This is what happens when you oversleep in the Cole household:
No two vocalizations are the same with this guy, and I bet he could go on like that for hours, but I’m afraid to test that theory.
by John Cole| 91 Comments
This post is in: Cat Blogging
This is what happens when you oversleep in the Cole household:
No two vocalizations are the same with this guy, and I bet he could go on like that for hours, but I’m afraid to test that theory.
by David Anderson| 37 Comments
This post is in: Anderson On Health Insurance, C.R.E.A.M., All we want is life beyond the thunderdome, Clap Louder!
I admit it, I can not figure out why Oscar is a media darling. I might be an old fuddy duddy stuck to the ways of a dinosaur industry but I can’t figure out what they are doing that is so vastly superior to what my former co-workers (who work at a profitable entity by the way) do. And then I read this write-up on Oscar in BackChannel and I know what their core competency is; getting the tech press to write fawning write-ups. Is that truly a market breaking and market making core competency with sustainable value?
I just want to pull out a few things that had me wait the weekend to write this as I just couldn’t go into an immediate critique.
(By the way, “members” is Oscar’s preferred term for its users — “customers” sounds too meretricious, and “patients” implies that they are sick. Oscar thinks of itself as a wellness machine.)
Members is fairly standard language at every health insurer I have ever talked to, worked for or been covered by. If I am talking with actuaries or the finance department, I’ll hear the term covered lives as well. Per Member Per Month (PMPM) is a nearly universal metric for first pass cost analysis. Quora had an answer for PMPM from 2011.
The collaboration with Mount Sinai is part of Oscar’s new “narrow network” in New York City. This term refers to a tightly bounded but high quality set of medical services, and is a key component of Oscars full-stack approach.
Everyone is doing a narrow network these days. My previous insurance was through an IDN’s narrow network. My new job’s insurance is through a narrow network. Smart insurers use narrow networks to drive both pricing down and quality up. This would have been innovative in 2004. Now it is normal. Penn’s LDI has a great brief on the evolution of QHP narrow networks.
The numbers on Schlosser’s screen marking Oscar’s subscribers don’t seem game changing— some thousands in each age group; the largest chunk in the 26 to 35 bracket. It’s not surprising that young adults are susceptible to a health care insurer with the vibe of an internet startup; after all, Oscar has been called the “Hipster Health Insurer.” But there are both older and younger signups as well, even some people over 65. “It’s exactly on target,’” says Schlosser of the mix, his English heavily accented by his native German. As for the numbers themselves, Oscar had about 120,000 members last year and may not (because it left two markets) have many more this year
What I see in this paragraph is massive risk adjustment outflows.
We know that the current Exchange market is an older market with a median age over 35. Young people on average are net healthier individuals so their premiums will be used to cover sicker individuals. The marginal young person dollar is far more likely to see a significant portion of that dollar leave a carrier’s coffers to balance the risk pool. Oscar might be able to sign up a lot of people but the net of risk adjustment revenue is not impressive PMPM. The one risk adjustment protection that they have is that their pricing is not that good. For example in San Francisco (zip code 94105) they are the #3 Silver. For a single 40 year old, they are priced $39 per month more than the benchmark Silver offered by Kaiser and $76 more than the low cost Silver offered by CCHP. For a 25 year, it is a $30 spread from Oscar to Kaiser and $60 from Oscar to CCHP. The lowest price Silver assuming the quality is not horrendous will get most of the healthy people who are cost sensitive and not network sensitive so they’ll get the most risk adjustment exposure.
To serve its New York members, Oscar has opened its first dedicated clinic, in collaboration with Mount Sinai Heath System, one of its new partners for services in the city. The fourth-floor facility near the Jay Street subway stop in Brooklyn doesn’t resemble a doctor’s office as much as a spa, or the headquarters of a cool startup—down to the Nespresso machine and free Kind bars. In a conscious homage to the Apple Genius Bar, the traditional crabby receptionist is replaced by smiling “greeters” who help you log in on an iPad. They are trained to stand next to visitors instead of behind them, to foment a feeling of collaboration. Those with actual ailments are shuttled to exam rooms where doctors continue the digital huddle; visiting Oscar members who are feelin’ good can drop into a “multipurpose wellness center,” which will host classes on disease maintenance, pregnancy, and yoga, as well as TED-type talks on subjects of community interest.
