to medical devices, computer service companies that offer computer consulting, website development, online advertising, Payment Card Industry compliance, IT Auditing and much more. Internet Risk Specialist will also be focusing on Telecommunications companies including Internet Service Providers, Satellite uplink/down link facilities, Network Access Points, cabling companies. Internet Risk Specialist will also provide the insurance solutions for internet based companies. This includes Internet Dating Companies, internet based applications, job search sites, classified sites, auction sites, meeting sites and much more.

Andrew Cohn runs Internet Risk Specialist which is the technology division of Wilson, Washburn & Forster Insurance. Andrew has been published by The Insurance Journal, Website Magazine, Go South Magazine and The Pinecrest Tribune. Andrew will also be speaking January 2009, at the Internet Dating Conference in Miami on the issues of Bodily Injury liability for internet dating companies. Andrew was a finalist in the Liberty Mutual Risk Innovator of Year Award for 2008. Andrew blogs at numerous blogs including http://andycohn.blogspot.com. Andrew is Vice President of the Pinecrest Chapter of Business Networking International. He is also involved with the Committees for the Real Estate Speaker Series and The Under 40's Network for the Greater Miami Jewish Federation. He is also on the Development Committee, Membership Committee and 20s and 30s Committee at Temple Beth Am. Andrew is active in Next Miami, Refresh Miami and the MIT Enterprise Forum.

Globalization: Insured

2009-03-24T21:37:00.001-07:00

A-Z Technology, Inc. is very conscious of its domestic risk exposure, and the CEO and CFO have made sure to fill every gap possible with an insurance product. They obviously have their property insurance, general liability, workers compensation, car insurance, professional liability and they even have internet liability and network security liability. They're starting to grow, but the policies keep renewing, and the premiums keep growing so they feel safe. However, now A-Z Technology has starting to grow outside of the United States.

It was only a little bit at first. A trip to Brazil to make the sales pitch for 4 days. Then they got the account in Columbia which had their two employees over there for 3 weeks. And now they have the call center in Chile that is saving them a lot of money. The principals didn't think much about it, until the one day that they got the call.

The call center manager was in Chile and decided to rent a vehicle. He was tired of relying on the taxis and public transportation, and he knew his way around by now. Well, he got into an accident. He's a little banged up, the other driver was hurt more severely, and your employee was at-fault. What do you do now? Can you call up your car insurance to cover the accident in a rented vehicle in another country?

This is where you need to make sure your global exposures are properly insured by your global insurance. Just think about all of the obstacles of driving in another country: Jet lag, Unfamiliar roads and signs, different speed limits, rules, and regulations, and an unfamiliar vehicle.

This type of coverage is called Hired and Non-owned Automobile Liability Insurance. On top of this there are other coverages that companies need to take into consideration. For one, you need property insurance. In the example above the company actually had a physical location which could be insured for building coverage, and in addition they have equipment and other business property which can be insured as well for theft, fire, vandalism, windstorms, lightning, ect. You probably also have property-in-transit which you would want to insure including samples and equipment. You also have general liability concerns. Just like someone can fall in your office and sue you in the United States, the same can apply overseas.

In the example above your employee was hurt. You need to think about how that employee will be insured for in the recovery process. Foreign Voluntary Workers Compensation covers U.S. employees while they are working overseas. In addition to the normal workers comp coverage, foreign voluntary workers comp also pays repatriation and evacuation expenses to get your injured employee safely back into the United States. Foreign Voluntary Workers Compensation is not a regulatory benefit like Statutory Workers Comp, which is regulated by each State. However, Foreign Voluntary Workers Compensation is a promise to pay the equivalent of regulatory benefits, should the loss fall outside the state/country statutes or regulations.

Lastly, A-Z Technology, Inc. should consider having Kidnap and Ransom Insurance and Accidental Death & Dismemberment Insurance for their employee benefits. Nobody wants to think about it, and no one thinks it can happen to them, but it does happen, and it happens to someone. Kidnap and Ransom Coverage helps in the process of trying to negotiate with a person's captor in the event this would happen. The insurance can also pay requested Ransom amounts, and pay for any events that do occur.

