Ron this is a good article. The facts are correct. What Americans need to realize is that "Health Insurance" as we know of it... is NOT insurance at all. There is one very important element of the ecomomics that you left out. The fully insured health companies like UHC, Aetna, etc. don't care if the cost of health care rises. They just make more money. They are nothing but a "cost plus" vendor for the 14% of the nation that they cover. In fact, Ron, they actually encourage hospitals to raise their fees so that the spread on their PPOs looks even better to potential customers. It's true. I've been there and seen it happen. At the end of the 70's health insurance as we knew it provided the gasoline for the conflagration that we now see. As long as there was a third party paying the freight then it didn't matter what the hospitals charged and it didn't matter to the covered member either. As long as the deductible was LOW no one cared. See my 14 part series on the History of Healthcare on You Tube under Simplicity Health Plans.
Hence, the real surge in Self Funding brought on by the ERISA act of 1974. Now 45% of the nation is covered under self funding but that number of members pays only $480 billion a year for all of their care vs. the 14% covered by the main carriers at about $800 billion a year. One system is for profit and cost plus while the other is "not for profit" and run as efficiently as a company can run their own business except for the fact that they have to deal with hospital costs being driven up by the carriers.
As a result the main health carriers have been able to move into the self funded field in a big way by extending their "discounts" to the happless self funded employer trying to control costs. This is niche where all the carriers will seek refuge. That is being administrators for self funded plans. It's no wonder that the current administration in DC tried to get rid of self funding and it's no wonder that state insurance commissioners are trying as well. Why? because states collect taxes on premiums but not self funded programs. So, the higher the premiums the more the states make in taxes helping to perpetuate buracratic inefficiency and deepen the black hole.
As a physician I can tell you that Americans over use healthcare resources. In fact, we spend more per capita on care and are only ranked 17th in the world. It's not about the quantity. It's about our responsibility to stay healthy and plan with real "Insurance" for the bad day.
It's not a surprise that increasing the deductible causes people utilize healthcare in a more consumer orientated way. The data on high deductible consumer driven health plans bears that out. Those covered under these plans save money, utilize healthcare less and maintain their health.
Here is the answer Ron to much of our problems:
Allow all business to self fund and use real "stop loss insurance" since stop loss acts and functions as true insurance. Then make policies with minimum deductibles of $2000/$5000 that cover ONLY a select few screening tests. Those same policies would not allow 100% covrage after the deductible but at most only 80%. The total coverage per member per year would be no more than $1 million and $2 million in a life time.
Then make it law that the insurance has to reimburse the member NOT the hospital or doctor.
Then key premiums to biometrics of BMI, Blood Pressure and Smoking like any other insurace does for risk factors.
If you're healthy and want to gamble and not get insurance then that's your right.
Let Americans buy prescription drugs from anywhere in the world. (80% cost savings)
Enable self funding to make it easier at all levels.
Gregory Hummer, MD
CEO
Simplicity Health Plans