What’s wrong with the US insurance–medical costing systems?

Count this post as news – not healthcare. Ok I am no longer a political reformer. And Lord knows I have learned soapboxes help very little to not at all. BUT. This is ridiculous. Outrageous. Nonsense. Offensive. Problematic, and of course I could go on.  Spend a few moments looking at this explanation of benefits (EOB) for a patient of mine insured by United Healthcare.  image

Now I am not faulting UHC, but it is obvious that UHC has a great contract with the lab.  BUT what if you are uninsured?  Well – quite simply you are SOL. Scr***d!!! This ought to make us all crazy and drive us to a find better ways to fix this system which is so clearly broken. Now to make this simple, the lab wanted to get paid $2,630 for their work and the insurance contract said – no way – and they reduced the obligation ONLY to their insured clients to $245 (a 91% reduction).

WE THE PEOPLE need to fix this. No political party, President, Congress, HHS, or any governmental agency has the power to take on big insurance or this system. We got ourselves into this in the 1930’s when wage control during the Great (Horrible) Depression prevented businesses that were functional from raising wages to get the best employees.  So instead of wages they offered insurance as a “benefit” because it was a temporary loophole in the law. 

So far in front of any country in the World our employers offered their workers a benefit.  Now you see the unintended consequence of the US Congressional action during the 30s.

I have no easy solution to this mess.  Clearly the Obama plan will bring a whole new set of unintended adverse consequences.  Doing nothing clearly leaves a lot of people in a marginal place due to unreasonable cost shifting away from insurers to the uninsured/soon-to-be-bankrupt of the US. Fixing it can only start with us.

Because – the number one cause of bankruptcy is not divorce or a bad economy – its health care costs.  Small wonder – when you see bills like this without insurance.

About Dr Bradstreet
Dr Bradstreet is a graduate of the University of South Florida College of Medicine and received his residency training at Wilford Hall USAF Medical Center. He is a Fellow of the American Academy of Family Physicians. He is an Adjunct Professor at the Southwest College of Naturopathic Medicine in Arizona. He is extensively published in the peer-reviewed literature on subjects of autism, oxidative stress, mitochondrial disorders, virology, hyperbaric oxygen, and toxicology (especially heavy metal chelation). He is trained in the the isolation and use of stem cells.

7 Responses to What’s wrong with the US insurance–medical costing systems?

  1. Bill Burke says:

    The solution is quite easy. Reverse the New Deal and Great Society programs. Together they confiscate and redistribute about 20% of GDP. As you say, prior to the Great Depression we did just fine. Government “help” set the tone. Imagine the explosion of investment, productivity, and innovation if Social Security was privatized, instantly making us the greatest saving nation in the history of mankind. (12% of gross wages) That would accumulate half a trillion dollars each and every year. Add to that the decrease in federal spending by eliminating the bureaucracies that run those programs. That would save hundreds of billions more. The transition back to personal responsibility, for some, would be the difficult part. The rest would be on an even keel in under a generation.

  2. Tony Mach says:

    The prices the lab charges are insane. That panel would cost round about $500 (in local currency) here in Germany. The prices here are regulated by a state commission, the labs are doing just fine, the patients are doing just fine, the doctors moan a bit, the insurance companies moan a lot and the people pay for health insurance half of what you pay in the USA – and almost everybody is insured.

    • Bill Burke says:

      The high prices here are not because we need price regulation. Indeed, the price on Dr B’s example is $245 or half your $500. Price regulation will never match markets for efficiency. We need to unwind the nanny state and then we must add tort reform. Insurance rates are so high because lawyers here can create revenue out of thin air by suing for ridiculous reasons. Of course, then they settle for a fraction of the suit…….keeping 40% of the total. Our local phone books have full page and two page advertisement s by law firms boasting having won hundreds of millions in “damages”. THAT is why the cost of insurance is so high.

      • Tony Mach says:

        No, the price in Germany is $500, regardless whether you pay out the pocket of whether your insurance pays for it.

        The price here is $2,630 if I would pay out the pocket – a slight difference, I’d say.

        “Price regulation will never match markets for efficiency.” That is the reason you pay twice as much(!) per capita(!) for insurance in the US compare to any(!) country in the EU, with a much higher rate of uninsured(!). Market efficiency my ass.

      • Bill Burke says:

        The point you missed is that government and lawyers cause the “full price” to be $2,630. Unwind the nanny state and put the lawyers in the box and the market will charge a fair price to everyone. That fair price is the $245 that the lab accepts as assignment. That is, the lab covers cost and profits at $245. That is market efficiency. The 90% above that is regulation and the cost of litigation. So, if the price in Germany is $500, you’re paying (everyone is paying) double the acceptable price in the US if you back out government interference and litigation induced distortions in the US. You can accept the $500. My target is the $245…….if I can just get the government out of my life (including regulations that might set our “accepted price” to $500) and if we could implement loser pays.

      • Winston Smith says:

        No, I disagree somewhat. The problem is a complete lack of a healthcare “market” due to 3rd party billing, otherwise known as insurance companies. Third party payment is nothing but privatized socialism. Tort reform may be needed but the most relevant point is that insurance pays for everything – there is no motivation for the consumer to properly price their medical delivery. This is ridiculous. My car insurance doesn’t pay for my gas, oil changes, car washes, dings, etc. In a true market, the consumer is at the forefront of decisions, not so in the health market.

        My recent anecdote. Due to severe dry skin from time to time I get severely impacted ear wax that can cause vertigo and other issues. In the last 20 years I’ve had to get my ears cleaned out promptly 3X. 15-20 years I went to a walk in clinic in Mass and paid $20, quite reasonable. 4 years ago $75 @ a Walmart in Maine. And just recently $330 @ a walk in clinic in Florida. Unfortunately, my insurance co. won’t cover such non-emergency, emergencies. Even so, on what planet does anyone think that $330 for less than 30 minutes by a nurses assistant using a bulb and water solution is reasonable or what the true “market” price is? That comes to $660 an hour for a relatively “unskilled” medical practitioner using low tech equipment.. When Obamacare hits it will only get worse. Within a year healthcare costs will be like 30% of GDP. This won’t end well.

      • Bill Burke says:

        We’re very close to agreeing. The root of all these evils is government. “Private Insurance” was born as a way for companies to skirt wage and price controls during the new deal. To say it the more precisely and correctly, government distorted a market and the market found a way to fix the distortion. The unintended consequence was that insurance benefits cannot easily be unwound. To compound the issue, Johnson’s “Great Society” gave us Medicare and Medicaid. Those programs are bankrupt by any objective standard. I worked (a LONG time ago) in a medical lab as the accounting manager. Every time Medicare changed (i.e. CUT) reimbursement rates, the private insurance companies followed within one or two workdays. i.e. government continues to distort the market. The response now? “Private pay” (your ear wax example) gets gouged to subsidize the under payment mandated by government.

        Find a way to unwind Medicare, Medicaid and do away with private insurance and I’m right with you!!!

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