For more information about global insurance please contact me, Andrew Cohn at (305) 666-6636 x. 132 or email alcohn@wwfins.com. You can also visit my website, www.floridatechinsurance.com. I am with Wilson, Washburn & Forster Insurance of Pinecrest, Florida, in the South Miami area. Our firm is a full service, Property and Casualty insurance agency established in 1961.

General Liability vs. Professional Liability for Manufacturing Companies

2009-03-24T21:36:00.002-07:00

Most people have a good understanding of the needs for professional liability or errors and omissions insurance for the industries that provide the public with services. Lawyers need professional liability, Doctors need malpractice and insurance agents, engineers, computer consultants and stock brokers all need errors and omissions insurance. Likewise, there is a general consensus that if you are manufacturing, fabricating or assembling a product you need a commercial general liability policy which includes product liability. What a lot of risk managers, CFOs, owners of manufacturing companies and insurance agents for manufacturing companies fail to realize is their risk exposure for Professional Liability Insurance as a manufacturer of a product.

Companies that manufacture technology tend to have a huge professional liability exposure, but most companies that manufacture a product whether it would be considered technology or not have the exposure as well. As the operator of Florida Technology Insurance I see technology companies all the time which should have this coverage. But at Wilson, Washburn & Forster Insurance we deal with companies in all industries that manufacture, assemble and fabricate products whose liability extends past the general liability's products liability definition.

To fully understand the gap of coverage, you need to understand what the commercial general liability policy covers. A commercial general liability insurance policy general will cover the company for suits brought against the company for a number of things: Bodily Injury, Property Damage, Advertising Injury and Personal Injury. As you can see, there is no coverage listed in there for "Financial Damage".

Let's say you manufacture computer servers. You have a product liability policy. So if the server catches on fire and causes the loss of life, the loss of property or a bodily injury to a customer, your policy will protect you. But what if that server catches on fire at a stock broker's office right after a client put in an order to sell $1,000,000 worth of stock which was about to tank and be worthless. Who does the stock broker's client sue? Who does the stock broker blame? What if it really was an error or omission on your company's part which caused the server to catch on fire?

Think about the product that your company manufactures. Does your product enable others to make money? Would your product failing cause your customers to not make money? If your product was to fail, explode, implode or malfunction due to an error or omission, or perceived error or omission on your part, what will happen? If you only have a product liability policy, than you are partially self-insured.

Some of you may be saying, "My carrier offered me a professional liability quote, and it was more than my general liability quote". Well your carrier has been insuring you for a few years now and they probably have a decent understanding of your business. If they charge you $2,000 for products liability and $4,000 for professional liability, maybe that's because they know that your professional liability exposure is two times as great as your product liability exposure. It might be even more than twice as great, but they know you're not going to buy it if it's that expensive so the insurance company is taking a little risk with providing the quote.

So now your thinking, "Great I have this huge exposure, revenues are down, insurance was too expensive last year, how can I afford to buy more coverage?" Well, the good thing for you as a manufacturing company is that this is a soft insurance market. Insurance companies are stepping over each other, and some are even taking underwriting losses to write accounts and get them on the books. So as a business owner, CFO, risk manager, this is a good time to shop around your insurance, get the General Liability down, scrimp and save on the workers compensation, beat down the property insurance quote and apply the savings to the professional liability insurance. If you're agent can't do it, give me a call. I am Andy Cohn with Wilson, Washburn & Forster Insurance in Miami, FL. I run Florida Technology Insurance which is Wilson, Washburn & Forster's Technology Insurance division. You can contact me by email at alcohn@wwfins.com or by phone at (305) 666-6636 x. 132. Wilson, Washburn & Forster Insurance is located at 10301 South Dixie HWY, Pinecrest, FL 33156.

