What’s wrong with America’s Health Care System?
When I first got into sales my boss at the time told me that in order to sell you had to do three things.
1. Tell ‘em what you’re gonna tell ‘em.
2. Tell ‘em.
3. Tell ‘em what you told ‘em.
Here in this first chapter I am going to accomplish step 1. I’m going to tell you what I’m about to tell you. The problem with anything that is this deeply ingrained and a part of our culture is that there is more than just one thing wrong. There are actually about fifteen individual problems all together leading up to a system that doesn’t work. It doesn’t work for employers, health care customers, doctors, hospitals, health insurance companies, drug companies, politicians on either side of the aisle or offices of insurance commissioner.
While it doesn’t work for any of them they all bear responsibility for what’s wrong.
There are four pieces of good news with all of this though.
1. It can be fixed.
2. Government can’t do it.
3. By following a simple path and doing it quickly it will work better and EVERYONE in the process will be better off within a period of months.
4. It can be done one person at a time leading to less overall chaos.
But before the solution makes any sense you’ll first have to understand how we got here, ergo the next two thousand words.
Problem Number One: Health care has been lumped in with health insurance. When you hear the numbers of people in the United States who are without health care those numbers are an out and out lie. Everyone has access to health care in this country. The hard fact is you cannot be turned down. The numbers you hear are the numbers of people who for whatever reason do not have health insurance. For some it’s that they don’t understand the need for insurance. For others it’s that they can’t afford it. And for some it’s that they don’t want to afford it. Health Care an Health Insurance should never be intermingled. Would you ever entangle car care with car insurance? No! Car insurance is there to pay for repairs due to an accident. It’s not there to pay for maintenance, gas or simple repairs. Which leads us to…
Problem Number Two: On the surface this may look like a repeat of number one, but it’s not. Health Insurance should be like other insurance it should be there to cover you in the event of a catastrophic loss. Is a $50.00 Doctor visit a catastrophic loss? No! Yet that is where roughly 90% of the claims that are file go to pay. The part that no one here wants to tell you is that premiums are based on the number and totals of claims paid. And the other part of this equation is that insurance companies need to operate at a profit. That is required by law. If an insurance company does not operate within a certain window of profit the offices of insurance commissioner shut them down. What this means to customers of health insurance is that when you pay your health insurance company to pay for your doctor visits you are paying an inflated price for that doctor visit. Plus if you are typical customer visiting roughly twice a year you are also paying for others in your risk group who use more doctor visits for their additional doctor visits. Which leads to…
Problem Number Three: Because our health insurance system is an employer based system the insured has no ownership in the policy. Ownership begets stewardship. Look for a second at rental cars. Rental cars do not get the car when they are driven that a car that is owned by the driver. The problem with not owning a health insurance policy is that it becomes an entitlement. An entitlement is ALWAYS-expected, over-used and under-appreciated. The supplier of the entitlement is generally abused over the entitlement and the entitlement is always complained about. It is never enough. It is never good enough. And it is always a source of complaint from the entitled. AND because it is called health care and not health insurance it is completely misunderstood. Even though the employee pays for it with lower wages and less choice the entitled never writes a check for the care and therefore it carries with it extra layers of abuse. The employee sees the deduction for the amount the health insurance costs him and resentment builds causing more use. “If I’m paying for it I really should use it.” The employee grumbles as he trots his family into the doctor with a slight grin of satisfaction at having pulled one over on the entitler. While there are some who do appreciate it what we are talking about is the general attitude taken by the entitled. It is generally one of dissatisfaction with the entitlement. Because health care is never paid for and taken for granted health too is taken for granted. Which leads to…
Problem Number Four: When there is no price there is no perception of value. When there is no perception of value there is no interest taken in the item received. People have come to look at their health differently because of employer based health care. Because they have no financial stake in their health care policy they have taken to looking at their poor health as something over which they have no control. The fact is that most of the things for which we take pills are lifestyle issues. Among those are heart disease, high blood pressure, high cholesterol, cancer, diabetes, asthma, arthritis - the list could go on. We have come to look at ourselves as victims of our health. When in reality of the things in our life we really have more control over than almost anything health is at the top of the list. Many of the things on the list can be overcome or avoided with diet and exercise. Others still are a function of our emotions and mindset. But because we have no stake in our health care we take no interest in it. Which leads to…
