Saturday, October 15, 2005

OFT and a new plan for healthcare for Ohio teachers and others

"In addition to the Ohio AFL-CIO, sponsoring unions in Ohio include the Ohio Federation of Teachers, the Ohio Association of Public School Employees/AFSCME, the Ohio Nurses Association, Communications Workers of America, Operating Engineers, Local 20, and the Ohio AFL-CIO. Several other unions are now considering becoming sponsors. Sponsoring unions have a seat on the plan’s board of trustees. OFT President Tom Mooney became the board’s first chairman in May. Officers of the Trust will rotate annually."

Union-Sponsored Health Care Plan Open for Business

The Ohio Health Care Trust, offering comprehensive union-sponsored employee benefits, is open for business. Ohio labor unions, under the auspices of the Ohio AFL-CIO, have partnered with Michigan unions to create a new, non-profit trust to offer high-quality care at below-market rates. Michigan unions created their Public Employee Trust in 1985 to reduce costs, improve quality and gain more control over their benefits and their premiums. After two years of research and negotiations, Michigan and Ohio unions decided to join forces.

The partnership allows Ohio union members to take advantage of the benefits, services and efficient administrative structures created and tested by our Michigan brothers and sisters over the past 20 years.

The Ohio Health Care Trust offers medical, prescription drug, dental and vision coverage, as well as term life and disability insurance. The Trust can administer 401(k) and 403 (b) tax-deferred annuity plans, along with Section 125 “cafeteria” plans. Employers and unions can purchase any or all of these benefit programs. But, only bargaining unions represented by unions covered by the Trust and other employees working for the same employer are eligible.

Plans Can Reduce Costs
The Trust can offer teachers, school employees, higher education faculty and staff, and other public employees the same coverage they enjoy now at less cost, in most cases. Or, the Trust can make expanded benefits affordable. The union-sponsored plan can also provide coverage to private sector employees.

How does the Trust hold down costs? First, it is a non-profit entity. Administrative costs are kept to a minimum, and no profits are retained. Second, the Trust negotiates the steepest discounts available with pharmacy benefit managers, hospitals and physician groups. All costs, discounts and contracts are transparent. Nothing is hidden from the employers or the unions seeking coverage. Commercial health insurance and prescription benefit managers too often do not reveal the discounts they negotiate with drug companies and health care providers, so their customers don’t know if they are getting the best available price.

In Ohio, the union-sponsored plan took another innovative step to reduce administrative costs and corporate profits that add to health care costs. After soliciting and examining bids, the Ohio Health Care Trust contracted directly with a provider network, Emerald Health, bypassing the for-profit health insurance companies altogether. Emerald has an extensive network of hospitals, doctors and other health care providers throughout the state, and has negotiated very competitive discounts with them.

Emerald has partnered with a national network, Health EOS, so that employees and family members covered by the Trust have access to care while traveling out of state or attending college.

For prescription drug coverage, the Trust participates in a larger AFL-CIO purchasing coalition that has negotiated one of the lowest cost plans in the country, administered by Caremark.

And, medical benefits offered by the Trust include a state-of-the-art program that monitors the quality of medical care to ensure that patients are getting the treatment they need and that care is coordinated among various doctors treating the same patient. Health care experts agree that timely and appropriate medical care is the most effective way to reduce health care costs in the long run.

Finally, employers and unions that contract with the Trust for benefits do not need to use brokers who add their commission to health insurance premiums.

In addition to the Ohio AFL-CIO, sponsoring unions in Ohio include the Ohio Federation of Teachers, the Ohio Association of Public School Employees/AFSCME, the Ohio Nurses Association, Communications Workers of America, Operating Engineers, Local 20, and the Ohio AFL-CIO. Several other unions are now considering becoming sponsors. Sponsoring unions have a seat on the plan’s board of trustees. OFT President Tom Mooney became the board’s first chairman in May. Officers of the Trust will rotate annually.

Contact Information
If your school district, college or agency has health care coverage, or other insurance programs or benefits that are up for renewal, your local union may want to get more information about benefits and services offered by the Ohio Health Care Trust. Contact Bob McCollins, executive director of marketing and field services for the Trust, at 1-800-968-9682 ext. 383, 614-537-9741 cell or

Employers and unions should, however, seek competitive bids for all employee benefits periodically and should retain expert consultants to review their coverage and costs and assist them in preparing RFPs and analyzing the bids they receive. But, such consultants should be paid fixed fees for their services, not a percentage of premiums.

Article Courtesy of the Ohio Federation of Teacher, AFT, AFL-CIO

On Lipitor? Read this

October 15, 2005

Lipitor or Generic? Billion-Dollar Battle Looms


The Lipitor war is about to begin.

Starting next June, insurers and government agencies will have the opportunity to save billions of dollars by moving patients from Lipitor, a
cholesterol-lowering drug by Pfizer that is the world's top-selling medication, to an inexpensive generic version of Zocor, a similar but less potent drug now made by Merck.

Some insurers are already planning ways to move patients from Lipitor to generic cholesterol drugs after Zocor loses its patent protection. But Pfizer, which plans to use marketing muscle and clinical data to fight that migration, says that Lipitor has unique benefits and is worth a premium price, especially for patients at high risk of heart attacks.

Both medicines belong to a class of drugs known as statins, which are the nation's best-selling medications, with almost 150 million prescriptions expected to be filled this year at a cost of $16 billion. The insurers, and some cardiologists, say that switching patients from Lipitor to generic Zocor will be a safe way to cut costs in an era of skyrocketing pharmaceutical prices.

In many cases, they say, patients who now take the most commonly prescribed dosage of Lipitor - 10 milligrams daily - can reduce their cholesterol just as much with Zocor. Lipitor costs $2 or more a day, while generic Zocor will probably cost 35 cents or less.

"If I was taking a statin, I'd want to take the cheapest one, as long as I get to the goal that I wanted to get to," said Dr. Scott Grundy, a researcher who has consulted for both Merck and Pfizer. Dr. Grundy led a federal panel that in 2001 wrote guidelines for treating people with high cholesterol.

But other doctors and epidemiologists say that Lipitor may be the best drug for many patients. "It would not be good medicine to go to a cheaper medicine that has less efficacy in our high-risk patients," said Dr. Robert Vogel, a cardiologist at the University of Maryland, who has been paid by Pfizer to help conduct a clinical trial of Lipitor.

Pfizer says it will fiercely defend Lipitor. "By taking any dose of Lipitor, you will reduce the risk of a cardiovascular event faster and to a greater degree than you will with any other medicine," said J. Patrick Kelly, Pfizer's president of United States

The fight over Lipitor involves a collision of fundamental forces in American health care. Spending on prescription drugs has jumped from $40 billion in 1990 to almost $250 billion this year, and continues to rise faster than overall inflation. But while many Americans say they believe that prescription drugs cost too much, they rarely want to accept generic medicines for themselves instead of more expensive drugs that may be only marginally better - especially since insurers or government agencies pay nearly 70 percent of all drug costs.

Dr. JoAnne Foody, a practicing cardiologist and a professor at Yale University School of Medicine, said she expected to continue prescribing Lipitor for her high-risk patients, who need the maximum possible reduction in cholesterol.

But she said she would be inclined to switch other patients off Lipitor onto generic Zocor, also called simvastatin, if the price difference was significant.

"There are a very large portion of patients where the data for simvastatin are equivalent and sometimes better than the data for Lipitor," Dr. Foody said.

But convincing American patients to give up a brand-name medicine and take a generic drug is not easy, said Albert Rauch, a drug industry analyst at A. G. Edwards, a regional brokerage firm based in St. Louis.

For example, even though the antacid Prilosec is available in an inexpensive over-the-counter form, people prefer three very similar but higher-priced prescription antacids - Prevacid, Nexium and Protonix. Those three will have $10 billion in United States sales this year.

"Therapeutic substitution - substituting one product for another in the same class - just hasn't happened yet," Mr. Rauch said.

And Lipitor has more than Pfizer's marketing dollars working for it. Last month, an analysis of 14 clinical trials by Oxford University and the University of Sydney in Australia found that the more potent the statin and the greater the cholesterol reduction, the lower the risk of
heart disease.

Dr. Colin Baigent, who oversaw the analysis, did not directly endorse Lipitor but said he believed that statins were not interchangeable.

"The aim should be to get their LDL cholesterol as low as possible," Dr. Baigent said, referring to low-density lipoprotein, or LDL, cholesterol - commonly called bad cholesterol. "There is potential for many patients benefiting more."

