Thursday, November 29, 2007

My Recent Adventure In Health Care Land.

I had a colonoscopy about two months ago. If you are over age 50, you should have one too.

Happily for all of us, that’s not what this is about. There will be no further mention of my colon in this post.

The procedure is routine. Mine was performed at a hospital here in Chicago, by a gastroenterologist who happens to be the Gastroenterology Section Chief at that hospital. He was recommended by my internist. It was out-patient, in and out in a few hours. Everything was normal. Routine, routine, routine.

My health insurance is with Blue Cross Blue Shield of Illinois (BCBSIL). As I am self-employed, it is an individual policy. I’ve had it for about 20 years, ever since I came to Chicago. It is a Preferred Provider Organization (PPO) plan so I can see any doctor, but I have to use in-network hospitals. There is a deductible and, after that, it pays at least 80 percent of covered charges.

For purposes of this post, that’s enough detail. The coverage is pretty standard, nothing exotic, and it’s not cheap.

My plan does not, as some do, require advance approval for this type of procedure, but I called BCBSIL anyway to make sure everything was covered. They assured me it was.

I’m a pretty healthy guy, but I’ve had enough medical care of various kinds over the years to know the drill with billing and insurance. Everybody gets your insurance information and sends their bills first to the insurance company, which pays the amount it believes it owes. Then the providers come after you for the rest. You expect to receive separate bills from the doctor and hospital, maybe another one for outside lab services, and maybe one or more from other practitioners, such as a pathologist or anesthesiologist.

When the bills start to come, the easiest way to process them is to take the Explanation of Benefits (EOB) reports from the insurance company and match them up with the provider invoices. You should have an EOB for each bill and all of the numbers should agree, including the number you care most about, the amount you owe.

This is my first gripe. When I take my Buick in for repairs, I don’t get separate bills from the mechanic, garage, and parts department. If the work is covered by warranty, I don’t get another envelope full of paperwork about that. I get one bill and it says, “here’s what we did, here’s how much you owe us.” There is no real reason health care can’t be just as straightforward.

But it isn’t.

Although everything should have been routine, in the case of my recent procedure there was a billing problem. BCBSIL disallowed almost $1,500 in lab charges that the EOB labeled “routine lab services.” I immediately called BCBSIL and the representative explained that “routine lab services” are not covered by my policy. I countered that the lab services were not “routine” but were a necessary part of a covered procedure. She agreed that what I described sounded like something which should have been coded as “medical lab” or “surgical pathology,” not “routine lab services,” but at any rate they could not change the coding. That would have to be done by the provider who submitted the charges.

Gripe number two. I maintain that “customer service” in most businesses means “solve the customer’s problem,” but that’s not what it means in the health care business. The ball was back in my court.

So I called the hospital. Their representative agreed that it sounded like a coding error. She conferred with the hospital’s coding department and everyone seemed to agree that pathology services rendered as part of this procedure should not be considered “routine lab services” by anyone.

The coding department’s suggestion, forwarded to me by the hospital’s customer service representative, was that I ask my physician to fax his orders from the procedure to the coding department. Presumably, this would allow them to recode the charges and resubmit them to BCBSIL.

Once again, an opportunity for a customer service department to provide actual customer service was missed.

Gripe number three. The system seems designed so that everyone can say, “it’s not my job, it’s not my fault,” and pass the buck.

I spoke with my physician, explained the situation, and told him the proposed solution. He stated that he understood the problem and would contact the hospital to resolve it. After our initial conversation, he called me back two more times just to let me know he was still working on it, and finally, about two weeks later, to say that it was resolved.

It was a coding error, as everyone knew it would be. It got fixed but the person who fixed it wasn’t a customer service representative, it was a board-certified gastroenterologist with 25-years of practice experience, who had to spend his valuable time resolving a coding error. Gripe number four, in the health care industry, everything will be done in the most expensive way possible.

My story is as common as it is tedious. The needless complexity of health care billing adds tremendously to the already absurdly high cost of health care here in America. Liberals seem to think a government-run plan of some sort is the solution, while Conservatives are entirely focused on thwarting the Liberals.

While I share their distrust of government programs, I don’t see how we can accept the status quo either. The free market has worked its magic in terms of providing quality, but the cost is breaking our backs. It’s not that great health care isn’t worth paying for, it’s that we can see exactly where all the waste is, but no one can seem to root it out. For individual consumers, when even the simplest problem occurs, it takes a task force to solve it.