Problem Number Five: Unnecessary and overused doctor office calls. Stand by for a bit of news insurance premiums are based on payment of claims. Doctors visited because insurance covers it leads to an overuse of claims which leads to excessive health insurance AND health care costs. Too many doctor visits are paid by insurance companies for things that should never walk into a doctor’s office. If you go to the doctor for high blood pressure pills the doctor should tell you that you need to lose weight and exercise, but that would mean the doctor would lose another appointment from you in six months PLUS he would probably lose you across the street to the doctor who would give you what you want which is a quick and easy fix – a pill. Which leads to…
Problem Number Six: Too many medications – both prescribed and available. The drug companies have got so much invested in research and regulatory approval that they must pump out a new drug it appears every week. You cannot turn on the TV without seeing an ad for a drug. (Do we really need the shots of the lurid glances and the symbolic bathtubs overlooking the ocean, accompanied by the disclaimer about erections lasting more than four hours?) It seems that everywhere you look there are drug pushers. Drugs on TV, your doctor and his ever handy prescription pad, even your next door neighbor telling you about her latest prescription. People here is a hint, we all have anxiety. Get used to it. There are some estimates that claim that over 90% of the drugs that are prescribed are unnecessary. Some estimate lower. I have been in the health insurance industry for more than half a decade and I go for the higher number. I’ve seen people that are apparently very healthy at the age of 35 already loading up in the pills. I have met with older people who started out with a high blood pressure medication ten years ago who now carry a pharmacy with them. Here is the most frightening fact about prescription drugs I have ever come across; in order for a drug to get FDA approval it MUST be a toxin! Do you get that folks? In order for a drug to be a drug it must also be a poison! Which leads to…
Problem Number Seven: Doctors get paid so little for what they do that they have to see many more patients every day than they can properly treat. PLUS it’s the health insurance company that is really making the call on your treatment anyway. Doctors treat symptoms only. They don’t offer cures. Go ahead ask your doctor next time to give you a cure rather than pill. See how he answers. Which lead to…
Problem Number Eight: Health care – because treatment is prescribed by the health insurance companies – is inferior. Both HMOs and PPOs tell your doctor how you should be treated. Now the doctor is free to tell you whatever he wants but at that point he is liable for costs should you pursue that option and the health insurance company doesn’t approve of his recommendation. Remember doctors too have a business to run. If it is costing them money to treat you – even though you may believe he really, really, likes you, and you are his favorite patient – he probably will stick with the treatment course for which he knows he will get paid. This is – with the rare exceptions of cancer – always the treatment of symptoms. If your doctor tells you to toughen up and get therapy instead of complaining about your anxiety attacks he won’t get to see you for a meds check and you probably will go to another doctor to get pills anyway. Which leads to…
Problem Number Nine: Doctors get incentive from the drug companies to give you pills. Trips, gifts and sometime even cash go to doctors who prescribe certain pills for their patients. Enough said about that one.
Problem Number Ten: What you are billed and what the insurance company pays are really very different. You want to have the insurance company pay for your doctor visits, because you see the bills from the doctor that says you owe $250.00 for the five actual minutes you had with the doctor. You don’t care that the insurance company only paid $50.00. You’re just glad you didn’t have to fork over $50.00 per minute! Because of what has happened with health care in the U.S. there is no transparency or honesty in billing. The doctor has to bill you $250.00 to get the $50.00 from the insurance company. That is part of their deal! Doctor agrees to bill $250.00 for a certain type of office visit and also agrees to accept $50.00 as payment in full. In reality the visit was worth only $30.00 but with the added costs of billing the insurance company the doctor needs to collect $50.00 just to keep the shingle on the side of the building.
There are more and I will get into them plus all that I’ve just mentioned deeper over the next few chapters. Remember – I just told you what I’m gonna tell you. Next comes me telling you.
Copyright 2009 Dennis Rowley
Wednesday, April 22, 2009
Thursday, April 16, 2009
Can the Government Really Provide Good Health Care?
Can the Government Really Provide Good Health Care?
Let’s put the favorite tool of the liberals – emotion - aside for a few minutes. We’ll get back to that soon – TRUST ME! Emotion aside let’s look logically at health care first. First of all what the government is calling “health care” is really health insurance! Health care is doctor visits and hospitalization.
Here is my first and most important logical point. You can go into the doctor without health insurance. In fact you not only can you should! It will cost you less overall if you do. If you pay for a health insurance policy where there is a low deductible to pay for doctor visits it will cost you more per year than you would ever go for visits. If you don't have the $50 that it takes to visit a doctor many doctors will work with indigent, OR you can go to a county clinic. No one has to go without health care. That’s the logical part.
The emotional part is that the doctor will treat you better. He will have more time to spend with you. You will be treated as a patient – not a number or a customer. For a simple sick visit the doctor will be do the work for around $50.00. For a well visit he will charge a little bit more. The emotional part of this is that you got treated better for a small amount of money.