Statins work by interfering with the liver's ability to synthesize LDL cholesterol. All statins are chemically similar, although Lipitor, whose active ingredient is called atorvastatin, is more potent than Zocor, or simvastatin.

The highest dosage of Lipitor (80 milligrams) can reduce cholesterol as much as 57 percent in an average patient, while the highest dosage of simvastatin lowers cholesterol 47 percent. But because most patients are not placed on the highest dosages, the two drugs can achieve comparable cholesterol-lowering results in many cases.

Several large clinical trials have shown that statins reduce the risk of heart attacks and strokes. And statins appear to be safe for most patients, although they can cause muscle weakness in some people and occasionally lead to severe muscle damage.

As a result, statins have become among the most commonly prescribed drugs. This year's forecast of 150 million statin prescriptions in this country is up from 82 million in 1999, according to
IMS Health, a Pennsylvania company that compiles data about drug usage.

About half of those prescriptions will be for Lipitor, which is taken by 12 million Americans a year, at a cost of about $8 billion. Worldwide, Lipitor sales are forecast to top $12 billion this year, making the drug by far the best-selling prescription medicine.

Prescription drugs are protected by patents that give their inventors the exclusive right to sell them for up to 20 years, though they usually must spend part of that time gaining federal approval. The patent protection enables the drug maker that discovered the drug to earn back its development costs and make a profit. Otherwise, other companies could make and sell identical versions of the medicine, undercutting the company that invented it.

But when a patent expires, the legal protection disappears. At that point any company can make the drug, as long as it proves to the Food and Drug Administration that its version is identical to the original. The patent on Lipitor is to expire in 2011, but that patent has been challenged.

Zocor will lose its patent protection next June 23, and be opened to competition.
Ivax, a generic drug company, has already said it will produce a generic version of the drug, and other companies plan to follow. As more generics enter the market, the price of generic simvastatin could fall to 35 cents a pill or less, compared with $3 or more now, according to Richard T. Evans, a drug industry analyst at Sanford C. Bernstein & Company.

Merck will lose billions of dollars in annual sales and profits when Zocor loses its patent protection. To recoup its profits, Merck has introduced another anticholesterol drug, Vytorin, which combines Zocor with Zetia, a medicine from
Schering-Plough that is not a statin but also reduces cholesterol.

Vytorin is about as effective as Lipitor at lowering cholesterol, so both Merck and Pfizer have a stake in convincing doctors and insurers that they should pay extra for the increased potency their drugs offer over generic Zocor. But because Lipitor is so much more popular than Vytorin, Pfizer has more to lose than Merck and Schering-Plough if generic simvastatin becomes a standard treatment.

Last week, Express Scripts, a Missouri company that helps companies design drug benefit plans, said it would drop Lipitor from its list of preferred drugs. Instead, Express Scripts has devised a plan that will offer patients taking generic simvastatin a much lower co-payment on their prescriptions.

Steve Littlejohn, a spokesman for Express Scripts, said simvastatin was a viable alternative to Lipitor for most patients.

At its minimum 10-milligram dose, Lipitor reduces bad cholesterol an average of 39 percent. In contrast, a 40-milligram dose of simvastatin cuts cholesterol by as much as 41 percent. For patients who need a higher-potency statin, Vytorin will be available, Mr. Littlejohn said. Consumers and physicians and employers have seen the steady, almost inexorable rise in pharmacy costs, and said nothing can be done," Mr. Littlejohn said. "We're saying something can be done."

Other insurers also say the Zocor patent expiration is an opportunity to reduce drug spending. Robert Seidman, the chief pharmacy officer for WellPoint, the nation's largest publicly traded health insurer, estimated that wide use of simvastatin could reduce the nation's drug costs by $2 billion or more a year. To encourage patients to switch from Lipitor, WellPoint plans to offer members four to six months of free simvastatin as soon as generic versions are available, he said.

But Pfizer is fighting back. To demonstrate Lipitor's benefits in different kinds of patients, Pfizer has conducted 400 clinical trials on Lipitor, covering 80,000 people. Lipitor's edge over other statins goes beyond its superior ability to lower cholesterol, said Mr. Kelly.

The data from those clinical trials has enabled Pfizer to repeatedly broaden Lipitor's label of approved uses, changes that must be approved by the F.D.A. Last month, the F.D.A. said Pfizer could begin to market Lipitor for the prevention of heart attacks and strokes in
diabetics. To build brand loyalty, Pfizer also has thousands of sales representatives discussing Lipitor with doctors and spends at least $60 million annually to advertise Lipitor to consumers, according to Brandweek magazine. Pfizer declined to discuss how much it spends to market Lipitor.

Dr. David Hyman, professor of medicine at Baylor College of Medicine in Houston, said he did not expect many patients to be switched off Lipitor. He pointed to drugs that lower
blood pressure, where expensive branded medicines dominate cheaper generics despite extensive research showing the generics work as well. "So much of the market is really not price-responsive."

But other experts on drug benefits said they believed that generic simvastatin might put a dent in Lipitor's sales, because companies, government agencies and patients had become so concerned about drug costs.

"It's very likely that a large portion of the market, especially those covered by managed care organizations, will switch to generic Zocor," said Albert Wertheimer, a professor of pharmacy at Temple University. "It seems like a reasonable thing to try."

Friday, October 14, 2005

STRS to hold health care discussion meetings throughout the state; you are strongly urged to sign up: first come, first served

Health Care Discussion Meetings

From the STRS website:

STRS Ohio and the Health Care Advocates for STRS invite you to join us at one of the meetings listed below. At these meetings, we’ll be sharing a proposal for a possible legislative initiative that increases member and employer contributions to support the STRS Ohio Health Care Program for current and future retirees. We also want to share what we see happening to health care costs in the future — and what you should be preparing for in retirement.

Each Health Care Discussion meeting will begin at 7 p.m. and include a special half-hour presentation. Audience members will then be invited to ask questions and share comments. Meetings will end by 8:30 p.m. Everyone who attends a meeting will be given an opportunity to complete a survey.

Due to limited seating at each meeting site, advance registration is required and is on a first-come basis. Click here to register online for a Health Care Discussion meeting. You may also register for a meeting by calling STRS Ohio’s Member Services Center toll-free at 1-888-227-7877. A written confirmation of your registration will be sent to you, along with directions to the meeting location.

Listed below are the dates and locations for the meetings.

Health Care Discussion Meeting Dates

Tuesday, Oct. 25: Athens; The Ohio University Inn, 331 Richland Ave., Athens, OH 45701

Wednesday, Oct. 26: Columbus; STRS Ohio, 275 E. Broad St., Columbus, OH 43215

Thursday, Oct. 27: Cincinnati; Holiday Inn--Cincinnati Eastgate, 4501 Eastgate Blvd., Cincinnati, OH 45245

Thursday, Oct. 27: Portsmouth; Shawnee State University, 940 Second St., Portsmouth, OH 45662

Wednesday, Nov. 2: Cleveland; Quality Inn & Suites, Cleveland Airport, 7230 Engle Road, Middleburg Heights, OH 44130

Thursday, Nov. 3: Dayton; Holiday Inn--Dayton North, 2301 Wagoner-Ford Rd., Dayton, OH 45414

Tuesday, Nov. 8: Cincinnati; Five Seasons Country Club, 11790 Snider Rd., Cincinnati, OH 45249

Tuesday, Nov. 8: Toledo; Holiday Inn--French Quarter, 10630 Fremont Pike, Perrysburg, OH 43551

Wednesday, Nov. 9: Canton; Four Points by Sheraton, Canton, 4375 Metro Circle NW, Canton, OH 44720

Thursday, Nov. 10: Akron; Four Points by Sheraton, Akron West, 3150 Market Street, Akron, OH 44333

Tuesday, Nov. 15: Youngstown; Holiday Inn--Youngstown--South, 7410 South Ave., Boardman, OH 44512

Tuesday, Nov. 15: Lima; Holiday Inn, 1920 Roschman Ave., Lima, OH 45084

Thursday, Nov. 17: Cleveland; Holiday Inn--Beachwood, 3750 Orange Place, Beachwood, OH


Registration is on a first-come basis.
Click here to register online for a Health Care Discussion meeting. You may also register for a meeting by calling the Member Services Center toll-free at 1-888-227-7877.

The Health Care Discussion presentation is also available for viewing online.
Click here to see the online version.

