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S&S Benefits.....Opinion, Hearsay & News Review

Why be like everyone else?

S&S Benefits Consulting, Inc. 219 Darien, Dundee, IL 60118 Phone: 847-428-5353, Fax:847-428-9876,

Email: jseiler@ssbenefits.net www.ssbenefits.net

Volume 4 Issue 9 Street Talk January, 2003 Issue


Canada Life’s board has rejected a takeover bid from Manulife Financial Corp. However, Manulife (Canada’s second largest insurer) could still prevail by appealing to Canada Life’s (Canada’s 4th largest insurer) shareholders. Speculation is that if totally rejected, Manulife’s offer could induce other suitors such as Great-West Lifeco.

There is also speculation that Willis could finally boost it’s presence in Chicago by taking over the brokerage of Near North. Willis recently hired Near North exec Thomas Ealy. Others rumored to be interested include Mesirow and Entegra (launched by a former Aon exec). Speculation is due to the continuing legal troubles of Near North owner Michael Segal.

Conseco has filed for bankruptcy protection. It is the 27th largest US insurer and the second largest underwriter of long-term care insurance.

The American Hospital Association and other industry groups have formed a venture to ask hospitals to voluntarily release data on 10 quality measures (on procedures such as acute heart attacks and pneumonia) to be published on the CMS web site. AARP is pushing for outcome data to also be published.

While group insurance trends are in the 13% to 16% range for most health plans, one insurance carrier (Avemco) is citing individual insurance policy trends to be 20% to 24%.

The Council of Insurance Agents and Brokers reports that 78% of small accounts (50 or fewer employees), 74% of medium accounts (51 to 500 employees) and 74% of large accounts had health care premium hikes from 10% to 30%. For small accounts, 14% saw premium increases of 30% to 50%. Twelve percent of medium accounts and 3 % of large accounts saw premiums rise between 30% and 50%.

According to PricewaterhouseCoopers, 27 cents of every new dollar of health care spending was driven by litigation, mandates and fraud, adding $18 Billion in new health spending that could have insured 6.8 million more Americans.

A federal judge in Miami has halted settlement of an Illinois settlement between Cigna and physicians. The suit basically centers on the common practice of all claims systems to eliminate overbilling due to unbundling and upcoding. The case continues in federal court against all the large managed care payors.

Aetna has announced that it will cut an additional 690 jobs. This follows an announced cut of 2,750 jobs three months ago and 4,400 jobs last December. Aetna also announced it will acquire the mail order pharmacy facilities of KC, MO based Eckerd Health services.

The Institute of Medicine reported three years ago that 98,000 Americans die each year from medical mistakes. However, according to the JCAHO, the operations performed on the wrong body part or patient have actually increased since that study was released.

A study by a major insurance company produces some interesting statistics. Expenditures on health are distributed as follows for 2002: Admin and profit-6.5%; Rx drugs-9.4%, nursing home and home health-9.6%, other services-21.1%, physician service-22% and hospital care-31.7%. In the year 2000, people aged 65 and older represented 12.4% of the population, but accounted for 1/3 of healthcare spending. Nursing costs represent 44% of the direct cost of inpatient care and payroll costs are 80% of direct costs. Care in teaching hospitals has a 29% higher cost per case than in community hospitals.

"Close ‘em up Cole" is back in town. He seems to have been most places that went out of business or that went down the tubes, shortly before they did so. John Cole is the new Unicare Senior VP of Sales. Previous stops include Pru, Lincoln National, Aetna, Amicare, and BC of CA.

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