Since 2000, healthcare costs have risen by hundreds of a percent and both you and I are having to pay for expensive insurance that pays for less, while our premiums soar. After the approval of Obamacare in 2010, premiums rose at least 60 percent as well as copayments and deductibles, which means that insurers are charging much more and paying much less, with some people having deductibles that are so high they cannot afford to use the insurance they were compelled by law to purchase.
Prior to Obamacare, many had warned that Obamacare’s rules is likely to force the cost of care to skyrocket, and while covering things such as colonoscopies for free is likely a good public service, nothing is really free and there is always a cost of doing business.
Like most businesses, health insurance carriers work on margin, and to restrict them to 20 percent maximum for administrative needs, they needed to find a way to provide their shareholders with value and growth. During the run-up to Obamacare, they reduced costs, streamlined systems, prepared for the ICD-10, the new coding system and removed paper checks, enticing doctors to do direct deposit and using email and other systems to reduce mail costs. They also did something else; they set a course for higher premiums, higher deductibles and poorly negotiated prices, while hospital systems consolidated and drug companies raised prices. Certain classes of providers such as chiropractors are underutilized, even though they as per Consumer Reports, Bottom Line Personal and others are less costly for back pain and many other musculoskeletal conditions commonly seen by therapists and other professionals.
Doctors used to visit all of their patients in the hospitals until the private insurers stopped paying them. Now, higher priced hospitalists see them and report back to the doctors. Gastroenterologists have invested in surgi-centers because they are underpaid by insurers, but overpaid for the surgi-center meaning we all pay more. An MRI is less expensive if you want to pay cash instead of use your insurance and hit your deductible.
Primary doctors are required to see more patients to pay their overhead as they are squeezed financially, and they refer them out for many more tests which are usually negative because the current system makes it unaffordable to spend the time figuring out their problems. Years ago, you paid them for their time and they figured things out in a simpler system with fewer specialists. These are insurance company changes we all pay more for, but did this improve the cost of care or make it cost us more?
The real math behind all of this is that in order for an insurance company to make more under Obamacare and make their shareholders happy (see their recent stock prices and profits for proof of this), they need to constantly raise the amount you pay (deductible and premium), and do things that are less efficient, costly and provide proof that we should all pay more for the care we receive.
Recently, I came across another web site that approached this idea differently but came to the same conclusion; The insurers will negotiate poorly and pay for more expensive drugs, while ignoring those that truly save the companies money (chiropractors save United Healthcare through their Optum affiliate a huge amount) so they can justify the higher premium prices the following year.
Recently, The Kaiser Foundation reported that physicians accounted for only 11 percent of the costs Medicare pays out yearly . Even so, Medicare is looking as if this is the problem, and wants to change financial incentives to doctors, many of whom in private practice are struggling to earn a living, while certain specialties such as Ophthalmology and Hematology are paid very well by Medicare alone.
That is just Medicare, the plan that offers a low deductible of $147 this year and has you covered as 80/20. What do other insurers look like when it comes to healthcare and if physician fees are the problem at 11%, where does the rest of the money go? How come Medicare premiums and deductibles are not sky high compared to Aetna, or United, or Oxford?
Perhaps, we as a nation need to add more fuel to the fire to the conversation regarding single payer options that do not include insurance companies, shareholders and clout that is making us pay more, by using care that is less efficient, more expensive and highly regulated. Most primary doctors wish for simplicity and one set of rules. Many have joined hospital systems that feed their own specialists and their own therapists, often at higher costs and then add facility fees to improve their profitability, costing us more and adding to our insurance premiums every year.
While this sounds like a rant, it is just the fact that insurers thrive when the cost goes up, since their percentage of profit improves with each higher cost they pay.
Check out this blog post. It builds on this idea of how incentives are a huge part of the cost problem for us. Maybe the current discussion of rolling out Medicare for those of you 55 and above is a good idea.
The 80/20 Rule: Why Insurers Are Incented Against Lowering Costs (and Integrative Health)
07/21/2016 06:35 pm ET John Weeks
The lesson I am about to share I learned on the mean streets of the early years of integrative medicine and health. This was the time of the first “œcomplementary and alternative medicine” coverage in the late 1990s. The lesson”™s a “œduh!” no-brainer once you get it. Yet my experience in sharing this perspective with others on an insurer”™s perverse incentives tells me that it”™s not well-known.
So – if this is new to you – here is a simple lesson that will cement your views about the negative value of insurers in U.S. health reform.
Hard knocks for integrative care advocates: insurers are not aligned
First, context. Many of us have a belief that whole person, natural therapeutics would cost less and have beneficial effects on systems economics. Holistic, integrative and naturopathic medical doctors, chiropractors, acupuncturists and others readily speak of patients getting off drugs or not needing pharma and thus avoiding significant adverse effects. Other patients forego costly tests, procedures and surgeries. Imparting self-care principles reasonably might contribute to long-term cost reductions. Won”™t an empowered patient be less likely to need a doctor, or run to the ER?