The Shell Game of Healthcare Insurance

shell-game

Blog Post by Joe Babaian

What you discover about life’s shell game is that it’s hardest to follow the pea when you’re the pea.

~ Robert Breault

For many of us, this week in healthcare means the beginning of summer – the conference circuit slows just a bit, families & individuals often travel, work enters a less hectic pace, and collection agencies can spend time tracking you down for unpaid medical bills.

Whoa, wait?! That’s the issue I want to touch on today – some summer thinking that kicks the #hcldr community into high gear – finding solutions versus just finding problems. With that in mind, we DO have to discuss the problem first.

A quick shout out to my #hcldr friend and partner – Colin Hung who is this very week is helping launch the first-ever Health IT Expo Conference in New Orleans: 5/30-6/1! It’s a one of expokind conference that has worked to include patients and demonstrate real diversity! Do check it out! #HITExpo is the tag on Twitter and you’ll be pleased with what you find. Great job Colin – in collaboration with the one-of-a-kind John Lynn of course!


This conversation on healthcare insurance has been brewing for a long time. Often, the cost of care (or more properly, the charges for care) is seen via the lens of the providers – namely large healthcare systems and the like. The recent @ProPublica / @NPR article by Marshall Allen“Why Your Health Insurer Doesn’t Care About Your Big Bills” turns to the role of the insurer in the financial (shell) game. It’s a powerful view and if you haven’t read this excellent work, take a moment.

The story itself generated a lot of powerful interest and the conversations have been flying. One comment from Esther Choo stands out – she calls this story out for (rightly) focusing on the role of insurers vs just the hospitals and physicians.

When looking at the relationship between insurers and the providers, we may ask why the insurers are accepting the high prices. The article nails this down in several ways, but one very telling comment really sheds light on the situation:

Insurance companies may also accept high prices because often they aren’t always the ones footing the bill. Nowadays about 60 percent of the employer benefits are “self-funded.” That means the employer pays the bills. The insurers simply manage the benefits, processing claims and giving employers access to their provider networks. These management deals are often a large, and lucrative, part of a company’s business. Aetna, for example, insured 8 million people in 2017, but provided administrative services only to considerably more — 14 million.

It doesn’t take much thinking to see that the insurance company often has little to no incentive to keep prices down – both for self-funded and traditional plans. The negotiations between providers and insurers are exceedingly complex and do resemble a shell game as savings here is made up by increases there. Large organizations demand concessions that are paid for by smaller, less powerful providers. The list goes on. Where does this leave the patient?

Patients, of course, don’t know how the behind-the-scenes haggling affects what they pay. By keeping costs and deals secret, hospitals and insurers dodge questions about their profits, said Dr. John Freedman, a Massachusetts health care consultant.

I know it would be important and valuable to explore this situation in healthcare. Please join me on Tuesday May 29th at 8:30pm ET (for your local time click here) for the weekly #hcldr tweetchat where we will be discussing:

  • T1 What is your outlook for the healthcare cost crisis? What do you see happening in the near term to mitigate the issues?
  • T2 How is everyone impacted by the present state of payor/provider relationships? Is there a systemic issue or is it localized?
  • T3 Who have you seen faced with medical debt and the associated shame? How have they recovered (or not)?
  • T4 As healthcare leaders, what can we do to change this paradigm? It’s possible – but action with sustainable results is needed.

 

Photo Credit: imgur.com/a/j8dWp0P

One comment

  1. Reblogged this on A Girl Disrupted.

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