Logical point number two goes like this. You can go to a hospital without insurance as well. You have two options here. The first is that you can go and make payment arrangements. If you are able to keep up the payment arrangements they will collect on you so it is best to have insurance for hospitalizations – ALWAYS! IF YOU CANNOT PAY HOWEVER – and you know that going in, you can apply for charity care. You will be labeled as indigent – which affects some other things in your credit and such so again so it is best to have insurance for hospitalizations – ALWAYS!
But the point is you don’t need it. Hospitals cannot turn you away.
Now let’s talk logically about government control for a second. How well does the government run ANYTHING? Let’s look at Amtrak – our Vice President’s claim to fame. Has Amtrak ever operated at a profit? How about your local transit system? No millions – or in the case of Amtrak billions – of dollars goes into running it every year. And since we are talking about government run health care lets look at the two three that our Federal Government runs right now – the Veterans Administrations Hospitals system, Medicare and Medicaid. In my experience veterans tell me all the time that the Army will kill you one way or the other. The first is in war the second is in the VA hospital. While they usually smile when they say it there is a deep sadness to their joke. How sad that we treat our returning hero soldiers and sailors like that.
Then let’s go to Medicare. First of all it is going broke. Secondly it does not even begin to cover many of the costs that retired people will accumulate. Those costs must be covered with a secondary policy from a private insurance company – called a supplement. OR the senior can have Medicare make premium payments toward a private health insurance company under a program called Medicare Advantage. This is generally infinitely better coverage but again Medicare cannot afford to pay for all coverage on the top of the line plans and the Medicare recipient must a pay a portion of their premiums AND Medicare is still going broke!
Our last stellar example of Government Health Care is Medicaid. Talk to any proponent about Medicaid and watch them quickly change the subject. The program is going broke at a record breaking pace. The care is woeful and ALL Medicaid patients are treated disgracefully. If you doubt that just go to the ward side of your nearest Nursing Home. What goes on there is deplorable.
So much for the logical part of the government running our health care – now let’s tackle the emotional side. Imagine your child now hit by a car crossing the street. Your child is taken by ambulance. If that is government, how soon will it get there? Plus based on the fact that even our local governments are charging now for ambulance and paramedic services you may still have to pay. (Medicare doesn’t pay 100% for ambulance.) So let’s imagine that your child must lie in the street for even five minutes more than a private ambulance service would offer. How does that make you feel?
Now once he gets to the hospital how long does he have to wait in the E.R? Let’s say that with typical waits for universal health care in other countries he has to wait even another 15 minutes longer than he waits now, how does that feel?
Surgery is needed. Surgical wait times in other universal health care systems averages between days and months. Even in critical cases.
Now go to your nearest Nursing Home and go to the ward side – the Medicaid side - and imagine your child waiting for hours to get a diaper changed, or his pain meds. Imagine your child is now in distress and ringing the nurses bell and no one comes. That is what happens now in our government run health care system now.
How does that make you feel?
Now let's answer the favorite emotional plea of proponents of Universal Health Care. "There are over 50 Million people without health care in the United States!" Remember the first paragraph in this post. I stated that 50 million people do not have health insurance. That is because health insurance is expensive. That however is a free market problem that cannot be legislated out of existence.
There are solutions and those will happen soon.
I started out with a question. I will ask it again. Can the Government Really Provide Good Health Care?
Copyright 2009 Dennis Rowley
Let’s put the favorite tool of the liberals – emotion - aside for a few minutes. We’ll get back to that soon – TRUST ME! Emotion aside let’s look logically at health care first. First of all what the government is calling “health care” is really health insurance! Health care is doctor visits and hospitalization.
Here is my first and most important logical point. You can go into the doctor without health insurance. In fact you not only can you should! It will cost you less overall if you do. If you pay for a health insurance policy where there is a low deductible to pay for doctor visits it will cost you more per year than you would ever go for visits. If you don't have the $50 that it takes to visit a doctor many doctors will work with indigent, OR you can go to a county clinic. No one has to go without health care. That’s the logical part.
The emotional part is that the doctor will treat you better. He will have more time to spend with you. You will be treated as a patient – not a number or a customer. For a simple sick visit the doctor will be do the work for around $50.00. For a well visit he will charge a little bit more. The emotional part of this is that you got treated better for a small amount of money.
Logical point number two goes like this. You can go to a hospital without insurance as well. You have two options here. The first is that you can go and make payment arrangements. If you are able to keep up the payment arrangements they will collect on you so it is best to have insurance for hospitalizations – ALWAYS! IF YOU CANNOT PAY HOWEVER – and you know that going in, you can apply for charity care. You will be labeled as indigent – which affects some other things in your credit and such so again so it is best to have insurance for hospitalizations – ALWAYS!
But the point is you don’t need it. Hospitals cannot turn you away.
