Candace

Talmadge

Read Candace's bio and previous columns

July 7, 2008

To Solve Health Care, Eliminate Health Insurance 

Navigating an uninsured, low-income person through today’s U.S. health care maze is an eye-opening education in frustration and eye-popping bills. 

One of the most interesting and instructive lessons is how much of a discount – in many cases, as much as 50 percent – doctors and hospitals will take for a cash payment. Cash eliminates the need to deal with health insurers, which specialize in delaying reimbursement for as long as possible and in reducing payment amounts as much as possible. 

(Imagine, for a moment, the outlay of having to deal with multiple health insurance companies, each with its own set of forms and different rules about how those forms are to be filled out. One comma missing, and the insurer gleefully kicks back the form, which then must be filled out again and resubmitted. FYI: All radiology claims must be sent to an entirely different company at a different address. Small wonder that “coding,” the industry term for all this expensive, time-consuming BS, is one of the hottest topics among physicians and hospitals.) 

The very willingness of health care providers to slash a cash payment by half fairly screams that as much as 50 percent of the exorbitant amount that we Americans pay for health care each year goes to burdensome insurance paperwork and administrative shell games, not actual care. This overhead amounts to trillions of dollars each year, which is real money even by federal budgeting standards. 

It is in this context that I note with interest newspaper reports that Massachusetts Sen. Ted Kennedy and others in Congress have already started laying the groundwork for health care reform on a national level in 2009. If it ends up looking anything like the so-called health care reform in the senator’s home state, we’re in a world of trouble. 

Massachusetts health care reform has resulted in the worst of all possible outcomes. Health insurance is now legally required for every state resident, yet there is no cap on the premiums that health insurance companies can charge. The preceding means that the health insurance industry, by charging outlandish rates for those with pre-existing conditions, can cherry-pick the healthy population for meaningful coverage, and stick the rest with high-deductible policies that won’t do squat for them, even though they are the ones who most need health insurance. 

The problem here is that health insurers profit most by selling premiums to those who don’t really need the coverage – the young and the relatively healthy (no chronic conditions like diabetes). Under Massachusetts’s version of health care reform, the state must pick up the tab for the less healthy by subsidizing their insurance premiums or paying the entire cost altogether. 

Massachusetts is a big win only for the health insurance industry, while ordinary citizens are stuck paying the bill twice. Once for mandated insurance premiums that most likely don’t cover all their health care costs, and second in either higher state taxes or reductions in other state services – all necessary to cover the state’s portion of health insurance costs, which are soaring at a rate far higher than previously forecast or acknowledged. 

If Massachusetts teaches us anything, it’s that real health care reform can start only by removing private health insurance from the entire equation. If this happens, at one stroke we will have eliminated a huge chunk of the overhead that currently drives up the costs of providing care.

Then we can begin to sort out how to keep health care costs from going up, like making sure all health care providers institute best practices, making health care records electronic, and instituting real competition in the form of appropriate alternative and complementary therapies.

© 2008 North Star Writers Group. May not be republished without permission.

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