The ability
of private health insurance companies to limit lifetime cost and deny coverage
of preexisting conditions is the prime factor in the overly expensive health
care costs in the United States. The web of cost and payment systems is built
on these two lee ways.
The limits
on lifetime costs creates many instances where a person who begins a lifetime
of medical intervention exhausts their available payments. Once that threshold
is reached, the person and his/her family must beg for services and utilize the
ER system in order to receive urgent care. They must seek out philanthropic
sources to obtain treatment which cannot be had from an Emergency room visit.
Many times the medical facility must write off the costs to the actual patient
and instead allocate them to overhead and charge the insurance providers a
higher amount. This is why a $2 bag of saline is charged at $800. As long as
the insurance provider is in the loop the medical facility gets paid. This
scenario of cost allocation puts an undue burden on people who do not have
coverage and are similarly charged the $800 amount.
In the mix
of who pays for what, the insurance company gets to limit their exposure to
payouts and doesn't have an incentive to contain the costs.
By being
able to exclude high risk patients and high cost procedures and medications the
insurance companies shift the costs over to charitable, philanthropic and
public assistance budgets such as Medicaid, SCHIP and Medicare Disability
coverages. The exclusions for unfavorable items such as abortions,
contraceptives, mental health, dental and elective surgeries likewise drive up
the costs to people who do not have coverage.
As long as
certain people can be excluded and certain procedures and therapies not covered
there will be inequities and cost shifting rather than true cost containment.
Medicare,
for instance, is prohibited from negotiating with the pharmaceutical industry
for bulk buying prices. For the people who are covered by private insurance
they do not need to worry (for the most part) about the costs. For people who
are covered by Medicare or Medicaid the co-pay amounts can be prohibitive. The ostensible
reason for co-pays is to make the patient partly responsible for limiting the
demand for medications. The real reason is the funding sources for drugs will
only pay a certain amount and the manufacturer wants more than that.
If the
insurance industry could not deny a patient, charge a deductible and a copay,
then they and the pharmaceutical industry would have to come to terms for the
actual costs. One or both industries would have to accept a smaller profit
margin.
Of course
this treatise is leading in the direction of a single payer health care system
for the United States. This doesn't mean the entire healthcare insurance
industry would be scrapped. Someone still needs to administer the system and
monitor it for efficiencies. That entity (those entities) can easily be the
existing insurance corporation. It would necessarily limit the salaries and
other compensation of the top executives and the ROI for investors. On the positive side, everyone would be able
to receive care. When a need for facility and personnel expansion is identified
building would be built, personnel would be trained. In the agglomerated mash
up of services and administration there is no rational relationship between the
number of doctors, nurses and technicians who are trained. The industry does
not act on the attrition of personnel via retirement and career switching. The
industry doesn't act on the projections of population, age demographics or
emerging disease crises.
One can take
as an example the number of and locations of dialysis units around the country.
While any business which decides to build a facility can be assured of its full
use capacity, they rarely take into consideration that getting there and home
is an integral part of the treatment. Precisely where the patients live
relative to the dialysis unit is an external factor as far as the dialysis
provider is concerned. As long as they do not have to consider the
transportation element, cost will be high and patients will have difficulty
obtaining their essential treatment.
The first
steps in health care justice is to not allow insurance companies to deny
coverage. Then put a price limit on the "essential" coverages. They
will have to work together with their vendors to buy the hardware and drugs
they cover. Lastly, they would have access to public funds to make up the
difference.
Yeah, you
can call that socialist. It is. So are the Police Department, Fire Department, Public
Works Department, Highway Department, and those pesky socialists who plow and
salt the highways each winter. It is time the single largest economic cost
division get in line with the remainder of the economy.
Fewer and
fewer people are employed today than before due to job migration and
automation. Fewer of the remaining jobs will be full-time and of a compensation
level which includes health insurance. In 12 years, the last of the Baby Boom
generation of 59 million people will reach age 65. Owing to the actuarial
tables, there will be somewhere around 120 million Americans who are Medicare
age. The planners in our society and the Legislators we elect need to take a
hard look at what the future will be and devise a new system of health care
delivery and payment.
