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Health Insurance Doesn’t Make Sense

The reason I am writing about health insurance is because the evolution of health insurance has created shocking gaps in healthcare. Physicians are filling these gaps in creative ways and that’s why the topic is germane.

US health insurance doesn’t make sense and I am convinced and will make the argument that it’s a waste of money to have health insurance in the US.

It’s not a better proposition even if your health insurance is covered by your employer; you’re just fueling an inefficient system which further drives up the cost of care.

Basic Healthcare

Basic access to healthcare should be mandatory. If you don’t have your health then you cannot make money, you’ll lose your job. Therefore, basic health is a prerequisite to be a tax-paying citizen.

But “basic” is hard to define. Most countries offer basic access to healthcare. Here in Spain you can be seen the same day or within a couple of days for routine or acute medical issues.

But if you want/need a sinus CT or a knee replacement for joint pain, no, that’s going to take much longer. As for a sex change operation, it’s not covered. But mental health and obstetrical care, that’s all covered.

People complain about NHS in the UK because they can wait around for cholecystectomy while suffering through pancreatitis flares. Therefore, having basic healthcare access doesn’t mean you’ll have timely access.

Healthcare Access in the US

Is basic healthcare access free in the US? Yes, but only for the poor or the elderly. If you have Medicaid or Medicare then you can be seen for free or nearly free. If you need medications or a surgery then there might be a copay – if it’s approved.

For the rest of us who don’t qualify for these services, we’ll have to pay out of pocket for face-time with a doctor or blood tests or a simple x-ray.

Hospitalization is definitely not covered for everyone in the US. Even for something as a 72-hour stay for sepsis – a rather simple condition to manage – you’d have to pay for this out of pocket. Not only that, you don’t have the right as a consumer to know the exact cost/price of such services.

The fear of not knowing how much something will cost is enough to deter patients from getting timely care. And as we know, the longer you delay a medical condition, the more you’ll have to spend later to remedy it.

Health Insurance in the US

Healthcare is delivered through insurance companies in the US. For some reason the majority of Americans think that Medicare, Medicaid, Tricare, or the VA system is administered directly to the consumer. Nope.

Medicare and Medicaid are serviced by an insurance company, such as Blue Shield. So the “Medicare for all!” slogan is really “Blue Shield for all”.

The complexity of health insurance in the US and the many laws which protect that industry hide transparency. If you’re ever worked in Utilization Management or done any Prior Authorization work, you know the game.

Transparency

The one thing governments are responsible for is enforcing rules and forcing transparency. That’s it. Not to control the people or force religion on people. But, for some reason, when it comes to healthcare we aren’t offered that service by the US gov’t – no price transparency with my medication, my hospital stay, imaging studies, or surgical interventions.

The lack of transparency drives up prices. It allows hospitals, large medical groups, imaging centers, laboratories, and pharmaceutical industries to hide their costs from their customers.

That is why we have insurance companies earning billions and billions of dollars. Not that it’s bad for them to earn money – they are taking the risk, they should earn the money. But if I’m paying $400/month for health insurance and have a $6k deductible and might be denied my chin reduction surgery, I want to know the dollar numbers behind these decisions.

I could pay $80 to see a doctor directly or I can receive a $250 insurance bill for the same visit. I can pay $320 for a limb MRI or receive a $2,750 bill from my insurance company.

Dental Care

Dental care is a little better – but not by a lot. You’re always getting screwed when you have dental insurance. I won’t dive into this topic too much but let’s such say that you are incentivising your dentist to make a financial decision instead of a clinical one.

The Direct Care Model

The direct care model such as Direct Primary Care takes advantage of this cost chasm and advertises their services to the consumer directly. Instead of the insurance company doing the negotiating, the physician owner negotiates prices with pharmaceutical suppliers, imaging centers, and laboratories.