Senate OKs revamped identity theft legislation

2009-03-24T21:36:00.001-07:00

On July 31^st, 2008, Dan Kaplan published an article in SC Magazine – For IT Security Professionals titled, Senate Oks Revamped Indentity Theft Legisltation. This was a very interesting article about proposed legislation which could make internet liability all that more important, and could raise the premiums some. If you would like more information about how to protect your company with an internet liability or cyber liability insurance policy, please contact me, Andrew Cohn at alcohn@wwfins.com or (305) 666-6636 x. 132. Here is the article from SC magazine's Dan Kaplan:

An amended bill that would impose harsher restrictions on cyberattacks and allow identity theft victims to recoup costs in federal court passed the Senate on Wednesday.

The legislation, known as the Identity Theft Enforcement and Restitution Act, is included in a U.S. House-approved bill that states that former vice presidents would receive U.S. Secret Service protection. The combined bill will now return to the House for consideration.

The bill, co-sponsored by Sens. Patrick Leahy, D-Vt., and Arlen Specter, R-Pa., had unanimously passed the Senate in November but had stalled in the House.

This bill allows ID theft victims to recoup costs associated with the loss of time and money spent restoring their credit standing.

The law also lowers the bar for what is prosecutable as a felony. The bill eliminates the requirement that sensitive information must have been stolen using a computer through interstate or foreign communications, meaning criminals can be more easily prosecuted if they hack a computer in the same state.

The bill also would make it a felony to use spyware or keyloggers to damage 10 or more computers, regardless of the amount of destruction caused. It would eliminate a requirement that attacks resulting in less than $5,000 worth of damage be classified as misdemeanors. This component of the legislation would speak to the growing problem of bots, or zombie computers, that are remotely controlled to send spam and deliver malware.

Under the proposed law, the definition of cybercrime also would be expanded to include cyberextortion cases, where malware is removed or DDoS attacks halted in return for a ransom.

"The Senate's action moves us in the right direction to provide critical tools to combat cybercrime and to protect the privacy of all Americans," Leahy said in a statement released Thursday. "I hope the leadership in the House will quickly act to pass this legislation and send it to the president for signature."

Leahy's optimism may be justified, said Tim Bennett, an independent consultant and former president of the Cyber Security Industry Alliance, a trade group that has since merged with the Information Technology Association of America.

Bennett told SCMagazineUS.com on Thursday that it is a good sign to see legislation pass through the Senate, whose bipartisan nature has served as a major stumbling block for legislation in general this year.

"I think something as nonpartisan as this, there's probably going to be a lot of interest seeing this move through to a presidential signature," Bennett said.

Many IT security-related bills have been stalled during the last few years. Bennett said the reasons vary, from a lack of White House leadership to legislators not making it a priority.

Still outstanding: a federal data breach notification law, which has been recommended by a federal task force.

Intellectual Property Insurance

2009-03-24T21:35:00.002-07:00

American business owners protect a lot of things when it comes to insurance. They purchase property insurance to cover all of their contents. There's liability insurance to protect companies from lawsuits for slips and falls, errors and omissions, products, personal and advertising injuries, and from actions of the directors and officers. There's liability for employment practices, automobiles, the Internet, etc. Companies also protect their employees with workers compensation, health insurance, disability, life insurance and other group benefits. The list could go on and on. However, there's one thing that companies fail to buy insurance to protect, and it's the main thing that their company was built upon. Most American companies are built around their intellectual property (IP), yet few of them protect it.

Intellectual property comes in many forms, but if you're in the business of selling something unique, then intellectual property is your business. For instance, say you are a software development company. You've developed a great software program and it's selling like hotcakes. You can have a fire, lose all of your computers and furniture, and eventually get back up and running because you have a great program. You can have a liability suit and eventually recover your losses because your making money from your program. You can even lose an employee, and although it will be difficult, you can eventually train someone to take his or her place. But, what you cannot afford to lose is your product.

