Wednesday, October 12, 2011

Health Insurance Coverage, Who Really Benefits?

Health is a primary need
Primary needs are considered natural or untaught needs determined by innate factors to an individual or their environment such as food,water and shelter.  Health is another primary need because without it, one may not be able to inquire or utilize any other element regardless of its necessity.
Definition of health:
In humans, it is the general condition of a person in mind, body and spirit, usually meaning to be free from illness, injury or pain (as in “good health” or “healthy”).

What is the definition of “healthcare”?
Healthcare refers to any type of action which is related to keeping and maintaining an individual healthy or free of disease.  This maybe in the form of a “preventive” action to prevent disease from happening and I find this to be the most important and effective form of healthcare; or it may be in the form of treatment which is after the fact and after disease or damage to health has occurred and goal is to cure or support the individual in fighting with the disease and obtain health.
What constitutes healthcare costs?
Looking at the question, the best answer that comes to my mind is the cost of providing healthcare to people
Do all individuals need healthcare?
Do all individuals need food and shelter? Unless each person harvests, gathers and grows all crops and raises kettle and builds his/her shelter from scratch the answer is yes.
While one can get technical and say no, the reality is that we all need healthcare from the very moment that we are conceived until the day we die.  Now,some of us many never deal with a serious disease in our entire lifetime but even those lucky ones have benefited tremendously from the “preventive” aspect of the “healthcare” and very likely have utilized that aspect to its fullest potential to enjoy a healthy life.
So“healthcare” is not only defined as the care provided to an individual when disaster strikes or when one is hit by a car or needs a heart transplant. It simply is a collective term used for all actions which share one goal,prevent onset of disease and in cases that disease has already occurred,prevent further damage and restore health to individual human beings.
Is healthcare cost considered a loss?
Idon’t know, but let’s look at some of the other services that we all need and all acquire and see if we consider spending money on those as "loss"! 
Food: we all need food to survive.  We eat when we are either hungry or feed a hungry tummy.  When we eat, do we consider the cost of food as“loss”?  Of course not, that is just the cost of one of our primary needs. 
Clothing: we wear clothing to primarily keep warm and dry and secondarily to look good and presentable.  While the money spent for the secondary aspect maybe justifiably considered “loss”, I don’t think anyone would consider the money spent on clothing to keep warm and dry as “loss”. 
Transportation: we all need ways of transportation to commute to work or get around. While how much we spend on the type of car we drive may justifiably be considered “loss” but what it takes to get us around and to work, sure enough is a necessity and not “loss”.  
So as you see, we all spend money on primary needs such as food and clothing and transportation without considering those expenses as “loss”.  I think we can all agree that the money spent on prevention of a disease or if prevention fails,to treat the disease is just as crucial as money spent on other primary needs.  We all know one can have all the food and clothing and money the world but if that person is not healthy, he/she cannot even enjoy the abundance of anything else in life.  So healthcare is as much a primary need as food and shelter and clothing are. 
What is the definition of “insurance”?
Practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or deathin return for payment of a premium is called “insurance”.  Do we consider payment for any one of our primary needs (food, shelter) a loss or damage?  No, that is just cost and expense of living…. 
Should we allow a company to come and label our food expenses as “loss” and take it under control and charge us premiums for selling us a coverage for controlling what we eat and how much we eat and when we eat?  Of course not!  No one should control how we manage our primary needs and put a capon it or add limitations to our entitlement.  We are each well capable of making the appropriate choices when it comes to that.  Now imagine if that company forces itself down our throats and takes over one of our primary rights like food and on top of that it must make money and show profit to itsshareholders…?!?!
So why do we need insurance coverage anyways?  for example why would anyone purchase home owner insurance?
The homeowner insurance is to protect our home which is our shelter and our primary need against disaster.  It does not limit in any form or shape how we obtain our home, how we pick it, how we choose to live in it.  It simply shares our liability and loss in case something happens which would lead to that such as earthquake, fire, flood etc.   
We buy insurance for our valuables when there are factors out of our control that may lead to damage and loss of our entire investment.  We pay premium to insurance companies and they promise to share our liability.  We all know that these companies must make profit and how they make profit is by having more clients and less accidents.  If every home would get destroyed at some point by fire or earthquake or flood, would any insurance company be able to make profit?  Of course not!  If that was the case, this industry would not even be created.  Would they pay for losses due to any factor?  Of course not, only those stated in contract and under the conditions stated in contract.  Basically, the contract is drafted to limit the scope of liability of the insurance company in case of an event leading to loss of the insured.
