Why are health insurance costs are so high?
A patient had an, as yet, un-diagnosed condition. The routine testing done by her specialist yielded an initial diagnosis that about a year later was determined to be wrong. They were looking at a cluster of difficult, slowly developing and confusing diagnoses. The specialist recognized her shortcomings and sent the patient off to the big city for a second opinion by a big wig specialist.
The second specialist repeated most of the testing previously done and some new avenues of testing. He reviewed the prior treatment that had not produced the expected results that had ultimately lead to questioning the original diagnosis. No firm diagnosis was evident, but the focus was trending which made the second specialist want to try a new therapy.
But that’s just the background. The reason healthcare costs are so high follows.
The patient had health insurance. The doctor visits and diagnostic testing costs were submitted, as usual, for payment. After about 3 weeks, the insurance company notified the patient that they were declining one of the laboratory tests as unnecessary. The second specialist was recruited to explain to the insurance company what he was looking for, why he ordered the test, what the result would do to help the patient find her diagnosis, and on, and on. The insurance company declined, again.
In fact the insurance company fought the payment of the lab test for the next 9 months, through several submissions to be paid, 2 levels of review and 3 appeals. For a lab test that cost them $145.70.
What the insurance company won’t tell us is how many full time employee man-hours (and at what hourly rate) were used in the submission and appeal process to finally capitulate and pay the bill.
For 2018, the total direct written premiums to health insurance totaled $714 billion.
Healthcare.gov health insurance issuers (essentially medicare) deny, on average, 18% of all claims and across the board 13% of all insurance claims (private and medicare) are denied.
There are over 900 insurance companies in the USA.
About 270 million USA citizens have health insurance (estimated 300 million qualify).
So, here we have one patient out of 270 million fighting one insurance company out of 900 over $145.70 in an industry that nets over 1.4 trillion/year in revenue.
I’m tired and you can do the numbers, but who is scamming who?
Your grumpy uncle Dave.