Yeah. It always comes down to money...
There was a time, in the early 1990s, when health insurance companies devoted more than 95 cents out of every premium dollar to paying doctors and hospitals for taking care of their members.
Today, insurers only pay about 81 cents of each premium dollar on actual medical care. The rest is consumed by rising profits,... huge administrative expenses, the cost of weeding out people with pre-existing conditions and claims review designed to wear out patients with denials and disapprovals of the care they need the most. - Wendell Potter, former Vice President of Corporate Communications for the CIGNA corporation, The Insurance Industry’s Lethal Bottomline...
That sounds kind of harsh.
On the other hand, if you have ever been forced to deal with coding errors, or just a standard claim, with an insurance company, either directly or through your healthcare provider then you’ll know it is not only...kind, it's also rational.
That’s the best term you can use for the practice of creating layers of bureaucracy (yes, it exists in private health insurance companies...sheesh) for the sole purpose of defeating us, the customers of health insurance companies, customers from using your services. These services being the services we pay for each month with our monthly premiums. Those of us fortunate enough to be able to afford health insurance.Stepping away from the issue of providing for our healthcare, or the issue of providing the services for which we pay each month...what kind of commercial, for-profit industry can intentionally create layers of bureaucracy for the sole purpose of not providing their services to their customers. Sure, some companies do this as a result of the standard disconnect between companies and their customers. But how many industries do this as part of a profit-making strategy?
Health insurance executive: Hey, guys. I have an idea. Let’s create layers of bureaucracy....no wait a minute, hear me out...staffed with titles like plan administrators and claims adjustors or customer service reps. Except their role is not to administer the plans and benefits our customers have paid for, but to prevent this from happening!!!
Board member who’s executive at real for-profit company: Wait a minute. Won’t that frustrate and anger your customers? And won’t they leave you for your competitors?
Health insurance executive: (Nodding to his colleagues and then pointing at the Board member) He doesn’t get it. You see, our customers have nowhere to go. See. You have to compete for your customers. That's so yesterday. We don't have to compete!
In most states we have an "exemption from competition". It’s a complicated and very legal term (wink) that our PR agencies provided each state's insurance commission to use as they announced they had blocked all competition for us.
Here's the kicker, you'll love this: the rational for blocking competition in each was so we could "provide better service unencumbered by competition!
And in those states where we have to ‘compete’ (as he uses his hands to make the quotation mark), well, we’re all going to do this, so our customers will all find out there's no point in leaving one for another!
I think cooperation is so much more beneficial than competition.And, see, we have the actuaries and their skills to create a table that shows how many layers of bureaucracy we need to implement before the customer gives up on their claims! It’s so cool!
Board member who’s executive at real for-profit company: Huh. Yeah. Now I see. I wish our industry was competitive like yours. (And they all laugh together.)
And that’s how they work together: MLRs, profits and our [declining] healthcare system. As a result of lower MLRs and higher profits, our healthcare system is now the most expensive to administer. And what is administered declines in quality each year as compared to our counterparts in other countries.
And the great thing, the thing I really admire (darkly) of the health insurance industry, is how they used their profits from our rising premiums and their declining level of service delivery to turn literally on the hands that pay them and with expensive lobbyists convince us:
* they are not a monopolistic industry,
* that they are not already subsidized with terms and conditions designed to prevent competition from entering,
* that competition from the federal government (the federal government) is unfair,
* that their layers of bureaucracy are not intended to ration care,
* that they haven’t already created their own death panels from these macabre plans with unaffordable premiums and unattainable benefits and they are far better than the 16-17 other countries whose healthcare systems run far more efficiently, deliver better care to more citizens and claim a lower percentage of their GDP.
Elsewhere in the world, healthcare systems are much less reliant on private sector support--and much less expensive. For example, the U.S. system costs 83 percent more per capita than the Canadian system, where public funds collected through taxes pay for up to 70 percent of healthcare coverage. A number of East Asian systems also enjoy high quality of care for a much lower cost.
Health policy expert Gregory Conko warned that removing antitrust exemptions, which date back to the 1940s, will actually drive up prices and harm consumers.
“Federal enforcement isn’t necessary to ensuring fair competition in the health insurance industry, but could actually drive smaller companies to the brink of insolvency,” said Conko.
The McCarran-Ferguson Act of 1945 exempts insurers from federal antitrust laws as long as the states police anticompetitive conduct.
The chart below shows the results of 40 years of anti-trust exemptions.
* US Health Spending Breaks from the Pack, Economix - NY Times