Insurance Companies and Healthcare

There are powerful and wealthy forces within the Healthcare industry that are working hard to keep your healthcare costs rising and the quality of your care substandard. And they’ll keep doing it as long as we all put up with it. Drug companies are one of those forces and it’s easy to understand their motivation. They are about sales. If you get better and don’t need to take medicine, they don’t make any money off of you. Therefore, they like treatments that reduce symptoms but don’t heal and resolve the core issues. That way, you get relief from the drug so you have good reason to take it, but then you have to keep taking it. Allergies, asthma, diabetes, hypertension, heart disease, strokes, hypercholesterolemia, osteoporosis, auto-immune diseases, thyroid problems, Alzheimer’s, depression, addictions and such fall into the category of conditions for which you would be given medications for the rest of your life even though there are proven cures and/or preventions that are steadfastly ignored (and even demonized) by conventional medicine.

As part of their business plan, the drug industry now has major control over medical research, the medical literature and medical education. It is an ingenious and very successful business plan. Train a carefully selected corps of caring practitioners to follow your every order then tightly control what information they have access to and manipulate your market to suit your purposes. Your poor health is their market.

But even though the tactics of the pharmaceutical industry are deplorable, their motivation is clear from the perspective of corporate behavior. But there are many more players in the healthcare industry who are equally responsible for the healthcare crisis but are even more devious in their tactics.

Hospitals, pharmacies, drug companies, surgical and medical supply houses, labs, physicians, naturopaths, chiropractors, rehab centers, supplement manufacturers and distributors…these are also obvious players who make more money the more people are sick and the longer they stay that way. And we wonder why healthcare costs are so hard to control.

I used to think that the only factors in the healthcare equation that wanted to cut costs and increase quality were 1) the people who bought their own insurance and/or healthcare, 2) the employers paying for insurance and 3) the insurance companies. I was wrong.

(People who get their insurance paid for have no incentive to save medical resources. As an extreme example, here in the Northwest, people with Microsoft’s Cadillac plan are at high risk for being over-tested, over-exposed to x-rays, over-scoped, over-surgerized and over-medicated. Microsoft is self-insured and they’re getting taken to the cleaners, not only by their employees and their families, but also by the medical community.)

I thought it was strange that the insurance companies didn’t do what the drug companies did and take control of medical research and education, pay for studies of the preventative strategies and start to really support preventative measures that are proven to keep people healthy and reduce healthcare costs. They certainly give a lot of lip service to cost containment. But I recently had an experience that opened my eyes to another major corporate force working to increase healthcare costs and degrade care. They’ve pretty effectively stayed hidden behind the smoke screen they’re spreading with all of their advertising.

My practice is very different from most physicians’. I’ve gotten interested in getting to the root of people’s problems and searching for ways to treat those roots so that people’s issues resolve. I’m not satisfied with just helping someone limp along with their health issues if there is anything in our power that will help that person.

Over time, I’ve moved away from the regular family practice model: running madly between exam rooms; to spending an hour with each patient, deeply listening, tackling multiple, complex and interrelated issues, doing a lot of education and such. As you might imagine, my practice stood out in the insurance companies’ data mining. They audited me to see what was going on. They couldn’t understand the one hour visits. They wanted me to do the ten-fifteen minute visits like everyone else.

I told them that I was saving them a lot of money, that when these complex patients started seeing me, they often didn’t have to keep seeing their expensive panel of specialists. I thought they’d be happy to hear that. I was shocked by their response. When they heard that the way I practice might be decreasing how much their enrollees are spending, their faces actually blanched at the idea. After that meeting, they redoubled their efforts to drive me out of their networks.

In that moment I realized just how wrong I’ve been all these years. I learned that the insurance companies make a percentage of what you spend on your healthcare, especially if they just administer the plan, as with Microsoft. All of their “cost-saving procedures”, such as prior authorization, just add layers of paperwork and administrative overhead to the costs of healthcare, giving them the public image of wanting to cut costs, but in reality just giving them a bigger slice of the pie. Arguably, the most powerful and most subversive force keeping your costs high and eroding the quality of your care are the health insurance companies, not the drug companies

If you’ve ever gone to your practitioner with a list of problems and been told to pick one to work on today and come back another day for the rest, thank your insurance company. If, during your visit, your practitioner interacts more with their computer than with you, thank your insurance company. If you’ve ever felt herded through your doctor’s office, thank your insurance company. If you feel like your physician never has time to really consider the details of your case, thank your insurance company. If your physician has low morale and is over-burdened with paperwork, thank your insurance company. Short of corporate profit, there is no excuse for the damage they’ve done to the healthcare profession.