Health Care Discussion Meetings Online Presentation
The online presentation for the Health Care Discussion meetings is still being developed. To be notified when the presentation is available, click the link below to send an e-mail to the Webmaster.

Notify me when the online presentation is available.

STRS: October Board meeting schedule

Public Meeting Notice for Oct. 19–21, 2005

The State Teachers Retirement Board and Committee meetings currently scheduled at the STRS Ohio offices, 275 East Broad Street, Columbus, Ohio 43215, are as follows:

Wednesday, Oct. 19, 2005

8:30 a.m. Disability Committee — Executive Session

3 p.m. Blue Ribbon Committee (A very brief meeting of the Blue Ribbon Committee is expected on Wed., Oct. 19, to discuss the final stages of the Asset/Liability Study.)

Thursday, Oct. 20, 2005

9 a.m. Retirement Board Meeting*

Friday, Oct. 21, 2005

9 a.m. Resumption of the Retirement Board Meeting*

* The Retirement Board is expected to receive reports from the Finance Department (Actuarial Valuation), Investment Department and Member Benefits Department (regarding health care) on Thursday. The public participation portion of the Board’s agenda is expected at 1 p.m. on Thursday. The Retirement Board meeting will resume at 9 a.m. on Friday, October 21, to address routine matters and receive a report from the Member Benefits Department regarding pension benefits.

Another labyrinth of hospital bills

"I'm the president's senior adviser on health information technology, and when I get an E.O.B. for my 4-year-old's care, I can't figure out what happened, or what I'm supposed to do," said Dr. David Brailer, National Coordinator for Health Information Technology, whose office is in the Department of Health and Human Services. "I can't figure out what care it was related to or who did what."

"Mr. Pollack and other health care experts said they believed that only a small percentage of people end up calling their insurance company to inquire about a claim or to dispute a decision. Still fewer call a hospital to go over a bill they believe might contain errors."

Insurance companies, hospitals, employers, and self funded retirement systems bank on this one- boy do they. John

The New York Times
October 13, 2005
Being a Patient

Treated for Illness, Then Lost in Labyrinth of Bills


When Bracha Klausner returned home after an extended hospital stay for a ruptured intestine three years ago, she found stacks of mail from doctors and hospitals waiting for her.

There were so many envelopes - some of them very thick - that at first, Mrs. Klausner, 77, could not bring herself to open them, and she stored them in large shopping bags in her Manhattan apartment.

When she finally did open some of the envelopes, there were pages filled with dozens of carefully detailed items, each accompanied by a service code: "Partial thrombo 2300214 102.00," "KUB Flat 2651040 466.00."

On the 15th page or so of each bill, a "balance forward" line listed amounts in the tens of thousands of dollars. One totaled $77,858.04.

Another mailing, from her insurance company, clearly said, in large type, "This is not a bill." But she could make no sense of the remark codes: "G7 - Your benefit is based on the difference between Medicare's allowable expense and the amount Medicare paid" or "QN - Your claim may have been separated for processing purposes."

Mrs. Klausner's experience is shared by millions of Americans who, frustrated and confused, find themselves devoting enormous amounts of time and energy to sorting out their medical bills.

Walk into any drugstore, and the next few minutes of your life are fairly predictable. After considering the choices, you make your purchases and head for the cashier. Seconds after the transaction, you are handed a receipt that reports to the penny what you paid for each product, along with its brand, its size, and the date, time and location of the purchase. But become a patient, and you enter a world of paperwork so surreal that it belongs in one of Kafka's tales of the triumph of faceless bureaucracies. And although some insurers and hospitals are trying to streamline and simplify bills, the efforts have been piecemeal.

Medical paperwork is a world of co-payments and co-insurers, deductibles, exclusions and contracted fees. Nothing is as it seems: patients receive statements that often do not reflect what is actually owed; telephone calls to customer service agents are at best time-consuming and at worst fruitless. The explanations of benefits that insurers send out - known as E.O.B.'s - are filled with unintelligible codes.

The system is so impenetrable that it mystifies even the most knowledgeable.

"I'm the president's senior adviser on health information technology, and when I get an E.O.B. for my 4-year-old's care, I can't figure out what happened, or what I'm supposed to do," said Dr. David Brailer, National Coordinator for Health Information Technology, whose office is in the Department of Health and Human Services. "I can't figure out what care it was related to or who did what."

Dr. Blackford Middleton, a professor at Harvard Medical School with special training in health services research, said he did not fare much better than Dr. Brailer.

"I understand the words of diagnoses and procedures," he said. "But codes? No. Or how things are paid or not paid? I don't understand that."

Dr. Brailer said he often used an analogy to describe the current state of medical billing.
"Suppose you walk into a restaurant," he said, "and you don't get a menu, you don't get any choice of what food you'll eat, they don't tell you what it is when they're serving it to you, they don't tell you what it's going to cost."

"Then, weeks or months later, you get a bill that tells you all the food you ate and the drinks you had, some of which you remember and some you don't, and although you get the bill, you still can't figure out what you really owe," Dr. Brailer said.

Some people make valiant efforts to sort through bills and claims, but end up throwing up their hands; others ignore them, until they are pursued by collection agencies; still others, basically healthy but weary at the prospect of a paperwork fusillade, stop going to the doctor altogether.

Piles Upon Piles

In the days before managed care, most insurance plans operated on a fee-for-service basis. Patients paid 20 percent of medical fees; insurers paid 80 percent. But as health care costs have continued to rise, many patients are being required to pay an ever-larger part of their medical bills, and deductibles continue to increase. And to keep the system churning, close to 30 cents of every dollar spent on health care goes for administration, much of it spent generating bills and explanations of benefits.

"The number of bureaucrats between the point of service and the final cash reckoning is just incredible," said Dr. Thomas Delbanco, a professor of primary care medicine at Harvard Medical School who is a leader in the field of patient-centered care.

For many people, the piles of paperwork they must contend with reinforce a simmering discontent with a system that aggravates tensions among patients, hospitals, doctors and insurers.

Insurance companies are, by and large, unapologetic.

"Even though the amount of paperwork a patient has to deal with might seem to be a lot, it would be much worse if there wasn't a unifying organization like a health plan easing that burden," said Dr. Alan Sokolow, chief medical officer at Empire Blue Cross Blue Shield in New York.

This might come as a surprise to Ellen Mayer, an artist who lives in Chester, N.Y. Ms. Mayer, 54, has a rare type of gastrointestinal
cancer that requires constant monitoring through blood work, CT scans and PET scans.

The paperwork nightmare started for Ms. Mayer when her oncologist switched hospitals. Everything suddenly seemed to need a justification, or a new piece of paper with an authorization.

The stacks of papers, folders and Post-It notes related to Ms. Mayer's treatment have started to take over her house. They fill manila envelopes, boxes and files, which fill closets. They spill from the dining room table onto chairs.

"You can't just be sick," she said. "You have to be sick and be drowning in paperwork."

So overwhelming has the paperwork grown that Ms. Mayer has considered giving up and ceasing all treatment because of the bureaucratic hassle that accompanies it.

"It's comical, it's unbelievable," she said. "And I think to myself, 'What if I was an elderly person, or a single person? What if I wasn't healthy enough to handle it?' "

Dr. Michael Mustille, associate executive director of the Permanente Federation in Oakland, Calif., said medical paperwork often delivered "a double psychological whammy."

"People get these things that look expensive that they can't understand," Dr. Mustille said, "and then there's the worry that the people they've paid for insurance may decline to assume responsibility for it."

In Mrs. Klausner's case, her son bought her an elaborate paper organizer, hoping it might help her face the chaos. She never used it.

Creditors began to call. Whenever a collection notice showed up, Mrs. Klausner panicked and wrote a check or reached for the telephone to call her son for help.

In the end, Medicare and United Healthcare paid most of Mrs. Klausner's bills, which added up to more than $150,000. And although the unwelcome mail has ceased, she cannot bring herself to throw out the bags filled mostly with unopened envelopes dating back to 2002, as if doing so might violate a law.

Dr. Middleton went through something similar with his elderly mother, Dugan Middleton, a former nurse who died of thyroid cancer last February at age 79.

Mrs. Middleton, who had lived alone in Palm Beach Gardens, Fla., preferred to handle the paperwork herself.

"It went on and on, with her reconciling her accounts with a lot of different doctors," Dr. Middleton said.

He said that his mother wrote check after check and that "I'm sure she was paying many of the same bills twice."

His medical credentials notwithstanding, Dr. Middleton was at a loss. "It was ridiculously complex," he recalled.

