Healthcare Insurance – Its CostCo membership for Health

It is now being referred to the as the third rail in healthcareNo one wants to touch it for fear of electrocuting themselves but it remains one of the greatest challenges facing healthcare and rising costs. The fact that healthcare insurance companies stock prices have reacted positively to the news of the loss of the 60 seat majority in the senate. The insurers have bitterly fought any notion of a public insurance plan because this would cut into their profits.

Taking a look at some recent profits: Wellpoint owner of Anthem Blue Cross – $ 2,700,000,000 which was followed by an announcement they would be raising premiums by as much as 39%……..! That’s even more than the university and education sectors astounding rate increases.  Kathleen Sebelius the Health and Human Services Secretary weighed in asking them to “justify” this. Seriously – “justify”!

All this was discussed in the “GetBetterHealth” Blog by DrStanleyFeld in a piece titled: “Are Health Insurers Killing the Goose that Laid the Golden Egg“. Pointing out the usual techniques in play to deflect criticism in an attempt to justify this behavior

using a well worn public relations technique by pointing a finger at the other stakeholders. All its administrative costs, additional reserves, and investment costs are included in the “85 cents out of every premium dollar figure.”

In fact you have to wonder which group of middlemen the Health Insurance industry falls into

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.”

and this characterization

“The health insurance model is closest to the parasitic relationship imposed by the Mafia. Insurance companies provide nothing other than an ambiguous, shifty notion of “protection.“

So what do individual personal experiences tell us about dealing with the insurance industry. Recent experince suggests that the insurance industry is misnamed. Insurance is designed to pay out for legitimate claims. Health Insurance does no such thing and is much closer to buying membership to CostCo but not as good. The CostCo model has customers paying a membership for exclusive access to lower priced of goods. If you are not a member you have to pay the higher rate.

Examination of a recent claim form showed that membership to the Healthcare Insurance club provided a discount to the billable amount of 87%. But unlike CostCo if any of the items you selected or used the insurer deems to be uncovered then you get to pay 100%. So this would be like showing up at the CostCo check out and being told that in your case the meat you purchased is not part of you membership perhaps because they think you are a vegetarian and therefor instead of paying $5 per pound you must pay $9.35 per pound

In the healthcare example a legitimate set of routine laboratory tests on blood and urine as part of an annual physical.  It is impossible for me to imagine a reason to deny basic routing screening but the system is geared to do precisely that every time a claim is submitted. SO where is all the money going… aside from posting profits and investor returns there is a big chunk in the case of Wellpoint allocated to $1.8 to $8.4 Million dollars per year for its CEO and Divisional Presidents. And UnitedHealthcare was even worse:

In a March 2007 post I stated that “ UnitedHealthcare claims that costs are out of control. Why? Who paid their CEO $1.8 billion dollars over 8 years? The amount equals $300 million dollars a year or $821,917 a day in salary and benefits to one person. What are the other top executives at UnitedHealthcare receiving in salary and benefits? Do you think these salaries affect the cost of insurance?”

I agree with the notion that we the consumer need to take greater control and management of our healthcare dollars and remove these excess additive costs. Will someone have the courage to take this on….?

What have your experiences been with insurance. Do you think you get value for money and that health insurance is part of your health solution as opposed to being part of your health problem?

New CPR Method – Contionous Compression

Not sure of the validity of this but interesting concept

 

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