Son,

We talked earlier of how the Health Insurance Companies determine cost and how they use that information to put pressure on medical professionals. If we take the analysis a step further we can see other means of insurance company cost savings, and health care mismanagement. Remember, health insurance companies are not benevolent organizations interested in the health of their clients – they are clear examples of American capitalism at it’s worst.

‘Cherry-picking’ is a term that is used to suggest, in the case of insurance companies, that they will only insure the population with the lowest risk factors. A pre-existing condition is obviously a high risk factor and no one wants to insure that loser. There are more subtle forms of ‘cherry-picking.’

So we reviewed the actuarial methodology in this other post. Let us examine more closely. The insurance company is able to determine, in our previously cited examples, that a person in a particular population costs them, say, $100 per month. Is is easy from there to determined the details of the $100 – how much for Physician Office Visits, Emergency Rooms, or diagnostic testing, etc. If there is a discovery that Emergency Room (ER) visits are significant (they determine significant) – then they subtly write their policies to either exclude ER visits, or they merely attach a high co-payment. Co-payment is their politically correct term to to say that their client is a partner in the payment process – a polite way of saying that the client has just been conned.

The insurance companies have discovered they can attach co-pays to all sorts of things. If a rotund fifty-five year old man has gas buildup from overeating vanilla ice cream with extra helpings of chocolate syrup; he might experience some pressure in his upper chest or back. He has dutifully paid his health insurance premiums and is confident he is covered. He goes to his family physician. The physician does not know about the overeating of ice cream. He does know that fifty-five year old men in America are at high risk for a variety of illnesses. The physician orders an in-office EKG (Heart Test). Nothing shows as abnormal.

The next step is a trip to the local Hospital Outpatient Gothic Testing Internal Exam (HOG-TIE). All the bells and whistles give it the elaborate Gothic appearance. The Outpatient Clinic starts with a CAT Scan. Then back to the Doctor’s office (and another $25 co-pay). Nothing shows as out of order. The physician, aware of potential legal liability if he misses something and worried about punishment from the insurance company if he costs them too much, is in a quandary. He cleverly sends the patient to see a gastro-intestinal specialist; the cost can be attributed to the other guy and he is off the legal hook.

The Gastro Guy is smart enough to ask about life style – where the ice cream is revealed. He is about 95% sure he has found the problem – but does he risk the wrath of a law suit. Not this time; he orders an Upper GI and a Colonoscopy. The patient had a colonoscopy when he was fifty-three but hey, much is at stake! Two more trips to the be HOG-Tied and it is back to the family physician for final determination. The Family Physician, trained by the pharmaceutical company, prescribes Prilosec. The patient goes home and every evening dutifully takes his Prilosec with his big bowl of ice cream.

Two weeks later the bills tart rolling in. Four physicians have touched the case and require payment, the Family physician, the Gastro Guy, The Anesthetist from the HOG-TIE Clinic, and the Radiologist who had to interpret the test data. There is a Co-Pay on each. The HOG-TIE exams also have CO-PAY’s attached.

The total out-of-pocket for the patient $2,511! This is no joke. This is a real scenario. I have cut back on my ice cream and walk three miles every day. Not one of those health care professionals recommended these life-style changes.

This is a disturbing scenario. And it speaks to the everyday problems of health care in America. Usually when a big toot is made about health care they talk about the uninsured – which is a gross dereliction by our country – or they talk about the extraordinary cases of brain tumors and liver transplants. I’m just talking about the cost of paranoia and lack of teamwork within the every day system.

This paranoia between Insurance Companies, Hospital Executives, Family Physicians, Gastro/Uro/Wacko Specialists, Pharmaceuticals, and Litigation has resulted in a convoluted corruption of health care and the loser is the patient.

The professionals, rather than just doing their job, have used sophisticated actuarial science to leverage their position. They are proud that they are ‘just good businessmen.’ They pat themselves on the back for maintaining a ‘financially viable’ health care system.

And the people of America suffer.

Dad