I have some professional experience in the health benefits field and know a lot more about it than the average person does, so I probably handled the situation as efficiently as it could have been handled. I still had to make several telephone calls, wait for call-backs, sit on hold for extended periods of time, and do other time-consuming tasks. At least two different customer service representatives spent some time on it, as did the physician, and who knows who else. The hospital has a customer service department, a billing department, and a coding department, but they couldn’t fix it without the physician getting involved too. All of that “service” had to be paid for out of the proceeds of that procedure. I wonder how much it would really cost, with all due safeguards, but without all of the “extras,” such as layers of billing complexity, the indigent care “tax,” the cost of excessive liability insurance, and everything else that gets larded into the cost of basic health care.

Everyone agrees that the system is broken but all proposed solutions have so far eluded consensus.

As important as health care is, and as good as the product itself is, the system through which it is delivered is ridiculous. The best symbol of its absurdity is the fact that critical therapeutic information is still communicated from one highly-trained and highly-compensated practitioner to another solely through scribbles on scraps of paper, physically carried from one practitioner to the other by the patient. Only now is the system starting to figure out how to get prescriptions from doctors to pharmacists electronically, and that’s only happening because the Federal Government mandated it as part of the Medicare Part D program.

As usual, politicians are talking about all of the wrong things. It’s not about getting coverage for the uninsured. It’s about reforming, from top to bottom, all of the non-medical parts of a badly broken system so people can afford the care they need.

Tuesday, November 27, 2007

Lying for a Worthy Cause.

Every time this comes up, I get worked up about it all over again. Today I received a constituent newsletter from my State Representative, Mr. Greg Harris. One of the things he is bragging about is legislation he sponsored "to ban the promotion, marketing and advertising of alcoholic beverages to children."

To me, that phrase is like waving a red cloth in front of a bull. So, of course, I sent Rep. Harris a stern letter of complaint, as follows:

Dear Representative Harris:

Although alcohol abuse is a serious social problem, and preventing children from obtaining and consuming alcohol is a worthy cause, I am disappointed to see that you support a phony solution. I know Senate Bill 1625 is now law, but I wanted to let you know my opinions on this matter anyway, as I expressed them to Senator Ronen when this legislation was introduced back in January.

It always bothers me when well-meaning people lie in support of a genuinely worthy cause, especially when kids are involved, but that is what the Illinois Alcoholism and Drug Dependence Association (IADDA), and now The State of Illinois, has done with this legislation to supposedly “ban(s) the promotion, marketing and advertising of alcoholic beverages to children.”

Lying to kids, even when it is for their own good, almost never works out the way we want it to. Let there be no doubt that I consider keeping kids away from psychoactive drugs of all kinds, including cigarettes and alcohol, to be desirable. But teaching kids to tell the truth is worthwhile too and we do kids no favors by lying to them. When they find out that we have lied to them about something like this (and they always find out), why should they believe us when we tell them about all the real harm the misuse of psychoactive substances can cause?

When this legislation was introduced, IADDA spokesperson Allen Sandusky accused beverage makers of targeting youth media with ads for so-called "alcopops" such as Bacardi Silver, Smirnoff Ice and Mike's Hard Lemonade.

"This is just like Joe Camel cigarettes that were advertised to kids years ago," said Sandusky. Senator Ronen made almost the identical statement at her subsequent press conference announcing the introduction of SB 1625.

They are the same, in that anti-tobacco crusaders lied about Joe Camel and now anti-alcohol crusaders are lying about “alcopops.”

The truth is as follows.

Advertising that used the character dubbed "Joe Camel" was deemed to be directed at children solely because the character was illustrated. Illustrations, especially those that can be characterized as cartoons, appeal to children, ergo Joe Camel was being used to advertise cigarettes to children. It became an article of faith among anti-smoking crusaders, then came to be treated as a statement of fact. There was never one iota of evidence presented that Joe Camel was intended to influence children or ever used in such a way as to reach children. The charge was based solely on the assumption that Joe Camel must be targeted at children because he is a cartoon character.

Likewise, "alcopop" is a term of derision coined by anti-alcohol crusaders. It is meant to describe flavored malt beverages such as the brands mentioned. These products start out as beer but are processed in a way that removes the characteristic flavor and color of beer, which is then replaced by other flavorings and sweeteners. The flavoring is usually some kind of citrus fruit, such as lemon, lime or orange. Consequently, they taste like a soft drink (e.g., 7Up) but contain alcohol, about the same amount as beer. These products have been around for many years – the Coors product Zima was the prototype. They have become more prominent recently, but have not been the success many in the beverage industry expected.

