Inside the Insurance Industry

August 19, 2009
Posted by Jay Livingston

Is just the threat of a public option changing the way insurance companies do business? I had to call my insurer yesterday to find out if an MRI at the place designated by my doctor would be covered. The MRI lab is in New York, my coverage is in New Jersey, so it wasn’t clear and simple. The guy I talked to was incredibly polite and helpful, checking every way he could, explaining the problem, asking if it was all right to put me on hold while he checked. He might as well have been saying, “We really, really want to keep your business.”

Meanwhile, if you had any doubts that the structural forces of the market affect health care, and not always for the benefit of the patient, check out this long interview with Wendell Potter. Potter is the former Cigna head of “corporate communications” who has been telling tales out of school, revealing what insurance companies actually do – how and why. (The “loss ratio” he refers to is the percent that the insurance company pays out to cover medical expenses. The lower the loss ratio, the higher the company’s profit. See this earlier SocioBlog post. )

As recently as fifteen years ago, the medical-loss ratio in this country was 95 percent. Since then, there’s been great industry consolidation to the point that now there are seven companies that dominate. They’re all for-profit. During the time that this consolidation, this shift to for-profit occurred, the medical-loss ratio has continued to drop. Now it’s around 80 percent. That means twenty cents of every dollar goes to something other than paying medical claims. Just fifteen years ago, ninety-five cents of every dollar went to paying medical claims. This trend is due to pressure from Wall Street. If a company misses Wall Street’s expectations—if the medical-loss ratio starts to inch up—the company will suffer. I’ve seen companies lose 20 percent of their stock value in one day by disappointing Wall Street with their medical-loss ratio.

Sightseers on the sociology tour bus will come across other points of interest in this interview.

• Social movements? The role of corporate PR in the “grassroots” reaction against health care reform. (“They’re skilled at setting up front groups to spread disinformation.” )
  
  
• Ideology? The relation between the insurance industry and Congress (“The industry has contributed so heavily to the Republicans over the years that they are pretty much assured that every single Republican in Congress will vote exactly the way they want.”)
  
  
• Social psychology? How the structure of insurance executives’ lives shapes their perceptions and misperceptions (“you get a very skewed understanding of America.”)

Potter also cites the events that led to his own apostasy (“Sicko,” a free health care expo at a fairgrounds in Virginia (“hundreds of people waiting in the rain while physicians attended to patients in animal stalls . . . ‘Is this the United States?’ ”).

The Roads Go Without Saying, Don’t They?

August 18, 2009
Posted by Jay Livingston

The Republican attack on Obama’s health care proposals has worked marvelously. The “public option” is all but dead. Harking back to Ronald Reagan’s line that “government is the problem,” Republicans railed against “government run” health care, stating as fact that the government can’t run anything well. For Republican lawmakers, this apparently includes the legislatures they themselves are part of. But pay no attention to that.

There’s a lot more to pay no attention to, and not just the government-run medical programs that do exist – the VA, Medicare, and Medicaid. Most of the protestors drove to their protests on government-run roads; most send their kids to government-run schools, and honor their government-run police and fire departments. . . .

Here’s Monty Python making the same point thirty years ago. “All right, but apart from the sanitation, medicine, education, wine, public order, irrigation, roads, the fresh water system and public health, what have the Romans ever done for us?”


(Hat tip: Mark Thomson at The League of Ordinary Gentlemen.)

Reality – We Lost It at the Movies

August 17, 2009
Posted by Jay Livingston
If the facts don’t fit the theory, change the facts. Whether or not Einstein really said this or really meant it, it might well be the motto of the New York Post.


In New York, last week, four robbers entered a run-down looking restaurant supply store on 125th St. They started to struggle with one of the employees, hitting him with a pistol, paying no attention to the owner, 70-year Charles Augusto. Augusto pulled out a shotgun and fired three times, killing two of the robbers, wounding the other two.

The New York Post carried the headline “Make My Day.” But what happened on 125th was not Dirty Harry (see the relevant clip from “Sudden Impact” here ). Charles Augusto tried to persuade the robbers that there was nothing worth stealing. He tried to get them to leave. Confrontation was the last thing he wanted. Pulling the shotgun was impulsive, not thought out. The gun had been sitting, never fired, for twenty years, so Augusto could have no idea whether it would even work.