The laws and procedures in place in the United States to protect intellectual property have been a cornerstone in the foundation of this nation's commercial and industrial prosperity. People all over the world know that if they create a new product they will have the ability to market and sell their product without the fear that someone else will simply copy it and try to sell it for less under another name. This protection gives inventors and innovators the incentive to work tirelessly to improve the world. It also gives venture capitalist the sense of security knowing that the investments that make will be protected. However, defending your company and pursuing lawsuits in the United States legal system can be very costly. This cost can be a deterrent from filing an infringement claim or defending one's self from infringement claims

So, how do you know if intellectual property insurance is right for your company? Number one, before you proceed further, you must ask yourself if your intellectual property is properly patented and registered. If you're unsure, or you are sure, that it's not, intellectual property insurance is not right for you, yet. What you need to do is contact an intellectual property attorney, or call me, and I will put you in touch with one.

After you have the first process taken care of, ask yourself, what percentage of my company's total revenue does this intellectual property represent? If this segment of my revenue were drastically reduced or eliminated due to infringement by a competitor or unsuccessful defense in a lawsuit brought against my company, what would be the impact on the company's business plan? Another question you need to ask yourself is does our company have the liquid capital necessary to pay the legal costs of a successful enforcement or defense of an intellectual property infringement suit?

So who creates intellectual property and should protect themselves with this insurance?

 Manufacturing companies - if they are manufacturing their own product or they have an intellectual property associated with their manufacturing process.

 Technology Companies – Software developers, electronics manufacturers, and other technology companies that have patented their services or products.

 Biomedical and medical equipment and device manufacturers and designers.

 Textile and Fashion designers and manufacturers

 Engineering Firms

Now that you can understand the importance of intellectual property insurance, and who should purchase IP insurance, we should discuss what the insurance covers. The first type of IP insurance is called, "Defense Cost and Damages Reimbursement Insurance". This coverage provides litigation expense reimbursement for IP infringement suits brought against the insured during the policy period, assertion of patent invalidity counterclaims in covered litigation, and re-examination proceedings initiated by the insured as a defense to the covered litigation. Intellectual property damages reimbursement insurance can be added by endorsement. Policy limits start as low as $100,000 and could be increased to fit the company's needs. Most policies cover inside the United States, its territories and districts, but foreign coverage can be added by endorsement.

When a company faces a situation in which they need to defend themselves against an intellectual property infringement suit, the financial ability to obtain the most qualified legal counsel could be the difference between winning and loosing, survival and bankruptcy.

Not all of the risks stemming from intellectual property have to do with defense. There are many companies out there that can go after the intellectual property that you've worked so hard to create and try to pirate, or reverse engineer your designs. Intellectual property infringement abatement insurance reimburses litigation expense for authorized litigation brought by the insured against an alleged infringing company during the policy period. The policy also pays, in authorized litigation, for Defense of Patent Invalidity counterclaims, re-examination in the Patent Office of the insured's patent if petitioned by the Defendant in an attempt to invalidate the insured's patent, and lastly, the reissue costs in an effort by the insured to strengthen the patent claims. The cost associated with enforcing your intellectual property can be very high. This creates just as much of a risk as you face by not properly insuring your defense.

The risk you face is very high. There are four ways to deal with risk: risk retention, risk avoidance, risk mitigation, and risk transference.

Risk retention is what many companies, probably your company included, are practicing now. Risk retention can also be called self-insurance. But there are two types of self-insurance: funded and unfunded. This goes back to the question I asked earlier. Does your company have the liquid capital necessary to acquire qualified legal representation when you are challenged on your intellectual property? And if you company does have it, what would be the long-term effects of using that liquid capital for defense costs as opposed to business development? If you were self-insured, but unfunded, then what would happen to your company if you could no longer use your intellectual property? Would it look something like a captain without a ship?

