A Deductible and Co-payment on everything Medical

by admin on 01/04/2018 5:06 AM

Some health insurance carriers still tout zero deductible or zero copayment as the best deal in medicine. But this best deal is just temporary because it leads to excessive healthcare costs because of overutilization. This then eventually will lead to increasing insurance cost. When money is no object, price does not matter. If price does not matter, e.g. when health care is free, it eventually leads to increased utilization, which increases scarcity and then increases the price and costs. 

Obamacare was proposed to give everyone health insurance which the administration believed would give everyone health care. They did not understand that giving everyone a health care policy meant that they could obtain health care. The limitations on available healthcare when the price is controlled by the government, means someone in the cost/payment exchange must lose. By forcing physicians to take the loss, many physicians became unavailable. This created a huge hole for sick patients to obtain treatment who were covered by the lowest rung of the system.

Attorneys used this sleight of hand when trying to obtain expert opinions and state the reimbursement would be by Medicaid. This frequently caused physicians to take a great loss because frequently Medicaid paid so poorly or denied coverage.

Health care which should be important to all was being dispensed as charity (payment at less that the physician’s cost of running his office) and thus devalued in the mind of the patient.

We have demonstrated in our cost-analysis evaluations, that sometimes a small copayment, even 10 percent would have caused the patient to seek a more economical strategy. For instance, a 10 percent copayment on an ER or Hospital admission, would have, in most instances, precipitated an office evaluation, frequently at one-tenth the cost of the hospital visit.

Thus a $10 copayment per each day in the hospital would have directed the patient to an office visit at a single $5 copayment. This would have saved Medicaid, in this example of several years ago, a $5,000 hospital payment for a $100 office payment. Such savings are enormous and unbelievable by most. In fact, when I point out such a 98 percent reduction in health care costs in this instance, I receive lifted eyebrows.

The data on the cost of emergency or catastrophic care is somewhere between 9 and 12 percent. This would then confirm that we need health insurance for, at most, the 10 percent of health care that is expensive and pay for the other 90 percent out of our own bank account. Although these figures may be inaccurate, this realignment of our health plans would save upwards of 50 percent of health care costs in this country.

The major problem is that it would not be politically feasible since hospitals, physicians, and insurance companies would also lose this same 50 percent of their revenue. Therefore, this disruptive program would have to be implemented outside of the three legs of the health industry. That would require someone with the assets of the Koch brothers to implement.

Corporate medical practice has been outlawed in a number of states. Establishing a practice one step away in a foundation has bypassed this restriction. The rationale for this restriction on health care has been poorly explained. In the corporate practice of medicine, the focus is on the bottom revenue line. This will always usurp revenue over Quality Of Care (QOC). In fact, most of what is known as QOC is really corporation finessing maximizing revenue vs a QOC that is just the minimal to avoid serious evaluation.

I think we can safely state, after observing decades of corporate medical practice maximizing the revenue line, that the corporate practice of medicine, which is obligated to maximize shareholder value, is not consistent with a high level of medical care. Although physicians have been charged with maximizing revenue, they are the only section of health care with a personal code of medical ethics, which always holds the patient as the ultimate beneficiary.

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