PROFITS BEFORE PEOPLE: THE AMERICAN MODEL
I recently had an interesting experience regarding insurance and providers (among hundreds over the years). It triggered some thoughts regarding our system of health care. Perhaps, I should call it by its proper name, Sickness/Disease Care.
My credentials for such observations include being a patient, spouse, parent and grandparent of patients, having sold insurance and being a health care provider. I hope this rather unique perspective helps readers understand what has been going wrong with our so called Health Delivery System.
In this particular incidence, our insurance policy refused to cover two different blood tests. Even though they were necessary prior to performing surgery on my wife, they were not covered. They involved, among other things, determining if there was a genetic possibility of either blood clotting or hemorrhaging. One would think this would be appropriate prior to major abdominal surgery.
I called Sonora Quest about the charges and suggested that perhaps instead of $374.22, I could pay the amount they would normally accept as reimbursement from an insurance provider (usually half of less). I was told this could not be done because the contract between the insurance company and the provider did not allow this.
That reminded me about my years of treating patients (40+). The insurance companies had the right (without warrant) to review all patient billings and records to, among other things, make sure those without insurance were being charged the same price as those who had coverage. If a provider was charging uninsured patients less, the company would then consider the lower price the provider’s actual price and force them to pay back the difference going back to “forever” PLUS interest. In other words, the insurance industry has been discriminating against those who could not afford insurance and punishing those providers who were trying to “do the right thing.”
Speaking as a former provider, I can affirm that for the past many years, the insurance industry has made sure their investors receive a significant return by regularly decreasing reimbursements. At the same time, they increase copay amounts making it more difficult for the patient to afford basic care.
As with all businesses, it costs health care providers a certain amount to provide their services. These include rent/mortgage, insurances, utilities, equipment leases/purchases, staff salaries, billing, workers compensation, Social Security contributions, computers, printers, programs, printer paper and toner. Oh, yes, toilet paper, soap, paper towels, patient gowns and many other little necessities, depending upon the services provided. Fees are set so a reasonable profit can exist for those who provide the actual care.
I have observed that fewer doctors are willing to take Medicare patients or limit the number they accept in a given period of time. The reason for this is they actually LOSE money with each such patient they accept and treat. Remarkably, insurance companies claim you can make up the deficiencies by spending less time with patients and seeing more of them. The logic escapes me.
Sadly, it is getting the same way with insurance providers besides Medicare. Many health care professionals have begun to practice “Concierge Medicine” where you pay a flat fee to the doctor and he/she will take care of you as much as you need. They do no insurance billing and know that they will at least make a reasonable return on their own investment in education and business.
Did you know that Medicare has their own “police force?” Without warning, they can enter any facility and review all billing to make sure EVERY bill is completely accurate. On the surface, that sounds great. In fact, it has been so successful that they have now sub-contracted outside companies to do their “no search warrant required” review of provider records. You probably also don’t know that this has been so successful that the money collected has significantly, beneficially affected Medicare’s bottom line.
A very large medical specialty group locally had such an audit. After careful evaluation, they found that in some cases there was over billing and also under billing. The audit showed that Medicare actually owed that facility money. Instead of paying what was owed, that facility was fined $1,000,000 because errors were made in the billing process. All were found to have been simple coding errors and not an attempt to cheat the system.
It appears that they require perfection while never practicing it themselves.
Many years ago, I attended a professional meeting at which the director of Blue Cross/Blue Shield spoke. At the time, they were the Medicare providers for the State of Massachusetts. When asked about errors made by his company, he replied, “We correct computer entry errors once each year.” He acknowledged that if they missed any corrections at that time, the patient and provider would have to wait another year. He didn’t appear to be the least bit embarrassed about what he said or the process his company used.
I had become a pioneer in the field of using Low Intensity Lasers/LEDs for treating pain and wounds. The only appropriate billing code is for Infrared Therapy (the light wavelengths include infrared). A patient asked me to bill his insurance company (Blue Cross/Blue Shield) for the hour long treatment. Since Blue Cross/Blue Shield of Arkansas, Tennessee and California covered the treatment and paid fairly well for it, I agreed. I received a letter in return stating that BC/BS does not cover that treatment because it considers it to be experimental. I sent a response which included the FDA approval certification and reminded them about BC/BS covering it in other states. Their response was, “We do not cover this treatment because we consider it to be experimental.”
