Fix Health Care; Fix the Economy

by Karoli on December 28, 2008 · 4 comments

[Note to insurance sales reps and spammers: Don't even try it on this post. I will hit the delete key so fast your head will spin. You are all part of the larger problem.]

Here’s a sure-fire way to be sick: Go price individual health insurance for a family of 4, where the insured is 50, spouse is 55, kids both teenagers. I did that this weekend and am still reeling from the experience.

Without going into a tremendous amount of detail, I’ll report that the best deal I’ve found so far is $650/month with a $10,000 deductible, and limited PPO options for normal doctor visits, similar prescription coverage to the coverage we have now.

In some areas, $650 is a house payment. Here, it’s a luxury car payment. One we can’t afford to have; one we can’t afford not to have. As friends have discovered, one catastrophe like a heart attack or diagnosis of a chronic illness will wipe out everything. No home, no car, no job, no income, no nothing. It will be gone. Just like that.

I’m struggling with this because on January 31st I have to either COBRA my existing coverage to the tune of twice the amount for a new policy, or get a new policy. Or hopefully, a new job. COBRA costs are outrageously high, so I’m looking for insurance that will bridge us into a job with benefits. It’s scary out there.

Where is the money going? That’s what mystifies me…this isn’t just a problem for individuals. Employers are bending under the weight of health insurance costs and scrambling to keep the coverage while staying afloat. Forget pension costs; healthcare costs are a primary driver for layoffs, workforce reductions, replacement of full-timers with part-timers, outsourcing and other downsizing.

If we don’t get our arms around some health care reform fast, our economy will not recover. Businesses simply can’t afford to provide it; people can’t afford to get it on their own, and the burden will fall on the government in one form or another if we don’t figure this out.

There are meetings being held in people’s homes around the country between now and January 31st to discuss the challenges that health care reform presents. Francine Hardaway is having one today that I truly wish I could have attended. Since I wasn’t able to, this post is my input to that discussion and others around the web. Here are my thoughts in a nutshell:

Bring officials of health insurance companies to the table and force transparency with regard to the actual costs of providing health care benefits. I believe it will be clear that there is a great deal of fat that can be cut away from how insurance policies work.
Bring representatives from the pharmaceutical and medical supply industry to the public roundtable (CSpan, UStream, whatever) to discuss ways to reduce the costs of supplies, hospitalization, and medications,
Begin a nationwide initiative to place the focus on wellness-based initiatives. By this I do not mean forcing PE classes on school kids. I do think that it’s reasonable to make smooth pathways to wellness, such as allowing coverage for smoking cessation programs and devices, diabetes education, nutrition, and exercise. I see the initiatives for national service in this context. By getting people out of their homes and into their communities with the goal of actual exertion on a regular basis.
Follow the money. There is a tremendous amount of money being poured into the healthcare black hole, yet no one really knows where it’s going. Doctors aren’t making more money. Nurses aren’t making more money. Hospitals are barely surviving. Where is the money? Follow it, find it, and once it’s found, put some reasonable controls on the outrageous profit-taking that IS happening in the industry while under the radar.
Focus on primary care. Primary care is dying as doctors realize they can’t earn a living as a primary care doctor. Make the pathway easier, help get doctors on the ground in the primary care arena, and don’t kill them with a maze of paperwork that leaves them in the hole after expenses.
Simplify, simplify, simplify. Much of the cost of health care relates to the sheer complexity of the system. Just getting a prescription filled practically takes the hand of God. If a doctor has prescribed it; fill it. And conversely, train doctors to prescribe only when necessary, whether the patient likes it or not.
Streamline and consolidate the medical records process. Yes, this means electronic health records.

These are some of the ideas I have. I don’t think our economy has a prayer until health care reform is tackled in a meaningful way. My ideas are just the beginning, though.

What are your ideas? Add them to the comments…I’ll prepare a document and submit it to change.gov with everyone’s thoughts.

Tagged as: economy, Health, health insurance, healthcare reform, Politics

arthurat

Other items that are the problem
Cost of providing health care for those without insurance. The money needs to come from some where. The someone is those with insurance.
Cost of new technologies and treatments. Remember, we are a capitalistic society. The ability to generate a profit for your work is vital.
Utilization of services will also drive cost up, remember supply and demand.
dbmurdoch