Finally, in the last months of his mother's life, Dr. Middleton hired a social worker who knew how to navigate the system to help with the bills.

How did things get this bad?

Most health care in the
United States is fragmented and profit-driven, a system in which everyone but the patient is meant to benefit financially.

"Fragmentation is a fact of life in health care, and people consider that to be one of the most fundamental problems," Dr. Brailer said. "We pay by the piece. Everybody gets paid individually to do something: to see a patient, to admit someone, to do a lab test, to do a prescription, so health care is swamped by detailed, line-item bills."

After an office visit, a physician sends a diagnostic code to the insurer, which then decides the level of payment. These codes differ from the codes the insurer uses in the E.O.B.'s it sends to patients to explain its decisions.

The billing codes used by hospitals are something else entirely.

"Each of them has their own system of paperwork, with their own billing codes," said Ron Pollack, executive director of Families USA, a health care advocacy group.

"Everyone is bogged down by this: the physicians, the hospitals, and ultimately it reverberates to the consumer," Mr. Pollack said. "And to the extent the consumer sees the bill, it's like reading hieroglyphics."

Mr. Pollack and other health care experts said they believed that only a small percentage of people end up calling their insurance company to inquire about a claim or to dispute a decision. Still fewer call a hospital to go over a bill they believe might contain errors.

The Navigator

In late 2003, Bonnie MacKellar's son Elias, then nearly 2, stopped eating. Then he stopped talking and walking. Elias had stage IV neuroblastoma, a highly malignant
tumor of the nervous system.

Though pushed to their emotional limits, Ms. MacKellar and her husband, Thomas Dube, refused to buckle until the bills started to appear in the mail each day: hospital bills amounting to tens of thousands of dollars; invoices from doctors she did not remember meeting; E.O.B.'s from her insurance company that explained nothing.

"It is hard to describe what it is like to be confronted with mounds of scary claims and bills when you have a 2-year-old who is extremely ill, who needs constant nursing and doesn't have a great chance of surviving," Ms. MacKellar said. "And to sit in a hospital room, on hold with the insurance company for 30 minutes or more only to have your child start puking just as you get a rep on the line."

The E.O.B.'s seemed to serve little purpose beyond engendering fear. They were detailed enough ("radiology services 2/19/04"), but when it came to understanding the boxes listing the amounts charged, the amounts not covered, the fees allowed, the available benefit and the remark code (IT, 29, and the ever-mysterious QN ), Ms. MacKellar and her husband were at a loss.

One statement that said, "Plan pays $00.00, patient pays $56,750.00," caused panic.

The remark code "07" stated, "These charges are for services provided after this patient's coverage was canceled."

There had been no cancellation of coverage, but convincing the insurance company of that fact was an ordeal.

The breaking point came when the group number on the health plan changed, and Ms. MacKellar was unable to convince the insurance company that it was billing under the wrong number.

In despair, she consulted a social services agency, which put her in touch with Lin Osborn, a private consultant fluent in the arcane language of health care billing. For a fee, Ms. MacKellar was told, Ms. Osborn could take all the paperwork off her hands.

An expert in deciphering insurance and hospital billing codes, Ms. Osborn spent several days straight working on the case and took care of the entire mess, Ms. MacKellar said.

Still Searching

Although there is no single solution to the medical billing morass, Dr. Brailer, of the Health and Human Services Department, said that the increasing use of electronic records to enable insurers, physicians, hospitals and pharmacies to share data would help.

And in some segments of the health care system, efforts are being made to simplify and cut down on paperwork. Some insurance carriers, for example, are reducing the number of E.O.B.'s they send out, posting them online instead.

For the past 18 months, Blue Cross Blue Shield of
North Carolina has been working to reduce the total amount of paper it sends out.

"When there's no remaining financial liability, then we don't send the E.O.B.'s," said Bob Greczyn, president of Blue Cross Blue Shield of North Carolina.

Blue Cross Blue Shield of
South Carolina is offering physicians an electronic card reader that lets patients find out how much they owe while they are still in the doctor's office.

In another effort to improve the system, the Patient Friendly Billing Project, led by the Healthcare Financial Management Association, is working with insurance companies on a long-term project to make bills more comprehensible.

Still, Dr. Brailer said that, on the whole, "there isn't a lot under way" in terms of efforts to fix the system.

Dr. Brailer pointed out that there had been frequent calls for a standardized insurance billing form, which would sharply reduce duplication and paperwork costs and "make patient management of these as simple as online checking."

But, he said, "this has not gone beyond the wishful-thinking level because the changeover would cost a lot."

Mitch Mayne, 38, is a marketing executive in San Francisco who considers himself basically healthy.

Mr. Mayne went to his doctor three times between March and June for the same thing: recurring

Yet the explanation of benefits statements he received from his insurer after each office visit differed drastically in the amount he owed, varying from $10.66 to $90, with no explanation of the services provided.

"What did I do on June 27 that was different than what I did on April 6 that was different than what I did on March 4?" Mr. Mayne asked.

When he calls for an explanation of the E.O.B.'s, he said, the most tangible result he sees is a new card in the mail with no indication of the amount he owes as a co-payment printed on the card.

"I'm paying through the nose for this premium, and when I go to the doctor it's a roll of the dice as to whether or not they'll pay it," said Mr. Mayne. "It seems like it depends on the mood of whoever happens to be doing the claim that day, or on the phases of the moon."

Mr. Mayne recently grew so fed up that he decided to try to beat the bronchitis on his own. "I can't deal with all this paperwork," he recalled saying. "It's just too much of a hassle." That turned out to be a mistake. Mr. Mayne became so sick that he finally relented and saw his doctor.

What if something truly catastrophic should happen to the state of his health?

"Oh wow, I hadn't even thought of that," Mr. Mayne said. "That's actually a pretty scary proposition. If I can't manage my health care as a healthy individual, the prospect of trying to manage it and be really sick at the same time - I don't know that I could do it."

Thursday, October 13, 2005

Will OEA also write the Actives' speeches for them & send a limo to pick them up? How about holding their hands, too, as they deliver their speeches?

OEA tries to tell actives about the current "affordable" hc that is offered to STRS retirees in this info that they offer active teachers! Gee, I can't see anything mentioned about spousal rates and affordability! Wonder why??? I also don't see any comparison to the rates that OPERS offers to their retirees. Wonder why? Once again, they attempt to sell a "half-truth" to their membership. Even at that, a "half-truth" is really "pushing the envelope." Click on the link below for a chuckle.

John, a Proud CORE member
(Text also printed below)



STRS and HCA launch member education, engagement campaign

This fall, the State Teachers Retirement System of Ohio (STRS) and the Health Care Advocates for STRS (HCA) will jointly host a series of meetings with contributing members, employers and retirees in the STRS pension system to discuss the future of STRS retiree health care. The education and engagement campaign is a component of the health care strategic plan adopted by the STRS Board in May.

The STRS and HCA plans were finalized at the September STRS Board meeting during which 17 OEA and OEA-R representatives spoke in support of the continuation of affordable STRS health care for current and future retirees, the need for a dedicated revenue stream to fund retiree health care benefits, and continuation of the 35-year formula established in SB 190.

“I am here to ask members of this new STRS Board to consider the huge impact a sound retirement plan with an affordable health care package will have in retaining younger teachers in our profession so that they can gain the expertise and vision necessary to spend their career with our children for the duration,” OEA member Maureen Reedy, a teacher in Upper Arlington and 2002 Ohio Teacher of the Year, told board members.

“Those of us in education for the long haul know that every day we are investing in our students’ lives and our society’s future by choosing to stay in the profession. We have always looked to our retirement as one of the long-term financial benefits in a career that does not have financial parity with other professionals with similar educational backgrounds,” Reedy explained.

“Teachers work every day to build our students’ knowledge and prepare them for a thinking, participatory role in a democratic society. We are here to ask the Board to continue its commitment to the democratic process of surveying active and retired members, their employers, health care advocates and professional organizations about possible solutions to the retiree health care problem.”

“STRS has a long history of serving teachers,” Mark Meuser, president of the Gahanna Jefferson Education Association, told the board members and audience. “It exists for the benefit of those members of society who have dedicated their lives to public education. I know that the STRS Board has several new members. I trust that these new members share with the experienced members not only a sense of duty to be fiscally responsible, but also an obligation to protect the interests of those for whom STRS was created.”