These products are deemed by their critics to be directed at children solely because they taste good, and taste similar to soda pop. However, these products also appeal to a great many legal age drinkers who want to consume a beverage alcohol product but don’t like the characteristic taste of beer. Functionally, these products are little different from a mixed drink that combines a neutral spirit, such as vodka or white rum, with a soft drink such as 7Up. The fact that most of these products bear the names of well-known distilled spirits brands is further evidence that they are not trying to pretend they are anything other than alcoholic beverages intended for legal age adults.

The beverage industry has never called them “pop” or used any terminology that would lead anyone to compare these products to soft drinks. The anti-alcohol crusaders have done all of that.

Two additional facts of relevance. First, most beverage alcohol advertising is directed at young adults, as is most advertising for automobiles, music, electronics, clothing, health and beauty aids, and a wide range of other consumer products. Young adults are attractive to advertisers because they are still forming their brand preferences. This is Marketing 101. Also fundamental is that there is no way to create advertising that will appeal to persons of legal age but won't appeal to anyone younger than legal age. There is not some kind of switch that is thrown at age 18 or 21. Kids, especially older kids, like many of the same things young adults like. It is not possible to effectively advertise to persons at the low end of the legal age scale without some of that advertising reaching individuals at the high end of non-legal age.

All of this is common sense that anyone short of a blinkered fanatic should be able to accept. It is why most claims that certain products or ads are nefariously "directed at children" are, at best, an unfounded personal opinion and, at worst, a deliberate falsehood.

The second fact is this. There is one objective way to determine if advertising is "directed at children," and that is by examining the medium in which it is run and determining who views or hears that medium. The standard followed by the beverage alcohol industry (similar to that followed by the tobacco industry before cigarette advertising was effectively banned) is that advertising for those products is placed only in magazines, on television shows, or on radio shows where at least 70 percent of the audience is expected to be adults. The Federal Trade Commission has consistently found that the beverage alcohol industry adheres to those guidelines and, therefore, does not market to underage consumers.

I am aware that SB 1625 primarily targets outdoor advertising, not the specific media mentioned above, but it still is fundamentally dishonest and a disservice to the very people it is meant to protect. With a little bit of honest examination, I think you can see that SB 1625 and the noise surrounding it has been simple demagoguery, wholly empty and phony. The law is so vague that it probably is unenforceable and it will not do anything remotely like what you and its other supporters say it will do to “help prevent alcohol abuse.”

I am very disappointed to see my state representative associated with such a sorry piece of work. I continue to expect better.

Charles K. Cowdery

Blogger Is Better.

On August 18, I started this blog on Blogger. I already had a blog, that I had been doing since 2005, that was a plain black-type-on-white-background design, very simple. Since August I have been posting everything to both places. I said then that it was an experiment to determine if it is "better on Blogger." I have come to the conclusion that it is. Therefore, from now on, new posts will be made here only.

Up until today, the "My Blog" link on my home page pointed to the original version. It now points here.

For posts made prior to August 18 go here. For 2006 posts go here. For 2005 posts go here.

More Kentucky Brandy

A correction to my Kentucky Brandy post: Brown-Forman owns neither Korbel brandy nor Korbel Champagne. Korbel Vineyards is privately owned by a guy named Gary Heck. Brown-Forman handles sales and marketing for the California Champagne line. It used to market and sell the brandy too, but turned that business back to Heck a few years ago. Brown-Forman has no relationship to Korbel Brandy except they sell them used Jack Daniel’s barrels for their aging.

According to Korbel Brandy's web site, "a new barrel is simply too strong in the harsher oak characteristics." It also says they char the barrels. This, however, may be a misstatement. The barrels are charred, of course, by the manufacturer before the Jack Daniel's goes in. Does Korbel char them again? I doubt it.

So, all of the top four U.S.-made brandies are distilled in California from California grapes. Korbel and E&J are aged in California, Korbel in used Jack Daniel's barrels. Paul Masson and Christian Brothers are aged in Kentucky in used bourbon barrels. Paul Masson and Christian Brothers also are bottled in Kentucky.

This business, the partial production of domestic brandy (the aging and bottling part), is in Kentucky providing jobs and tax revenue because bourbon whiskey production is located there. So, whiskey production doesn't just provide the whiskey-making jobs and revenues, it also brings other business to Kentucky, business that could be anywhere.