Now let’s talk logically about government control for a second. How well does the government run ANYTHING? Let’s look at Amtrak – our Vice President’s claim to fame. Has Amtrak ever operated at a profit? How about your local transit system? No millions – or in the case of Amtrak billions – of dollars goes into running it every year. And since we are talking about government run health care lets look at the two three that our Federal Government runs right now – the Veterans Administrations Hospitals system, Medicare and Medicaid. In my experience veterans tell me all the time that the Army will kill you one way or the other. The first is in war the second is in the VA hospital. While they usually smile when they say it there is a deep sadness to their joke. How sad that we treat our returning hero soldiers and sailors like that.
Then let’s go to Medicare. First of all it is going broke. Secondly it does not even begin to cover many of the costs that retired people will accumulate. Those costs must be covered with a secondary policy from a private insurance company – called a supplement. OR the senior can have Medicare make premium payments toward a private health insurance company under a program called Medicare Advantage. This is generally infinitely better coverage but again Medicare cannot afford to pay for all coverage on the top of the line plans and the Medicare recipient must a pay a portion of their premiums AND Medicare is still going broke!
Our last stellar example of Government Health Care is Medicaid. Talk to any proponent about Medicaid and watch them quickly change the subject. The program is going broke at a record breaking pace. The care is woeful and ALL Medicaid patients are treated disgracefully. If you doubt that just go to the ward side of your nearest Nursing Home. What goes on there is deplorable.
So much for the logical part of the government running our health care – now let’s tackle the emotional side. Imagine your child now hit by a car crossing the street. Your child is taken by ambulance. If that is government, how soon will it get there? Plus based on the fact that even our local governments are charging now for ambulance and paramedic services you may still have to pay. (Medicare doesn’t pay 100% for ambulance.) So let’s imagine that your child must lie in the street for even five minutes more than a private ambulance service would offer. How does that make you feel?
Now once he gets to the hospital how long does he have to wait in the E.R? Let’s say that with typical waits for universal health care in other countries he has to wait even another 15 minutes longer than he waits now, how does that feel?
Surgery is needed. Surgical wait times in other universal health care systems averages between days and months. Even in critical cases.
Now go to your nearest Nursing Home and go to the ward side – the Medicaid side - and imagine your child waiting for hours to get a diaper changed, or his pain meds. Imagine your child is now in distress and ringing the nurses bell and no one comes. That is what happens now in our government run health care system now.
How does that make you feel?
Now let's answer the favorite emotional plea of proponents of Universal Health Care. "There are over 50 Million people without health care in the United States!" Remember the first paragraph in this post. I stated that 50 million people do not have health insurance. That is because health insurance is expensive. That however is a free market problem that cannot be legislated out of existence.
There are solutions and those will happen soon.
I started out with a question. I will ask it again. Can the Government Really Provide Good Health Care?
Copyright 2009 Dennis Rowley
Wednesday, April 15, 2009
(FUTURE) Presidential Address to the Nation
(FUTURE) Presidential Address to the Nation
Date July 25, 2011 (Speech entirely read from teleprompter.)
Good Evening.
As you know three years ago the congress of the United States, under my direction, courageously passed the most comprehensive health care reform bill in our country’s history. In this bill were the tools for the entire country to receive free health care. Now, prior to the passage of this bill almost 56 million American were without health care due to the exorbitant and ever-rising costs.
Since congress passed this bill we have seen access to doctors increase and prescription drug prescriptions rise at levels never seen before. It is apparent from the results that we have seen that Americans truly needed this relief from the rising costs of health care. We have also seen the overpaid doctors and over charging hospitals get their fair due by restricting payments to this obviously overly-rich segment of the population. As a result enrollments in medical schools are down giving us the unexpected happy consequence of lowering costs for our comprehensive college reform program.
This is all good news.
But we have also found that the cost for this program has exceeded our expectations. Simply stated our health insurance program is going broke. Now after a two year study of this we have determined that the cause for this could never be predicted by us because we could never have foreseen the rush to the medical centers for the obviously needed medical treatments the poor, uninsured and underinsured are now receiving. It seems that because of our efforts at health care reform our claims are up at rates never predicted. Simply put we are going to the doctor more and that is costing our health care program more.
So tonight I am announcing our new health care reform reform. Because of the overtaxing of the system we will increase taxes on those who can best afford it. Now first of let me state, that those exempt from this tax will be as follows; the poor, the obese, the infirm, those with high blood pressure and high cholesterol. We will also be offering a health care credit – your checks will becoming soon – to those with diabetes, heart disease and cancer plus debilitating conditions like asthma, multiple sclerosis and lupus, as well as fibromyalgia, ADHD and depression.
