Health Insurance, a matter of life and death.

INSURANCE
An Interesting Dilemma

We frequently read, see, hear that the Insurance Industry is suffering and there is a need to keep raising premiums. The policies seem to cost more but cover less. The driving force for this is, of course, the need to provide “decent profits” for stock holders.

As a result of this insatiable need for more net income, the Insurance Industry has taken over our health care system. My primary care doctor eloquently stated, “At first I was a doctor. Then I became a provider. Now I am a f***ing data entry clerk.” A doctor’s choice for tests, procedures and prescriptions are largely controlled by the insurance provider.
In order to maximize profits, premiums have gone up as have co-pays. At the same time, reimbursements to doctors and other health care facilities have steadily gone down.
Most recently, United Health Care has DEMANDED that doctors accept a reduction in reimbursement by an ADDITIONAL 25%. Most offices, having to deal with previous reductions in reimbursement, have been operating on a very narrow margin of profit.

Being a retired doctor, I understand the business aspects of operating a health care facility. It costs “X” number of dollars to process each patient through such an office. That “X” number depends of the number of employees, their salaries, benefits, taxes, worker’s compensation premiums, building and malpractice insurance costs, rent/mortgage costs, utilities, repair and update costs as well as the costs of equipment (those lovely tables are very expensive) and disposable items such as tongue depressors, gauze, tape, gowns, toilet paper, paper towels and other items like computers, programs (which are also very expensive), paper, printer ink, postage AND MANY MORE NORMAL BUSINESS EXPENSES.
The Insurance industry, theoretically run by intelligent people, doesn’t care what it costs a doctor to process a patient. They believe having more patients go through your office results in the doctor making more money. In theory, that makes sense. In reality, it is remarkably stupid.

First of all, more patients mean LESS TIME with ALL patients resulting in decreased quality of care. Second, and for financial survival, if the reimbursement and copay are LESS than it costs to process a patient through the office, the doctor actually LOSES money with EACH PATIENT. More patients results in more loss.

As stated above, health care facilities have already significantly reduced their overhead/operating costs. They simply cannot absorb an additional decrease of 25% in income. But this is not the concern of the Insurance Industry. Their MAIN CONCERN is increasing return on investment for their stockholders and salaries of their top executives.

By the way, according to Laura Ungar, USA Today on January 19, 2016, United Health Care had a NET profit of 6.8 BILLION DOLLARS in 2015. It was $228 Million less than 2014, but hardly as bad as a stick in the eye. I was not able to find net profit report for United Health Care for 2016. However, United Health Care had estimated that in 2016 they would lose $25 million more than the year before, possibly as high as $500 million. If their estimate was correct, that would mean that in 2016 they would have a NET PROFIT of ONLY $6.3 Billion Dollars.
Speaking of Insurance, the most recent financial report from State Farm Mutual Automobile Insurance Company shows a NET PROFIT for 2016, (after taxes) of TWO BILLION, FIVE HUNDRED FIFTY-FOUR MILLION DOLLARS. This is FOUR HUNDRED AND SEVENTEEN MILLION DOLLARS MORE THAN 2015.

Allstate Insurance Company had a NET PROFIT (after taxes) in 2016 of ONE BILLION SEVEN HUNDRED AND SIXTY MILLION DOLLARS.
GEICO, admitting it had a bad year in 2016, had a NET PROFIT (after taxes) in 2016 of ONLY FOUR HUNDRED AND SIXTY MILLION DOLLARS.

On February 19, 2016 the U.S. Government announced it was giving a big increase to private insurance companies that participate in the Medicare advantage program (Medicare alternative). Based on that news, investors rushed to buy as much of the health insurance companies’ shares as they could get their hands on. By the time the market closed on Friday, February 26, 2016, just seven days later, Cigna’s stock was up 5.5% and Human’s was up a whopping 8.1%. By comparison, the Dow Jones industrial average was up just 1.5% (Wendell Potter, healthinsurance.org). This would mean that United Health Care estimate of loss was probably too high.

Once again, the driving force behind automobile and home insurance is to make greater and greater income dollars for their investors. In our society, there is nothing wrong with this model.
However, when it comes to health care, THERE IS EVERYTHING WRONG WITH THIS MODEL.

Kaiser Permanente has been a non-profit health care system since 1945. It has been tremendously successful. There will always be complaints, warranted or not, about particular doctors or policies, but overall, doctors and patients are very satisfied. They have NO stockholders, NO department dedicated to stockholder issues and, by the nature of being non-profit, are required to reinvest surplus income into facilities, equipment, services, doctors and support staff.

There is no doubt that Health Care would be significantly superior to what it is if ALL health insurers were non-profit. Unfortunately, national and state leaders do not have the balls or ovaries to pass legislation concerning improving health care for ALL Americans. That, too, is understandable because the Insurance Industry supplies, through direct donations and PAC’s, enormous amounts of money to elect and reelect members of Congress and Legislatures.

It is time to make the necessary changes. It certainly will be a steep, uphill battle. American citizens cannot match the irrational amount of money given to our state and national leaders. There are some legislators who agree with the concept of quality health care for everyone and getting the Insurance Industry out of the money making business which, therefore, would take health care back to where it belongs, the doctors.

So, remember when you hear the Insurance Industry cry about not being able to cover all citizens for health care, it is NOT that they would lose money. It IS that the number of NET BILLIONS or NET HUNDRED MILLIONS of dollars they earn could possibly be reduced. DO NOT EVER BELIEVE THAT YOUR INSURANCE COMPANY IS YOUR BEST FRIEND. They have only two best friends, dollars and investors. They are neither your good neighbor nor your good hands. They may provide good service for homeowners, renters and automobile damages. But, as with health care insurers, their most significant concern is profit.

My goal is to have more people think about our entire health care system, from insurance companies to doctors. At very least, I hope to provide a different perspective of the system. And, after intelligent consideration, realize and demand that we, as Americans, deserve a high quality health care system. Currently, we are ranked last compared to all other industrialized nations when it comes to health care. We are also the only country in that group that has FOR PROFIT management of our health care system.

Perhaps we can’t outspend the Insurance Industry, but we can make legislators believe, regardless of the money they spend on campaign advertising, that WE won’t elect them if they don’t get us high quality health care on a non-profit basis. And by non-profit, I do not mean the doctors. They are pretty much already at the non-profit status.

I hope you agree and want to help promote a grass roots movement to recapture our health care system and remove profit from determining our health status and whether/when we live or die. If so, please pass this blog on to others. It is time to stop being passive about accepting an inferior health care system. I have always believed that I/WE are either part of the solution or I/WE are part of the problem. Especially now, there can be no middle ground. Without your health, regardless of your wealth, YOU HAVE NOTHING.

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