OEA-R member Len Codispoti said that he has watched as the STRS and HCA have struggled to find a solution to the problems of providing health care that maintains quality care and yet holds down costs. “I am proud of the health care that STRS has been able to provide to this point and wish to see it maintained. These benefits continue to require larger and larger portions of our resources and we must face the fact that action must be taken, now, to prevent us from running out of the resources needed to provide these benefits.”

I am here to ask members to consider the huge impact a sound retirement plan with an affordable health care package will have in retaining younger teachers so that they can gain the expertise and vision necessary to spend their career with our children for the duration. MAUREEN REEDY

In his testimony, Scott DiMauro, president of the Worthington Education Association and president of Central OEA/NEA, said, “Quality health care is not free. While many costs associated with our nation’s health care system seem to be spiraling out of control, there are measures that can be undertaken in the area of hospital and physician procurement, creative utilization of prescription drug formularies, and proactive measures to promote healthy lifestyles and wiser consumerism, that will help contain costs to the extent it is possible to do so.”

“Any solution to the health care challenge must involve long-term, sustainable strategies that involve both active and retired members sharing in both the costs and benefits of change,” DiMauro noted.

The STRS and HCA campaign speaks to the concerns raised by Association members through its primary goals:

1. To educate members about the economic realities of health care and explain that employees will need to plan for the increasing cost of health care.

2. To assess the level of support among members for a legislative proposal to create a dedicated revenue stream for retiree health care. This revenue stream would be funded by an increase in the employee and employer contribution to the retirement system.

The purpose of the engagement campaign is not only to share information about health care with STRS contributing members and retirees, but also to gather meaningful feedback regarding members’ thoughts about the future of the STRS health care benefit. The campaign will begin with presentations to leadership groups such as the OEA Executive Committee. Throughout October and November, regional presentations will be made across the state. Additionally, STRS will provide a presentation that members can view online and will distribute related printed materials.

“I am excited about the partnership between HCA and STRS to address the issue of health care,” says OEA Secretary-Treasurer Bill Leibensperger.

“We need to educate our shared constituencies about the economic realities of health care and we need to assess the level of support for creating the dedicated revenue stream that is needed. We need to gather feedback and generate broad consensus around a sound proposal for funding these benefits. This type of change will require a legislative change, so we will all need to be together and vocal in our advocacy. It’s a daunting task, but I continue to believe that as Ohio’s educators we can help shape the future."


Now it’s time for leaders and members from across the state to come forward and help the new STRS Board understand that these concerns really do represent everyone. Please plan to attend or send representatives to future STRS Board meetings to provide either testimony, or presence or both. OEA Vice President Pat Frost- Brooks ( and OEA Secretary-Treasurer Bill Leibensperger ( will help with the logistics of your participation and testimony development. Please email both officers to indicate your interest.

Following are the board meeting dates for the remainder of the 2005-2006 school year. Please try to attend the October, November and December meetings especially.

October 20 and 21

November 17 and 18
December 8 and 9
January 19 and 20
February 16 and 17
March 9 and 10
April 20 and 21
May 18 and 19
June 15 and 16

Public participation is held at 1 p.m. on the Thursday meeting day. Please make it a priority to ensure an OEA presence at each of these meetings.

(I can't help wondering about OEA's patronizing, paternalistic approach, when they offer "help with the logistics of your participation and testimony development" [euphemisms for "we will see that you get to Columbus" and "we will write your speech FOR you"?]. I have always regarded Ohio's teachers as highly intelligent, very well educated and articulate individuals, quite capable of thinking, writing and speaking for themselves [and also getting themselves to Columbus]. KB)

October 13: More viewpoints on public speaking at STRS Board meetings

From Board member Dr. Stephen Buser:

Dear Dennis and others:

I cannot speak for other Board members. Nevertheless, I assume that we all understand the significance of the opportunity for members to address the Board, and that we all want to work toward maintaining a viable structure. With respect to Chairman Brown's statement, I think he clearly deserves the benefit of any doubt at this point. Chairman Brown was asked to respond on a particular issue, and he did so by noting that the full Board will be able to explore permanent solutions at the February retreat. I do not interpret his willingness to respond as a desire to preempt the Board as a whole. Nor do I interpret his response as a decision to rule out temporary solutions to problems that might arise prior to the February retreat.

On the contrary, I am only aware of one prior instance in which a problem arose with the schedule of speakers. That occurred at the last meeting, and Chairman Brown took steps to address that issue to the benefit of members in general. Thus, while I confess that I do not as yet fully understand the nature of the current issue, I have every confidence that both Chairman Brown, and the Board as a whole, will continue to work in the best interests of members, even if that means adopting yet another stop gap measure pending our search for more permanent solutions.

For example, one advantage of the current system is that we have been alerted in advance to a potential problem with the schedule of speakers for next week's meeting. If indeed we are confronted with an unusually large number of requests from a single organization, I can imagine that the Board or the Chair might advise that organization that their voice could be heard more effectively, and perhaps with greater sympathy, if the organization were to appoint one, or perhaps two representatives to speak for the group as a whole in order to allow other speakers to address the Board as well. If such voluntary efforts fail, I can imagine that the Board would want to consider another temporary measure, as it did at the last meeting, and perhaps even reschedule the issue of speaker schedules for a meeting prior to February if needed.

In sum, pending evidence to the contrary, I continue to believe that both Chairman Brown and the Board as a whole will continue to act in the interest of members on this and other issues. We might not get every issue right every time. However, based on my limited observations to date, I think we have all earned respect for our continuing efforts on behalf of members.


P.S. Please note that I will be out of town until next Tuesday and will not have access to email. Thus, if anyone expects me to respond further on this or other issues, please do not interpret my silence as indifference.

From Board member Conni Ramser (written to Molly Janczyk):

Hi! Having finished parent conferences last night and being back in at my usual 6AM time, I may not make a bunch of sense. However, that said, I will try to be coherent.

The public speaks session, from my understanding, is to allow members to address the board with issues of interest/concern. I am not concerned with whether they are active, retired, or both.

What the individuals have to say is more of interest. I appreciate printed remarks, so that I can go back and more thoroughly reflect on the message at a later time. So for me, a letter is as valuable as a speech.

So, that's my 2 cents, for what it is worth.

Conni Ramser

From Molly Janczyk:

Thank you, Conni, But how do you feel about folks who wish to speak and possibly being shut out after driving hours to attend. All speakers need know they have equal opportunity.

From Jim Kimmel:

Ms Ramser:

It should also be of concern to you that more than one point of view be heard. If the OEA people (active or retired) use up all the allotted slots then CORE and others cannot have their say. A letter may be useful but it should be obvious that a letter or email read in the privacy of one's home or office cannot possibly have the impact that a speech made by an individual before the assembled STRS Board would have. A letter is private but a speech is there for all to hear. And it might be difficult to get a specific letter read by one of the board members at a board meeting, especially one that criticizes or asks probing questions that may need to be asked. During Mr. Dyer's regime HE opened board members' letters personally, even when not addressed to him. Not only was that a federal offense but one wonders how many letters ever even made it to the board members at all. While I doubt that is happening now the retirees would certainly feel more confident in future board decisions if it were clear that speech opportunities are not monopolized by the OEA,CORE, or any other single group. I really wonder if this is not a tactic of OEA (your neighbor across the street) to monopolize things and prevent CORE people from having their say. Please try to create a situation that is fair to all and expresses the retirees' true sentiments. For example, a recent series of OEA speakers said to the Board that the retirees were so glad "STRS has continued to provide 'affordable' health coverage." Do you REALLY believe that?

So we need more than one point of view, don't you think? CORE never tried to monopolize the Public Speaking time, as far as I can tell. How often did OEA and other groups like ORTA or others even ask to speak until recently? Perhaps some had other ways of communicating with past Board members that are no longer available. For CORE and individual retirees the public speech (3 minute limit) was the ONLY venue in which we could be sure board members could be reached. E-mails were returned, letters opened by Dyer, etc. Just be fair so all can be heard - including all points of view.

James O. Kimmel
Proud CORE Member
STRS Retiree

Open season on people with Medicare

From Suddenly Senior

ACT NOW: State Attorney Generals Must Step Forward to Protect Consumers


October 13, 2005 . Volume 5, Issue 41

It is open season on people with Medicare for companies chasing profit from the new Medicare drug benefit. The companies, large and small, have a key strategic goal as the marketing of hundreds of drug plans blankets the nation: market share.