Because of the fuel savings and the extra income of those in our population who do not need to take off from work and drive to the doctor’s office because they do not need doctor’s care on a regular basis. We will be getting the much needed money from those who do not need medical care. This only makes sense. Those who have good health should pay for those who, through no fault of their own, do not.
This program is called the Pretty Health Alternative Tax – or our PHAT tax. All healthy American are hereby ordered to visit a health care center within the next 30 days to be tested, weighed and measured to determine the level of taxes you will pay. Now because we already have health records for the infirm through our Drug Czar program you will very soon be receiving a letter informing you of the new accelerated level free care or the health care credit you will receive.
Thank you.
Editor's Note: You think this can't happen. Think again look at what has already happened in less than 100 days. Our current President is serious about this and apparently no one in congress in either party is serious about stopping him.
email me a healthdennis@gmail.com
Date July 25, 2011 (Speech entirely read from teleprompter.)
Good Evening.
As you know three years ago the congress of the United States, under my direction, courageously passed the most comprehensive health care reform bill in our country’s history. In this bill were the tools for the entire country to receive free health care. Now, prior to the passage of this bill almost 56 million American were without health care due to the exorbitant and ever-rising costs.
Since congress passed this bill we have seen access to doctors increase and prescription drug prescriptions rise at levels never seen before. It is apparent from the results that we have seen that Americans truly needed this relief from the rising costs of health care. We have also seen the overpaid doctors and over charging hospitals get their fair due by restricting payments to this obviously overly-rich segment of the population. As a result enrollments in medical schools are down giving us the unexpected happy consequence of lowering costs for our comprehensive college reform program.
This is all good news.
But we have also found that the cost for this program has exceeded our expectations. Simply stated our health insurance program is going broke. Now after a two year study of this we have determined that the cause for this could never be predicted by us because we could never have foreseen the rush to the medical centers for the obviously needed medical treatments the poor, uninsured and underinsured are now receiving. It seems that because of our efforts at health care reform our claims are up at rates never predicted. Simply put we are going to the doctor more and that is costing our health care program more.
So tonight I am announcing our new health care reform reform. Because of the overtaxing of the system we will increase taxes on those who can best afford it. Now first of let me state, that those exempt from this tax will be as follows; the poor, the obese, the infirm, those with high blood pressure and high cholesterol. We will also be offering a health care credit – your checks will becoming soon – to those with diabetes, heart disease and cancer plus debilitating conditions like asthma, multiple sclerosis and lupus, as well as fibromyalgia, ADHD and depression.
Because of the fuel savings and the extra income of those in our population who do not need to take off from work and drive to the doctor’s office because they do not need doctor’s care on a regular basis. We will be getting the much needed money from those who do not need medical care. This only makes sense. Those who have good health should pay for those who, through no fault of their own, do not.
This program is called the Pretty Health Alternative Tax – or our PHAT tax. All healthy American are hereby ordered to visit a health care center within the next 30 days to be tested, weighed and measured to determine the level of taxes you will pay. Now because we already have health records for the infirm through our Drug Czar program you will very soon be receiving a letter informing you of the new accelerated level free care or the health care credit you will receive.
Thank you.
Editor's Note: You think this can't happen. Think again look at what has already happened in less than 100 days. Our current President is serious about this and apparently no one in congress in either party is serious about stopping him.
email me a healthdennis@gmail.com
Tuesday, April 14, 2009
What is Insurance?
What is Insurance?
Insurance has always been a way for you to invest in protection against a catastrophic financial loss.
Here is how pure insurance is set up. Let’s say that you need a policy to protect you against the financial loss from breaking your arm. Let’s call this a broken arm policy. Let’s say now that you want this policy to replace lost income of $10,000.00.
Now the insurance company actuary has determined that broken arms occur twice in every 1000 people every year. (This is made up for the purposes of the example. Don’t quote me on the incidence of broken arms!) Now the actuary can accurately determine through his formulas how many people will break their arms out of 1000, he just doesn’t know who.
Now also through their research they determine that if the policy is priced at a level of $20.00 per year that 2000 people will buy the policy. So the insurance company issues 2000 policies at a cost of $20.00 per year. The total collected is $40,000.00. The insurance company is wagering profit on the fact that only two people will file claims for the $10,000.00 for a total in paid claims of $20,000.00. The other $20,000.00 is for operating costs and cost of sales, etc.
Now the cost of $1.66 per month per individual obviously made it worth the risk for 2000 people. The risk for the insurance company was determined through extensive research and after that research they also felt it worth the risk. In this situation the insurance company actuaries predicted the number of claims perfectly and everyone was happy.
BUT as you can see the business of insurance actuarial tables is truly an art. If the actuary underestimated by even one profit was gone. If he missed by two, the company lost money. So if the company decided that they were going to offer the policy again the next year and their claims totaled $30,000.00 they would have to adjust the premiums.
