An eroding model for health insurance
By Lisa Girion and Michael A. Hiltzik
Los Angeles Times
First of three parts
October 21, 2008
The health insurance system has become increasingly expensive and inaccessible. It leaves patients responsible for bills they understood would be covered, squeezes doctors and hospitals, and tries to avoid even minuscule risks, such as providing coverage to a newborn with no serious illness.
At the heart of the problem is the clash between the cost of medical care and insurers’ need to turn a profit.
During her pregnancy, Jennifer Danylyshyn’s regular visits to her obstetrician were covered by her Blue Shield policy. So was the delivery of Ava on March 24. The couple expected that Ava would be covered as a matter of course.
When the company rejected the baby because of the hip misalignment, her parents appealed with the help of their pediatrician.
Blue Shield refused to budge.
http://www.latimes.com/business/la-fi-insure21-2008oct21,0,2292699,full.story
And…
Health insurers reinvent themselves as money managers
By Michael A. Hiltzik
Second of three parts
October 22, 2008
WellPoint Inc., the nation’s largest health insurance company, ran into a snag last year while pursuing an important new business initiative.
Federal banking regulators insisted on classifying WellPoint as a healthcare company. And that was interfering with its efforts to open a bank.
The Federal Reserve Board eventually agreed that the company’s core insurance business could be considered financial services.
That a medical insurer would agree to keep a lid on healthcare expenditures so it could get approval to open a bank illustrates a fundamental change in the industry: Insurers are moving away from their traditional role of pooling health risks and are reinventing themselves as money managers — providers of financial vehicles through which consumers pay for their own healthcare.
Because he has high blood pressure, (Alex Kipper, an engineer who lost his employer-provided health insurance during the dot-com bust) found himself virtually uninsurable. Fearing that he could be financially wiped out in a medical emergency, he signed up for a bare-bones policy that provides no coverage until his medical expenses exceed $8,000 in a year.
His health plan’s concession to preventive care was a $25 discount on a physical. Once diagnostic tests were included, the fee for the checkup came to more than $300, Kipper said — which the health plan declined to pay.
He hasn’t returned to a doctor’s office in three years.
Although the policy costs only $200 a month, “nothing is covered, absolutely nothing,” Kipper said.
http://www.latimes.com/business/la-fi-insure22-2008oct22,0,3603421,full.story
And…
The battle of the medical bills
By Daniel J. Costello, Lisa Girion and Michael A. Hiltzik
Third of three parts
October 23, 2008
“Insurers have found a very creative way of denying, delaying or slowing payments in a way that is having a real impact on patient care and some of our survival,” said Von Crockett, Centinela’s chief executive. “Every single doctor and hospital is writing off money they are legally owed but don’t collect. It’s an insane situation.”
In June, the American Medical Assn. released its first rating of insurers’ billing patterns. It found that United Healthcare paid physicians the contracted fee 62% of the time, Aetna paid 71% of the time and Medicare paid 98% of the time.
Dotti Smith, office manager for a group of surgeons affiliated with St. Mary’s Hospital in Long Beach, recently billed a major insurance company for a gallbladder operation. The insurer had preauthorized the surgery and the surgeon was a member of the insurer’s network of preferred physicians, Smith said. But the company refused to pay the $3,100 bill.
Why? The patient was enrolled in a subcategory of coverage with a smaller network of doctors that did not include the Long Beach surgeon.
http://www.latimes.com/business/la-fi-insure23-2008oct23,0,4914143,full.story
This important series of three articles published this week in the Los Angeles Times explains why the private insurance industry has neither the efficiency nor the moral authority to continue to manage our health care dollars. Each of the excerpts above provides an example of the management perversities of the industry, along with an example of the impact on a real-life patient. Much more can be found in the articles.
The private insurance industry has shifted from an amoral business model selling us administrative services to help manage our health care spending, to an immoral racketeering industry that is threatening the health and financial security of all of us.
We desperately need to reform health care financing in the United States, but not with a model that keeps these crooks in play.