The Irony of Health Insurance: Why US Healthcare is a Costly Disaster

In order to solve a problem one must understand certain definitions at the core of the discussion.  Health- the state of being free from illness or injury. Insurance- coverage by contract whereby one party  undertakes to indemnify or guarantee another against loss by a specified contingency or peril. In reality  health insurance should really be called “illness or injury” insurance just as life insurance should really be  called “death” insurance. Health insurance is supposed to be purchased to cover excessive medical costs  associated with illness and injury. Thus when catastrophic expenses arise- injury, cancer, heart attack,  stroke, etc the individual or family can protect their assets and cover the expense of treatment.  Currently “Health Insurance” is really providing a “total health management” package which is of course  costly, unsustainable and unnecessary. There was a time when medical costs were reasonable and it  was a fee for service. The patient paid a fair price for a reasonable service. If the service was too  expensive or ineffective the patient chose a different physician or treatment. The physician did not  have to hire several people to bill the insurance for that visit. The doctor wasn’t required to purchase an  expensive EMR or forced to document 20 “points” to justify his bill. Your physician wasn’t too busy  typing into a computer or doing paperwork instead of spending valuable time with you. The paperwork  before a surgery wasn’t akin to closing on a mortgage. The doctor simply listened, examined and treated  his/her patient. When’s the last time you’ve had a doctor do those things? Fee for service is an example  of a true free market health care system- the consumer (patient) dictates to the supplier (doctors and  hospitals) the care expected not the government or insurance industry. Doctors spend all those years of  training for the privilege of caring for sick and injured patients not to do paperwork. I pay cash to my  dentist for most of my treatment and I’m very satisfied with the care she provides me.

Today, the patient with a health problem has to sort through a list of “providers” and hope there is a  quality physician on their plan which was formed by the insurance plans, hospitals and big medical  groups not by the patient choosing the best doctor. The independent doctor is shut out. The patient  sees that practitioner who will refer them for testing or treatment at the facility that has been dictated  by the plan not necessarily the facility providing the best care. Through the process the patient might  see an “explanation of benefits” which will outline all the exorbitant charges for treatment that will or  will not be covered. These excessive charges will cover all the middlemen- all the billers and coders and  collectors in each office, all the non practicing physicians hired to scrutinize the necessity of the  treatment (legal way for insurance denial of coverage), the malpractice insurance for the doctor (over  100k for many obstetricians and neurosurgeons), malpractice lawyers (direct cost- settlements, indirect  cost- unnecessary “cover your ass” tests ordered). The middlemen costs are truly insane! Then there is  the expectation that health insurance covers everything- routine doctor visits, preventive tests, erectile  dysfunction, sex change operations- the list goes on forever. How can affordable insurance cover  everything? Imagine if you insured your car like your health. The car insurance would cover oil changes,  wiper blades, brakes, tires, everything! First- nobody could afford car insurance. Secondly imagine all  the waste- your tires are 1⁄2 worn, might as well replace them, it’s only a $25 co pay. Your transmission is  a little off and you’ve met your yearly deductible- might as well replace it. Imagine the racket such an  insurance product would create- soon the car insurance would set up review process to determine if  your oil change was really necessary! Can you see all the potential waste and abuse? Welcome to  today’s healthcare.

The only affordable healthcare solution is really quite simple. Allow patients to keep tax free money in a  health savings account to use toward routine health spending- doctor visits, dentist visits, gym  memberships, mammograms, MRI’s, CT’s, whatever the patient feels is best for his/her’s health.  Insurance (tax deductible) would be purchased and used to cover catastrophic problems- stroke, heart  attack, cancer, surgery, transplants, etc. The patient could choose deductibles and coverages like they  choose their car insurance- high deductible means more out of pocket exposure but less premium. The  physician and patient are happy- more time with the patient and less time recording useless data to  justify the visit to insurance or Medicare. The overhead cost of billing insurance- gone. For example, the  doctor suggests considering an MRI for knee pain- the patient decides if the cost of the MRI is worth it or  just see if it gets better on its own. If the pain and disability become significant and he/she gets the MRI  (cash price is usually far cheaper than what insurance pays) and it shows a meniscal tear. The doctor  offers PT, injection or surgery. If the knee problem is severe the patient will choose the surgery. If the  pain is tolerable the patient will avoid the copay and cost associated with the surgery and choose the  lesser treatment. A good decision is made and an unnecessary test or surgery is avoided. There’s no  middleman deciding the necessity of either the test or treatment. The patient has decided with his  pocket book. This will drive down the cost of health care because the consumer (patient) is put back in  control and the product (doctor and hospital) have to work for that consumer. This will drive better  more affordable care across the board and avoid waste.

What about birth control, erectile dysfunction, sex change, and anything else controversial or political?  That’s what the health savings account is all about- you are free to use it on whatever health or dental  issue you desire. Freedom- imagine that!!!!