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Embodiment of corruption: Your health insurance network

Embodiment of corruption: Your health insurance network

Picture of Steven Weissman
Gangster

As 2018 dawns insurers and providers celebrate their ongoing control of politicians who reduced the industry’s corporate taxes by 40%. Meanwhile, American families remain crushed by prices gone berserk with no relief in sight.

Because of networks, the U.S. has the highest priced medical care on earth by a margin of at least 50% per-capita. In 2016 we spent 3.3 trillion dollars ($10,348 per person) on healthcare. Based on costs in nations with better rated care and longer life expectancies, we were overcharged by 1.1 trillion dollars.

An insurance network consists of a group of hospitals, labs and physicians that agree on the amounts participants in an insurance plan are to be charged for any service.

Insurers routinely include provisions in contracts with network providers prohibiting disclosure of contracted prices. Network pricing is legally treated as a “trade secret” in nearly all States. For example, a Florida law prohibits physicians from disclosing HMO fee schedules: “. . . the provider shall maintain the confidentiality of the schedule.”

Secret network pricing helps render patients defenseless against price gouging. It’s as absurd as grocers being permitted to keep the price of milk secret.

Ask any hospital, lab or physician the price of anything and all you get is a question: “What insurance do you have?” If you are uninsured or out of network you may be charged 12X more than your neighbor for the exact same service. Obtaining an actual price is impossible because there is no real across the board pricing.

Insurers falsely tell patients that they saved them the difference between the “list price” and the “discounted” network price. List prices are approximately 4 to 12 times more than the real prices billed to the 91% of patients who are insured and should never be a factor.

For example, an insurer states you were charged $3,200 for an MRI (i.e. list price) but you received a discount price of $600 (a reduction of $2,600).  The insurer claims it saved you $2,600 – even though it pays nothing if you have not satisfied your deductible.

Insurance company network “discounts” are a scam. As The Wall Street Journal, among others, have noted: “Many hospital executives dismiss those list prices . . . as meaningless and misleading, since few patients ever pay them.

Make a few phone calls and you will quickly discover that the real cash price for an MRI is approximately the Medicare rate of $300-400; substantially below the network price in the example of $600.

Kiplinger's illustrated how paying cash for a minor surgery cost a patient $1,700 versus the $6,400 it would have cost if the patient had “utilized” his insurance. The Federalist reported “. . . patients who don’t max out their deductibles would do far better for themselves . . . by paying cash straight up.”

The fact that individuals can obtain better pricing than insurance companies has been called “one of the dirty little secrets of healthcare.” Federal law perversely incentivizes insurers to pay high prices for medical services. Insurers are required to pay 80% of premiums collected for patient medical bills. To increase the 20% that insurers may retain towards profit, they need to constantly pay more for medical services.

Hospitals, labs and physicians are the only sellers of consumer goods and services in the U.S. permitted to charge every customer a different price for the same item.  Insurance networks are the cover story for an immoral pricing system; crafted by the industry that spends more on lobbying than the defense, aerospace, and the oil and gas industries combined.

Medical providers should be free to set their own rates, but patients must be empowered with legitimate pricing information – meaning everyone pays the same price for the same service by the same provider. This fix would slash prices 33% overnight and we would still have about the most expensive healthcare on earth. A Google search would provide the price for any medical service. Network restrictions on patient choice would disappear; patients would be free to select any health provider.

This past week, the NY Times reviewed some of the research establishing that the reason our healthcare is so expensive is because of the obvious: unjustified rising prices. It is really simple, prices are skyrocketing because the industry and corrupt politicians built and designed our system to assure that there is no price competition and therefore no check on prices. As the Times stated “And lowering prices would upset a lot of people in the health industry.”

Comments

Picture of <span class="username">Guest (not verified)</span>

The filthy rich, not for us little people.

Picture of <span class="username">Guest (not verified)</span>

The whole healthcare industry is a fraud. The only way to stop this insanity is for America to finally realize that we have the best government that money can buy and elect representatives and senators that want to do away with Citizens United and the immoral "money in politics". Until we make these donations illegal with big penalties attached, our nation, our Democracy and our Lives is in peril.

Picture of <span class="username">Guest (not verified)</span>

Working for a local hospital, I am aware of what goes on with billing. It is way out of hand. I see in the future people not going to a physician or hospital because they will not be able to afford it. The new procedures and medicine will not be used. Many of our citizens will choose not to go to a physician or hospital and will die much younger or suffer more because they cannot afford the care. Very sad!

Darla Ritchie

Picture of <span class="username">Guest (not verified)</span>

As a dentist practicing in Ohio, I would have lost my license to practice if there was collusion among dentists to manipulate fees. P. Rosko, DDS

Picture of <span class="username">Guest (not verified)</span>

when people take responsibility for their life style (drinking, smoking, weight) , the need for crisis care will plummet, and the costs will plummet. the solution is not to manage the current system, but change the need for the system in the first place. I am 67 and have seen an MD one time in my life. I see my chiropractor (pay cash), - monitor my diet, exercise and mental attitude daily. 10% will always need crisis care, but that still leaves 90% to clean up their act.

Picture of <span class="username">Guest (not verified)</span>

7 of 10 deaths in the USA are due to nutritional ignorance, or WILLFULLY ignoring that we are an Herebore species. nutritionfacts.org, the book HOW NOT TO DIE etc. prove this unbiasedly and clearly. TYPE 2 Diabetes and Heart Disease are reversible quite quickly without meds on a whole foods 100% plant based diet. The omnivore meat seafood fish diary eggs diet also is the leading cause of disability. Watch "Uprooting the Leading Causes of Death" or "More Than and Apple a Day; Preventing the Most Common Diseases" or "From Table to Able; Avoiding the Most Debilitating Diseases" on youtube.com. 600,000 heart disease deaths per year ALONE due to the omnivore diet. Med schools rarely teach about nutrition.