Cool clinics with modern design principles and yoga classes sound great. They sound like a place to be hip and chill and part of Brooklyn’s third and fourth wave of gentrifiers while the real action for the next scene has passed the neighborhood by already. I again am seeing massive risk adjustment outflows. People who are active and taking classes and feeling good will have very low HCC scores. An insurer needs those people to pay for the very sick and the very expensive but too many of those people in the QHP market means risk adjustment outflows. If Oscar is optimizing their pitch to young and healthy people, making money under ACA rules and most likely any functional replacement of the ACA that has significant limitations on underwriting will be tough.
Plenty of insurers have adapted a neighborhood PCP clinic model. Harken and Zoom are also recent start-ups that had a focus on lifestyle and PCP access. Value Based Insurance Design (VBID) is proliferating where PCP care is very low or no cost sharing.
UnitedHealth’s Optum to Acquire Surgical Care Affiliates for $2.3 Billion – big HC services news #JPM17 https://t.co/igvGoSOTdW
— Bijan Salehizadeh (@bijans) January 9, 2017
Optum and United Healthcare is making a major play far higher up the value chain with their most recent acquisition of a surgical specialty practice. They are also playing in the on-demand PCP business with MedExpress (I’ve used MedExpress for years and the experience has been extremely nice and user friendly)
I am also seeing a core problem with the individual market. Pre-ACA the individual market had two segments. The first were long termers such as consultants and contractors. They would stick around and PCP services could produce a decent return on investment through better future health. The other segment of the market were short termers who needed coverage for a couple of months as they changed jobs or something better came their way. They were healthy enough to pass through underwriting screening but they would be gone with anything more than a flu shot was a money loser in terms of preventative care. The ACA has added a third group, people who were either too sick or too poor to afford insurance. But again, we know the QHP market is still a very high churn market. Unless Oscar has almost no churn and can offer products in all lines of business in order to internalize the gains of prevention, PCP services are a poor financial investment for a carrier that is overwhelmingly in a high churn, individual market. And since they are chasing Millenials, that is a group that is extremely likely to churn out of the individual market due to either job moves or geographic moves.
Warren oversees over 60 engineers, who not only work on the app and convivial interfaces but also are constructing a digital infrastructure to make Oscar a platform where third-party developers can add value. Down the road, he sees the company as a pioneer in exploiting machine learning to improve services for customers, and maybe even to anticipate medical crises.
My first thought on this is that I’ll bet on Carnegie Mellon or Google or MIT or someone with millions of covered lives to really be able to effectively do deep data mining and predictive analytics rather than a company with 135,000 covered lives in 2016 and maybe 200,000 unique covered lives throughout its life. Non-obvious solutions need both massive data sets and amazing expertise. Oscar does not have the data sets that the Blues or Optum (UHC) or CalPers or Medicare has.
Secondly, sixty software engineers are not cheap. And I think the idea of building an infrastructure where other developers can plug in is a great idea but there is a massive chicken and an egg problem. Other people will want to plug in if and only if there are enough Oscar members to make it worthwhile to do so. And Oscar won’t get those members if they can get their pricing both under control and profitable. Right now Oscar is pricing their products in the middle of the market. This pricing is still insufficient to cover their claims expense through the first nine months of 2016 in New York (126% MLR when a healthy insurer’s MLR is in the mid-80s) and their administrative build-out costs are very high (26% of premium admin expense when a health insurer has no more than half that as their admin costs) Even if Oscar could run with no administrative costs, they would need to raise their premiums by 40% to break even on their medical costs. Their story is that they’ll use the combination of their awesome technology and a lower cost narrow network as a means of reducing their medical expenses but they need to find some combination of $142 per member per month in spending reductions or increased revenue to break even before we even think about their administrative costs.
It’s fairly easy to get good press and decent start up numbers when you’re taking a 30% loss on the operational product and you have a hugely expensive back-end that has not achieved economies of scale nor useful operational. The challenge and the thing that I still have not been able to figure out is how the hell does Oscar break even operationally in the individual and small group markets as those markets are extremely price sensitive and have higher than average churn. I can’t figure out how Oscar does well in the large group market as their price sensitivity is a bit less but they want bigger networks and more technical sophistication. I have been scratching my head for two years on Oscar and I am wearing out a bald spot over my right ear now.
So, if Oscar’s core competency is getting good press from the tech side, is that enough to actually pay the bills and be profitable?