My husband has been a family physician for 20+ years. He has an offer to go corporate and has to decide in 2 wks what he will do. He has a life calling to be a physician, this is awful for him. Simplify? How about working w a patient for an hour to find what meds are covered, or tests they need, fighting w insurance companies on their behalf, he has to do it, not a helper because it is too complicated to argue. In our area of the state a doc gets $42 for a reg visit from BC/BS, which owns 75% of the market. Medical asst at $20/hr. Front office person $18/hr. Benefits for all. Malpractice (ugh). Rent, phones, supplies – it costs HIM money to see patients many times. Now our kids are starting college. Can't do it anymore. It is so sad. The system rewards production, fast fast visits, sore throat? Here's a pill. Goodbye. What if he sees something more? No extra money just extra time and lost money from another patient. What if he wants to use electronic medical records and needs to input critical information? No extra money, just extra time he would be paid if he saw another patient. Extra time, but he would never turn away a problem, and he insists on quality of care and inputting to electronic medical records. 99th percentile every time he takes the specialty boards. He loves his calling. But nobody pays for this kind of care. He cannot do it any more, it is choosing between our kids in college or him seeing patients. Very sad.
tuckspop

Well, I am an ex insurance agent. You are absolutly right about a couple of things. The employer is drowning under the burden of providing good health care, especially the small employer. 50 employees or less. He can't compete with the bigger companies offerings. I used to manage a large insurance trust for the auto parts industry in Texas. I got to see the claims reports and costs. Even though we were collecting $500,000 a month in premiums, our costs were $550,000 per month. We almost went broke. Drug costs are outrageous. The drug companies are making a fortune. But lets look at the small employer with 10 employees. Let's say he is paying $1000 per family a month (employees contribute their share), so the monthly premium is $10,000. Most of these cases now have a ded of around $2,000 per person, somewhere around $6000 per family. 80 % co insurance. The chances of having serious health issues in a ten person group is pretty high. Diabetes, heart problems or cancer are the main causes of high claims. I had a hospital stay of a week this month and the total cost was about $25,000. Not a lot of testing either. That basically eats up two months of premium. Agents now make about 5% commission. On $10,000 that $500 per month. For the service they provide, you wouldn't work for less. Granted there are bad agents, but the good agents give good service and pay for themselves in reduced costs. Most of the time this size of group has a loss ratio of 75 to 85%. That means claims take up that much of the premium.
I don't have a dog in this hunt anymore, but I agree that heatlh care is of upmost importance. I can promise that no one will be happy with the outcome, but we can't go on this way. The adoption of a Medicare type system won't work. Most of the doctors won't take new Medicare patients. They don't get paid enough. Now in workers' compensation, we have the same problem. The docs get paid medicare rates and the specialists won't work for that. It's hard to find a good orthopedic doctor that takes work comp cases. My opinion is that everyone is to blame in the current system. We all need to come to the table and be ready to negotiate. Patients, doctors, and insurance companies. We are having a mild crisis here as many rural hospitals are going broke. Not enough paying patients.
Mike
tuckspop

Well, I am an ex insurance agent. You are absolutly right about a couple of things. The employer is drowning under the burden of providing good health care, especially the small employer. 50 employees or less. He can't compete with the bigger companies offerings. I used to manage a large insurance trust for the auto parts industry in Texas. I got to see the claims reports and costs. Even though we were collecting $500,000 a month in premiums, our costs were $550,000 per month. We almost went broke. Drug costs are outrageous. The drug companies are making a fortune. But lets look at the small employer with 10 employees. Let's say he is paying $1000 per family a month (employees contribute their share), so the monthly premium is $10,000. Most of these cases now have a ded of around $2,000 per person, somewhere around $6000 per family. 80 % co insurance. The chances of having serious health issues in a ten person group is pretty high. Diabetes, heart problems or cancer are the main causes of high claims. I had a hospital stay of a week this month and the total cost was about $25,000. Not a lot of testing either. That basically eats up two months of premium. Agents now make about 5% commission. On $10,000 that $500 per month. For the service they provide, you wouldn't work for less. Granted there are bad agents, but the good agents give good service and pay for themselves in reduced costs. Most of the time this size of group has a loss ratio of 75 to 85%. That means claims take up that much of the premium.
I don't have a dog in this hunt anymore, but I agree that heatlh care is of upmost importance. I can promise that no one will be happy with the outcome, but we can't go on this way. The adoption of a Medicare type system won't work. Most of the doctors won't take new Medicare patients. They don't get paid enough. Now in workers' compensation, we have the same problem. The docs get paid medicare rates and the specialists won't work for that. It's hard to find a good orthopedic doctor that takes work comp cases. My opinion is that everyone is to blame in the current system. We all need to come to the table and be ready to negotiate. Patients, doctors, and insurance companies. We are having a mild crisis here as many rural hospitals are going broke. Not enough paying patients.
Mike