Health Care Reform Is Now Health Insurance Reform   Leave a comment

As the legislation continues to be worked through it has become more and more clear that nearly all the health care industry is on board with most of the proposals before us except the health care insurance industry.   It is also clear that it is this industry that has the most to lose with reform.   If we look at that industry we can plainly see that millions (if not billions) of dollars each year are funneled through it.   A great deal of that money goes for administration, salaries and huge bonuses for the top executives of each insurance company, as well as to the stock holders of these companies.   That represents a great deal of health care dollars that do not go toward health care for the American people.

 It is also clear that health care provider (hcp) fees are inflated due to the insurance companies.   Let me explain.   Annually hcps negotiate with the insurance company payors (icp) that they will be accepting in net.   The contracts generally include the discount that the icps will receive due to the clout that they have being such large an industry.   Typically discounts of 40-60% are negotiated. Now, hcps have to calculate what their “usual and customary” (uac) fees will be in order to receive enough revenue to remain in business.   Remember, most of the revenue for providers will come through the icps.   This means that the hcp must inflate the uac fees in order to maintain its ability to provide services.   That means that when an uninsured person receives his/her bill it will charge the “uac” fees.   To do otherwise would be a violation of the contract that the hcp has with the icp. Let me give an example.   Suppose a hospital bill comes to $500,000 and the icp has a contract that gives it a 50% discount.   That means the statement sent to the patient would show a fee of $500,000, the amount the icp pays ($250,000) and the amount the patient is responsible for (if there is a copay or a percentage that the patient is obligated to pay).   Suppose the patient has no obligation to pay anything (plans vary).   In this example the hospital receives $250,000 for the fees charged of $500,000.   This, of course, means that the hospital must inflate the uac fees in order to, not only cover its true costs, but to also cover all overhead (salaries – including non-medical staff -, maintenance, utilities, security, equipment, etc, etc).

I believe that most of us would agree that this is extremely unfair to the uninsured who are in the minority (about 15% of the population but steadily rising) who would have to come up with the full $500,000 on their own.

 I just returned from a rally supporting President Obama’s health insurance reform plan.   The presentations that I heard from a panel of seven physicians (three of which practice at Centerpoint Medical Center of Independence), group organizers and a cancer patient have done nothing but reinforce my previous views.

 It is so important that the final version that goes into law contain a provision for a public option.   If this does not occur the bill will be quite weak and much more will need to be done to bring real reform.

 I realize that there are many good people who work for the health insurance companies.   This is why a plan must be phased in as to change too quickly or drastically would put many thousands more out of work.   We must have a plan that will allow for gradual change and for adaption over time.

 There is so much more that I could say.   For those of you who listen to talk radio or to the network or cable news I would say, fine, go ahead and listen. I listen to them so that I can try to balance the two positions.   I would encourage you to also be open to what those supporting reform are saying.   Don’t dismiss out of hand what is being shared.  There is a long way yet to go, but progress is being made.   Let us stand in there for the duration.   Let’s make change happen for the sake and for the good of our country now and long into the future.

 

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Posted October 3, 2009 by terryflowersblog in Health Care

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