Insurance based Healthcare is counterproductive at it's core!

The whole political realm is focusing our healthcare system on 3rd party payer comprehensive healthcare insurance providers. Here's a couple excerpts from past Heritage Foundation articles providing data showing that the higher percentage of our population using 3rd party payer comprehensive healthcare insurance the faster healthcare costs skyrocket:

But, as Book and Fodeman note, all of these increases take place within a distorted health care market, driven by misaligned economic incentives. Since 1965, “third-party payments increased from 48 percent to 85 percent”. Third party payers, they argue, “may appear to have an incentive to encourage efficient use of resources, but ultimately they do not pay the price for inefficiency.” Patients, doctors, and insurers alike are thus insulated from the direct effects of increased spending; patients and taxpayers ultimately experience the pain, albeit indirectly. ---- http://blog.heritage.org/2010/02/19/obamacare-bends-the-cost-curve-...
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On a per capita basis, health care spending increased by a factor of six between 1965 and 2005, after adjusting for inflation.[7] In 2008, the latest year for which figures other than projections are available, total health care spending in the United States was $2.34 trillion (16.2 percent of GDP), up 4.4 percent from the $2.24 trillion spent the previous year. By contrast, in 1960, total health spending accounted for only 5.2 percent of GDP. Since then, health spending has more than tripled as a percentage of GDP.[8] The Congressional Budget Office (CBO) forecasts that, if present trends continue, health care spending will account for 25 percent of GDP by 2025, 37 percent by 2050, and 49 percent by 2082.[9] --- http://www.heritage.org/Research/HealthCare/bg2369.cfm
That was waayyy before obiecare assaulted us. Demonstrating just the concept of developing a healthcare system with insurance at it's core is wrong minded and counterproductive. Add government dictating it all to it and it just gets worse. The whole idea of everybody using 3rd party payer comprehensive healthcare insurance guarantees healthcare costs skyrocketing. The whole political realm has it all assbackwards, as usual.
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Here's another past Heritage Foundation article that is MUCH closer to a reality based effective way to lower healthcare costs, which is the prime directive according to most every politician's sound bites;
Cash-Only Docs: A Promising Advancement in Consumer-Driven Health CareCash-Only Docs: A Promising Advancement in Consumer-Driven Health Care Posted February 17th, 2010 at 11:00am in Health Care at http://blog.heritage.org/2010/02/17/cash-only-docs-a-promising-adva...

Dr. James Eelkema, a Burnsville, MN family practice physician was fed up with the costly paperwork insurance companies required and the second guessing of his medical decisions by company bureaucrats. So when he learned that up to a third of his pay was to become contingent on “measures such as whether his patients got pap smears or whether he got them to stop smoking,” Dr. Eelkema decided enough was enough and converted to a cash-only practice.

Dr. Eelkema’s decision represents a growing trend of medicine returning to its fundamental role as a market-oriented, patient-driven profession. Cash-only practices have a number of advantages over traditional practices. First, they allow the doctor to save time and personnel on insurance paperwork and redirect resources to patient care, simultaneously passing savings on to the consumer. Second, they encourage a closer doctor-patient relationship, free of interference from third parties such as insurance companies or government programs. Most importantly, cash-only practices curtail expenditures by linking health care decisions and cost directly to consumers; after all, when the insurance company is paying for your checkup, who bothers to ask how much it costs?

The experience of Dr. Vern Cherewatenko demonstrates the merits of cash-only practices for physicians, patients, and the health care system at large:

Six years ago, Cherewatenko was drowning in paperwork and red ink, accepting more than 300 different insurance plans with 7,500 different medical codes. “We were losing $80,000 a month. We were inundated with paperwork. What we found is the more patients we saw, the more money we lost, and it was devastating,” he says. Unable to survive, Cherewatenko discovered what he says is a better way — a cash-only practice that’s grown into a national network of 1,600 doctors. “We have lowered our fees anywhere from 30 percent to 50 percent on some of our services which is incredible,” he says. ‘And it’s really charging less and making more.’

