Tuesday, May 01, 2012

insurance boogie man

i've worked in health care now for almost four years.  i went from knowing very little about the health care system in america to knowing more, but admittedly, i am no expert.  i know enough to know that the system we have in place today is deeply flawed, and that there isn't any easy way to fix it.  i also know that fixing it is going to be a long, sucky process, and everyone at some point is going to get their panties in a bunch about it.  i believe in that the way i believe in death and taxes.

working in insurance gives me a very specific view of american health care costs.  one thing you may not be aware of when you go see the doctor is the difference between the "charged amount" and the "allowed amount".  if you have insurance, and your doctor is contracted with your insurance carrier, then part of that contract states that for specific procedures there is an allowed amount.  meaning, your doctor and the insurance company both agree that for an office visit less than half an hour, say, the insurance company will pay $75.00.  however, your doctor and his colleagues at the clinic or hospital he works for may have a totally different amount they actually charge; for the same service, one office visit of less than half an hour may be priced at $125.00.  what this means to you is that if you have an insurance the doctor accepts, your doctor agrees to only charge you $75.   if you don't have that insurance (or any insurance), that visit is going to cost you $125.  the difference between the $125 charge and the $75 charge is called "write off." you can't be charged that, and the amount is written off as a tax break.  many providers (what we in the business call doctors, clinics, hospitals, et al) have charge amounts much higher than typical contracted allowed amounts for a few reasons, one being that if the provider contracts with more than one insurance, and the allowed amounts are different, they'll be covered for both.  the other is that charging some patients more for services means more money, means that the amount they may lose in write off balance out that loss.  it's not always about making mad cash either, although it would be easy and fun to say that about doctors.  "oh, they just want a new yacht!" money is part of it, sure, but it's all not going into gold-lined lab coat pockets.  it pays administrative staff, cleaning staff, lab techs, insurance/malpractice costs, educational debt as well as continuing education costs, etc. (seriously, you want your doctor to keep getting some learning. that cost is totally worth it.)

all that aside, sometimes i talk to people who are upset about what they actually have to pay out of pocket.  i can understand that.  when you get a bill for $500 for a single afternoon's worth of service, you wonder what you're paying for.  if you are lucky, you will call someone like me who will walk you through all the charges.  i had a person who was livid about a $500 bill, just absolutely pissed and yelling about "what's the point of insurance if i have bills like this?" i had to point out that yes, $500 is a lot, but the total charges for the services they actually received totaled over $5,000.  well over $5,000, to be more exact.  if that person hadn't had insurance at all, the doctor would have charged them for ALL OF THAT.  yes, premiums can be high and deductibles are a bitch, but when you take into account the sum total of premiums and deductible and out of pocket cost, if you have one moderate medical issue (a colonoscopy that requires the removal of a polyp, say, or a mammogram that needs additional views, or an allergic reaction to a medication) you're much better off with insurance than without.  especially considering that moderate medical issues usually have follow up issues.

was this totally boring?  because to be honest, i find the whole thing kind of fascinating.  also, i talk to so many people on a daily basis who don't know the basics about insurance, and i think that's a shame.  if more people knew how it worked, what was going on, what motivates insurance companies and health care providers, we could all pitch in and use our massive brains fixing the system.  this is my tiny way of shedding a bit more light on the situation. if you don't all threaten to kill me after this point, i'll do some more of them.  are there any questions you have specifically?


Anne said...

I love it! I was totally floored that we did not have to pay any out of pocket costs for T's open heart surgery. Our itemized statement of costs was $125,000.00. We had already met our out of pocket limits because of pre-op appointments. His regular cardio check ups cost $5-7,000 for a one hour visit. I think we should put our giant brains together for a better solution!

Sarah Lindahl said...

Very interesting! I'm curious about what your opinion is on universal health care? From the little I know, I'm all for it, but it's not exactly an informed opinion.

amanda said...

universal health care should be the goal of any and all sane, rational governments, in my very humble opinion. getting there is a task, though, and i think it's a system with it's own flaws and weakness. however, making sure people are informed about their bodies and their options, making the goal preventive care and maintenance should be a huge priority for americans, i think.