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Pit Bull in a Miniskirt

When Good Insurance Agents Make Bad Decisions


Thursday, May 23, 2013

BEWARE OF FINE PRINT: If more than 600 of the biggest, baddest overachieving insurance salespeople from all over the country effectively occupied the Sunken Gardens of the county courthouse — rendering it off limits to the general public for the better part of two days — you’d think there might be some mention of it in the local[CQ] media. But we — the local media, that is — have become the proverbial forest in which even giant sequoias can crash without a peep having been made. Not even the blogs — which breathlessly report every case of jaywalking — saw fit to mention how hordes of Liberty Mutual salespeople had taken over the Sunken Gardens Tuesday night, when they got wined and dined in the most extravagant fashion. I was too busy to crash, but I understand it was a five-star foodie fest. There was “Pimenton seared Alaskan” halibut, “herb roasted” beef loin, and the chanterelle-and-truffle quesadillas were enhanced by a dazzling drizzle of “truffle honey.” And yes, kale — mandatory, ubiquitous, and utterly inedible — was served, albeit braised with lemon, though not, I am sure, nearly enough. Even so, a good time was had by all. The bar, after all, was open. Afterward, the hardworking overachieving insurance salespeople, all 619 of them, trudged wearily and well fed back to their digs, which in this case happened to be the Bacara — where room rates hover between $500 to $10,000 a night — which Liberty Mutual had booked — all 354 rooms — for four days.

Angry Poodle

As a general rule, I try not to wallow in bitterness and envy. It’s bad for the digestion and makes for tiresome conversation. Besides, any business is good business these days. For that reason, I rejoice at the sight of the cruise ships in the harbor — all 22 of them — which, like the steady stream of panga boats, are here as a direct result of the Mexican drug trade. Cruise companies have discovered that their customers are wary about going to Mexico, where people don’t just get killed by drug traffickers — roughly 10,000 dead by one recent estimate — but decapitated. As a result, the floating skyscrapers have opted to drop anchor here instead. Still, I find it unsettling that people selling insurance are generating such immense profits that their employers can book the entire Bacara and commandeer the courthouse to dispense “president’s awards” as corporate atta-boys. Whatever hypothetical line separating success from excess these days has been crossed. Given the trouble so many are having with insurance these days, maybe a little discretion is in order. I know not all insurance companies are alike and there’s a difference between Liberty Mutual — which only dabbles in the medical field — and Blue Shield — which strip mines it. But still.

Perhaps you read the recent federal report in which the prices charged for various medical procedures by 3,300 hospitals were itemized. For those inclined to despair, it was not a comforting read. The prices charged for the same operation varied insanely from hospital to hospital, demonstrating — yet again — there is absolutely no connection between the actual cost of an operation and the price you pay. Compounding matters was the vast disconnect between the hospitals’ list prices and what Medicare actually pays. According to the records, Cottage Hospital “charges” $25,000 to treat a bad case of pneumonia. By contrast, the Templeton hospital charges $48,000 for the same treatment, while Lompoc charges $10,000.But in all these cases, Medicare pays only $5,000. Private insurance companies, as a rule, pay even less. Does that mean these numbers are meaningless, as the hospital industry insists, artifacts from a bygone regulatory era that signify nothing? Don’t bet on it. By “charging” the astronomical prices, nonprofit hospitals have been allowed to claim as tax deductions the substantial “amount” they didn’t get paid. That ain’t chump change. Likewise, there’s reason to worry that these obscenely inflated “prices” serve as the starting point for payment negotiations for people without insurance. And even for those lucky enough to be insured, as the New York Times reported, the inflated hospital “prices” serve as the basis by which copays and deductibles are calculated. There’s no shortage of reasons why insurance premiums have gone up more than 170 percent in California over the last 10 years, but the California Nurses Association contends this wildly fictitious price inflation — which increased 22 percent last year — is a big one. They can point out that the “prices” charged by California hospitals exceeded what Medicare paid by a factor of 451 percent, significantly more than the 331 percent overcharged nationally.

When I crashed my bike earlier this year, I was lucky. My insurance covered a big chunk of my day in the ER and my night in the hospital, and the care I got was absolutely great. But I’d feel much better about paying off what’s left of my bill — and it ain’t chicken feed — if I knew it was based on actual costs and not just secondhand smoke from made-up numbers. Likewise, a coworker of mine has developed whiplash shaking his head at the $37 “consultation fee” he was billed by Cottage. A nurse took 30 seconds out of her no doubt busy schedule to show him how to use a respirator mask to give his son an inhalant. Everyone has their health-insurance stories; nobody, I realize, really wants to hear them. But somewhere between the second and third time my insurance company — Blue Shield — denied me coverage for the six teeth I cracked in the bike accident, the company sent me a press release explaining how “smiling optimists who can see the lighter side in any situations” tend to live longer. “Laughter,” the release started, “is the best medicine.” Maybe so. But actual medical treatment isn’t a bad substitute. Five months after my crash, a Blue Shield administrator named Andre — they never use last names — finally relented and approved my dental work. For the time being, I might not be laughing, but at least I can smile better. I just hope there’s no kale stuck between my teeth.

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