Many observers are confused by an apparent change of heart on the part of the insurance industry regarding Hillary Clinton. Why, they wonder, is “big insurance” contributing so heavily to a left-leaning politician for whom they once harbored such antipathy?
Kevin, MD links to a post by Dr. Rich, who theorizes that the insurance industry is backing Hillary because they expect one last orgy of profits before her majesty butchers their cash cow. The big problem with this theory is that Hillary has no plans to “drive them into oblivion.” In fact, the opposite is true.
Senator Clinton, like the rest of the Democrats running for President, wants to protect the health insurance industry’s most sacred cow: the employer-based coverage system. That is to say, she plans to keep in place the tax subsidies that animate this perverse arrangement.
The insurance industry is more afraid of Republican flirtation with the ideas of decoupling health insurance from employment and creation of a national health insurance market. No serious presidential contender has openly endorsed this as yet, but Giuliani has advisors who will encourage him to do so if elected.
Removal of the distorting tax subsidy for employer-based health insurance, while forcing the insurance companies to compete with one another for customers in a national health insurance market, would inevitably drive the price of health insurance down and cut into the profits that everyone claims to deplore.
So, there has indeed been a change of heart, but not on the part of the insurance industry. It is Hillary who has changed positions. She is now the last best hope of “big insurance.”
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I freely admit that you may be right. Indeed, Senator Clinton specifies that her plan provides for the continuation of the private insurance market. So whether one thinks that her plan will really accomplish this feat depends on how one supposes it will play out in actual practice
The key to Senator Clinton’s plan is that it offers to preserve choice. It does this by a) preserving the option of employer-sponsored private insurance (”If you like what you have you can keep it.”), while b) offering individuals the new option of a government-sponsored plan similar to Medicare.
So, while her plan preserves the private market, it also appears to place the government in direct competition with that private market. If that competition is entirely fair (and my goodness, Mr. Catron, are you really in the group that assumes the feds will establish a level playing field?) then you are correct - her plan will preserve the private insurance market.
But because it’s the government that ultimately will determine the rules of the competition, the cynics in the audience (I sadly admit to being one of these) will predict the competition will tilt in favor of the government’s insurance product. This would would make Senator Clinton’s plan a particularly slick pathway to a government-contolled system, and in this regard I would agree that she has indeed learned a lot since 1994.
But alas, I’m even more cynical than that. I also accuse the private insurance industry - having figured out that making money by actually taking care of sick people is impossible - of being nearly ready to throw in the towel. I see them as emulating the old-time railroad magnates of the last century, engineering one last windfall for themselves as they “gracefully” turn their industry (fully milked for all it’s worth) over to the tender mercies of the feds.
DrRich
Posted 14 Nov 2007 at 3:22 pm ¶http://covertrationingblog.com
The key to Senator Clinton’s plan is that it offers to preserve choice. It does this by a) preserving the option of employer-sponsored private insurance while b) offering individuals the new option of a government-sponsored plan similar to Medicare.
That’s the truly pernicious thing about her plan: No matter which choice the patient makes, the insurance companies clean up.
In the employer-sponsored model, the patients will be herded to over-priced insurance products by the tax incentives she wants to preserve. If they choose the government-sponsored version, the insurance companies will receive “fiscal intermediary” contracts to administer the program—just as they receive to manage claims for Medicare.
The only way to get insurance costs under control is to (1) get rid of the tax incentives favoring employer-based insurance and (2) open up the market so that insurance companies must compete nationally for customers.
Posted 14 Nov 2007 at 3:57 pm ¶I have a better idea, let’s have all the doctors, hospitals, anybody in the health care field stop taking all insurance, then we could lower our prices to something reasonable and we would have to compete with good service and reasonable prices. On top of everything else we would actually know how much medical care costs, all we know now is how much it costs plus a guess on the overhead created by both private and public insurance plans!!!
Posted 14 Nov 2007 at 4:31 pm ¶drmatt, while I don’t believe that eliminating insurance would have any significant effect on the cost of care, I do agree that we need full transparency. I want to know not only the doctor’s cost, but also the insurance company’s contracted rates so I can make a more informed decision. I left the co-pay world years ago, and would like to see how that would effect the market as a whole, but am also concerned with freedom of choice for the consumer. It really is silly to pay more for a haircut than a trip to the doctor.
