The figure are pretty well-known by now: 48 million Americans don’t have health care and millions more pay outrageous prices for inadequate care. This is all about greed and profit–take those two factors away and, presto, you get national health care.
The Wall Street Journal today exposes one aspect of the blood-suckers who are ripping us off (it’s subscription only so I’m giving you a taste here):
Health-Care Consultants Reap
Fees From Those They Evaluate
As Insurance, Drug Costs Rise,
Employers Seeking Advice
Often Discover Conflicts
A Superintendent’s Surprise
By BARBARA MARTINEZWhen Kevin Grady took over as an employee-benefits consultant for the Columbus Public Schools District in 2001, he signed a contract promising to act “in the best interest” of the schools. The Ohio district agreed to pay him $35,000 a year to help it choose a health insurer. Officials thought that was all Mr. Grady was getting out of the deal.
It wasn’t. After the district switched its health insurance to UnitedHealth Group Inc. on what it says was Mr. Grady’s recommendation, he started getting payments and other compensation from the big Minnetonka, Minn., insurer. “Thank you and United for the steaks,” Mr. Grady wrote in a Dec. 20, 2001, email to a UnitedHealth employee. “We’ll have those on Christmas eve.”
All told, UnitedHealth paid Mr. Grady $517,138 for helping it get the district’s business. The district says it learned about the payments two years ago after a new human-resources chief came on the job. It canceled Mr. Grady’s contract. Last month, the Ohio Department of Insurance suspended Mr. Grady’s license for three years, accusing him of “deception.” He was ordered to pay $137,000 in restitution to the Columbus district and a $25,000 civil penalty. Earlier this year, UnitedHealth agreed to pay a $125,000 penalty to settle the matter without admitting wrongdoing.
The episode spotlights a widespread and largely invisible practice that critics say boosts the cost of health care. Many consultants and brokers who are hired to help employers get the best deal on health insurance or prescription-drug coverage have significant financial ties with the health vendors they are supposed to be scrutinizing. The ties may take the form of bonuses for bringing in business, commissions or consulting fees. Often they are disclosed only partly or not at all.
Mr. Grady’s son, Joe, who is president of the family consulting business, says his father is appealing the suspension and did nothing wrong because the payments he received are standard in the industry. “All [insurance] companies offer bonuses,” says Joe Grady. “It’s a way to sell the product and saves them from hiring 20,000 agents.” He denies that his father pushed the district to choose UnitedHealth and contends the district knew all along about the payments. The insurer declined to discuss the specifics of Columbus case.
