In the public discussion about the necessity of fixing the extremely broken health care system in the United States, the terms "health care" and "health insurance" or "health coverage" are essentially used interchangeably. If the discussion is to progress constructively, it is imperative that consumers, policy-makers, and health-care providers use these terms accurately. Health care is what is provided in the doctor's office. Health coverage
is all about who pays for it. I'll explain why this distinction is important.
First, insurance companies like this confusion because it makes them look viable. The following quote is from the Iowa Health Insurance Network website (www.iowahealthnetwork.com) : "Wellmark provides (emphasis mine) all health care services through their highly acclaimed PPO network known as Alliance Select and the managed indemnity plan through their Classic Blue network."Now while this is technically accurate, the wording is misleading. Wellmark does not directly provide any health care whatsoever. The doctors in its networks are contracted with, but not employed by Wellmark. If Wellmark actually provides health care services, it is practicing medicine without a license.
In my experience, health insurance companies provide very little service at all. They make money in 3 ways – by collecting premiums, denying payment, and investments. Premiums are skyrocketing. According to Linda A. Johnson (her article)with the Associated Press, "Health insurance premiums have skyrocketed, making it ever-tougher for workers and employers to afford them. From 1999 through 2008, annual health insurance premiums jumped 119 percent, according to Kaiser data. The average family premium paid by workers rose from $1,543 to $3,354 a year, and employer payments per worker jumped from $4,247 to $9,325." However, for them to be profitable (and their profits can be obscene), they must figure out ways to keep more and more of the premiums and pay out less and less to the doctors who actually treat patients. Indeed, as a new report by Health Care for America NOW points out, "profits at 10 of the country's largest publicly-traded health insurance companies in 2007, rose 428 percent from 2000 to 2007, from $2.4 billion to $12.9 billion." In 2007, the chief executive officers at these companies collected combined total compensation of $118.6 million — an average of $11.9 million each." The average salary for your family physician is about $173,000/year.
The 2nd way they make money is by denying payment. In a study conducted in 1999 by Price Waterhouse Cooper that determined if health insurance companies denied only 1% of all claims, even if they later paid those claims within the maximum allowable time (usually about a year), the industry would make $280 million in interest during that period of time. By denying this payment, and even eventually making it, they generate interest income while the doctors whose payment is denied either lose interest, or worse yet, have to borrow money to cover the shortfalls created by this procedure. I can't tell you how many times we have submitted clean claim forms, have them denied, and then re-submit the exact same form and have it paid for.
Insurance companies do not value their doctors. I recently received a letter from the largest health insurance company in the US greeting me as "Dear Provider," with no recognition that I am a licensed doctoral-level psychologist. Other letters refer to me as Paul M. Conditt, LP, presumably standing for Licensed Psychologist – or perhaps Liquid Propane or a classic vinyl record. My correct title is Psy.D. (Doctor of Psychology). Reimbursement rates for doctoral level psychologists are only slightly higher than that for master's level therapists, even though we have usually 2-3 times as much training. In the medical field, increasingly more treatment is being provided by Physician's Assistants or Advanced Registered Nurse Practitioners to save costs, even though their training is a fraction of that obtained by an MD. A couple of weeks ago, I got a call from an insurance company asking if I needed help with a child diagnosed with Asperger's Disorder. I was highly offended. They offered to have me consult with a master's level therapist who may or may not have any training with the disorder (I have a lot), who has never seen the child, and did not take into account that I have successfully worked with this child off and on for over 4 years. I assured the representative that when I need consultation, I seek it from highly qualified professionals who have excelled in the area of treatment I could use some guidance in.
Insurance company policies greatly drive up my over-head costs. Billing can be a complete nightmare. We get multiple denials each month where there is absolutely nothing wrong with the claim form. We resubmit it and it gets paid. What a waste of time, paper, and postage. A couple of years ago, a big switch was made nationwide to make claim forms more universal. The company that covers about 70% of our clientele had some problems with its system in receiving the claims. We kept getting denial after denial. After many hours of intense discussion the phone with a myriad of different "representatives," I finally decided to lodge a complaint with the State Insurance Commission. They did nothing, explaining that "we assume that insurance companies are telling the truth unless there is evidence to the contrary." They didn't bother to try to gather any other evidence and ignored the evidence I sent them that outlined how the insurance company made multiple mistakes and lied to me about how to "fix" the claim forms. The company ended up owing us over $15,000, which we eventually collected, but this is a huge percentage of our gross annual revenue. Having to go without that cash flow for 3 months nearly put us out of business.
A huge talking point by the more conservative politicians is that a public insurance option will limit competition. What they don't recognize is that there is, in practice, almost no competition. In Iowa, Wellmark Blue Cross Blue Shield insures about 70% of the population. No doctor or clinic can afford not to be on their provider panels for two reasons. Business-wise, since so few people pay out of pocket for psychological care, we would be cutting 70% of our customer base. Secondly, because most doctors are in business to help people, we don't want to discriminate against people who have a certain insurance plan that they cannot afford not to utilize. The "competition" they speak of is not about competing over who will provide the highest-quality, best bargain health care, but who will pay for it.
Another option is to essentially expand Medicare and Medicaid to cover anyone who wants it. As a psychologist, my experience with these programs has largely been negative. First of all, our small business could not keep the doors open if the majority of our clients were covered under these plans at current reimbursement rates. We accept Medicaid in our practice because of our commitment to provide for the lower income population. However, this requires us to give a 40% discount below our standard fee. Secondly, the rules for participating in these programs can be prohibitive. Years ago, Medicare changed the rules about documentation, saying that start and stop times must be recorded for each session. Prior to that, the total length of the session was reported. They did not inform providers of this rule change. When large organizations were audited, any records that did not have start and stop times recorded were considered to be fraudulent charges. Therefore, the agency had to not only pay back what was paid for those sessions, but also a stiff penalty. Also, any clinic that accepts Medicare has to have all records comply with Medicare standards. When auditing, the Medicare officials are allowed to examine all charts, not just those covered by Medicare.
The last time I was audited by the large HMO contracted by the state to run the state Medicaid contract, I was docked points for not having documented the allergies a client has in the chart. I argued with the auditor, saying that doing so essentially forces me to practice outside my area of competence. I am a clinical psychologist, not a medical doctor or an allergist. By me documenting this, I am implying that I know at least something about allergies. All I know is what happens in my own sinus system at certain times of the year. Many dentists will not accept the state Medicaid in Iowa at all because of low reimbursement rates and the fact that this clientele tends to have poorer outcomes and higher no-show rates.
Health insurance companies have no positive influence over the quality of health care, and if anything, are decreasing the quality. It is similar to teachers teaching to the test. Doctors are getting more pressure to treat based upon what will get reimbursed, having to balance that with what is in the best interests of the patient. Lesser-trained providers are cheaper, so insurance companies give preference to policies that utilize them over doctors.
In summary, health care does NOT equal health insurance. In the upcoming decision-making process, policies must be developed that help rein in costs. Insurance companies will try to focus the discussion on ways that doctors, hospitals in clinics "waste" money, implying that they (the insurance companies) are the models of efficiency. This is far from true, and if they want to be a player in the reform, they must reform themselves first. Doctors must learn to be more transparent about what the benefits and costs are of different treatment options, communicate them to their patients, and then be given the freedom to make decisions based on what is best for the patient, not for the insurance company.