IMPORTANT POINT: Claims paid determine the premium of policies.
Insurance companies assume a lot of risk. That could be why some insurance companies go out of business ever year.
Let’s now shift gears for a second and talk about what is being sold as “health insurance” right now. Based on current claim data provided by Mutual of Omaha, most insurance claims (around 70%) are for procedures less than $2000.00. with about half of those claims totaling less than $250.00 each.
The point here is that health insurance has become less about protecting against catastrophic financial losses and more about the insurance paying for doctors visits. Now remember in the broken arm policy example the insurance company assumed risks based on their ability to make a profit. What is called “health insurance” now is no different. Your health insurance carrier must also make a profit or next year they will join the insurance companies that go out of business. So what happens is that you pay your health insurance company premiums approximately one and one half times the actual costs of total claims paid for your risk group.
The average person goes to the doctor two and one half times per year. Only 7% of people actually file a claim for costs exceeding $2000.00 for a single claim. That is for a hospital stay with the average hospital stay costing around $20,000.00.
Question 1: Does it make sense to pay your “health insurance” company almost $5000.00 a year to cover doctor visits when they cost less than $250.00 per visit?
Question 2: Would it make more sense to write policies that only covered the cost of hospital expenses?
If you have questions please contact me at healthdennis@gmail.com
Insurance has always been a way for you to invest in protection against a catastrophic financial loss.
Here is how pure insurance is set up. Let’s say that you need a policy to protect you against the financial loss from breaking your arm. Let’s call this a broken arm policy. Let’s say now that you want this policy to replace lost income of $10,000.00.
Now the insurance company actuary has determined that broken arms occur twice in every 1000 people every year. (This is made up for the purposes of the example. Don’t quote me on the incidence of broken arms!) Now the actuary can accurately determine through his formulas how many people will break their arms out of 1000, he just doesn’t know who.
Now also through their research they determine that if the policy is priced at a level of $20.00 per year that 2000 people will buy the policy. So the insurance company issues 2000 policies at a cost of $20.00 per year. The total collected is $40,000.00. The insurance company is wagering profit on the fact that only two people will file claims for the $10,000.00 for a total in paid claims of $20,000.00. The other $20,000.00 is for operating costs and cost of sales, etc.
Now the cost of $1.66 per month per individual obviously made it worth the risk for 2000 people. The risk for the insurance company was determined through extensive research and after that research they also felt it worth the risk. In this situation the insurance company actuaries predicted the number of claims perfectly and everyone was happy.
BUT as you can see the business of insurance actuarial tables is truly an art. If the actuary underestimated by even one profit was gone. If he missed by two, the company lost money. So if the company decided that they were going to offer the policy again the next year and their claims totaled $30,000.00 they would have to adjust the premiums.
IMPORTANT POINT: Claims paid determine the premium of policies.
Insurance companies assume a lot of risk. That could be why some insurance companies go out of business ever year.
Let’s now shift gears for a second and talk about what is being sold as “health insurance” right now. Based on current claim data provided by Mutual of Omaha, most insurance claims (around 70%) are for procedures less than $2000.00. with about half of those claims totaling less than $250.00 each.
The point here is that health insurance has become less about protecting against catastrophic financial losses and more about the insurance paying for doctors visits. Now remember in the broken arm policy example the insurance company assumed risks based on their ability to make a profit. What is called “health insurance” now is no different. Your health insurance carrier must also make a profit or next year they will join the insurance companies that go out of business. So what happens is that you pay your health insurance company premiums approximately one and one half times the actual costs of total claims paid for your risk group.
The average person goes to the doctor two and one half times per year. Only 7% of people actually file a claim for costs exceeding $2000.00 for a single claim. That is for a hospital stay with the average hospital stay costing around $20,000.00.
Question 1: Does it make sense to pay your “health insurance” company almost $5000.00 a year to cover doctor visits when they cost less than $250.00 per visit?
Question 2: Would it make more sense to write policies that only covered the cost of hospital expenses?
If you have questions please contact me at healthdennis@gmail.com
Monday, April 13, 2009
Does it take an Act of Congress?
Does it take an Act of Congress?
How many times have you jokingly said, “What does it take, an act of congress?”
Even though we have all – at one time or another – used that line or a variation of it? These days it appears to be no laughing matter. It seems we are ALL waiting around for congress to make changes. And folks as we can see very clearly that ain’t gonna happen. No, if we want change we will have to make it happen.
Congress – the federal government in general – doesn’t look at things the way we do. We look at our income and decide what we can and cannot do with that money. Congress on the other hand looks at what they want to do and then comes up with tax laws to get more money from us to make those things happen. The difference is that they are not budgeting or spending their own money. They are spending ours.