Picture of <span class="username">Guest (not verified)</span>

I never wanted this problem I liked and could afford my old insurance I was promised I could keep. So sick of all the Lies and Bull shit. Just trying to live my life but it seems I just work to make everyone else lives better. Whats wwrong with this picture.

Picture of <span class="username">Guest (not verified)</span>

It’s unbelievable how the American people allow this aberration happens!
I don’t have insurance paying my bills out of my pocket.
Just try to keep a health life and save the money you’d pay to those guys

Picture of <span class="username">Guest (not verified)</span>

Health care providers, insurance companies, and pharmaceutical companies are over-charging us every chance they get and our politicians won't do a thing about it because of their lobbyists. Alaskans are even worse off because we have fewer choices and more price fixing, especially by orthopedic surgeons.

Picture of <span class="username">Guest (not verified)</span>

This must be changed!

Picture of <span class="username">Guest (not verified)</span>

Big Pharms only care about profit.

Picture of <span class="username">Guest (not verified)</span>

One of the real crimes of our healthcare system is that the cost is not included in our senior citizens cost of living. Healthcare is by far the biggest cost we have - we don't eat as much as we used to so food costs are no longer as high - we don't drive much, if at all, so gas costs are not as high - but HEALTHCARE COSTS are out of sight for us. Yet, when they figure our cost of living increase each year healthcare costs are not included in the equation. So we get a 2% increase in our Social Security (it was zero for the previous few years) but our healthcare costs have risen by a much bigger percentage. SHAME ON THOSE WHO CREATE SUCH A SYSTEM OF HIGHWAY ROBBERY!!!!!

Picture of <span class="username">Guest (not verified)</span>

Steven:

You are very correct on the pricing side of the fence: however, you're omitting the utilization side-- structured by the industry to produce maximum short-term profits, which in-turn, accelerates the creation & worsening of chronic disease.

I have commercial healthplan data to verify this deadly & costly disease cycle. The absolute proof rests with the industry's creation and sale of high-deductible health plans. Population data shows these to be "improvised disease bombs". For example, plan data shows only 10% of the sickest plan members spend 70% of annual total plan assets. (claims) The bottom 75% spend only 10%, under $400 annually (each member) and the bottom 50% (one of two members) spend only 2% averaging under $200 annually in claims.

How can a $2000 deductible benefit the population finances? This simply prevents a majority of members from receiving high-value, low-cost, preventative and disease mitigating care!

Picture of <span class="username">Guest (not verified)</span>

The American people must take back our government. We have reached a point where only the very rich have access to good schools, good healthcare and a secure retirement. Numerous nations with a lower GDP than ours have managed to put safeguards in place that protect the basics needs of their citizens. Surely the wealthiest nation on earth could do so if only its government was not controlled by a special interest oligarchy. Unless we reverse course soon, I fear we will reap the same outcome that France and Russia encountered when it ignored the suffering of countless millions.

Picture of <span class="username">Guest (not verified)</span>

We know what the problem is but what is the solution?

Picture of <span class="username">Guest (not verified)</span>

Keep up the good work, Steven. . . The only way to bend the healthcare cost curve is the continued publication of the truth.

Yes! Insurance companies are part of the problem. . . But, uncontrolled, obfuscated costs and overutilization are even bigger culprits. As long as providers operate in a fee-for-service system (piecework), they will continue to overdiagnose, overtreat and, in the aggregate, overcharge the unsuspecting organizations that are actually paying for healthcare - employers, the government and, now, patients whose out-of-pocket costs are skyrocketing.

Picture of <span class="username">Guest (not verified)</span>

My wife recently had an outpatient MRI at Watauga Medical Center, Boone NC that took approximately 25 minutes. BC/BS was billed by Watauga Medical Center a total of $5031.00 for two X-rays (latter labeled as Radiology on my invoice, Watauga Radiological Services billed for two MRI's in the amount of $1000.00 , and Patrick Holmes, MD billed $1000.00 for two diagnostic X-rays. Each was billed from separate addresses in different NC counties although all are a single entity within the hospital's radiology center. Total billed amount by the separate hospital owned entities was $7130.00. BC paid a total of approximately $4000.00. The was for a routine MRI which was represented as two MRI's apparently based on readings on two areas of the scan. Bottom line is that all aspects of this simple medical transaction would seem to constitute a significant misrepresentation to milk the system.

Picture of <span class="username">Guest (not verified)</span>

My wife recently had a routine outpatient MRI at Watauga Medical Center, Boone NC that took approximately 25 minutes. BC/BS was billed a total of $7031.00. This included $5031.00 by Watauga Medical Center for two X-Rays (latter labeled as Radiology on my invoice, Watauga Radiological Services billed for two MRI's in the amount of $1000.00 , and Patrick Holmes, MD billed $1000.00 for two diagnostic X-rays. This was all different descriptions used for the same MRI. Each was billed from separate addresses in different NC counties although all are a single entity within the hospital's radiology center. Total billed amount by the separate hospital owned entities was $7130.00. BC paid a total of approximately $4000.00. The was for a routine MRI which was represented as two MRI's apparently based on readings on two areas of the scan. Bottom line is that all aspects of this simple medical transaction would seem to constitute a significant misrepresentation to milk the system.

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