If we all need healthcare and if health is primary need, why do we allow the insurance companies to manage and administer the fulfillment of this need?
Doesn’tmake sense to me at all!  They certainly don’t feel compassionate about patients or the doctors! And they are in it to make money of course…so how do they make profit? By not providing the much needed care to those who are in need and denying benefits or payment and compensation to the healthcare providers or both.  
Does anyone think even for one second that insurance companies have the best interest of patients in mind?  Why would they?  When any payment of benefit is a loss to their shareholders!  Why is it that we have become so dependent upon companies that benefit from denying us our right to one the most basic primary needs?  The relationship between healthcare provider and individual is like the relationship between the individual and any other service provider.  There is no need for a middleman, especially one whose best interest is in limiting the care and services the individual needs.  When the individual can directly be involved with the service provider, why charge a premium for limiting the services to patient and limiting the disbursement to provider?  This practice has gone on so long in this country that it has become a way of life and a necessity.  One that has made insurance companies rich beyond imagination and has rubbed us off our primary needs and rights to the point that we feel so insecure without having healthcare insurance.  We don’teven imagine seeing a healthcare provider when we don’t have health insurance and most often we only accept services that are a covered benefit by the insurance even though they are the cheapest subclass. 
We are happy to pay premiums to a company who pays the least amount of money for a limited number of services.  We don’t see a doctor without it because we are fearful that we couldn’t afford it.  The insurance company tells us that unless we pay them a premium, we wouldn’t be able to afford any healthcare services.  Then when we see a healthcare provider and we are diagnosed with a condition, if it is not covered by our insurance plan, we rarely consider it “necessary” and often times consider it “elective” and even go as far as thinking that the healthcare provider is trying to make money off of us.  On the other hand, some healthcare providers over diagnose and over treat some conditions simply because it is covered by insurances.  When patients elect to not follow a recommendation when it is not covered by insurance and follow at times without any questions as to the necessity a suggestion which is covered by insurance, they do more of procedures for which they get reimbursed without any hassle.  The outcome is disaster!  
Some doctors recommend and perform unnecessary procedures just because they get paid for those services and they need the money to cover the costs of living and running a healthcare facility.  Of course this is very unethical and most fraudulent approach to practice of healthcare by any healthcare provider. 
When a procedure is paid for by insurance, some patients readily agree and accept to have that procedure done because the cost is not directly coming out of their pocket so if the doctor says they need it, they probably do……but they don’tthink the same when the procedure is not paid for by insurance company and if the doctor says they need it, the doctor is probably trying to make money off of them, at least this is what's perceived by some individuals. 
Doctors do not get compensated properly for rendered services when the fees are dictated by insurance industry and is measured based on the cheapest level and quality of components involved. 
Patients do not receive proper quality care due to limitations in insurance disbursements.  If the disbursement doesn’t pay for the costs of providing care, two things can happen: either the center shuts down and goes bankrupt or corners would be cut to make ends meet.  In either case, patients are the ones who will suffer the consequences. 
When costs are on the rise, premiums go up.  This affects all of us in the short and long term.  Fewer employers would offer health benefits and those who do, limit the benefits and pay for limited coverage.  Our out of pocket portion goes up while we receive fewer services.  Benefits go down.  Fewer patients seek healthcare. 
But one thing never changes and that is all insurance companies at all times make profit.
This means that for example if there is high risk of cardiac disease in a family and that family chooses to buy liability insurance in case of the need for a heart transplant then that family would pay a premium to a medical liability insurance company in exchange for payment of costs associated with a disastrous event which would be a cardiac failure.  Not everyone has to or need to pay the monthly premium because not everyone is at risk of such potential loss but for those who are, this maybe a necessity because a heart transplant surgery may cost thousands of dollars.
This means that unlike the current practice of health insurance companies where a pre-existing condition is grounds for denying coverage, all pre-existing conditions must be welcome because if it wasn’t for those pre-existing conditions, why would anyone be willing to pay a monthly premium to a company to share liability?  Remember the whole concept of insurance is to share the liability of a potential loss in exchange of payment of monthly premiums. If there is no potential for loss, why should there be monthly premiums? How in the world do these companies allow themselves to refuse insuring those individuals who actually have the possibility of a potential loss? 
