Marketing Degree--A Qualification to Practice Medicine? Managed Care 101 in 2010 (Part VI)

December 3, 2008

Just what do Insurance companies add when it comes to Health Care? They drain off at least 25% of the premium dollar to pay stockholders and executives.

In an ‘

p,’ the seller understands the wants and needs of the buyer and then attempts to deliver on that; the buyer, likewise, also has something to offer the seller, obviously. Now, assume that buyer is you, the patient; you need insurance or insurance coverage. If that exchange is so much to the advantage of the seller over the buyer, your health is likely to be compromised; caveat emptor. That’s the rub with health care as big business - it’s profits before patients. jgk

exchange relationshi

On October 9, 2008 at 3:04 PM, Fredrick H.

(MD, PhD, Esq

) wrote:

Gil: Just what do Insurance companies add when it comes to Health Care? They drain off at least 25% of the premium dollar to pay stockholders and executives. Worse, in order to cover this non-essential expense and have an equivalent amount of money available to deliver the actual health care needed, premiums would have to rise 33%. OTOH, to keep premiums constant, insurers need to find ways to keep people from using that extra 25% allocated for health care. What do they add that makes them worth their keep?

Response from Gilbert R. (a large academic medical group [PPO] Director):

I have never said that I favor insurance companies, nor thought they were doing a good job!

Ed Comment: Just what do Insurance companies add when it comes to Health Care? They drain off at least 25% of the premium dollar to pay stockholders and executives.

Back to Fredrick:

OK, but if you mistrust government bureaucrats, at least you can vote to throw them out every 4 years if they don't perform adequately.

Response from Gilbert R.

Never would say that either. Government and businesses do not have all the solutions and some of their solutions cause problems. I also note, the turnover in Congress is very small as most get re-elected.

Fredrick:

all

What can you do if your Insurer or HMO rips you off? Change to another? Firstly, they do the same thing because they all learned the same thing in business school. And, if they ripped you off, it presumably means you've got some untreated, expensive disease. Good luck trying to buy into a new health plan!

Gilbert

Businesses and governments run without controls and that often leads to greed and corruption where the public is hurt and then to add 'insult to injury' they have to pay for it.

Fredrick:

It's just like the right-wing approach to War. Instead of paying a

U.S.

soldier $30K a year, we pay a private contractor $100K for each mercenary he provides, so we pay more and lose control. Meanwhile the contractor (e.g., Eric Prince) pulls down huge profits (OBTW: just like the HMO CEOs) for sitting on his duff in an air-conditioned office, and we have 1/3 the number of boots on the ground as we could have had if we simply recruited more soldiers directly.

So, why do we embrace such blatantly absurd policies? Because a significant proportion of the patronage that goes to Blackwater and Insurers and HMOs goes back to the coffers of the politicians who provided them with the windfall taken out of the People's tax payments!

Fredrick:

not

There has been, is and will be fraud and waste in government that cost the taxpayers a lot, so perhaps government isn't the answer, but immoral, greedy private insurers are clearly the answer. Is altruism the answer? I wouldn't depend on it; it’s hard to imagine a group who’d fork up a ton more then they’re already paying to help a fellow member with a catastrophic illness, especially if their rates are already going to go thru the roof!

Response from Gilbert R.

non-discretionary

Very few people want their job eliminated, but I’d augur for extricating the insurance model from the health care landscape, unless we decide to keep it just for catastrophic care. Imagine if your auto was covered as health insurance is supposed to be -- where every thing's covered -- the costs of owning an automobile would go up. One of the toughest questions is how much of basic health care should be covered? -- Many people seem to be able to get money for other, more discretionary things (flat screen TV’s, smokes and booze, for example) so why not get them to allocate more for their healthcare?

Perhaps there should be a tax, like the one for Medicare, and everyone would get a chit to buy a basic policy from whatever company they wanted and they could buy additional coverage if they wanted it. [Ed Comment: And without penalty such as for preexisting condition clauses.]

Do you have any comments about misaligned incentives and conflicted motives in health care?

For instance, what are the obstacles in trying to achieve any of the following: Optimal value for the patient-customer? Equanimity and trust between the employer and patient? Non-interfering and fair treatment by the health care overseer/utilization review tzar over you? And, how do you make healthcare affordable at the same time?