Our Health Care “System”
I’m not surprised that we had an insurance plan that doesn’t actually pay for anything. Nor am I surprised to find out that we were on an insurance plan that that costs $1600 a month if we pay for it ourselves. I am a bit surprised that we were on an insurance plan that didn’t pay for anything and yet also cost $1600 a month. This is what makes us reluctant to use COBRA if we don’t have to. For a variety of reasons, we are collectively uninsurable in the straight-up individual market. If we find out that we can’t get by with a lapse in coverage that isn’t a Lapse in Coverage, we’ll either bite the bullet with COBRA or see what PPACA can do for us. (At this point, it is dependent on when insurance on her new job will kick in.)
This isn’t my first time to be uninsured, or virtually so. In the past, I’ve gotten what I can only call “Fake Insurance.” Which is insurance with high deductible, minimal payouts, and the ability to cease coverage if I were to actually have cause to use the insurance I was “purchasing.” Basically, the only reason to have the insurance is to avoid a Lapse in Coverage. So, considering that I had motivation to keep coverage, and not have them cease coverage, I basically acted like I was uninsured.
It was an interesting experience. In some ways, it was actually the least expensive health care that I had. If you have the money, and are willing to pay up front, hospitals and clinics will work with you. It was during this period that I got pneumonia. And I did the things that people say people don’t or can’t do. I called the local clinic to find out how much a clinic visit would cost. Had it seemed too high, I would have called the next one. As it happens, a visit was $100 until they found out that I didn’t have insurance and was paying with cash. Then it was $80. They also helped me out with the cost of medication.
Some years later I was on an insurance plan and needed to get a mole removed. I was given a heads up that the insurance company didn’t look kindly on mole removal (“They consider it ‘cosmetic’ if it’s an inch around and in the middle of your back.”). As such, I went into the dermatologist “uninsured” and there, too, they worked with me on price.
So it’s not surprising to read this story, from the Wall Street Journal, about a guy who basically negotiated down surgery fees:
I explained that just because he had health insurance didn’t mean he had to use it in every situation. After all, when people have a minor fender-bender, they often settle it privately rather than file an insurance claim. Because of the nature of this man’s policy, he could do the same thing for his medical procedure. However, had I been bound by a preferred-provider contract or by Medicare, I wouldn’t have been able to enlighten him.
Hospitals and other providers make their “list” prices as high as possible when negotiating contracts with health plans and Medicare regulators. No one is ever expected to pay the list price. Anybody who has seen an “Explanation of Benefits” statement from a health plan will note a very high charge from the provider, and an “adjusted charge” based upon the contracted fee schedule, which usually leaves the patient with little or nothing in out-of-pocket expenses. The only people routinely faced with list prices are those few people who have insurance like my patient’s—that doesn’t include a pre-negotiated fee schedule with contracted providers—or those who have no insurance.
Most people are unaware that if they don’t use insurance, they can negotiate upfront cash prices with hospitals and providers substantially below the “list” price. Doctors are happy to do this. We get paid promptly, without paying office staff to wade through the insurance-payment morass.
That last part is pretty important, and one of the main drivers of the “I’ve got cash” rebate. Moreso than charity, I think. And it speaks to the gross inefficiency – and insanity – of our “health care system.” Many iberals will look at this and blame it on “the market.” Many conservatives will look at this and say that the problem is a lack of market. Both will look at the pricing transparency and blame it on the market and absence of market. Liberals will correctly point to this as being a non-issue if we just had single-payer, and conservatives will correctly point out that the lack of transparency is a product of the separation of buyer and consumer.
For me, it remains indicative that our system is the worst of both worlds. We have neither the advantages of market, nor the advantages of government. It’s a hodge-podge system that we didn’t develop, but rather backed into due to wage controls and circumstance. And lastly, the product of a political system that requires an abnormally high degree of consensus to do anything. Such as, for instance, developing a health care plan from the ground up rather than settling for the one we drifted into.