The Los Angeles Times
delivers the inside story of David Axene, a California actuary who, working from home and a hospital bed, unwound the mistaken math behind Anthem Blue Cross's request to raise rates by up to 39 percent earlier this year. "Axene Health Partners is off the beaten path, but it was well known to senior managers from the California Department of Insurance as a top-flight actuarial firm with a reputation for deft work. So when they wanted someone to double-check Anthem's numbers in mid-February, they called Axene, who personally took on the project and enlisted three of his staffers."
Axene and a handful of employees who also work from home, including his son, tore though more than 1,000 pages of documents and spreadsheets in search of errors. In the midst of the investigation, the actuary became sick with a blood infection, but logged 66 hours of work from a hospital bed while recovering from surgery. Finally, they found a key error: "Anthem had double-counted the effect of aging. … The actuaries determined that Anthem could reduce its average rate hike to 15% from 25% by correcting the error and a handful of other mistakes."
His work had big implications. Anthem issued a new request last month for only a 14 percent average increase — down from an average of 25 percent in the original filing. Also, the escapade has been singled out as a turning point for the health overhaul legislation (Helfand, 7/15).