Imagine what would happen if in California home owner insurance companies would refuse to provide earthquake insurance to homeowners because California has a history of earthquakes…well if there is no danger of earthquake leading to loss, why would I want to insure my house against earthquake?  Do you think someone owning a home in a location where there has been no earthquakes within the last200 years would even consider paying a monthly premium for earthquake insurance?  I don’t think so.  While that is a personal choice, it seems highly unlikely unless money is abundantly present. 
We all need to wake up!  It is time to wake up and see that all actual parties involved in delivery and receipt of healthcare services are hurting and suffering and the only one benefiting is the insurance company who is not even a party to the normal routine of providing and distribution of this basic need.  Now where there is a specific potential liability such as a medical condition present from birth or something that runs in the family that potentially could lead to loss warrants purchasing of medical liability insurance to cover those scenarios.
Who provides healthcare?
Individuals who have received in-depth training about specific organs and their respective functionality; and understand what could go wrong and how to prevent damage to that body part!  Those would be doctors, dentists, surgeons, nurses,medical and dental assistants, dental hygienists, psychologists etc.
Is it easy or inexpensive to become a healthcare provider?      
Absolutely not!  It takes many years of hard work and preparation and it certainly costs a lot of money for school tuition and that’s the easy part.  The hard part is the responsibility that comes with being a healthcare provider whichever ends.  Just imagine, how does it feel to be dealing with people’slives on the most direct level, every single day of your life?!  Believe me, it is a huge responsibility.
How much does “healthcare” cost?
Delivery of healthcare involves various set ups.  Sometime it can be delivered on the phone, other times it must be delivered in the hospital with highly specialized equipment using very expensive material.  At times healthcare can be delivered by healthcare provider auxiliary and other times it must be delivered by an individual who is only specialized in a specific field. In general the further we depart from the preventive aspect of healthcare, the more costly healthcare becomes.  Costs include fees for material, use of machinery, sterilization fees, disposal fees and the healthcare provider fee and the list goes on and on.
Can we eliminate any thing to lower the cost?
Let’slook at a general breakdown of costs:
-   Facility (Cost of running a hospital or clinic in line with all regulations set out with everyone’s best interest in mind)
-   Material (medication, syringes, etc.)
-   Sterilization fees (hmmmm…do we want ourselves or our loved ones exposed to germs of other patients?!?!  I don’t think so)
-   Disposal fees (I am sure we wouldn’t want any of the toxic waste generated in healthcare facilities not disposed or disposed the wrong way!)
-   Healthcare provider fee (now, do we expect someone who has invested so much money to receive the education needed to care for others well-being and takes on many huge responsibilities everyday just because he/she is passionate about doing so to do it all for free?)
-   Auxiliary fees (could anyone imagine a heart surgeon operating without auxiliary?  I think this would guarantee the failure even if the most experienced surgeon was involved)
Are all these costs justified?
I find it justified to pay for the costs of a facility which is designed and managed to deliver optimum healthcare to individuals.  I would expect the facility to provide access to the latest technology in healthcare field and I would expect it to follow all the guidelines set forth to ensure public safety and best interest.  I understand that all this would cost money and I would gladly pay for having access to such facility. 
I would gladly pay for material used in providing healthcare services.  I would like to be given options and explanations to go with those and once I make an informed decision, I would gladly pay for the material used as it would only benefit me to use the right material for the best outcome. 
No one can deny the monumental role of sterilization in controlling the spread of disease.  Proper sterilization requires use of proper techniques and machines and manpower.  All this costs money and I wouldn’t expect the healthcare provider to pay of pocket for these costs as this is not part of his job.  He is responsible to make sure that it is done properly but thatdoesn’t mean that he/she has to pay for it.  So I would gladly pay my share of the cost. 
We all pay for our garbage to be picked up and disposed of properly, I would gladly pay for the medical waste to be picked up and disposed of properly as well. 
We all know that in this world, there is a fee associated with every service we deliver or receive.  We all understand that when we go to a restaurant, we pay for the meal we order and consume.  We all know that this meal is provided by a human being (chef) and we all know that ingredients were used to prepare the meal.  We all know that the fee charged includes the cost of those ingredients, running the restaurant and of course compensation for the chef.  We wouldn’t expect the chef to do it for free would we?  So I think the healthcare provider deserves to be compensated fairly and accordingly for the provided services. 
