The Health Insurance Mafia
Stanley Feld M.D.,FACP,MACE
Jonathan Kellerman is an M.D.. He is telling it like it is even though no one asked. His story is clear. I believe many physicians understand the problems in the healthcare system more clearly than most of our politicians. I also believe it is our obligation to describe to consumers the real problems and dismiss political babble.
However, when physicians are in positions that represent many physicians they themselves become politicians and abandon the purpose of the medical care system which is to put patient care first. For some reason physicians do not articulate the problems of every day medical practice.
“Most discussions about the rising cost of health care emphasize the need to get more people insured. The assumption seems to be that insurance – rather than the service delivered by doctor to patient – is the important commodity.”
The healthcare insurance industry has kept the discussion focused on insurance and not on the patient physician relationships and services delivered by physicians to their patients, namely cognitive services. It also does not focus on the patients adherence to the recommended treatment and the exploding obesity epidemic.
“You don’t need to be an economist to understand that any middleman interposed between seller and buyer raises the price of a given service or product. Some intermediaries justify this by providing benefits, such as salesmanship, advertising or transport. Others offer physical facilities, such as warehouses. A third group, organized crime, utilizes fear and intimidation to muscle its way into the provider-consumer chain, raking in hefty profits and bloating cost, without providing any benefit at all.”
The healthcare insurance industry is the middleman that controls the healthcare system. The government through Medicare depends on the healthcare insurance industry to be the third party administrator for Medicare. The healthcare insurance industry sets the prices and the benefits using a unscientific social science called actuarial science.
“The health insurance model is closest to the parasitic relationship imposed by the Mafia and the like. Insurance companies provide nothing other than an ambiguous, shifty notion of “protection.“
In order to control the healthcare system the healthcare insurance industry has managed to control the process of authorized treatment and reimbursement.”
“ But even the Mafia doesn’t stick its nose into the process; once the monthly skim is set, Don Whoever stays out of the picture, but for occasional “cost of doing business” increases. When insurance companies insinuate themselves into the system, their first step is figuring out how to increase the skim by harming the people they are allegedly protecting through reduced service.”
Insurance is all about betting against negative consequences; the insurance business model is unique in that profits depend upon goods and services not being provided. Using actuarial tables, insurers place their bets. However actuarial science is not an exact science. Therefore, to be safe a percentage is added to the potential pricing error guaranteeing an increase in profit.
“Health insurers have taken steps to avoid that level of surprise: Once they affix themselves to the host – in this case dual hosts, both doctor and patient – they systematically suck the lifeblood out of the supply chain with obstructive strategies. For that reason, the consequences of any insurance-based health-care model, be it privately run, or a government entitlement, are painfully easy to predict.”
Jonathan Kellerman nailed it. It is not about the patient, society’s health or the value of physicians’ intellectual property, it is about the healthcare insurance industry’s profit.
” There will be progressively draconian rationing using denial of authorization and steadily rising co-payments on the patient end; massive paperwork and other bureaucratic hurdles, and steadily diminishing fee-recovery on the doctor end.”
The result is obviously more profit for the healthcare insurance industry and more out of pocket expenses for patients.
In the olden days: “ The doctor had to look you in the eye – and didn’t need to share a rising chunk of his profits with an insurer – the cost was likely to be reasonable. The same went for hospitals: no $20 aspirins due to insurance-company delay tactics and other shenanigans. Few physicians became millionaires, but they lived comfortably, took responsibility for their own business model, and enjoyed their work more.”
The idea is to get the dollar out of the hands of the healthcare insurance industry and let the patient manage his own money and keep the money he does not spend in a trust.
Healthcare insurance must be converted to true insurance that is needed for expensive procedures.
Both physicians and patients need to be active in liberating themselves from the notion that insurance will pay. The healthcare insurance industry has figured out how to control the premiums and the reimbursement. They have now figured out how to neutralize the innovative concept of patient control of the healthcare dollars with Medical Savings Account and converted them to Health Savings Accounts with healthcare insurance industry control.
“Physicians and other providers need to liberate themselves from the Faustian bargain they’ve cut with the Mephistophelian suits whom now run their professional lives. Because many doctors are loath to talk about money, they allowed themselves to perpetuate the fantasy that “insurance is paying.” It isn’t. There is no free lunch and no free physical exam.”
One solution is for physicians and patients to abandon the traditional healthcare insurance grip.
Government (local,state or national) or employer associations (third party payers) set up their own healthcare insurance companies. They set rules in favor of the patient with the patient having control over their first six thousand dollars. The patient does not contribute the first 6,000 dollars. One of the third party payers contributes the insurance premium. Self employed people would contribute their own money with pre-tax dollars. If they could not afford the premium, they would be subsidized by the government. This is not an entitlement. This is pure insurance with motivation to save money.
I wonder how many politicians would be willing to past legislation to permit this to happen. It could easily be done on a state level. Consumer would then be able to control the system. We would be able to get rid of what Dr. Kellerman calls the Healthcare Insurance Mafia.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
QuoteFL • August 19, 2008
First of all, I love your mafia take as it is dead on! I am in favor of deductable assistance, or government subsidies for high risk individuals that need it the most. Another thing to point out is that unfortuntely in the US, insurance (especially health & life) is considered a luxury and many young people and working middle class with a choice of where to spend there money are opting for toys and entertainment rather than planning ahead. Hopefully that will change in the future. Great post and resource links…I’m your newest fan. Bookmarked!