And if your insurance company calls themselves non-profit, don’t believe it for a moment. All that means is that they keep all the money for themselves. Those executives are paid exorbitant salaries and bonuses. Most insurance companies run a 26-28% administrative overhead. Obamacare is going to require them to keep it to 20% (still much higher than most other industries). That is one reason the insurance companies are fighting Obamacare so vigorously.

If your insurance company is for-profit, well…there are lots of other ways to make money in this economy, why should some investor be getting a share of your hard-earned premiums? The answer is absolutely clear in my mind: health insurance companies need to go away. There are much better ways to deliver healthcare, ways that incentivize wellness and high-quality healthcare. We’re not a third-world country. Why do so many Americans continue to suffer from a lack of quality healthcare as if we were? I see two reasons: corporate greed and a kowtowed populace.

Corporations’ primary purpose for existing is to make money. Any product or service they provide to do that is secondary. Greed is in their nature. It’s not bound to go away any time soon. But just like any good citizen of the community, corporations need to learn to control their bestiality. That’s what laws and regulations are for. If, on one side of the equation, a corporation doesn’t want to be regulated, then, on the other side of the equation, they have to choose to do the right thing. I’ve got some ideas about how to help corporations do that, but that’s a topic for another blog. Right now, I’d like to speak more about the kowtowed populace. That is something we can all do something about.

When insurance companies misbehave and screw you over, they protect themselves by throwing up as many paperwork roadblocks as possible. Millions of hours are spent each year by people just trying to get their insurance companies to meet their obligations. The insurance companies set up a gauntlet, hoping that you won’t survive the running of it and thus give up and go away.

Don’t give up. If you have a grievance with your insurance company, please make it your business to be the biggest burr in their bra they’ve ever seen.

  • Write formal letters to the state Insurance Commissioner (One of my patients did that during my audits and the insurance company actually wrote their own letter to the Commissioner asking him to please disregard my patient’s letter. It was groveling and pathetic. If the Commissioner received dozens of similar letters asserting the same complaint, they’d investigate.)
  • Lodge a complaint with your employer and their benefits department, if you have insurance through work.
  • Write letters to your state and national representatives.
  • Write letters to the editor of your newspaper.
  • Write a blog.
  • Post on your Facebook page.
  • Get the word out any way you can about how your insurance company is treating you.

Stories have power. You have power.

Believe it or not, medicine is a consumer-driven industry. If enough consumers demand it, eventually medicine will change.

Steven M. Hall, MD

Copyright 2012 Steven M. Hall, MD

Healthcare Crisis Solution - Letter

During President Obama’s mid-term State of the Union address, he issued a call for ideas about how to heal healthcare. The following is a letter I sent him. I have no idea who read it, all I heard back was a form letter. But this outlines the basic ideas I think could cure our healthcare system. Please let me know what you think. Thanks. 1/30/10

President Obama 1600 Pennsylvania Ave Washington DC,

Dear Mr. Obama,

You issued a challenge during your state of the Union speech that I’d like to accept. I have been in practice now for over 25 years and have spent a considerable amount of time thinking about the terminal illness that is afflicting our healthcare system and how to treat it at its root causes.

Unfortunately the root causes of the healthcare crisis, as I see them, are beyond the reach of public policy. But public policy is what we have to work with and the right public policy can create the right environment and motivation for the healing of the healthcare system.

I believe that the solutions I’m about to propose would give all Americans good coverage, fix Medicare, the VA and DSHS, lower the cost of healthcare, keep the paying for healthcare in the private sector, keep competition and innovation alive, allow everyone to have the physician and hospital of their choice and motivate Americans to live healthier lifestyles. Please bear with me as I explain because, like the solutions to most complex problems, these ideas cannot easily be reduced to sound bites.

I believe that universal access to healthcare would not only benefit individuals but also society as a whole. This puts access to healthcare into the same category of social needs that we as a society traditionally meet through social solutions, e.g., public roads, public water, libraries, public education, electricity, trash collection and the most socialist of all organizations, the Military. Most often, the solutions to challenges that we all have in common are solutions that we all share.

I propose that we move the paying for healthcare into the public utility sector of the economy. The country can be divided into five or six geopolitical regions. Within each region, three public utilities would be licensed by the government to manage healthcare payments. The regions would have to be large enough that each of the utilities could be financially sound. Three utilities would balance the need for competition and innovation without excessive duplication of administrative costs. Each utility would be not-for-profit, run by public boards, transparent to the community.

Each utility would devise perhaps three to four coverage packages, the simplest being a minimum agreed-upon level of coverage (I might suggest that be the level of coverage Congress has chosen for itself) and then other combinations of coverage the utility might think would be popular to people. Each person in each region would be required to choose one utility and one of their plans. This would achieve universal coverage. The plans would have to compete with each other to get people to choose their plan. By providing universal coverage this way, there would be no need for Medicare; we would “fix” Medicare by transcending it. The same goes for the VA and DSHS. The rates for each plan would be set by the public board of each Utility.