Cash-only doctors serve as an excellent counterpart to consumer-driven health care plans, which include high deductible health insurance plans and health savings accounts (HSAs). High deductible insurance plans offer lower premiums and supplement the cash-based market, ensuring consumers have coverage for catastrophic and unforeseen events. For all other medical costs, patients would pay out of pocket, using HSAs for predictable health expenses like checkups and lab tests. This system empowers the patient while enhancing affordability of care. Cash-only practices complement and enhance the beneficial aspects of this system by providing more consumer control of care and a better doctor-patient relationship, all at equal or less cost to the consumer.

So what’s keeping these practices from becoming more widespread? As usual, big government has its fingerprints all over the crime scene. Unfortunately, such ideas are discriminated against by the federal tax code in its virtually exclusive treatment of comprehensive, employer-provided health insurance. Every dollar paid directly to a doctor, without going through the bureaucratic apparatus of a third party payment system , must of necessity be an after tax dollar. The most effective, though limited, relief from this tax discrimination against direct payment is the health care savings account. But Congress caps the maximum contribution employees and employers can make to an HSA. Congressional policy, in other words, divorces the economic principles of supply and demand.
In reforming health care, lawmakers should create a level playing field for different types of care. This means that Congress should not be picking winners and losers, or favoring one type of health care delivery system over another. It means that cash-only practices and other consumer-driven options should not be on the receiving end of official discrimination in either law or regulation. Patients should make the choice of how they get care. As Heritage’s Ed Haislmaier writes, “[Maximizing value] can be achieved in health care only if the system is restructured to make the consumer the key decision maker. When individual consumers decide how the money is spent, either directly for medical care or indirectly through their health insurance choices, the incen­tives will be aligned throughout the system to gen­erate better value—in other words, to produce more for less.”

Co-authored by Vivek Rajasekhar.
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.... IF lowering healthcare costs was actually the prime directive of politicians they'd remove themselves from the equation altogether.

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Comment by American912 on June 29, 2017 at 7:56am

I'm not throwing out the old fogey label Larry.

It's not that easy trying to find the truth when searching for information on the web. Same would apply when trying to find a good doctor when it comes to our personal health.

My parents never took us to the doctors unless it was for school vacinations. I didn't pay attention to healthcare until I was ready to birth my own children in the 80's.

I do believe you should see a doctor if needed but should also take every effort to exercise and eat healthy.

Comment by Larry Puckette on June 29, 2017 at 7:35am

Am -  80s?  my memories were of late 60s/early 70s.   oh well, older than dirt again I guess.

which I guess becomes even more true when I relate well to your grandparents opinion. I very much think doctors misdiagnose and over-prescribe medications far too often. I do think over-all your health is better off by relying on and exercising you immune system until whatever wrong undeniably needs medications and is undeniably identifiable.

go ahead, throw an old fogey label. My collection of labels is short on that one  ;' /. I see it as my faith 1st being where it's better off being - in nature and nature's laws.

Comment by American912 on June 29, 2017 at 7:10am

I do remember healthcare still being affordable in the eighties. Yes, you are correct when you said..."It was considered extraordinary then to have BCBS coverage".

Nothing in life is free so costly healthcare provided by an employer today would still be considered a gift. imo

My parents and grandparents stayed clear of all doctors because they thought doctors were out to kill them with their medicine.

Comment by Kos on June 28, 2017 at 4:57pm

There are many who believe (flat out) that third party is truly responsible for huge increases.  If I'm pitching a baseball to a catcher, I don't a guy standing in the middle, handing it off.  Remove them.........and prices collapse.  It's just another scheme.  Being in the stock market each day, I have to say I agree but they certainly enjoy HUGE support from BIG supporters. 