As consumers struggle to decipher the complex benefit plans being sold by scores of profit-seeking companies, these companies are launching multimillion-dollar campaigns to sell their products. The companies-UnitedHealth, Aetna, Humana, Medco and many more-see billions of dollars of sales at stake.

Even truthful marketing by the companies will not educate consumers on what to do. Marketing, by its nature, emphasizes what will appeal to a prospective buyer. A plan with low premiums will trumpet the premium cost in its marketing; you will have to search hard to find any mention of corresponding excessive prescription copayments.

You will also have to look hard to find any mention of the plans' gaps in coverage-the infamous doughnut holes-in these companies' marketing materials. Wrongly, the federal government is allowing misleading promotional materials to invade the homes of 43 million Americans with Medicare.

Worse yet, the White House and the Centers for Medicare and Medicaid Services (CMS) are playing a role in misleading people with Medicare as well-sometimes by design, sometimes by human error.

The administration just spent millions of taxpayer dollars to distribute an insert in Parade magazine that ran in hundreds of Sunday newspapers across the country. The insert was supposed to describe, in an educational and fair manner, the standard Medicare drug benefit.

However-whoops-the CMS insert neglected to even mention the "doughnut hole"-the nearly $3,000 gap in coverage whereby people will keep paying plan premiums but will receive no assistance paying for their medicine. That is propaganda, not education.

And then there is the mailing of 43 million copies of CMS's annual handbook, Medicare & You. It also contained a huge error, but unlike the purposeful propaganda that has been issued by the administration, it seemed to be an honest error. Still, people will be hurt if they rely on the official advice that low-income people receiving the so-called Extra Help Program's subsidy can sign up for any Part D plan without paying unaffordable premiums.

CMS and other federal agencies should be in the vanguard of protecting people with Medicare from the misrepresentations and fraudulent conduct of the marketplace. Up to now, the Bush administration looks more like an aider and abettor, not a protector from the unscrupulous.

In the months ahead, commission-based insurance brokers will be driving the national campaign to enroll people in the competing drug plans: they will have every financial incentive to maximize enrollment in the plan they are selling. They will have little incentive to help consumers make good choices from the array of confusing benefit options.

CMS, in its zeal to make the Medicare drug market profitable to plan sponsors, left the door wide-open to telemarketing scams. Salespeople working for the insurers have been authorized by CMS to call people with Medicare at home from 8 a.m. to 9 p.m. Even AARP, itself a large sponsor of profitable drug plans, pleaded with the Bush administration to bar telemarketing.

Yes, it will be open season on a vulnerable and often bewildered market of older Americans and those with disabilities. But, hey, there's money to be made.

There will be many good people at CMS, far below the ideological zealotry zone that conceived the convoluted structure of the Medicare drug benefit, who will try to protect people with Medicare from harm. But to trust the political leadership in Washington to choose the people's interest over the commercial interests of the drug and insurance industries is to trust the fox to guard the hen house.

State attorney generals, Republicans and Democrats, must step up as guardians and enforcers of consumer protections. They must shield consumers from misleading promotions, whether in the form of government propaganda, prescription drug plan marketing abuses or outright fraudulent activity.

Click here ( to send a message to Oregon Attorney General Hardy Myers, the chair of the National Association of Attorneys General Consumer Protection Committee.

Medical Record

"With millions of seniors eligible for Medicare's new Prescription Drug Coverage Plan, you can bet the bad actors are waiting to pounce," said National Association of Attorneys General President Steve Carter, Attorney General of Indiana (" President's Message: Medicare Rollout Raises Concerns for Fraud Against Seniors ( ," National Association of Attorneys General, October 2005).

Telemarketing scams are estimated to cheat one out of six consumers every year, costing Americans $40 billion a year. And 80 percent of the time, Americans over 65 are the primary target of these crimes (" Corzine Introduces Legislation to Ban Medicare Rx Telemarketing ( ," Press Release from Office of Senator Jon S. Corzine, September 2005).

Private plan representatives are allowed to make unsolicited phone calls-"cold calls"-but plans must honor the National Do-Not-Call Registry and "do not call again" requests. Private plans are prohibited from making door-to-door sales calls or sending unsolicited e-mails (" Final Part D Marketing Guidelines ( ," Centers for Medicare and Medicaid Services, August 2005).

People with Medicare often make the decision to join Medicare HMOs based on direct sales approaches, advertisements and word-of-mouth, not on a careful comparison of the advantages and disadvantages of enrollment (" Medicare HMO Marketing in the Information Age ( ," Medicare Rights Center, January 1999).

Fast Relief: What You Can Do

Let everyone-your colleagues, friends, families-know how we can improve the Medicare prescription drug benefit for people with Medicare and American taxpayers. Help us build a national network of concerned citizens who want to create the Medicare prescription drug benefit Americans deserve.

Click here ( to help build a national campaign for a real Medicare prescription drug benefit!

(Note from KB: Here's the buzz I keep hearing: if you are an STRS retiree on Medicare, you should NOT sign up for Medicare Part D. The STRS plan is as good as, if not better than, Medicare D. Be sure you do your homework.)

PA-STRS/PERS figures: could this be STRS-Ohio?

The situation in Pennsylvania makes one wonder, if a similar situation is occurring at STRS and if this is the reason it is so difficult to get information of substance out of STRS.

Nancy Hamant


Forwarded Message:
Subj: PA-STRS/PERS figures don't lie, but ....? OR, Creative Bookkeeping 101 in the Keystone State?
Date: 10/13/2005 4:16:17 P.M. Eastern Standard Time
From: John Curry

Pa. pension data leave questions about returns

"By the end of last year, the funds had returned about $3 billion of the total investment, according to the retirement system's annual reports to pensioners and the General Assembly. More than 70 percent of the fund's private-equity and venture-capital managers - most of which were hired during the investment boom years of 1997 to 2001 - had yet to pay back the state's investment, let alone realize any profit."

"How does the teachers' retirement system - like other buyers and managers of alternative investments - report such positive numbers? They count not just the cash they actually collect, but also estimated profits from investments that have not yet been liquidated."

By Joseph N. DiStefano
Inquirer Staff Writer

As pension funds shift more assets to "alternative" investments that don't trade on stock or bond markets, it's getting harder to tell what they're really worth - or how big a subsidy they'll need to provide pensions to future retirees.

For example, take the Pennsylvania Public School Employees' Retirement System, which, at The Inquirer's request, has disclosed some of the performance data it uses in estimating its profits from nearly 100 private-equity and venture-capital funds.

The system has invested about one-tenth of its assets, or $5 billion, with private-equity and venture-capital firms in the last 10 years.

By the end of last year, the funds had returned about $3 billion of the total investment, according to the retirement system's annual reports to pensioners and the General Assembly. More than 70 percent of the fund's private-equity and venture-capital managers - most of which were hired during the investment boom years of 1997 to 2001 - had yet to pay back the state's investment, let alone realize any profit.

Yet the retirement system claims total annual returns from these investments of about 6 percent a year since 1999, 8 percent a year since 2001, and 21 percent in 2004 alone. That is roughly two to three times what the system's U.S. stock investments returned during those periods, and far above its U.S. stock benchmark, the Dow Jones Wilshire 5000 Index. New Jersey is also considering investing in private equity.

How does the teachers' retirement system - like other buyers and managers of alternative investments - report such positive numbers? They count not just the cash they actually collect, but also estimated profits from investments that have not yet been liquidated.

Because no one knows how much those investments in small and often unproven companies will earn, the system relies on estimates from the outside managers who make the investments; the managers calculate an "internal rate of return" based on their best guess of what the investments might be worth someday, using, for example, the values of publicly traded companies in similar industries.

The teachers' pension system is not as big a user of alternative investments as the Pennsylvania State Employees' Retirement System, which pays pensions to retired state workers. But the teachers' system is more open about the performance of dozens of managers it hires to handle the funds.

The teachers' system uses a combination of investment profits and subsidies from local school districts, state government, and deductions from teachers' paychecks to pay pensions to more than 150,000 retired school employees.

The more the retirement systems make from investments, the less they need in subsidies from state taxpayers. For the teachers' system, local school districts and property-tax-payers help foot the bill. That makes investment performance a matter of public concern as subsidy levels are calculated each year.

Though it relies on managers' estimates of the value of each alternative investment portfolio and uses them to calculate the portfolio's overall performance, the teachers' system does not disclose the underlying data in its yearly reports to pensioners and state legislators.

The system reports assets, payouts and fees, but not each manager's performance - let alone the names of the companies or properties in which alternative managers invest.