The second way to handle risk is risk avoidance. This is also not a viable option. Risk avoidance is abandoning intellectual property, or setting up licensing agreements, from a weak position, to sell your IP through someone else.

The last two are what your company should be doing, risk mitigation and risk transference. Risk mitigation can be done by hiring a highly qualified intellectual property attorney. In addition to the attorney, mitigation will also be a focus when you contact your intellectual property insurance agent go through the application process.

Lastly, but most importantly, risk transference is done by purchasing insurance. You pay your premium, and in return, the insurance company takes on the risk that your company previously had. By effectively mitigating and transferring your risk you can prevent losing important capital for defense spending and reward settlements. Also, your company now has the funds necessary to put a strong front against the suit.

Everyday companies all over the world are creating new products and innovating existing products and creating new procedures and services that change our lives. These geniuses put in time and money and work tirelessly to improve society. In our capitalist society these innovators and creators are rewarded with great prosperity. However, there are pirates and thieves out there looking to prosper without doing the work. There are also opportunities for mistakes to take place. In order to protect your company, your livelihood, and the livelihood of your employees you should look into purchasing intellectual property insurance. Premiums are based on the strength and numbers of your patents and can cost less that the price of your property insurance.

Internet Liability Insurance, Cyber Liability Insurance, Privacy Insurance

2009-03-24T21:35:00.001-07:00

There has been very little in the history of the world that has revolutionized the world so greatly and as quickly as the Internet. The Internet has allowed anyone and everyone with a computer to access information from anywhere in the world, and has allowed everyone to create their own content have it accessible to anyone in the world. In a perfect world, there would be no limitations on the greatness, which this could enable. Doctors, scientists, researchers, and philosophers from anywhere in the world has the ability to converse with colleagues on the other side of the world. Over our lifetime the world has become a lot smaller.

However, doctors and scientist striving to better the world are not the only ones with access. There are plenty of people on the Internet with malicious intent. Everyone has heard stories of hackers gaining access to different websites and obtaining private information, and holding companies hostage with their abilities.

The Internet has also created a whole new venue for companies and individuals to make careless, but costly mistakes. These mistakes when not made on the Internet like a "personal or advertising injury" have usually been covered by insurance in a Commercial General Liability Policy. However, many general liability insurance policies exclude a company's actions on the Internet.

Internet liability insurance covers very specific wrongful acts as defined by the policy forms:

· Infringement or unauthorized use of any advertising material, copyright, slogan, trademark, ect through the internet.

· Failure to protect private or confidential information of others from unauthorized access on or through the Internet.

· Making known to any person or organization material that violates a person or organizations right to privacy or publicity right.

· Plagiarism or unauthorized use of a literary or artistic format, character, or performance through the Internet.

· Failure to prevent the transmission of a computer virus to authorized users of your website or any of your private communication networks such as customers, suppliers, or supporters, on or through the Internet.

Take a second to digest that last bullet point. As protection software advances as viruses advance, can you imagine that there may be an instance that a company could get sued for not properly updating their virus protection, thus causing everyone that legitimately uses the site to download a computer virus. Is there anyway you can be 100% that a hacker will not install a virus on your website?

When purchasing this relatively new insurance product you must make sure of certain things. First, that your agent knows what he's talking about is getting you the correct coverage. Secondly, make sure that the territory definition is global. If it is not, what will protect you form someone in Indian or China accessing your site and bringing suit against you in the US?

Lastly, you need to make sure that the company that is providing your Internet liability insurance is adequate. You need know, how long have they been providing technology insurance? How long have they been in business? What is their A.M. Best rating? Are they admitted? These are all key questions to consider when purchasing Internet liability insurance. But do not let this scare you away from protecting your company's assets from this immerging threat. You know that the Internet is dangerous, but it can be a great tool that can grow your company like the greats of Google, and Yahoo, just make sure your properly protected.