Comment by Larry Puckette on June 28, 2017 at 4:18pm

thanx Am - expanded on it all nicely. I remember when young AT&T provided Blue Cross Blue Shield to their employees, my mom being one. It was considered extraordinary then to have BCBS coverage, which made working for AT&T something special.

Comment by American912 on June 28, 2017 at 5:52am

Myth Buster #20: Third-Party Payment

By Greg Scandlen

No term is as widely misunderstood as “third-party payment.” Most health policy people hear that expression and automatically think “insurance coverage.” “My goodness,” they think, “critics of third-party payment want to abolish all insurance! It’s not even worth talking to them.”

But this attitude is wrong. Third-Party Payment (TPP) has a specific and precise meaning. It is a form of coverage in which the payer (third party) pays a provider (second party) to deliver a service to a patient (first party).

By contrast, most forms of insurance consist of a two-party contract. The first party (the consumer) buys a policy from the second party (the insurer). When the insured incurs a “loss” the insurer pays a benefit to the insured.

Third-party payment never existed until it was created by BlueCross in the 1930s. BlueCross was actually invented by the hospitals that were concerned about their financial condition during the Depression. The prototype was launched by Baylor Hospital in Dallas in 1929, and soon replicated by other hospitals around the country. The whole movement was endorsed by the American Hospital Association (AHA) in 1932.

For many years BlueCross (and later BlueShield) insisted it was not “insurance,” but “prepaid hospital (or medical) service organizations.” They were organized, not under state insurance laws, but under special enabling legislation in the states that provided them with special tax-exempt status and immunity from many of the regulations that apply to insurance companies. For instance, they were exempt from insurance reserve requirements because their hospital members guaranteed their solvency. They were set up as not-for-profit organizations and had Boards of Directors that were controlled by their hospital members. This would have been a flagrant antitrust violation but for the “state action” doctrine, which exempts state-regulated companies from anti-trust law.

BlueCross strictly avoided insurance terminology, calling its customers “subscribers,” rather than insureds, who paid “subscription fees” rather than premiums and received “service benefits,” rather than a payment upon a loss.

Because its priority was hospital finances, it paid hospitals directly for services rather than trusting its customers to pay for the care they received.

Because of its many regulatory advantages, BlueCross quickly dominated the market for hospital financing, so other insurers learned how to replicate its third-party payment model, by using “assignment of benefits” and “participating provider” networks.

So, what difference does any of this make? It is enormous, especially in accountability and transparency

In a two-party contract there is direct accountability. I pay you for a service. I know what I paid you and what you are supposed to do. If you don’t deliver the service or do a poor job I can sue you, or yell at you, or punch you in the nose. It is between you and me, and you do not want to make me angry.

In a three-party payment system there is no accountability. I go to the doctor and he does what he wants and somebody pays him. I don’t know what he was paid or whether he did what he was supposed to do. But, importantly, the payer doesn’t know, either! The payer may know what they paid, but they don’t know what transpired between the doctor and me. The doctor doesn’t know what my arrangement is with the insurer, either. He may not even know if what I want is a covered service or not.

Nobody knows anything. And so we spend way too much time trying to figure out what we don’t know. The insurance company is very interested in what transpired, so they spend a lot of time getting the doctor to fill out forms and getting me to complete surveys. The doctor hires clerks to try to find out what is covered and for how much.

And I am simply baffled by the whole thing and annoyed about it all. I figure I can’t trust any of these jokers because none of them cares about my well-being in spite of all the money I (or my employer) shovels into their bank accounts.

There is no way this arrangement can ever be made to work well. Yet our system is fundamentally based on it. In fact, it has become so fundamental that most people cannot imagine any other way of doing it. And that is where the conversation usually stops. http://healthblog.ncpa.org/myth-buster-20-third-party-payment/

Comment by Kos on June 27, 2017 at 9:02am

Shared it and I love the last line.  "If" being the operative word.

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