"We don't get many requests" for manager performance data from pension-fund members, and virtually none from legislators, said Evelyn Tatkovski, spokeswoman for the teachers' retirement system. She added that the system considers not only how profitable alternative investments may be, but also the benefits of "diversifying our investment portfolio" beyond stocks and bonds.

But the teachers' system has provided to The Inquirer an estimate of the value of its remaining investments for 78 of its 96 venture-capital and private-equity managers. For 18 others, the system would not provide the estimated value.

In most cases, those 18 investments date to 1999 or earlier, and managers have already sold most of their assets, Tatkovski said. Still, the teachers' system wants to keep the remaining value confidential because "release of this information would harm the partnerships by indirectly providing confidential information" on the "small number of properties [or] portfolio companies" remaining in each fund, she said.

Steve Lisson, publisher of the Texas-based private-equity newsletter, questioned the teachers' system's basis for not disclosing estimated values.

"By that point in a fund's life, the investments are mature and their valuations [are typically] well-known," Lisson said. "They are furiously trying to exit the investment, shopping it and its valuation to any greater fool with a pulse."

Lisson added, "Fund managers love to brag about returns in the good times, and then complain about confidentiality when they're not performing well."

Tatkovski said the teachers' retirement system kept that data secret partly because it believes that is a good policy, and partly because some investment managers ask it to do so.

Among the remaining estimated investment values that the system will not release, some are from funds that made money during the bull-market years of the 1990s. Edison Venture Partners, of Princeton, has returned more than $52 million from investments in 1991 and 1994 that totaled $25 million. TL Ventures, of Wayne, turned $60 million, invested in 1992 and 1997, into a total of $83 million in cash. The teachers' system will not say what either firm's remaining investments are worth.

Other investments whose current value the teachers' system will not disclose have so far been money-losers. The teachers put $56 million into investment firm Houlihan, Lokey, Howard & Zukin's Sunrise Investment Partnership in 1998, but had only $5 million to show for it at the end of last year. The system put $180 million into Deutsche European Partners IV in 1999, and was still $44 million short of showing a profit as of Dec. 31.

The teachers' system also provided estimates of the value of investments held by 25 real estate funds, withholding the information for certain funds managed by Lazard Freres Real Estate Investors and Whitehall Street Real Estate Funds.

The system says its overall real estate portfolio, which equals around 5 percent of its total assets (not counting real estate investment trusts, which trade on the stock market), has been more profitable than any other asset class in the last five years, returning an average of more than 12 percent, and rising to 25 percent in 2004.

Last year, the two systems paid a total of $386 million to more than 300 private firms that manage state investments. Of that total, $260 million was paid to managers of private equity, venture capital, real estate, hedge funds (at the state employees' system), and other alternative-investment managers, which accounted for less than one-third of the systems' combined investments.

Keeping Data Confidential

The Public School Employees' Retirement System and the State Employees' Retirement System support legislation that would confirm their power to suspend the state's Right to Know law for any money manager and allow them to withhold public access to information on billions of dollars of public investments. Here is what various bills would do:

House Bill 126 would allow the state employees' system to suppress "sensitive investment or financial information" on venture capital, private equity, hedge funds, and other alternative investments if the firms that manage those investments insist on confidentiality. It would also allow the retirement system to delay making data public if it believes it could cause "substantial competitive harm" to any money-management firm hired by the state, or if disclosure might "have an adverse impact on the value of an investment."

Senate Bill 592 would extend similar powers to the public school employees' system, as well as the state employees' system.

House Bill 546 would allow the public school employees' system to delay reporting investment data if "in the reasonable judgement of the board" disclosure could "have an adverse effect on the value" of the investment.

- Joseph N. DiStefano

Another message to STRS Board Chairman Brown on the issue of public speaking slots and equity for all

Dear Dr. Brown,

I am a retiree who lives in Columbus and have easy access to STRS Board meetings. I am also younger than many retirees, in excellent health and have no problem with driving, so getting to STRS is no problem for me, and I am there for many Board meetings.

However, there are many retirees who must drive great distances to get here from all parts of the state, many of them not in the best of health, and for whom today's gas prices may force them to make sacrifices to get here. Will they be told they may not get a chance to speak to the Board when they show up at a meeting?

Remember, your next door neighbor, OEA, has launched a campaign to get out their speakers, possibly in an effort to make up for their notable absence the past 2-1/2 years. This is fine; I'd like to hear what they have to say; hopefully, they will recognize and have some solutions to many of the problems facing STRS today. But I also believe we need a level playing field.

This is an issue that cannot wait until next February. Emergency measures must be put into place now. February may be too late for some of these people. If you have the power to delay the decisions on this issue until February, you also have the power to put a temporary solution in place until then. This needs to be resolved before October 20, less than two weeks away. Please -- do the right thing; find an equitable solution for all.

Thank you.
Kathie Bracy

Decoding Confusing Medical Bills

From the New York Times
October 13, 2005

Helping Patients Decode the Bill


The bureaucratic tangles and mysterious lingo of the health care industry make filling out income tax forms seem simple.

Far less well-known than the nation's professional tax preparers - but every bit as helpful - is a cottage industry of private consultants who take medical paperwork off patients' hands.

Lin Osborn, one such consultant, is part of a group of medical billing advocates scattered around the country who organize bills, comb through them for errors, negotiate with collection agencies and spend hours on the phone haggling with insurance companies on a client's behalf.

"People think they can do what I do on their own, and theoretically they should be able to," said Ms. Osborn, 56, who lives in Hastings-on-Hudson, N.Y., and holds a master's degree in health advocacy. "But when problems occur, people are absolutely clueless."

Some billing advocates charge a fixed percentage - typically a third of the amount they recover - while others charge an hourly rate of $100 to $200. For people who are healthy but want someone to keep track of their bills, some billing advocates charge a flat annual fee of $450 to $500.

Like many other specialists in billing, Ms. Osborn has an encyclopedic knowledge of the codes that govern how payments are made in the health care industry. She knows when to suspect that an item on a hospital bill has been coded incorrectly and how to word correspondence to get results.

The key, she said, is knowing which questions to ask.

Ms. Osborn and other advocates rely on printed guides and references, many of which are publicly available.

One is "The Medical Bill Survival Guide," by Pat Palmer, founder of Medical Billing Advocates of America (

Another is "Essentials of Managed Health Care," by Peter Kongstvedt.

Ms. Osborn says she also uses the Physicians' Desk Reference and "The Red Book: Pharmacy's Fundamental Reference" (Thomson), which contains a comprehensive listing of every medication sold in the United States, along with the dosages it comes in and the average wholesale prices.

Another reference recommended by Ms. Osborn is "Medical Abbreviations: 24,000 Conveniences at the Expense of Communications and Safety" by Neil M. Davis, which explains the shorthand that physicians and hospital staff enter on medical records.

A software program called Encoder Pro, published by Ingenix, costs $900 and allows the user to cross-check billing codes. For instance, a broken foot might get miscoded as a sprain, and the software can catch the mistake.

Ms. Osborn has been in business for more than seven years, and although she is an expert in the field of medical billing, she still finds herself stumped on occasion. "There's a bunch of us who talk to each other every other day with a new problem," she said. "We exchange information all the time because not everyone has seen everything."

One answer re: signing up for Medicare D, then later returning to STRS plan

Subject: RE: Question re: Medicare D
Date: 10/13/2005 8:36 A.M. Eastern Standard Time
From: Gary Russell

Dear Ms. Bracy

Under current rules, to come back in to the STRS Ohio Health Care Plan, you must be terminating medical and drug coverage. If you are not terminating coverage there is a six month waiting period. Each Medicare D plan that is offered may have its own restrictions or requirements for terminating that plan so you will want to find out what those restrictions or requirements are before enrolling. STRS Ohio doesn't have any restrictions that are unique to the member coming from a Medicare D plan. However, this would only cover the drug side, you would also have to be terminating the medical plan that you enrolled in.

I hope this helps,
Gary Russell
Director, Member Services

From: Kathie Bracy

Sent: Wednesday, October 12, 2005 4:40 PM
To: Gary Russell
Subject: Question re: Medicare D

Gary --

If a retiree signs up for Medicare D and decides later they want to return to the STRS plan, will they be allowed to do so?

