Doctors, Insurance, and the state of healthcare
Michael Moore's new movie, Sicko, has focused national attention on the economics of healthcare in our country. The dysfunction of the system came home to me recently. I had a minor surgery where I was treated and released in the same day. A few weeks later I received the hospital bill for $39,000 (not including the separate physician's charges which were several thousand each for the surgeon and the anesthesiologist). I was amazed at the cost of 12-hours of hospitalization.
Even more amazing, a few days later I received the "Explanation of Benefits" from my insurance company and discovered that the insurance company's agreed upon rate for the procedure was less than $4000. That is nearly 1/10 of the amount the hospital stated as its charges. My $400 co-pay was 10% of the insurance company's agreed upon rate, but only 1% of what the hospital says it was due. Amazing.
Well, the plot thickened a bit today when I read in the LA Times has an excellent article on a local physician who has modified his business model to take more of the profit from the insurance companies. He bought a local hospital, canceled all insurance contracts, and steered patients towards the ER for treatment. He strengthened his ER staff and support services to dramatically reduce the wait times at the ER over other local hospitals. Apparently the insurance companies have to pay the ER charges--regardless of the price. I recommend reading the article.
What do you think about the virtue of such practices? They are clearly legal, and some argue they aren't increasing the costs at all...simply transferring the profits from the insurance companies to the providers. Read and discuss...
Hospital group rejects system and cashes in - Los Angeles Times
Even more amazing, a few days later I received the "Explanation of Benefits" from my insurance company and discovered that the insurance company's agreed upon rate for the procedure was less than $4000. That is nearly 1/10 of the amount the hospital stated as its charges. My $400 co-pay was 10% of the insurance company's agreed upon rate, but only 1% of what the hospital says it was due. Amazing.
Well, the plot thickened a bit today when I read in the LA Times has an excellent article on a local physician who has modified his business model to take more of the profit from the insurance companies. He bought a local hospital, canceled all insurance contracts, and steered patients towards the ER for treatment. He strengthened his ER staff and support services to dramatically reduce the wait times at the ER over other local hospitals. Apparently the insurance companies have to pay the ER charges--regardless of the price. I recommend reading the article.
What do you think about the virtue of such practices? They are clearly legal, and some argue they aren't increasing the costs at all...simply transferring the profits from the insurance companies to the providers. Read and discuss...
Hospital group rejects system and cashes in - Los Angeles Times
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posted by Michael | 9:57 AM
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