All middlepersons are cut out. It’s the doctor sitting before the patient. All prices are negotiated ahead of time. There is no upselling.

$$$: I have done a lot of reading about DPC and haven’t found a single solid resource for DPC’s. A place where a potential DPC or a cash-only doctor can find out about costs of services and goods, from medications to hospitalizations. A subscription website like this could be profitable and it would have a huge market.

1. Consumer Savviness

The consumer can do the same price negotiations but they have to be rather savvy and have a lot of free time. I don’t see why most of us can’t uncover the true cost of our care as responsible consumers.

Consumers can even negotiate their hospital stay. That’s another advantage Direct Primary Care doctors have – their insight into the cost of services. They usually negotiate on their patient’s behalf ahead of time based on the relationships they’ve built.

What’s complicated about healthcare is that you cannot just factor in the price, as many do when they buy consumer electronics. You have to not only focus on the cost but also the quality and it take a savvy consumer to be able to determine quality.

This would take us to the topic of the definition of health. How many of us physicians have spent any time defining what health means to us?

$$$: We don’t have enough consumer education websites for patients. There are good ones out there which discuss costs and others which discuss health. But there is no good website to bring these 2 topics together. This is a great opportunity for someone to curate such a website.

2. Consumer Defense

There are also companies which will negotiate your medical bills down for you. Whether it was a surgery you had or a hospital stay, they have the knowledge to shave those bills down.

Some companies will charge a flat fee ($500) plus 5% of whatever they save you. Others are there to arm you with knowledge so that you know exactly how much something should cost.

$$$: I could see many lawyers getting into these space and helping patients haggle their healthcare bills. Not just major hospital bills but even the small dental visits and outpatient visits.

3. Alternatives to Inpatient Care

Sometimes a patient doesn’t need a hospital admission and their care can be managed in a quasi-inpatient setting. These buildings, which strongly resemble a hospital, don’t allow a patient to stay a full 24 hours.

They can literally stay for 23:59 hours and have to leave and come back. Idiotic? No. Just a way to get around the legal requirements to be a hospital.

The advantage is that patients can get IV infusions, be monitored, and have around the clock nursing without getting ripped off by a hospital.

I have worked at such centers before. It feels and looks exactly like med-surg floor, monitors and IV poles everywhere, individual rooms. But it’s an outpatient center which is open 24/7. I managed pyelonephritis there, spesis, chest pain, and pericarditis.

$$$: There is no good source right now for patients nor practitioners to learn about these center. Naturally, these places would rather go under the radar even though everything they do is legal. This is a good income opportunity for a physician who can review cases and determine which patients would be a good fit for such a service.

The Insurance Premium

I would have to pay $400/month and have a maximum out of pocket expense of $6,000 for decades before possibly needing an emergency room or hospital visit to justify the premiums.

No other insurance works like this. Your auto insurance isn’t mean to be used for your flat tire or scratch on the door. It’s not even meant to be used for that broken windshield. It’s meant to be catastrophic, protecting you against an extreme financial event.

I don’t contact my condo insurer when I need a new bulb in bathroom. I go to the hardware store and shop around for the best bulb for my needs. I can get the cheap incandescent bulb for $1 or the fluorscent bulb for $2.50 or the LED for $9.

Major Trauma

Imagine a trucks plows into me while I’m biking. I might break multiple bones and need a chest tube or I’ll suffer a spinal fracture and become a quadi. Either way, I’ll need to pay for trauma care along with ongoing follow-up visits.

But even in such a case, I can orchestrate my own care. After the trauma surgery I don’t have to stay in the ICU. I can go home AMA and get in-home care.

Obviously this is something I would need help with; that’s where family comes in. Let’s have such discussions long before we ever need these interventions.

Would you feel comfortable having your crumpled body flown out of the Harvard hospital to one in Mexico? Would you be comfortable getting your reconstructive surgery on your knee in Thailand?

$$$: If you can be a patient advocate, an independent patient ombudsman, you can save a patient a lot of money. A physician or a non-clinician are potential candidates for this work.

