Insurance

Taking Back the Financial Reins of Our Health Care: The Only Way to Win

SEPTEMBER 30, 2013 – Our present system is one in which prepaid care via a third party (private or public) masquerades as insurance and one in which health care costs are measured largely by the price of insurance premiums, not by the true cost of rendering care directly. Here is the irony: It is these same high premiums that keep costs high because it is the tool that finances them! It is a racket folks; kind of like a mob boss that tells the business owner what to charge his customers, limits competition and then takes the profit off the top!

Here is an illustrative, but true story of my cardiology bill. I had a high deductible plan with an HSA (health savings account) at the time of my visit to the cardiologist following an ER visit the day before for some atypical chest symptoms. I had a thorough evaluation including about 30 minutes with the cardiologist, an EKG, Echo, and a stress cardiolite nuclear scan. My total bill was just shy of $1,900. After the EoB cycled through and the “allowable charges” were discounted the bill came down to $1,310. Not too bad. So, once I received my EoB with final amount owed, I called the cardiologist’s office and asked them if the offered any cash discounts for high-deductible or uninsured patient. The response was “yes, if you pay half then we pay half”. I asked her to clarify and basically if I paid 50% then they wrote off or zeroed out the remainder.

So basically my $1,900 bill turned into $655. Viola! The real cost of care! It really reflects just how inflated prices have become and how disconnected the billed charges are from the true cost of rendering care.

This is why moving away from, not toward, more third-party paid care is the solution. Focusing on “coverage” rather than a cost-effective primary care model, is what has got us into this mess in the first place. Trying to make coverage “affordable” by using someone else’s money to subsidize it creates an illusion of affordability. It also kicks the reform can further down the road for someone else to deal with while enriching the Government-Medical industrial complex that stands to benefit from maintaining the status quo.

How do we get to price transparency and restore financial sanity to the HealthCare market?

1. Believe in the sovereignty and good judgment of the individual patient to seek care as they see fit at a transparent price and in the absence of insurance network constraints.

2. Understand that quality medical care starts with an unencumbered Doctor-Patient relationship.

3. Acknowledge that a doctor serves their patient’s needs better if they work directly for the patient, and not within the constraints, mandates or barriers of a provider contract with a third party.

4. Realize that only by creating free-agents of both physicians and patients will we bring together the stakeholders for a meaningful exchange of value, thus substantially lowering medical costs in the outpatient arena.

5. Acknowledge that the main driver of health care costs in the outpatient arena is not malpractice costs, but rather expensive third party prepaid policies that utilize “first dollar” benefits for virtually any physician interaction, regardless of how minor.

6. Realize that to gain control of spiraling medical costs in the U.S, that health plan “coverage” needs to become a true “insurance” policy such that it only insures unexpected losses that we otherwise couldn’t afford on our own.

7. Embrace the concept that health insurance works best when it is portable, personal, private and not linked to employment, nor zoned by networks. This approach would allow insurance policies to be tailored to individual needs, cut down on the number of uninsured due to job changes and other life events, thus obviating the need for expensive COBRA coverage.

8. Understand that the true costs of medical care is much lower than that reflected by the cost of a co-pay based health insurance policies offered in the workplace today.

9. Embrace the economic realization that only by creating free agent of physicians and patients will the economic forces of supply and demand exert their desired effect, thus determining the fair market value of routine medical services.

10. Empower the idea that better informed consumers make better patients and unrestricted patients make better consumers.

 Robert W. Nelson, MD

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