"One Cannot Measure What One Does Not Manage": Lobbying with a Conflict of Interest (Part XIII-g)

May 1, 2009

I have argued that the pharmaceutical industry has a legitimate role to play in healthcare and when they help practitioners achieve a better outcome for their patients, they should be garner a greater market share, price, and profit.

I have argued that the pharmaceutical industry has a legitimate role to play in healthcare and when they help practitioners achieve a better outcome for their patients (through adherence programs and better follow-up, for example), they should be garner a greater market share, price and profit. I guess I'm a contrarian but in my (pediatric) office, they provide support and I invite them in. I use their product line when it serves my patients best. Not so for numbers-crunchers like the Lewin Group who "serves government and private clients." They are not hermetic; in fact, they serve a different master--their grandparent is none other than the United Health Care Group (UHC) who pays doctors (or tries not to). I don't trust their data or their conclusions and neither does courts.

If it looks, smells and feels like a conflict of interest, it is one!

United owns the Lewin Group's parent—Ingenix whose raison d'être is to produce usual, customary and reasonable (UCR) fee scales so that the Uniteds Aetnas, CIGNAs and BCBSs "health" plans can squeeze practitioners, especially those who are out of network (OON). For example, it is contended that Ingenix may be low-balling its UCR data to reduce group health out-of-network costs.

Joseph Paduda's January 14, 2009, "Managed Care Matters" blog provides all the background you need to understand—"Years ago, the health insurance industry's lobbying and service arm (HIAA) aggregated and compiled physician charge data as a service to its members. HIAA collected the data and fed it back to members, who then used the data to determine how much they should pay providers in specific areas for specific services (services defined by CPT codes). HIAA was taken over/disappeared about a decade ago, and Ingenix took over the aggregation and distribution of [said data]." However, a "problem arose when a few folks in New York complained about the amount they still owed providers after their insurers had paid their portion - according to Ingenix's UCR [rates]."

At the end of his blog, Mr. Paduda draws attention to the property casualty industry, where a Massachusetts court, last year, found that "Ingenix could not prove that the underlying data was accurate, that it was a fair representation of provider charges in an area, or that the results were anything more than 'dollar amounts resulting from the statistical extrapolations from whatever bills were actually included in its database.'" He rhetorically asks what this mean for his readers; I ask the same.

From: Gilbert R (Academic PPO's Exec. Dir.)

Sent: Tuesday, April 07, 2009 2:19 PM

"The [NY] attorney general’s agreement tries to address one of the major frustrations of patients in dealing with health insurers when they use a doctor outside of the insurer’s network: the puzzling gap between a doctor’s bill and what the insurer says it will cover.

The inability to decipher the insurer’s calculations can be overwhelming to patients with serious medical conditions."

"Big Health Insurer Agrees to Update Its Fee Data," NY Times, Published: January 13, 2009

Let's assume for a moment that UHC and Igenix have systematically engaged in dishonest, deceptive or, even, fraudulent practices that have cheated millions of people. (If what New York's Attorney General, Andrew Cuomo has alleged is true, then it is likely that the foregoing is also true.) Based on such an assumption, I believe it is prudent to look closely at both the motives and work product of the offspring of such tainted entities.

*The Lewin Group is part of Ingenix, Inc., which is a wholly owned subsidiary of UHC; they were acquired in June of 2007.

From: Martin J

Sent: Tuesday, April 07, 2009 2:19 PM

Just as reforestation follows the ruin of the primary growth forest, to reclaim a just, efficient and economically rational healthcare system in the U.S., the private health insurance industry, as we know it, has gotta go.

From: Fredrick H (MD, PhD, JD)

Sent: Tuesday, April 07, 2009 4:14 PM


A public system, if enacted and managed in an even reasonably competent manner, is almost certain to out-compete-the-pants-off the private insurers; that's hardly rocket science. Even the Lewin Group came to the same conclusion about a decade ago.

So, why has nothing happened? Part of the reason is found in the adage, “If you lie down with dogs, you get up with fleas”—the title of next week's post.