My good friend, John Koziol, recently wrote a post about
Obamacare and that it sucks. I am also a believer that Obamacare sucks and I
agree with his assessment that all it did was raise the “count” of how many
people are covered by insurance. It forced people to purchase insurance that basically
covers catastrophic events. These are people who couldn’t afford insurance in
the first place, and now they are doling out money for a plan that still doesn’t
address their basic health care needs. Most are no better off, and many are
much worse.
For many of us that already had insurance, Obamacare
significantly raised our insurance rates. In my situation, my health insurance
premiums went from paying $1,000 a month $1,700 a month. Folks, that’s MY
portion, after my employer paid their portion!! When your health insurance premiums
are more than your mortgage, something is wrong!! Because of that increase, I
had to make the tough decision to find a new job that provided health insurance
at a more reasonable rate.
Obamacare simply forced people to purchase insurance. It did
not address the REAL issue, which in my opinion, is the exorbitant cost of
medical care. In fact, forcing people to purchase insurance only exacerbates
the problem. Over time, the system has become broken and people aren’t
recognizing why that happened. This is my take on it …
Employers began providing health insurance to employees,
which everyone loved. Unions, such as auto workers and teachers, demanded the
cream of the crop insurance plans which costs the employees very little or
nothing because the employer paid for it. As more and more people were covered
by insurance, they disregarded the cost of medical care because it didn’t come
out of their pocket. People literally had no idea how much their employer was
paying for their health insurance. In addition, people literally had no idea
how much the insurance company was paying for their doctor visit, or MRI, child
birth, or surgery. They didn’t care about any of this because it didn’t come
out of their pocket. They simply had a $10 copay and that’s all that mattered
to them.
All this fed into the medical industry being able to raise
their prices, again and again and again, without the majority of people
realizing it. The insurance companies were paying the bill, not the average
person. So of course, with expenses rising, insurance companies increased their
rates. You can’t blame the insurance companies because that’s a no-brainer; If
your expenses increase, you have to increase your income .. Duh! And because
employers were paying the increased insurance premiums, the people still didn’t
pay attention.
Finally, businesses had enough and started making the
employees chip in more for their health insurance. And deductibles increased.
And copays increased. And that’s when people started to complain. But they’re
just complaining at the employers and insurance companies, not the medical
industry. And the people certainly aren’t recognizing how their “doesn’t matter
to me what it costs” attitude created this mess.
I believe one of the keys to fixing the system is
transparency and equality. Providers should have a price sheet that lists the
cost of each of their services. And the cost is the same for everyone no matter
who their insurance company is or whether the patient is paying cash out of
pocket. No more charging different rates depending on who is paying the bill. The
provider’s price sheet should be available to anyone who asks. Right now you
can’t get that. Try asking your provider how much they will charge for a
particular service. Most of the time you won’t get an answer. And even if you
do get an answer, often the actual charge ends up more.
My current insurance company recently implemented a feature that addresses some of these issues. They have an app that I can load on my phone. If I need a major service, such as an MRI, I can search the app for approved providers near me. But it doesn’t just stop at that. Some of the providers are indicated as “preferred” providers because their costs are less than others. If I chose one of these “preferred” providers for the MRI, the insurance company rewards me with a rebate check of $50, $100, or whatever is appropriate for that service. I believe that’s a step in the right direction by educating the people and allowing them to make wiser decisions. Stop and think about that for a minute. If the insurance company is paying me $100 for choosing provider A over provider B, it probably means they are saving way more than $100 for that service. That should open your eyes to the disparity of the cost charged by different providers.
I believe another key to fixing the system is contribution. People
need to have skin in the game. What I mean is that people should have to pay a
portion of the insurance premium, and a portion of the services (copays, co-insurance,
or a combination). Free does not work. If it’s free, people will abuse it. When
it’s free, people are irresponsible and go to the E.R. for a runny nose. When
it’s free, people don’t care what the costs are, which contributed to our current
situation.