This post is in: Hail to the Hairpiece, Open Threads, Proud to Be A Democrat, Republican Venality, Trump Crime Cartel
.@KellyannePolls: I'm concerned that somebody with a platform like Meryl Streep's is inciting people's worst instincts pic.twitter.com/QjITaedKnV
— FOX & friends (@foxandfriends) January 9, 2017
She asked everyone to practice empathy and to allow freedom of press as a check on our government, as our founding fathers had allowed. https://t.co/xRYLC7s1PI
— Gavin Newsom (@GavinNewsom) January 9, 2017
This evening at 9pmEST, President Obama will deliver his farewell address. Per the Washington Post:
… In his weekly Saturday address, the president alluded to the special feeling he has for Chicago. It’s where he came of age personally and politically. He started his public service career there, first as a community organizer before launching the political career that would take him from the Illinois state Senate (after he lost a U.S. House race) to the U.S. Senate and ultimately to the White House as the first black man to occupy the Oval Office. Chicago is also where Obama met and married his wife, Michelle, who is Chicago born and raised. Their daughters Malia and Sasha were born there, too…
Presidents give farewell addresses primarily to reflect on their achievements during their four or eight years, sometimes even including expressions of regret for promises left unfulfilled, said Marc Selverstone, associate professor at the University of Virginia’s Miller Center, which studies the presidency.
The speeches are also used to raise warning flags about specific policies.
Obama’s address is likely to issue some warnings about the politics of his successor, Donald Trump. The Republican president-elect has pledged to overturn much of what Obama put in place, including the Affordable Care Act, executive orders on immigration and other issues, and environmental regulations, among them.
White House press secretary Josh Earnest says Obama wants to give a “forward-looking speech” that will examine U.S. progress during his tenure, but that he also wants to spend time talking about the challenges ahead and what he thinks is necessary to confront them. He also wants to thank the American people for putting their trust in him, Earnest says…
Along with the usual media venues, it will be livestreamed at WhiteHouse.gov.
And in the happy news category, the National Nuclear Security Agency (NNSA) “is pushing back at a news report that the transition team for president-elect Donald Trump plans to remove the heads of the agency when he takes office.” So I guess Cole’s raised garden beds are safe, for the moment.
Apart from planning your evening watching / commenting, what’s on the agenda for the day?
***********
Click on the blue link at the end of the following tweet, and you will be rewarded:
Trump names conflict-plagued son-in-law as Senior Advisor because he is https://t.co/avNJwEt1P2
— Matt Ortega (@MattOrtega) January 9, 2017
Tuesday Morning Open Thread: Transition NotesPost + Comments (134)
by Adam L Silverman| 127 Comments
This post is in: Because of wow., Open Threads, Popular Culture, Fuck Yeah!
In light of yesterday’s post about caregivers, it is important to grapple with the difficult end of life questions. Specifically, how many strippers do you want at your funeral!
According to an article in the Wall Street Journal, funeral strippers are not uncommon. In fact, China’s Ministry of Culture has publicly asked that people stop hiring them. As far back as 2006, China Central Television aired an exposé on the practice, which states it has “severely polluted the local cultural life.” Obviously, the performances are intended to attract crowds, which is seen as good fortune for a bumping afterlife. One villager told CCTV, “It’s to give them face,” adding, “Otherwise no one would come.” Wow, burn.
by John Cole| 83 Comments
This post is in: John Cole Presents "This Fucking Old House"
So we are closing in on the finish here at Home Crap Home. All the flooring is done, and all that needs to be done is put the quarter round down and do molding touchups. The next to last big project is installing the hood for the stove (the last being railings for the stiarways and hooking up the stove and stuff, but the plumber does that), and that will be done tomorrow. Here was something we wrapped up today.
If you remember, there was a gap on either side of the stairwell on the second floor, and it was dangerous as hell. I actually had two separate nightmares with me falling down it, so we had to put in a railing. The before picture:
Once Dean got the flooring down, we had to do something to put a cap on it so it would be smooth. He came up with an ingenious solution, which was to cut a dowel rod down the middle:
We installed the railing that we had stained and varnished a while back, and here is the final project (that’s Anita- Herb’s wife and Dean’s sister):
Plumber comes Wednesday or Thursday, bed on Saturday, appraiser/inspector on the 17th, Comcast on the 18th, and moving begins.
I had a great idea for the entryway as soon as you come into the house, too. I’m having Dean, Herb, Anita, Gerald (and his two boys who did errand stuff), and Xubi pose for a picture in the living room, and I am going to blow it up and frame it and put it right over the light switch to the right of the doorway when you enter the house.
This post is in: Hail to the Hairpiece, Open Threads, Republican Stupidity, Republican Venality, I Smell a Pulitzer!, Not Normal
(see * bottom of post)
.
Reality: If Trump wont let ethics office do normal vetting of nominees, reporters will be winning Pulitzers for 4 yrs exposing their secrets
— Kurt Eichenwald (@kurteichenwald) January 7, 2017
Next day:
I fear that the reason Trump's nominees arent filing typical disclosures w/ ethics office is a competence issue, not trying to hide things.