Contact Andrew Cohn from Wilson, Washburn & Forster Insurance in Miami, FL for a quote at alcohn@wwfins.com or (305) 666 - 6636 ext. 132

Understanding Workers Compensation Insurance

2009-03-24T21:34:00.003-07:00

As an insurance agent I find that a lot of business owners are confused about how workers compensation insurance works. Workers Comp is a highly regulated insurance program which protects employees and employers in the event of work place injury. If an employee is hurt on the job, workers compensation will pay their medical expenses and up to 66% of their loss wages. If the worker dies because of a work related accident a death benefit will be paid to the beneficiaries.

So who needs to have workers comp? In the State of Florida, if you are a Construction Company you must have workers comp if you have one or more employee than is not an officer of the company working for you. In an industry other than construction if you have four or more full or part time employees you must have workers compensation, this is excluding officers of the corporation or partnership. If you are a farmer, and have five regular employees and/or twelve or more other workers for seasonal agriculture labor lasting thirty days or more, you must have workers comp.

Money can be saved for the company through the use of safety programs and drug free workplace programs. Another way for companies to get money back is through dividend programs. Many workers comp insurance companies offer a dividend program, which will give you money back at the end of the year based on your loss ratio. This is usually on a sliding scale and can be pretty significant. If you are currently not receiving a drug free work place credit, safety credit or a dividend you should contact your agent and see how you can. If you are not receiving a dividend, safety credit or drug free workplace credit and would like to save money on your insurance, please contact me, Andrew Cohn at Wilson, Washburn & Forster Insurance.

Insurance for Internet Dating and Social Networking

2009-03-24T21:34:00.001-07:00

Countless numbers of people have found love, friendship, and business contacts through social networking and internet dating sites. However, we also hear of the horror stories involving people that are physically harmed. You, the owners of these very profitable websites, are constantly balancing the risk vs. the reward of operating your company.

Right now you are trying to mitigate your risk by making your site as safe as possible. This is a great thing, because no one wants your clients to get hurt more than you. Social media is not a zero sum game when we're talking about assault and battery. Your client loses and you lose. One person gets hurt and it could all be over. Can your company withstand a multimillion dollar lawsuit?

Well finally there is an insurance solution for internet dating and social networking websites. It comes in the form of an endorsement to some internet liability policies for contingent bodily injury coverage. Internet liability insurance is the policy that covers a company for their internet activities. For the most part this covers invasion of privacy and intellectual property infringement. For more about internet liability insurance please read my article titled, Insurance 2.0 in Website Magazine's Issue 11.

http://www.websitemagazine.com/content/blogs/posts/articles/internet_liability_insurance.aspx

Many internet liability policies have many specific exclusions in there for bodily injury, property damage, violations of statutes and regulations, mass communications, and other hot-button items. But, some of these exclusions can be taken out my endorsement. You need to read your policy and discuss with your agent, the full list of exclusions and endorsements. The Contingent Bodily Injury Coverage Endorsement deletes the exclusion found in many policies for claims of bodily injury brought against the insured company. So what does this mean in real life?

XYZdating.com operates like many other dating website. Users post their profiles and can chat and meet up if they choose. Two users schedule a date. On the date there is a sexual assault. The criminal proceedings take place, but the victim also decides to launch a civil suit against XYZdating.com. XYZdating.com may or may not be found liable in the suit. However, even if they are not found liable, defending the suit could cost the company hundreds of thousands of dollars. This endorsement provides the duty to defend and a sublimit for any reward settlement.

This is a very basic example but it could easily take place with dating websites, social networking or business networking websites. And the endorsement can be added to some internet liability policies. There are other very important endorsements and conditions that should be taken into consideration for social media website and dating websites. I hope to have future articles going over Intellectual Property Infringement, and how it relates to User generated content. Also making sure you have coverage for regulatory action including violations of local, state and federal privacy acts. As well as cyber extortion, crisis management and public relations expense, business income for network interruption and privacy liability including paper documents. For more information please contact me, Andrew Cohn at alcohn@wwfins.com .