Cancer

The other fear many have is a cancer diagnosis. Just diagnosing the source of the cancer can be costly. Next comes the chemo and/or radiation and ongoing surveillance.

Oncology is a black bag and each Onc Center has their own way of doing things. Even if you have insurance, you have to be a savvy consumer to ensure that you get the right treatment for the right cancer by the right center.

This lack of transparency in oncology care appals me. From a clinical perspective, the care has gotten so obtuse that a primary care doctor nor a patient can do their due diligence to determine the best way of managing a particular cancer.

$$$: A business opportunity here is to be consulting physician who has no clinical involvement but simply serves as a middle-person to help the patient shop around for their best oncological care.

Chronic Disease

A less costly but equally feared diagnosis is something like MS, ALS, or Lupus. Chronic diseases can be costly in figuring out their exact diagnosis and in managing them.

Medications can be expensive, treatments and hospitalization for exacerbations can be add up.

Knowing what’s in store for you after a chronic disease diagnosis, you can anticipate your costs and plan for the spending. You negotiate the price and educate yourself on the alternatives of care.

$$$: I still haven’t seen a single solid telemedicine platform for chronic disease management. And I believe that it would take off well since most of these visits don’t require a physical exam.

Fueling the Healthcare Flame

To say that medicine has become an industry is an understatement. It wipes out bank accounts, it leads to bankruptcy, and it directly leads to increased morbidity and mortality.

Nothing wrong with making money from the delivery of healthcare. But profiting like this from basic healthcare?! That’s obscene. I feel gross being a part of it.

Unfortunately, we financialize a lot of things. We do this to nursing homes, funeral homes, hospitals, mental health, addiction treatment, and even our prison system is purely based on making money.

But when I pay for health insurance I’m fueling the flame. I’m choosing to forgo price transparency and I reject better quality healthcare for the sake of simplicity.

Better Health Outcomes

If you have an HMO and get a cancer, do you believe that your cancer will be treated to the highest standards or will you receive good enough care, enough that it will hold up in court?

If you have resilient acne which is leading to severe scarring, do you believe that your in-network dermatologist is the best person to go to or is there a private dermatologist who can do a far better job?

Before a consumer can choose the right provider for their particular needs, they need to know what the prices are. If we, as consumers, continue to rely on health insurance then we’ll never learn how to be savvy healthcare consumers.

I will write more on this topic in the future. I have worked on the insurance side and it wasn’t my jam. But I’m timid working on the other side, I don’t think that I know enough to be a solid patient advocate.

2 replies on “Health Insurance Doesn’t Make Sense”

I concur with many of your sentiments. My ex-girlfriend’s dad was an insurance broker, and he stated to me long ago that dental insurance is not worth it especially on the basis of actuarial research. Therefore, I have not carried dental insurance for quite some time. I also have not seen the dentist in quite sometime either. I buy high quality products: electric toothbrush, dental floss, and the higher end mouthwash brands; and couple them with a good cleaning regimen and healthy vegan diet. I went to the dentist about a year ago after not going for 3 years, and the dentist said my teeth were in perfect condition and they wished more of their patients utilized my regimen.

That being said, I wish I could drop my health insurance coverage but I fear a catastrophic incident that could bankrupt me suddenly due to the astronomical cost of medical care.

It makes sense to keep your health insurance when you can afford it. But it can also give you a false sense of security. In the end, a savvy consumer will always make good decisions regarding whatever they pay money for. I have had a lot of acquaintances and friends who have had major complications from surgery or some other intervention – but I don’t know anyone who had anything catastrophic, I mean truly catastrophic happen to them. I know there are such cases but I’m not sure if US healthcare can come to a real rescue. I can see a person utilizing 100’s of thousands of dollars of insurance dollars during their last few months before dying but that’s not really my definition of living. Obviously, I’m taking a very strong stance here so I am glad that you shared your story and I am glad that you are making a more conservative choice.

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