Thursday, November 22, 2007

Kentucky Brandy

In the 1980s, as the rye business was drying up and all of the rye whiskey distilleries in Pennsylvania and Maryland were closing, what little remaining rye whiskey production there was shifted to Kentucky. The Kentucky distilleries had always made rye whiskey, but when the last of the Maryland and Pennsylvania concerns closed down, only Kentucky remained. Although venerable brand names like Old Overholt, Pikesville, Rittenhouse and Mount Vernon continued to be sold, the whiskey was coming from Kentucky.

Now the same thing is happening with brandy.

Well, not exactly the same thing.

Brown-Forman has long owned Korbel. Heaven Hill owns Christian Brothers and Barton owns Paul Masson. Of the four best-selling U.S.-made brandies only one, Gallo's E&J, is not closely linked to a bourbon producer. All four companies use California grapes and the distilleries are there too. Gallo and Korbel also do their aging there, Korbel in used Jack Daniel's barrels.

Heaven Hill and Barton both ship their new-make brandy to Kentucky, enter it in used bourbon barrels there, and age it in their Kentucky warehouses. Both use warehouse locations for brandy that they prefer not to use for bourbon, specifically the lower floors of Barton's warehouses, and Heaven Hill's brick warehouses in Louisville. Most of the brandy is bottled and sold after two years of aging.

Friday, November 16, 2007

Jack Daniel’s Is the Best-Selling Whiskey in the World.

Ponder that statement for a moment.

Jack Daniel’s is the best-selling whiskey in the world.

Look for the qualifier that isn't there.


I'm not sure exactly when it happened, but not long ago Jack Daniel's surpassed Johnnie Walker as the best-selling whiskey in the world.

To all of the people who think whiskey means scotch I say, Jack Daniel’s is the best-selling whiskey in the world.

To all of the people who say whiskey should be spelled without an "e" I say, Jack Daniel’s is the best-selling whiskey in the world.

To all of the people who think all American whiskey is bourbon I say, Jack Daniel’s is the best-selling whiskey in the world.

To all of the people who think American whiskey will always be second fiddle to scotch whiskey I say, Jack Daniel’s is the best-selling whiskey in the world.

I'm not saying Jack Daniel's is the best whiskey in the world, I'm not saying it is the model for what whiskey should be, I'm not saying everybody else should be like Jack Daniel's. I'm just saying this. Everybody in business is in business to succeed and Jack Daniel’s is the best-selling whiskey in the world.

Tuesday, November 13, 2007

Heaven Hill Releases 23-year-old Rittenhouse Rye

For those of you who like really old, really expensive whiskey, this is the sort of thing you will like.

Heaven Hill is releasing a 23-year-old, 50% ABV, not chill filtered, single barrel, Kentucky straight rye whiskey, called Rittenhouse Very Rare.

Last year, under the same name, Heaven Hill brought out a 21-year-old.

The 21-year-old went for $150. It sold out (at wholesale, there is still some in stores). The 23-year-old is shooting for $170.

It is shipping now, on allocation to major U.S. metro markets. Also to Eaux-De-Vie in the UK and La Maison du Whisky in France.

The package, a tall gold-printed bottle in a delicate balsa wood box, is almost identical to last year's.

The whiskey is from the same batch of rye, made in October of 1984, as last year's release. When the 21-year-old came out it was just a little shy of its 22nd birthday. They waited a little longer with these, so they're just barely 23.

All of them (both sets) were aged on the lowest floors of rickhouse OO. (That's "Oh! Oh!")

The 21-year-old release was of 32 barrels. The 23-year-old is just 25 barrels. It is single-barrel, so each bottling could be slightly different. It's fun to tell what bottle you have. I have bottle number 70 from barrel number eight.

Like the 21-year-old, the 23-year-old is 50% ABV and not chill-filtered.

They aren't saying if they have any more barrels still aging from that 1984 batch. Will there be a Rittenhouse 25? I have been told there is other old rye in the pipeline. You never know with Heaven Hill. They're a very nimble company that can spot an opportunity and move quickly to take advantage of it.

Monday, November 12, 2007

Beam Sells Wines to Barton

Although it just finished changing its corporate name to Beam Global Spirits and Wine (its new web site just debuted last week), another new name is coming since the "and wine" part is going away, sold to Constellation (parent company of Barton) for $885 million. Beam is getting out of wine to concentrate on spirits, while Constellation, already the world's biggest wine maker, is now bigger. The sale was announced this morning.

Beam makes bourbons Jim Beam, Knob Creek and Maker's Mark. Barton makes bourbons Ridegmont Reserve 1792, Ten High and Very Old Barton.