zenman

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From Wall Street Journal:


The Health Insurance Mafia
By JONATHAN KELLERMAN
April 14, 2008; Page A15

Most discussions about the rising cost of health care emphasize the need to get more people insured. The assumption seems to be that insurance – rather than the service delivered by doctor to patient – is the important commodity.

But perhaps the solution to much of what currently plagues us in health care – rising costs and bureaucracy, diminishing levels of service – rests on a radically different approach: fewer people insured.

You don't need to be an economist to understand that any middleman interposed between seller and buyer raises the price of a given service or product. Some intermediaries justify this by providing benefits, such as salesmanship, advertising or transport. Others offer physical facilities, such as warehouses. A third group, organized crime, utilizes fear and intimidation to muscle its way into the provider-consumer chain, raking in hefty profits and bloating cost, without providing any benefit at all.

The health insurance model is closest to the parasitic relationship imposed by the Mafia and the like. Insurance companies provide nothing other than an ambiguous, shifty notion of "protection." But even the Mafia doesn't stick its nose into the process; once the monthly skim is set, Don Whoever stays out of the picture, but for occasional "cost of doing business" increases. When insurance companies insinuate themselves into the system, their first step is figuring out how to increase the skim by harming the people they are allegedly protecting through reduced service.

Insurance is all about betting against negative consequences and the insurance business model is unique in that profits depend upon goods and services not being provided. Using actuarial tables, insurers place their bets. Sometimes even the canniest MIT grads can't help: Property and casualty insurers have collapsed in the wake of natural disasters.

Health insurers have taken steps to avoid that level of surprise: Once they affix themselves to the host – in this case dual hosts, both doctor and patient – they systematically suck the lifeblood out of the supply chain with obstructive strategies. For that reason, the consequences of any insurance-based health-care model, be it privately run, or a government entitlement, are painfully easily to predict. There will be progressively draconian rationing using denial of authorization and steadily rising co-payments on the patient end; massive paperwork and other bureaucratic hurdles, and steadily diminishing fee-recovery on the doctor end.

Some of us are old enough to remember visiting the doctor and paying him/her directly by check or cash. You had a pretty good idea going in what the service was going to cost. And because the doctor had to look you in the eye – and didn't need to share a rising chunk of his profits with an insurer – the cost was likely to be reasonable. The same went for hospitals: no $20 aspirins due to insurance-company delay tactics and other shenanigans. Few physicians became millionaires, but they lived comfortably, took responsibility for their own business model, and enjoyed their work more.

Several years ago, I suffered a sports injury that necessitated an MRI. The "fee" for a 20-minute procedure was over $3,000. My insurance company refused to pay, so I informed the radiologist that I'd be footing the bill myself. Immediately, the "fee" was cut by two thirds. And the doctor was tickled to get it.

A few highly technical and complex procedures that need to amortize the purchase of extremely expensive hardware will be out of reach for any but the wealthiest patient. For that extremely limited category, insurance might work. A small percentage of indigent individuals won't be able to afford even low-cost procedures. For them, government-funded county facilities are the answer, because any decent society takes care of the weakest among us. But a hefty proportion of health-care services – office visits, minor surgeries – would be affordable to most Americans if the slice of the health-care dollar that currently ends up in the coffers of insurance companies was eliminated.

When I was in practice as a psychologist, I discussed fees up front with prospective patients, prior to their initial visit. People appreciated knowing what to expect and my bad debt rate was less than 1%. That allowed me to keep my charges reasonable and, on occasion, to lower them for less fortunate patients. And I loved my job because I was free to concentrate on what I went to school for: helping people, rather than filling out incomprehensible forms designed to discourage me from filing them in the first place.

Physicians and other providers need to liberate themselves from the Faustian bargain they've cut with the Mephistophelian suits who now run their professional lives. Because many doctors are loath to talk about money, they allowed themselves to perpetuate the fantasy that "insurance is paying." It isn't. There is no free lunch and no free physical exam.

If substantial numbers of health-care providers shook off the insurance monkey on their back, en masse, and the supply of providers was substantially increased by opening more medical schools, the result would be a more honest, cost-effective system benefiting everyone. Except the insurance companies.

