Health insurance companies predate the weakest consummer

[theeedude]

The whole argument is BS, the reason insurers get away with paying less is because they have negotiating power, not because it's cheaper for the doctors than someone who pays cash on the spot. It costs doctors a lot of money and time to deal with insurance companies. So conservative argument is, it's OK to prey on cash paying consumer because he's weak. Free market, anything goes. So here is the system that we get as result, you either go with insurance company and get ripped off by them, or you go alone and get ripped off by the provider. Those are your free market choices.
What we really need is a law that requires providers to provide the lowest price to consumers willing to pay cash on the spot.

 

[theeedude]

Unfortunately the system leads to inflation of the cash price. In order to charge, say $100 to the insurance company, invoice price needs to be set at $160. If you set the price at $100, the insurance company will give you $60. It is only recent that we are allowed to give a discount for cash pay. It took some senators son to get sick without insurance before the law was changed.

This is actually backwards, because cash pay patients that pay at the time of service actual cost less to see. Insurance submission, resubmission and write-offs actually cost much more. We actually have to employ two office staff just to fight with the insurer and chase down outstanding bills.

That's what I am saying. But it's a distortion of free market where insurer has all the power, and exactly why there is need for government interference. Otherwise insurer can demand much lower price than cash consumer, which in turn causes providers to jack up prices on those consumers, which in turn pushes those consumers into buying products of those insurance companies, it's feedback loop that can only be broken by regulation.

 

[mattpegher]

Yes there are many issues that affect health care cost.

1. The doctors are highly trained and a highly selective group. Therefore they demand high reimbursement for their services. (of note my plumber charges $150 per hour)
They spend about $400,000 to $600,000 dollars over their life time paying for their education and interest on the loan.
They had to compete for their profession, thus if it were not a lucrative one they would have persued a different career. In otherwords, lower the reimbursement and you will have less qualified physicians.
The cost of business is high. At one point in the past, I had to pay my own malpractice insurance. For half-time in the Er, for a physician with no judgements against him, cost $4000 per month.

2. Medical technology is expensive. When I treat someone is cardiac arrest, it is not difficult to spend $10,000 in an hour. The materials are specially made, and tested, sterilized and often perishable.
Specialty scans and test often cost the hospital thousands of dollars to perform.

3. Americans demand the best, even when it may not be necessary. I will admit that many tests are done to prove that the patient doesnot have a certain illness when I am reasonably certain that the result will be negative. However, the practice of medicine is one of probabilities, after I exam someone, I weigh the probability that they may have said illness. If I can place that probability at less than 5%, it is felt that I need not investigate further. Problem is that depending on the severity of this illness 5% or one in twenty patients, may not be enough. For example, a 3 month falls from her mothers arms while transfering to father and strikes her head. The patient is awake, and in no distress. Neurologic exam is normal. I discuss with the parents a CT of brain, which is a painless proceedure, with some limited radiation exposure. The parents agree to the proceedure, which shows a large subdural hematoma. This was not the probable outcome, and could have been fatal if not detected.
Some patients demand unnecessary tests and yes some cost savings could be gained by removing unreasonable liability thus necessatating fewer CYA tests.

4. People use health insurance like a credit card. Most people can afford routine care and most can even afford occasional sick care. We all have stories of the medicaid patient who smokes 2 packs of cigarettes a day, wears heavy gold jewelry and gets her hair and nails done weekly.
I myself when given the options for healthcare but having to pay for the plan completely, chose a high deductable plan with $5000 deductable (HSA eligible) it cost about $800 per month ($9600/year) verses a plan with $1000 deductable for $1400/month (16800/yr). That is a savings of ~$7000/year and is group rates. But consider that I used $0 of that 9600 for the last 3 years. I know its insurance, not a bank account. And it payed for others when I will be able to use others income later when I need to.

5. As long as we finance our health care, we will have to pay a surcharge. Unfortunately, we have to finance it somehow. Insurance companies current overage of ~35% may be to much, I hope we can find a less expensive alternative. But I still think that some regulation is necessary to avoid monopoly preditory practices against those who have no other alternatives. I'm not sure direct government financing will be cheaper. I believe that free market forces could be used if we eliminate the lack of competition.

6. Preventative medicine and healthy lifestyle are a goal but we can't expect health care to wait for society to change, we must pressure this change.

7. Tort reform has already been shown in some states to positively effect cost. Reasonable recompense should still be available for those injured, but the current system is a jackpot lottery.

8. The current pay system is biased towards specialists and proceedures. It rewards physicians for rushing through patients, and it fails to adequately fund primary care. The reimbursement of the general practice physicians (IM, FP and Peds) had declined over the past 15 years as costs have increased. Your primary care doctor can't take the time to properly diagnose you, manage your health, counsel you on good practices, and screen for future problems. We need to decrease the rates for specialists, and rework a fee schedule that incourages patient face to face time without encouraging fraud. I will admit that no-one has come up with any solid ideas that may impliment this yet.