Fixing Insurance

As I mentioned recently, I haven’t been feeling well.  This led to an ultrasound a month ago, just a precaution to make sure I wasn’t having trouble with my gallbladder despite the fact that I had no symptoms aside from a dull general pain.  Not a big deal because I have insurance.  I know that it won’t cover all of it but it will handle the bulk of the cost and it’s better to be safe than sorry.

I got my bills – yes plural – from the hospital.  The insurance didn’t pay a dime!  I got a discount because I have insurance but the company that my church pays thousand of dollars a year to insure me did not have to pay a cent.  My $400 ultrasound cost me $183 out of pocket.  To have someone read the ultrasound results was an additional $90, of which I had to pay $43. 

Although I find the fact that my insurance doesn’t pay anything toward my medical bills offensive, this isn’t actually the point.  The point is that despite a year of fighting in Washington, this problem hasn’t been fixed.  It’s great that approximately 30 million uninsured people are going to be able to get insurance now.  I have serious questions about the logistics of how it’s going to work and the cost, but I’m okay with the principle of it at least.  The problem is that there are about 250 million of us who have insurance and almost every person will say that they pay too much and there is too much waste involved in the system.

On top of this, having insurance is not a cureall.  I have insurance and have avoided going to the doctor simply because I know that there is a copay of $30.  Now certainly if I thought I really needed to go, I’d go but for some people $30 is more than they can afford.  And that’s just the start.  Any time tests are needed the costs will quickly add up.  Certainly having insurance is going to help some people but there are still going to be plenty of people who can’t afford copays, coinsurance, and deductibles.  Some people who really are having a problem with their gallbladder are still going to stay home until it gets worse because they can’t afford the cost even with insurance.

Unfortunately there aren’t any easy fixes.  To truly fix the system we’d basically have to blow it up and start over again and that’s not going to happen.  But just for the sake of argument, here’s my thought on how to at least bring the system under control. 

The idea of the government running the insurance industry will never fly.  Free market, socialism, blah blah blah.  But what about the medical industry?  Although I’m sure there’s a thousand holes in my idea, it’s basically pretty simple.  Currently, you go to the doctor and they run some tests.  You get billed by the doctor, the person who runs the test, and the doctor who interprets the results.  Each person gets paid a certain amount for their role and the amount varies depending on who is paying the bill.  Medicare will pay a certain amount which the doctor accepts as payment in full, Anthem pays a certain amount, Aetna pays a certain amount, and so on.  Quantity is emphasized over quality because the more people pushed through, the more money a doctor takes home to pay his malpractice insurance and pay off his hefty student loans.

What if doctors weren’t paid by the patient however?  Instead, a pediatrician was guaranteed $125,000 a year assuming he or she worked a full year, surgeons were gauranteed a certain amount depending on their specialties, and so on.  They work for the government and they don’t bill anyone because they’re paid directly.  Millions (maybe hundreds of millions?) would be saved each year just on billing and eliminating the bill for service.  Perhaps more importantly, doctors don’t rush to push as many patients through in a day don’t miss some important details from patients that will prevent misdiagnoses as well as catching some problems before they grow larger and cost more to treat.  A couple more minutes with each patient can save millions if not billions in later treatment.

To encourage more people to get into the medical profession, pay for their schooling like is done for some school teachers.  Some teachers’ loans are forgiven if they agree to serve in certain school districts for a set number of years.  The same could be done to encourage doctors to enter certain fields that are in high demand and/or don’t pay as much as other fields.

Of course the other thing that must be done to bring costs in line is to fix malpractice insurance.  The bottom line is that doctors make a lot of money and pay an absurd amount of it back to insurance out of fear of being sued.  Many doctors pay $100k a year just in malpractice insurance.  These rates are so high because lawsuits have become absurd along with the payouts associated with these lawsuits.  Doctors are not perfect and mistakes will be made.  It’s tragic when these things happen but telltale signs of diseases will be missed and tests won’t be run that could have caught a problem.  The truth of the matter is that without a doctor’s help people will get sick and suffer from the diseases a lot more than with help.  People need to acknowledge this and if they seek out help from a doctor, they should give up their right to sue except in the case of gross negligence.  In short, a doctor misses a sign of illness and the illness gets worse, the person is entitled to seek another opinion but not sue after the fact.  A doctor fails to remove a pair of scissors and sews a patient up with the scissors still inside, this would be considered negligent.  Needless to say, the former is sued over routinely and has driven the cost of malpractice insurance sky high.  The latter doesn’t happen too often.

Now, this doesn’t begin to fix all of the problems in a system so vast and complicated none of us truly understand it, including those who work in the industry.  There is still a question of how equipment is paid for and if there is even a role for insurance.  I say scrap the whole system.  Take what employers pay to private insurance companies and send it directly to the government.  This is upwards of $1 trillion a year (2004’s numbers, likely well over that now.)  Combine that with the $800 billion a year that the goverment is already paying (once again, 2004’s numbers) and there’s a lot of money for equipment. In case you’re curious. 

So all of this is a start.  Just some things to think about the next time you get a doctor bill or hand out your money to pay for health insurance.