On top of that when congress sees a problem they have only one way to fix it and that is with a law. It’s called the carpenters law: When the only tool you have is hammer, everything looks like a nail. The only thing congress can do to fix things they see as being wrong is to create regulation making something illegal, then they appropriate our money to fund the fix.
The only thing government has ever created is laws.
So what are we to do? We need to look for free-market solutions to fix the problems created by us and our government.
Look, did congress make a law requiring the invention and production of the automobile?
No!
Did congress create a law that conjured up human flight?
No!
The only thing congress has done for those two pieces of entrepreneurial magic has been to make both of them more expensive. (Think about it!)
No it has been the free market that created those things for a ready, willing and waiting market.
The same can be done with health insurance. I am doing it now. I am meeting with businesses looking to lower the costs of their health insurance and along with the employees I am designing health care plans that are, affordable, portable, easy to access and most importantly they belong to the employees not the company. That way the employee gets to control costs not the group.
Does any of that sound like what government is trying to legislate into existence.
Contact me at healthdennis@gmail.com for more details on what you and or your company can do to do the same.
How many times have you jokingly said, “What does it take, an act of congress?”
Even though we have all – at one time or another – used that line or a variation of it? These days it appears to be no laughing matter. It seems we are ALL waiting around for congress to make changes. And folks as we can see very clearly that ain’t gonna happen. No, if we want change we will have to make it happen.
Congress – the federal government in general – doesn’t look at things the way we do. We look at our income and decide what we can and cannot do with that money. Congress on the other hand looks at what they want to do and then comes up with tax laws to get more money from us to make those things happen. The difference is that they are not budgeting or spending their own money. They are spending ours.
On top of that when congress sees a problem they have only one way to fix it and that is with a law. It’s called the carpenters law: When the only tool you have is hammer, everything looks like a nail. The only thing congress can do to fix things they see as being wrong is to create regulation making something illegal, then they appropriate our money to fund the fix.
The only thing government has ever created is laws.
So what are we to do? We need to look for free-market solutions to fix the problems created by us and our government.
Look, did congress make a law requiring the invention and production of the automobile?
No!
Did congress create a law that conjured up human flight?
No!
The only thing congress has done for those two pieces of entrepreneurial magic has been to make both of them more expensive. (Think about it!)
No it has been the free market that created those things for a ready, willing and waiting market.
The same can be done with health insurance. I am doing it now. I am meeting with businesses looking to lower the costs of their health insurance and along with the employees I am designing health care plans that are, affordable, portable, easy to access and most importantly they belong to the employees not the company. That way the employee gets to control costs not the group.
Does any of that sound like what government is trying to legislate into existence.
Contact me at healthdennis@gmail.com for more details on what you and or your company can do to do the same.
Friday, April 10, 2009
There Is an Answer
There Is an Answer
And that answer is not universal health care.
I have read every proposal out there that I can find and all that I have seen neglect one area of concern or another. My plan addresses all areas of concern.
Some of these are:
Concern 1. What about the uninsurable?
Answer 1. Under my plan doctors and hospitals would be given tax credits for treating those who cannot afford to self-insure and are uninsurable. Because these doctors and hospitals will be making what they want and need to make to provide quality health care, and not the network payments that under contract they have to accept from managed care insurance companies, they could afford to take on a certain level of charity care. But because personal responsibility is the key to my plan people would by default become healthier and require less care and we would have fewer uninsurable.
Concern 1. What about the poor?
Answer 2. See Answer 1 above. The same would work for the poor. The poor would get better care and not free clinic care. They could go see doctors that for now they do not have access to, because the really good doctors can opt out of taking payments from Medicaid.
Concern 3. What about my doctor visits?
Answer 3. There will be a level of self insurance and I guess under the current employer based plan you could consider doctor visits self-insurance. But it is more than that; it is the freedom to choose your treatment by your doctor. It is the freedom to ask for a cure rather than treatment of symptoms. Self-insurance begets personal responsibility – personal responsibility begets stewardship. That is the element that is missing from our current health care system.
Concern 4. This self-insurance would mean that I have to have a certain amount of money. I don’t have that kind of discretionary money lying around.
Answer 4. Because employers would be saving money by giving their employees a health insurance / health care allowance rather than paying exorbitant group rates for things like doctor visis. Some of the savings could be used to help employees with a certain amount of money to help them with steep out of pocket costs for a period of time until the mindset of personal responsibility begins to be more prominent.
From the universal health care proponents there will be many more objections but those objections are really more about not wanting a health care system that works for individuals. These people believe in health care rationing, restricted treatments and overall control.
Those who think they want universal health care and don’t understand the huge downsides only believe from an emotional point of view that health care is a right.