The utilities would then contract with providers, hospitals, labs, pharmacies, home-health agencies, etc. just as insurance companies do now. Since there would only be three organizations to contract with, providers would be highly motivated to sign up with each one, thus helping to contain costs. And just reducing the administrative duplications from so many insurance companies offering so many plans could potentially free up 10-11% of the current healthcare budget to help cover the presently uninsured.

Then, each person, each month would get their “healthcare utility bill.” (HUB) If an employer wanted to give their employees a perk, they would offer to pay their employees’ HUB. If a person was on public assistance, the government would pay that person’s HUB for the base plan. If a person were retired and needed the assistance (not all retired persons do) there could be a program to pay part or all of that person’s HUB.

By spreading the cost of healthcare over everyone, the cost for each person goes down. People who can’t afford it could then get public assistance to pay for the lowest-tier plan. I don’t have access to the financial data to do the calculations, but my gut sense tells me that this approach would not cost the government any more than it now pays for Medicare, DSHS, the VA, State health insurance pools and the like. Perhaps many of the people now employed by private health insurance companies could work for the utilities.

There is currently a grotesque and horrific form of discrimination being practiced in the United States that is receiving very little discussion: people are treated very differently by the healthcare system depending upon their insurance coverage or lack of it. This discrimination results in many preventable deaths and untold levels of human suffering. Also, I watch as my patients spend dozens of hours of their time just trying to get their insurance companies to meet their contractual obligations. In this plan, everyone from the homeless to the wealthy would have nearly the same insurance. Veterans, the elderly, rich or poor, everyone would be treated nearly the same by the medical profession. This plan would free practitioners to focus on caring for patients, not worrying about reimbursement rates. Since the health payment utilities would be not-for-profit and the rates they charge and pay would be publicly and transparently set, there would be no financial incentive for them to try to wriggle out of paying for care. This would save millions of hours of people’s time and the administrative costs in every doctor’s office would decrease, realizing further savings.

The defined benefit packages would be de facto rationing of care, but no different than we have in our current system. To avoid the need for further rationing, we need real wellness throughout the entire population. How to accomplish this? By my observation, the threat of potential disability and disease is not, by itself, enough to motivate many Americans to take good care of themselves. We Americans are more motivated by our wallets.

We now have the actuarial data to calculate the lifetime healthcare costs of many products and practices. For example, the last figure I heard, the lifetime cost of a pack of cigarettes is around $7. Similar costs could be calculated for beer, wine, Twinkies, donuts, motorcycles, etc. This amount would then be added to the purchase price of the product as a “poor choice tax.” I envision the poor choice tax posted on the grocery shelf on the same label that says how much per ounce, etc. so people can make informed decisions at the point of product selection. No poor choice tax would be levied on products such as organic produce. The numbers could be calculated to level the playing field between junk food and nutrient-rich food. One might also consider stopping the public subsidies to crops that make junk food so cheap. Suddenly…eating well would make financial sense to people.

Then, the money within each region that is collected from the poor choice tax would be divided among the three Utilities proportionally to the percentage of the population from that region that is signed up with that utility. That money would go to lower the cost of everyone’s HUB. This system builds in a statistical probability of “user pay.” As the population starts making healthier lifestyle choices, the revenue from the poor choice tax would decrease, but so would the level of healthcare utilization thus decreasing the cost of healthcare for everyone.

Once we commit to universal access, then society is suddenly motivated to optimize everyone’s health. Right now, there is no financial incentive within the healthcare industry for wellness. I think that the medical profession would respond by being less reliant on the pharmaceutical industry to tell them what to do and more become more interested in pursuing real preventative medicine. Currently, most physicians think preventative medicine means immunizations and statin drugs. During my career I’ve been led to explore not only conventional medicine but also the wide range of concepts and treatments encompassed by what we refer to as “alternative medicine”. Believe me, there are some valid concepts not currently embraced by conventional medicine that, if they were, would save the national healthcare industry billions of dollars. I believe universal access would give us the social will we need to overcome the profit-motive grip that healthcare corporations have on the practice of healthcare and really heal the healthcare crisis. The cure is out there. We just need to take it.

Thank you for listening. I realize that eliminating private health insurance companies and instituting something like the poor choice tax would mean that you’d be fighting a third war, but it is one that is worth fighting. I would love the opportunity to discuss these ideas further with anyone you think might be able to help use them.


Steven M. Hall, MD

Copyright 2012 Steven M. Hall, MD