I believe a combination of the above factors (transparency, equality, and contribution) work together to fix the system. When people have skin in the game, they begin to care about the costs. And when people can shop around and compare costs for a particular service, providers will be forced to become more competitive. As the cost of services are brought back down to reasonable rates, the cost of insurance premiums will go down accordingly. It's a win-win.
As many of you know, I have battled the healthcare and insurance industries for years. I hate them. I despise them. Simply put, the system is broken. It's time we fix it. I pray that the incoming administration -- Democrat, Republican, Black, White, Male, and Female -- will all work together and fix it.
8 comments:
"When it’s free, people are irresponsible and go to the E.R. for a runny nose." Nope. You might get a very small number of people doing that but in my experience, people in the ER are there because they need to be. No one spends 3 - 4 hours in the ER for a runny nose.
Doug, I agree that most people don't do that. However, the ER is full of people that don't have health insurance because they can't be denied service. So instead of going to a doctor or clinic, they just go to the E.R. My example was extreme, but my point was that if people don't have to pay, they don't care about the cost.
I agree that transparency is a primary part of the solution, but I must say that folks who are in the er are not there because they don't care about the cost, but more often are there because they don't have the insurance, time or money to see a doctor before it became an emergency. In addition, one should note that the ACA did dramatically reduce the rate of insurance increases, but it was so out of control in the first place that even the reduced increases hurts. http://www.factcheck.org/UploadedFiles/2015/02/kff-chart.png
I have a client who used to be an MICN. A charge nurse for an Emergency Room at a hospital in California. Her rough estimate is 90% of the people that came into the Emergency Room did not need emergency service. The primary motivation was that people without insurance could get care because the Emergency Room became a catch all and cannot deny service by law. If someone came in with a runny nose, they are just made to wait. I am convinced that this is part of the reason that ACA requires everyone to have insurance. However, I agree with Cathy that the unintended consequence of making a service mandatory along with a disconnect from the underlying cost is a double whammy, proven formula for an increase in cost. It breeds waste and corruption. For an extreme example...an IV cost about $1 to produce, but hospitals are now charging upwards of $500-$800 for it. I am sure very few people complain and if they do it is probably to the person who has little control over changing it. Health care AND its recipients need better incentives if it hopes to provide better care.
Good one, Cathy. You took my post and expanded it grandly.
Hi Cathy,
Good post. You're preaching to the choir here. :) I'll point out that our company's insurance rates went down due to Obamacare changes (because it leveled pricing), and we were able to get a decent plan. I imagine large companies and those filled with young employees had to pay more than before. I'm not into politics, but I expect our rates will go back up if they repeal Obamacare. Ultimately, it all comes back to the cost, as you said.
In the late 80s through the mid-2000s when I was self-employed and buying my own family health insurance policy, my premiums increased by double digits pretty much every year and my monthly insurance premium did eventually exceed my monthly mortgage payment, including the escrow amounts for property insurance and local real estate taxes. So while it might feel satisfying to blame that on the ACA, it's a pre-existing condition (;-) and just as likely a result of our for-profit healthcare system, where the fiscal condition of every entity on the receivable side of the equation is more important than the health of the patient. If you've looked at the economic data, the slope on the healthcare cost curve has come down considerably since the ACA took full effect, notwithstanding the relatively large premium increases for this year, because more participants are in the system. That doesn't mean it's a perfect solution or can't be improved. The thing is clearly a camel (i.e. a horse designed by a committee) with gaps in the system, particularly in the states that refused to open their own exchanges in the name of ideological purity. Perhaps if we had a single payer system funded by everybody's taxes, by definition we all would have "skin in the game". But that's socialized medicine and the only thing worse than a European socialist is a Chinese communist... ;-)
I believe you are right about most of this Cathy. Medical providers should be required to post the cost for each service. Of course each surgery and procedure are a little different but the main differences are time and supplies. You should still be able to see pricing for that. You get charged a price for something that falls in the normal range and maybe so much for additional time. Supplies should be straight forward. So you should be able to shop around and get the best price. Others will say cheapest isn't always the best and may charge more. That is their choice. But reputations will spread and people will tell you if you are getting better care or not.
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