More on emotions next week
And that answer is not universal health care.
I have read every proposal out there that I can find and all that I have seen neglect one area of concern or another. My plan addresses all areas of concern.
Some of these are:
Concern 1. What about the uninsurable?
Answer 1. Under my plan doctors and hospitals would be given tax credits for treating those who cannot afford to self-insure and are uninsurable. Because these doctors and hospitals will be making what they want and need to make to provide quality health care, and not the network payments that under contract they have to accept from managed care insurance companies, they could afford to take on a certain level of charity care. But because personal responsibility is the key to my plan people would by default become healthier and require less care and we would have fewer uninsurable.
Concern 1. What about the poor?
Answer 2. See Answer 1 above. The same would work for the poor. The poor would get better care and not free clinic care. They could go see doctors that for now they do not have access to, because the really good doctors can opt out of taking payments from Medicaid.
Concern 3. What about my doctor visits?
Answer 3. There will be a level of self insurance and I guess under the current employer based plan you could consider doctor visits self-insurance. But it is more than that; it is the freedom to choose your treatment by your doctor. It is the freedom to ask for a cure rather than treatment of symptoms. Self-insurance begets personal responsibility – personal responsibility begets stewardship. That is the element that is missing from our current health care system.
Concern 4. This self-insurance would mean that I have to have a certain amount of money. I don’t have that kind of discretionary money lying around.
Answer 4. Because employers would be saving money by giving their employees a health insurance / health care allowance rather than paying exorbitant group rates for things like doctor visis. Some of the savings could be used to help employees with a certain amount of money to help them with steep out of pocket costs for a period of time until the mindset of personal responsibility begins to be more prominent.
From the universal health care proponents there will be many more objections but those objections are really more about not wanting a health care system that works for individuals. These people believe in health care rationing, restricted treatments and overall control.
Those who think they want universal health care and don’t understand the huge downsides only believe from an emotional point of view that health care is a right.
More on emotions next week
Wednesday, April 8, 2009
OK, I Get That it’s Broken – So What Can I Do?
OK, I Get That it’s Broken – So What Can I Do?
This is a question that be answered simply and completely right now.
Take personal responsibility.
Be responsible and talk to your employer or employees about not accepting the “entitled” health care offered by your company. Employees; see what you can do to get your own health insurance – not health care – actual insurance. There are plans out there in your state you just need to find them. (I can help with that. Email me!) See if some of the savings you get by not taking the health care offered by your employer. Talk to him or her about dropping the company plan and encouraging them to get their own health insurance. (I can help with that too. Email me!)
Employers; have the hard conversation with your employees about health care plans offered by your company. Tell them that it is breaking the company. Tell them the entitlement era is going away nationwide or they will soon lose all control of their health care and health care decisions. (Read Universal Health Care.) And I can help you with that too Mr. and or Ms. Employer.
What you will find is that as you realize that the money for health care – Dr. visits and the like - does actually come from somewhere, that you are more acutely aware of taking care of your own health care. When all it costs is a $15.00 co-pay to go to the doctor and your “health care” is covered by your employer there is no sting, you have no skin in the game. But once you have to fork over the cash yourself, you realize that health care doesn’t grow on trees.
And Mr. and Ms. Employer you will see a drastically different work force. Trust me on this; people who pay nothing for something see no value in it. Once the nickels begin to come out of their pocket you will have a dramatically difference workforce on your hands!
This is a question that be answered simply and completely right now.
Take personal responsibility.
Be responsible and talk to your employer or employees about not accepting the “entitled” health care offered by your company. Employees; see what you can do to get your own health insurance – not health care – actual insurance. There are plans out there in your state you just need to find them. (I can help with that. Email me!) See if some of the savings you get by not taking the health care offered by your employer. Talk to him or her about dropping the company plan and encouraging them to get their own health insurance. (I can help with that too. Email me!)
Employers; have the hard conversation with your employees about health care plans offered by your company. Tell them that it is breaking the company. Tell them the entitlement era is going away nationwide or they will soon lose all control of their health care and health care decisions. (Read Universal Health Care.) And I can help you with that too Mr. and or Ms. Employer.
What you will find is that as you realize that the money for health care – Dr. visits and the like - does actually come from somewhere, that you are more acutely aware of taking care of your own health care. When all it costs is a $15.00 co-pay to go to the doctor and your “health care” is covered by your employer there is no sting, you have no skin in the game. But once you have to fork over the cash yourself, you realize that health care doesn’t grow on trees.
And Mr. and Ms. Employer you will see a drastically different work force. Trust me on this; people who pay nothing for something see no value in it. Once the nickels begin to come out of their pocket you will have a dramatically difference workforce on your hands!
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