The Daily News headline got it right. Shooting the robbers was not something he wanted to do. It brought him no satisfaction, nor does he think it was at all heroic. He was not trying to rid the world of evildoers. He was trying to get some robbers to stop hitting his employee.

Unlike the Post and Dirty Harry, Charles Augusto understands that death – even the death of a violent criminal – is not an isolated fact. Other people are inevitably involved, as Augusto knew from experience. His own son had committed suicide twelve years earlier, and now he has nothing but sympathy for the families of the dead. “I know the pain these people must feel.”

The Post headline reeks of smug self-satisfaction, a reaction far different from Charles Augusto’s reality. “I don’t know what feels worse, now or when my only son died.”

“Funny People” – Making Hard Choices Easy

August 15, 2009
Posted by Jay Livingston

“We make extremely right-wing movies with extremely filthy dialogue.” Seth Rogen was talking about “Knocked Up,” and by “we” he meant the Judd Apatow repertory company.

Ross Douthat, the New York Times’s new right-wing columnist, included the quote in his op-ed on Apatow’s most recent film “Funny People.” According to Douthat this movie is more “grown-up” and “realistic” in its family values. “Doing the right thing comes harder.”

I saw a movie called “Funny People” last week, but it must not have been the same one Douthat saw. The one I saw twisted itself out of shape to make doing the right thing come easy.

Spoiler alert: I’m going to reveal the plot and ending,

George (Adam Sandler) is a very successful comedian who contracts a potentially deadly disease but then, miraculously, recovers. When he thinks he’s facing death he phones his ex-girlfriend Laura, who left him twelve years earlier because he was cheating on her. She is now a wife and mother. He realizes that he messed up back then and wants to rewind the tape.

She comes to visit, and later, when George is healthy again, he goes to see her in her Marin County home (her husband is, as usual, out of town). Both meetings show that they still love one another and that they still have a certain something. George wants her to break up her marriage and be with him.

The conservative message comes at the end, when Laura is faced with a family-values dilemma: should she leave her husband and get back together with George?


At first, the film tips the scales towards divorce. She and George still have that chemistry, and besides, her husband isn’t much of a husband. He’s macho-obnoxious and frequently out of the country on business. And he cheats on her.

Whichever she chooses, love or family, she will lose something. If she stays with her husband, she will lose George’s love, humor, etc. If she chooses happiness with George, she will lose her family; her children will suffer as well.

It’s a real dilemma, a grown-up problem. True love or family. You can’t have it both ways. But wait.

American movies and television have a long tradition of presenting a real problems and then conjuring up magical solutions. It’s called “the Hollywood ending.” “Funny People” is no exception. At first, Laura decides to split from her husband and go with George. But no sooner does she nod in his direction than he is suddenly transformed, and not for the better. Five minutes ago, he delighted in playing silly games on the floor with her kids and dogs; now he can barely bring himself to stay in the same room with them. Before, he was attentive to every nuance of Laura’s feelings. Now, he ignores her, flipping open his cellphone to read text messages about movie deals and money.

Her husband has a similar transformation though in the opposite direction, renouncing his extramarital affairs (just two), vowing to get a job that will keep him close to his family, and declaring his love and devotion to his wife. Surprise, surprise – she decides to stay with her husband.

See, the decision only appeared to be a hard one. In the end, doing the right thing brings no sacrifice at all.

The real cheating in this film is not men’s infidelity to women; it’s the director Apatow’s infidelity to the story he himself has created.

This is not a perfect film. The “lonely at the top” theme is a bit of a cliche. The movie is long, nearly 2½ hours, because it tries to paste together three different movies: the ex-girlfriend dilemma; George facing death; Ira (Seth Rogen) the virtuous, innocent schnook, hanging around with the super-successful George.

But the movie is often funny, and it’s at its best when it’s about comedy. It makes you appreciate how difficult stand-up is, with its strange relationship between performer and audience. The key to success is not to tell a funny joke but to capture the audience. The same jokes that seem lame when done by an unseasoned, aspiring performer (Rogen) become good material in the hands of a pro like George, partly because of his ability, his craft, but also because the audience is already on his side. The film also shows how much these comedians rely on “dick jokes,” which don’t bring much admiration from colleagues but can get laughs, especially with unsophisticated audiences.

And then there’s James Taylor, whose two spoken lines in the film (he also sings one song) are hilarious – playing completely against his usual persona.