Thank you --
Kathie Bracy

Too many public speakers at STRS Board meetings? A dialogue ensues with Chairman Brown

From: Dennis Leone
Subject: Re: Public participation
Date: Wed, 12 Oct 2005 21:18:35 -0400

Bob -- if an 80-year-old retiree drives 3 1/2 hours from Ashtabula on the morning of October 20 to address the STRS Board, I don't want said person to be told that he/she cannot speak because of a policy we have or because someone else came in the building at 8:30 a.m. and signed up 20 speakers. I do not think it is reasonable for said person to leave his/her home at 4:30 a.m. or 5:00 a.m. so he/she can be first in line to sign up.

I agree with you that this topic -- and the matter of what constitutes free speech during the public participation portion of the meeting -- are great topics for the February retreat. I don't feel that it will be the end of the world if we allow, as we did in September, people to speak.....since we know this matter will be considered further. I really don't think this needs to become an unpleasant issue at the October 20 meeting. In fact, there are some people (Gary Allen and Bill Leibensperger) that I'd like to invite to the next meeting because I have some questions I'd like to ask them.

A new State Representative (Dan Bubp from Winchester) wrote me the other day and said he is planning on attending the November 17 STRS Board meeting. Should I tell him that he may not be able to address the Board if he wishes to?

Dennis Leone

From: Molly Janczyk Sent: Wednesday, October 12, 2005 6:21 PM

Subject: Brown gives ineffective response;CALL ON BOARD TO INTEREVENE on Public Speak

This is not an acceptable response seeking a fair and equitable solution for ALL. I feel this is an not a impartial decision and reflects bias. There are 4-5 board meetings before Feb retreat and it needs to be addressed now. I call on other board members for input. OEA is next door, has offered to nearly write speeches FOR membership and have many in and around Cols.! Retirees come from all over the state representing their RTA's and wish to address the board. I would assume OFT may wish to do so as well with 2 new board members. We need assured THAT ALL WILL BE GIVEN FAIR AND EQUAL OPPORTUNITY!


We don't put off critical issues which interfere with public rights.

What an insensitive reponse to anyone wishing to speak BUT OEA ACTIVES!

Molly Janczyk

From: Robert Brown Subject: Public participation
Date: Wed, 12 Oct 2005 17:41:00 -0400

Dear Molly,

I, too, was caught off-guard when I saw the speakers' sign-up list at the STRS board meeting in September. I decided at that time to make a one-time exception to our standing board policy on public participation.

The public participation policy is included when the board conducts its annual review of all its policies. This review will occur at the February retreat. Before then I expect that STRS members, STRS staff, STRS board members, and others with an interest in this will put forth their best well-thought-out arguments for their positions. Any legal opinions that the board's public participation rule does not pass constitutional muster can be considered as well by the board at the February retreat.

Sincerely yours,

Bob Brown

Wednesday, October 12, 2005

Drug cost comparisons between Caremark and Costco: John Curry enlightens STRS

Sent: Wednesday, October 12, 2005 1:27 PM
Subject: Drug Cost Comparison between Caremark and Costco. All 90 supply.

Damon and Gary:

The study below was compiled by an STRS retiree who called this to my attention. This is an "apples to apples" comparison between Caremark's "stated price" (as furnished with these prescriptions) on his/her packing slip they received from STRS/Caremark's mail-in Rx service and Costco's retail price(as posted on the internet) to anyone off the street who simply "walks in the door" at Costco and purchases the below mentioned Rx. There is a very significant price differential and in many cases, Costco is radically lower in price on some of these Rx's. In some instances below, it would benefit the STRS retiree to simply ingore the Caremark "mail-in" service and to simply walk in the door at Costco to purchase these particular medicines. Either Caremark is doing some "creative bookkeeping" with their stated retail price or someone is getting "taken to the cleaners." It would benefit an STRS retiree to purchase Fluoxetine at Costco at $13.68 vs. paying the $30 generic Caremark "mail-in" price. They would save $16.32 on this 90 day Rx alone! Similar savings could be found also by the purchase of Atenol and possibly some of the other Rx listed below. All of these Rx's below are used daily by this retiree and/or his/her spouse. Are STRS retirees (and STRS for that matter) really getting the best "bang for their buck" from Caremark? John Curry, a Proud STRS member

Subject: Drug Cost Comparison between Caremark and Costco. All 90 supply.

(Note: since the chart would not format correctly for this Blog, please keep in mind that the first figure after each drug name represents the Caremark price; the second, Costco. KB)

Fluoxetine 20 MG: $100.85; $13.68

Avalide 12.5 MG: $148.63; $197.29

Atenol 50 MG: $ 63.07; $7.19

Digitek .25 MG: $8.16; $10.19

Pravachol 40 MG: $350.36, $419.27

Sotalol 80 MG: $387.41; $281.77

Fosamax 70MG: $183.20; $197.99

Welchol 625MG: $405.27; $92.39

Total Retail: $1,646.95; $1,219.77

I could not find the Caremark record for Coumadin.


AdvancePCS and "trade secrets": comments from some STRS retiree court observers

Dennis and Nancy,

I too was in court with the two of you last year and I agree Jim Petro's attorney did little to nothing to help our plight with AdvancedPCS.

I remember STRS taking no action on the Charter Schools that had not paid their employer and employee contribution and went out of business and STRS did nothing. I believe I read that Steve Mitchell got credit for a change that the employer contribution is now taken at the State Department of Education level. I disagree with that statement as Richard Stearns and I both testified on separate occasions in front of the Senate Education Committee for that change to be made. Never did I see STRS at the Senate testifying for these deductions to be made. I also activated the members of ORTA to write letters after I had done the math on the unpaid contributions which were published in an ORTA Quarterly. I did the documentation after going through hours of Auditor Petro's audits found on the web.

I ask you where is STRS in leading the charge on these matters? Where are our governments officials in due diligence?

Cathy Burner

Nancy, I agree with what you have written. I recall sitting there with you a year ago in court listening to the lawyer representing AdvancePCS argue that the rebate information was a "trade secret" and I also recall the lawyer representing STRS (from Jim Petro's office) not objecting to that argument. This bothers me today, given the New York decision about AdvancePCS being involved in kickbacks and withholding rebates from their customers. STRS, in my opinion, should have been arguing for full and open disclosure by AdvancePCS.

Dennis Leone


Sent: Tuesday, October 11, 2005 10:45 AM
Subject: Fwd: Multiple employers FORCE more transparency from the PBM's

Dr. Asbury and Ms. Knoesel:

An article about 52 businesses that are fighting for more of a PBM's rebates and for greater truth and disclosure from PBMs follows. STRS must fight actively for such disclosure and greater discounts to protect the Health Care Stabilization funds for current and future STRS members. AdvancePCS's (Caremark) argument that to divulge such is a "trade secret" is nonsense to protect Caremark's profit and such secrecy does not promote competition--in fact it prohibits open competition based on the facts of the drug company discounts (rebates).

Nancy B. Hamant, Legislative Chair
Warren County RTA

Tuesday, October 11, 2005

Confused about Medicare Part D? Read Al Rhonemus' advice to Brown County RTA members

Notes about Social Security

At the Brown County Fair I spent some time with our representative from the Social Security office in Batavia. He gave me the following points to follow as STRS Retirees as the newly published Medicare D is unfolding:

Keep on file ALL correspondence on Medicare D whether for or against.

Some letters will be received that are not from the Social Security office but they make you think that they are.

Do not sign anything because when you once leave the STRS plan – insurance and prescriptions, you cannot return to your original plan. (Note: this statement is being checked for accuracy. KB) (A response from Gary Russell of STRS, 10/13/05: Under current rules, to come back in to the STRS Ohio Health Care Plan, you must be terminating medical and drug coverage. If you are not terminating coverage there is a six month waiting period. Each Medicare D plan that is offered may have its own restrictions or requirements for terminating that plan so you will want to find out what those restrictions or requirements are before enrolling. STRS Ohio doesn't have any restrictions that are unique to the member coming from a Medicare D plan. However, this would only cover the drug side, you would also have to be terminating the medical plan that you enrolled in.)

If you are on Medical Mutual or Aetna, your prescription costs will probably be less than through the new uncertain Medicare D plan.

Be alert. Don’t sign anything until you check with your STRS plan.

SS Office number in Batavia, Ohio - 513-732-0396

SS Office in Maysville, Ky. - 606-759-0090

National Number - 800-772-1213

The following STRS number. - 1-888-227-7877

Ask for Sandra L. Knoesel, Membership Benefits

Do Not give social security number to anyone except the real Social Security office and/or the STRS if requested!

Al Rhonemus, treasurer

Larry KehresMount Union Collge
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