Posted 15 Nov 2007 at 10:19 am ¶“I want to know not only the doctor’s cost…”
That’s interesting - do you mean globally/in general/on average, or the costs incurred by a specific doctor?
Posted 15 Nov 2007 at 11:42 am ¶Rich, I want to know what they charge as a line item per CPT to the average guy on the street. Of course, I also want to know what the insurance contracted rate is as well.
Posted 15 Nov 2007 at 12:17 pm ¶Matt, I am sorry to hear you dont think it would effect cost, in my small solo practice, overhead directly related to insurance company billing/reimbursement requirements was 8K a month or about 100K per year. can’t imagine getting rid of that wouldnt bring down costs. As far as the “average guy” bill, the insurance companies require that you charge everybody the same, you can’t give out pricing advantages it is illegal. The way I devolped my pricing schedule was like this, I drew a graph, billing codes down the side, insurance companies across the top, I filled the boxes with what the insurance companies said they would pay for something, then I found the highest reimbursement for any given billing code and added 15%, that is what you would get charged as an average guy. By the way, the 15% was so that you would catch increased reimbursement rates, they routinely not tell you when reimbursement was increased and you couldn’t collect it if you didn’t bill it.
Posted 15 Nov 2007 at 2:17 pm ¶Oh, so you mean the charges, not the underlying cost.
In my pracitce, the average guy on the street IS the guy with the contracted rate.
Posted 15 Nov 2007 at 2:31 pm ¶well guys, I think we are all on the same page with transparency, just a different sentence. drmatt, that grid is exactally what I am talking about. I want to know what it would cost me based on your grid not necessarily get an advantaged rate. If I am insured, I want to know what the discount is. If I am a cash payer, I want to know what the price is. Rich, I know most have coverage, but some of us don’t use the old co-pay system and would like to know costs up front. drmatt, do the companies not send out updated reimbursment sheets? I would think they would be contractually obligated to do that. I know my key carrier doesn’t change contracts mid year, and usually sends someone out to deliver them if there is a change after that period.
Posted 15 Nov 2007 at 5:44 pm ¶Matt, The insurance company doesnt get a discount strictly, as a provider under their plan they pay me the MAB (maximum allowable benefit) that I have agreed to take because I signed the contract. This amount is different ins. co. to ins co. so it really is impossible to tell you the rate, it is also diff provider to provider. there is bargaining power in numbers, a large practice is likely to get paid more than a small practice providing the same service, to top it off, it is illegal for me to talk to other practices and compare what I get paid for a particular service compared to what they get paid!!!! They do update you when reimbursement changes but not in a timely fashion, usually once a year and it doesn’t matter when they changed it, strictly speaking this is not a contract change it is just a change in rates, they can change them four times a year if they want to, the contracts are written by the insurance companies so like credit card contracts it is a “take it or leave it” deal. This update comes in a rather sterile envelope in the mail with the thousands of other pieces of mail that deluge a practice. It cost money to go through all those codes in the computer and make changes too. I may be able to find my original grid but it is three years old. For Medicare you can go online and get thier reimbursement rates, however it will be meaningless unless you know what the codes mean. 99213 is the most used code which represents an acute/simple problem, cold, sore throat, knee pain, you could start there.
Posted 16 Nov 2007 at 7:02 am ¶Thanks for the insight drmatt, I am a big proporent of transparency and it looks like there are more hurdles out there that we need to look into before we can move forward.
Posted 16 Nov 2007 at 11:19 am ¶As I have said before, I doubt there is one person who understands the whole system in all it’s complexities, being such I do not believe that band-aids applied by people like catron, or for that matter the people he criticizes is going to fix anything. We must first decide what we want from our medical syste, exactly in detail, and only then can we talk about how to design and build it. This is like talking about how to build a house before we know how many rooms we want, how many bathrooms, what kind of heat and so on.
Posted 16 Nov 2007 at 11:53 am ¶The only way I would correct the analogy is that the house is already built and in need of repair. Do we fix the electrical first or the plumbing? Thanks for you insight, we all see it from different angles, but I think it is great that we are having these discussions.
Posted 16 Nov 2007 at 5:09 pm ¶Post a Comment