— Kurt Eichenwald (@kurteichenwald) January 8, 2017
Part of ethics office is ensurng nominee isnt in something that, as public official, wuld be illegal. Protects THEM. Once in office, 2 late.
— Kurt Eichenwald (@kurteichenwald) January 8, 2017
You know that old folk curse, “May you live in interesting times?”
* schrodingers_cat: The movie has been panned by critics but I love its title track, especially the panchakshara* stotra, the female voice in Sanskrit interspersed with a rapid fire, rap-like (in Hindi) description of Shiva.
Panchakshara == 5 letters (na ma shi va) nam = name shiva
Open Thread: Any Journalists Up for Some High-Stakes Adventure?Post + Comments (28)
by Adam L Silverman| 236 Comments
This post is in: Domestic Politics, Open Threads, Politics, Silverman on Security
I’ll just leave this here. I’ve bolded the relevant portions.
Antideficiency Act
This act prohibits federal agencies from obligations or expending federal funds in advance or in excess of an appropriation, and from accepting voluntary services.
- The Antideficiency Act prohibits federal employees from
- making or authorizing an expenditure from, or creating or authorizing an obligation under, any appropriation or fund in excess of the amount available in the appropriation or fund unless authorized by law. 31 U.S.C. § 1341(a)(1)(A).
- involving the government in any obligation to pay money before funds have been appropriated for that purpose, unless otherwise allowed by law. 31 U.S.C. § 1341(a)(1)(B).
- accepting voluntary services for the United States, or employing personal services not authorized by law, except in cases of emergency involving the safety of human life or the protection of property. 31 U.S.C. § 1342.
- making obligations or expenditures in excess of an apportionment or reapportionment, or in excess of the amount permitted by agency regulations. 31 U.S.C. § 1517(a).
Federal employees who violate the Antideficiency Act are subject to two types of sanctions: administrative and penal. Employees may be subject to appropriate administrative discipline including, when circumstances warrant, suspension from duty without pay or removal from office. In addition, employees may also be subject to fines, imprisonment, or both.
Reporting Requirements
Once it is determined that there has been a violation of 31 U.S.C. §§ 1341(a), 1342, or 1517(a), the agency head “shall report immediately to the President and Congress all relevant facts and a statement of actions taken.” 31 U.S.C. §§ 1351, 1517(b). The reports are to be signed by the agency head. The report to the President is to be forwarded through the Director of OMB. In addition, the heads of executive branch agencies and the Mayor of the District of Columbia shall also transmit “[a] copy of each report . . . to the Comptroller General on the same date the report is transmitted to the President and Congress.” 31 U.S.C. §§ 1351, 1517(b), as amended by the Consolidated Appropriations Act, 2005, Pub. L. No. 108-447, div. G, title II, § 1401, 118 Stat. 2809, 3192 (Dec. 8, 2004).
OMB has issued further instructions on preparing the reports, which may be found in OMB Circular No. A-11, Preparation, Submission, and Execution of the Budget, § 145 (June 21, 2005). The report is to include all pertinent facts and a statement of all actions taken to address and correct the Antideficiency Act violation (such as administrative discipline imposed, referral to the Justice Department where appropriate, and new safeguards imposed). An agency also should include a request for a supplemental or deficiency appropriation when needed.
What if GAO uncovers a violation but the agency thinks GAO is wrong? The agency must still make the required reports, and must include an explanation of its disagreement.
Additional Information
For more information on the Antideficiency Act purpose, history, and requirements see Chapter 6, Availability of Appropriations: Amount
- Principles of Federal Appropriations Law: Third Edition, Volume II
- GAO-06-382SP, February 1, 2006
Submitting Antideficiency Act Reports to GAO
Agency heads and the Mayor of the District of Columbia must provide a copy of Antideficiency Act reports to the Comptroller General of the United States at the same time they are submitted to the President and Congress.
Send PDF reports to [email protected]. GAO will confirm receipt by e-mail.
Send paper copies of reports to:
- Antideficiency Act Reports
- Comptroller General of the United States
- U.S. Government Accountability Office
- Room 7165
- 441 G Street, NW
- Washington, DC 20548
Questions?
For more information about submitting Antideficiency Act reports to GAO, contact Edda Emmanuelli Perez, Managing Associate General Counsel, at [email protected] or 202-512-2853.
For more information about the Antideficiency Act requirement, see
Transmission of Antideficiency Act Reports to the Comptroller General of the United States B-304335, March 8, 2005For general inquiries about the act, send an e-mail to [email protected].