Friday, September 28, 2007

Insurance Profit - Yes There is Blame


Health Affairs had an analysis of why hospital bills are so high and said you could "Blame the Paperwork". Anyone in the health industry could have told you that! The amount of waste and expense in getting the bill paid by the insurance company could cover the uninsured in the U.S.

The study, funded by PNC Financial Services Group, contends that about one-third of all healthcare costs can be attributed to administration—an unacceptably high share, according to the 1,000 consumers who were surveyed along with 200 hospital and insurance company executives. Here is what they found:

  • Hospital executives reported that one in five claims submitted is delayed or denied and 96 percent of all claims must be submitted more than once.
  • Hospitals that do not use electronic billing or claims submission processes reported resubmitting a claim 11 times or more, or nearly four times more than those hospitals using electronic processes.
  • Insurance executives surveyed say they go back to hospitals twice, on average, to get all the information needed to pay a claim.
  • Nearly a quarter of consumers reported having had a legitimate claim denied by their health plan, and one in five ultimately paid the claim out of pocket.
Hospitals and doctors spend millions TRYING to get claims paid.

Let me break this down into its simplest form. Insurance companies are for-profit, wall street conglomerates. There is no mystery why the largest buildings in any metropolitan city are insurers. They have posted record profits for years. They make their money by taking in more money than they spend on health care. Denial of claims, rules that no one understands, underwriting only healthy people and then dropping them when they get sick all means profit. If they can delay paying claims for several months, billions of dollars are the "float" that they keep. For smaller claims, like doctors bills, we just give up and eat it because we can't afford to keep submitting claims for $50.00. Patients give up too. Wall street loves the insurance industry... America loves them....Politicians love them.

Paula Fryland, executive VP of PNC's national health care group said:
“I don’t think there’s anyone to blame, per se; it’s a reflection of the complexity of the payment relationship between insurers and hospitals. The benefit we have in our system of choice and customization is part of what makes things more expensive.”

Wake up, America! There is plenty of blame! This system of choice and customization provides little benefit at great cost. The major benefit goes to Wall Street. I love profitable companies also. I just don't want the profits to come from my health care dollar. I want that dollar to pay for health care...either mine or my fellow American.

5 comments:

K said...

I work for a law firm that does a lot of work for insurance/risk-sharing pools. I would have to say that nearly every coverage opinion our attorneys have had to do results in a denial of coverage. Don't get me wrong, we still get a lot of covered work, but it is always sadly entertaining to get a tape to transcribe with a coverage letter on it, and hearing the inevitable words "we find there is no coverage for so-and-so, on the basis of blahblahblah".

I guess I'm just agreeing with you, that the insurance industry is a big greedy-pig scam.

Anonymous said...

Health insurance is a huge scam.I was dropped by my insurer when I came up for renewal. I can get another policy but it will cost me $560 a month just for me. I have no health conditions except seasonal allergies. I find the whole thing overwhelming and depressing and will vote for the candidate who enacts universal healthcare for all.

AbbyP said...

I have no allergies or health conditions and I don't take any medications except birth control. I had a routine check up about a year ago(getting ready for my next in two weeks). After insurance, my check up cost me over $500. When I asked for a payment plan I was denied. The doctor advised me to come in for another exam, but I didn't have the money.

I am grateful work covers my basic plan, don't get me wrong. I can't imagine paying the monthly bill and then for all the lab fees. How am I supposed to get the health care I need when I can't even afford it after insurance? I can't imagine having no insurance or having to pay an actual Hospital bill.

Anonymous said...

Everyone needs to ask their pokliticians about health care. Even though all the politicians take money from them if we all bring up the subject they will realize that we are even bigger than the corporations. I think the best chance is with Hillary on this one. She outlines a gov plan and keeping private plans . That way there is competition. Another thing to do is to get rid of the anit-trust provision for insurers. And let's outsource. Maybe India could do a better job for less.
Shake things up.

Toni Brayer MD said...

Abbyp: Being in the health care industry, it makes me sad to read your comments and the outrageous cost for a young healthy person. One tip...a 25 year old with no health problems doesn't need to have annual blood tests. That can really run up a bill and most insurers don't cover "screening" tests. A pap test and general check up should do it. Doctors get too many blood tests. Sometimes we do it because patients want it but it is completely unnecessary.