Dr. Kellerman, clinical professor of pediatrics and psychology at USC's Keck School of Medicine, is the author of numerous crime novels and three books on psychology. His latest novel is "Compulsion" (Ballantine, 2008).
 

Miami_med

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I agree with this 100%, except that I expect enough people fleeing the insurance model would simply bring on more government mandates to either accept insurance or to force people to buy it, meaning that they didn't have the money to pay after paying the insurance bill.

I believe that both of the major democratic candidates in this election have healthcare plans similar to a degree to the Mass plan in which everyone HAS to buy insurance and every employer is forced to pay some percentage of its earnings to insurance companies or face tax penalties. It's obvious robbery, but it's in the name of the poor :rolleyes:.
 

cpants

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I agree with this 100%, except that I expect enough people fleeing the insurance model would simply bring on more government mandates to either accept insurance or to force people to buy it, meaning that they didn't have the money to pay after paying the insurance bill.

I believe that both of the major democratic candidates in this election have healthcare plans similar to a degree to the Mass plan in which everyone HAS to buy insurance and every employer is forced to pay some percentage of its earnings to insurance companies or face tax penalties. It's obvious robbery, but it's in the name of the poor :rolleyes:.

My parents' doctor has an interesting strategy. He accepts no insurance. You pay him cash at time of service. However, at your request, he will do anything he can to make sure you get reimbursed by your insurance company. He or his staff will fill out forms and make calls for you. If more doctors took this approach, people would feel the squeeze from the insurance companies, not doctors. Maybe some real change could happen.
 
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AwesomO

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My parents' doctor has an interesting strategy. He accepts no insurance. You pay him cash at time of service. However, at your request, he will do anything he can to make sure you get reimbursed by your insurance company. He or his staff will fill out forms and make calls for you. If more doctors took this approach, people would feel the squeeze from the insurance companies, not doctors. Maybe some real change could happen.

Thats actually the only way to drive down health care costs. In the past when all the patient had to do was pay a $10 copay there was never any incentive for anyone to drive down prices as insurance companies or medicare was always there to pick up the bill. If patients have to start paying a proportinal amount then you would see an effort to decrease the price of medical care and meds.

Unfortunately prices have gotten so out of hand that this will not happen over night and will result in many people being screwed financially in the mean time.
 

CigarTragic

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I love that entire article. I want to print out a giant laminated copy of it and hang it on my wall.
 

Jnye33

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Playing devil's advocate here, but what happens to the people who are chronically ill, can't afford to pay for their healthcare, and live in an area where access to government funded facilities is limited or nonexistent?
 

digitlnoize

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Playing devil's advocate here, but what happens to the people who are chronically ill, can't afford to pay for their healthcare, and live in an area where access to government funded facilities is limited or nonexistent?

They die. Duh. ;)

Seriously, this is where the cash only model falls apart. Can this be tackled in a cash only system? Off the top of my head ideas:

1. Patient education - teach people that coming to the ER 10 times per month for tx of their fibromyalgia pain is not effective in any way (cost or otherwise).

2. Pt's pay their pain doctor a monthly "subscription" fee instead of a per office visit fee.

3. Health savings/investment accounts starting at birth to pay for people's retirement health care. If you put the money that you spend each month on insurance into a very safe portfolio (say 5% per year) you'd have more than enough money to cover any treatment you'll ever need.

That's all I've got in me tonight...I'm sleepy. These ideas may suck.
 

cpants

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Playing devil's advocate here, but what happens to the people who are chronically ill, can't afford to pay for their healthcare, and live in an area where access to government funded facilities is limited or nonexistent?

Doctors would provide charity care. Before the government started interfering with our healthcare system (remember? back when we had the greatest healthcare in the world.), doctors and hospitals provided tons of free or reduced rate care to people who couldn't afford to pay.

As far as the chronically ill go, that is why you still need health insurance. You pay into it for years and take nothing out. Then when something catastrophic happens, you are covered. Insurance is supposed to be for those unforeseen things, not for your yearly checkup and the sniffles you get every winter.
 
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