As the insurance laws are written, if an insurance company states that they consider something to be experimental, they do not have to cover the costs. It doesn’t matter if it is FDA approved and used at the Mayo Clinic. As long as they SAY they consider a procedure to be experimental, they can and do refuse payment.
Have you noticed the number of expensive advertisements in print, television and other media that are promoting medical insurance plans? It always gets more intense around the time for Medicare renewal. The very same companies that complain about costs, are vying for your business. Does it make sense for companies who complain about losing money to spend so much to get your business so they can lose more money?
Speaking of health care insurance plans losing money, I have some numbers for you. These are available to anyone who looks for them. The dollar amounts are NET income for the 2016 business year. United Health Care Group, SIX BILLION, EIGHTY MILLION dollar profit. Aetna, TWO BILLION, EIGHT HUNDRED MILLION dollar profit. Humana, SIX HUNDRED FOURTEEN MILLION dollar profit. Blue Cross/Blue Shield parent company, TWENTY-SEVEN BILLION SEVEN HUNDRED MILLION dollar profit. Interestingly, even with that amount of profit, BC/BS was granted a 20% fee increase by the State of Texas. United Health Group claimed they lost $720,000,000 compared to 2015. They STILL had a net profit of $6,080,000,000.
I found it interesting that the highest dollar amount spent for lobbying in the United States involved the health industry. In 2016 it reached $509,580,000. Theoretically your premiums could be lower and their profits could be higher with less money spent on lobbying. Then again, BC/BS probably wouldn’t have gotten that 20% premium increase in Texas.
As I said previously, I once sold insurance. I worked for Horace Mann Insurance Company which was eventually taken over by the CNA Insurance Group. My job was to sell as much Permanent Life Insurance policies as possible. However, when I met with young couples I realized that the chances were far greater that he/she would become disabled rather than die. I had already benefited from disability income after my first operation to remove a benign tumor from my spine.
I suggested they purchase enough Term Life Insurance to be able to sustain their spouse/family for about five years and also get a disability policy. It made sense then and makes sense now.
My sales manager was not as happy as the couples and I were. It seems that there is far greater profit in Permanent Life Insurance than there is in Term and Disability Insurance.
Clearly, I am a believer in the profit model. I have no problem with any business, including the insurance industry and stock holders making a profit. Sometimes, I do wonder if the concept of caring for people ever enters the equation for insurance companies. I also wonder if there will ever be a ceiling to the amount of profits compared to the needs of the public.
The American system should be more like those in other countries who focus on Health Care rather than just Disease Care. Doctors are rewarded for getting patients to stop smoking, lose weight and exercising. Preventive care is paid for. Doctors can actually earn a living that covers their investments in education and their business.
Sadly, family practice/primary care doctors are earning less than workers in fields that require no education beyond high school or GED. Many are retiring early and rarely encourage their children to follow in their footsteps. I base this on my experience with such doctors locally and a national shortage of those in that specialty.
As evidenced by the rate increase for BC/BS in Texas as well as similar increases for all insurance companies throughout the United States, the tail seems to be wagging the dog. They are controlling how a doctor can practice health care, what tests can be run, what medications can be prescribed (that will be paid for on behalf of the patients), how many patients have to be seen per hour and preventing providers from helping patients who can’t afford to pay insurance premiums. They regularly have decreased provider reimbursements with impunity and force patients to pay higher and higher co-pays. In some cases, co-pays are higher than the actual fees.
Our so called health care system is, itself, very sick. In fact, it has almost reached the classification of critical. NO ONE is really addressing what is really wrong with our system. It should be relatively easy to remedy. Instead, we just have political battles. Sadly, the system appears to have a terminal condition called, “Profits Before People.” Until a BALANCE can be reached, the majority of Americans will continue to suffer while a small percentage will see their stock values increase.
So far, no state or national leaders have demonstrated the balls or ovaries to make the necessary changes. I wrote a proposal for a privatized national health care plan in a previous blog. I try not to just complain. I try to present some solutions. I am willing to read any suggestions that others may have.
As always, I encourage you to NOT BELIEVE what I have written. Please do your own research.