We all know that a job is best done when a team of professionals are involved where each team member knows his/her role and does it well.  Delivery of healthcare is no exception.  It simply cannot be done without the support of auxiliary. 
I find all the above costs justified.  The one cost I don’t find justified is the insurance premium costs which I have not even mentioned above.  I have not mentioned that on purpose to show that it is not a justified cost at alland without it everyone who should benefit will benefit.  I think the individuals must benefit from having healthcare services and their benefit is enjoying a healthy life.  The healthcare providers should benefit from providing healthcare services because they have invested their life and financial resources to become a healthcare provider and it is only fair to be compensated for providing such valuable service and basic need.  As for insurance companies, I think it fair to say that they should make profit for providing a valuable service and to me, a sharing the liability of a potential loss upon collecting monthly premiums is a valuable service.  But thatdoesn’t constitute taking charge of controlling and administering one of our most important primary needs while making a profit.
So how do we pay for our healthcare costs?
We all know food and clothing and shelter and transportation costs money and somehow we manage to budget that into our expenses and not think of it as“loss” but when it comes to healthcare costs, we are at a loss.  We don’tthink about it when we are healthy, we don’t really like to take preventive measures and when disaster hits we complaint of costs when we have to pay to receive proper care to get our health back.  We don’t like to take charge of this very important necessity in life.  We don’t like to face the consequences, and sure enough we don’t like to pay for it either.  Let’snot forget that without going into exceptions, most of us are born healthy and are given healthy body parts at birth which would serve us a lifetime only if we give them proper care and attention.  Let’s not forget that we are not born with cavities or gum disease and with the exception of genetic predispositions to disease, rest of us acquire disease simply by not taking preventive measures.   Some of us spend less than a minute a day brushing our teeth, rarely floss and when we get a cavity or are diagnosed with gum disease look the dentist in the eye and ask why?  When the dental healthcare provider recommends periodontal maintenance procedures every 4months due to our specific needs, unless it is paid for by insurance we don’tfollow through with it and we still don’t like to give our teeth and gums more than 1-2 minutes a day…and when we are diagnosed with gum disease we are shocked and are angry at everyone but ourselves and somehow blame it on the rest of the world.  At times, we even decide to switch dentists hoping that the disease would go away and we may even get lucky and find a dentist who would not diagnose the condition and think that the disease went away on itsown…only to find out down the road that the loss is irreversible  and irreparable.
….So how do we pay for our healthcare costs?
By planning them in our budget, saving up towards them little at a time and keeping them saved up securely and overseeing the allocation of funds for the services that we really need!  Here is a simple yet practical model: 
National saving Institute 
This would be a theoretical financial institute dedicated for handling the savings of people for people allocated for specific costs.  It would be a national institute with branches in every state and its primary job would be to open and maintain accounts for every individual who is interested in saving towards his/her primary needs and overlooking the expenditure and allocation of such funds as needed.  Individuals would have online access to their saving fund and can deposit money from other financial institutions to this account.  The only person able to withdraw money from that fund would bean authorized healthcare provider and the amount of money withdrawn is authorized by the individual receiving the healthcare services.  Funds going to this account would not be taken out for personal use or any use other than the primary purpose they were deposited to begin with.  This account belongs to the individual and is part of his/her inheritance so he/she can give it to someone else as heritage, gift or may donate it to those in need of healthcare services who don’t have the financial means to pay for it.  The institute managing these funds has no right to invest these funds for any purpose.  It may use the accrued interest towards the costs of managing funds and the rest of the costs of managing funds and providing secure access by user and disbursement of funds would be paid by healthcare providers who use this system to get paid.  I am sure any healthcare provider would agree that it would save them thousands of dollars to get rid of the insurance companies and in return for that benefit, paying maybe a subscription fee based on average number of transactions per month would be very fair and acceptable. 
To facilitate this plan, one would ask the American Dental Association to publish data annually on how much per year on average each adult in US spends on needed dental care and how much on average is spent on elective dental care, then a table would be published for public which would show on average from age 1-65,and this would be used as a guideline for individuals and employers to know how much to contribute to their "dental saving fund".  Now given the fact that this is only an average, one could take the high end and start saving with that number in mind or one can take the low end and go with that. Keeping in mind that whatever is being saved belongs to the individual who is saving it, and will only be used to receive dental care either by the same individual or anyone that the individual designates.  Now if at some point the individual sees that there is a lot saved up already and there is really no potential use for the entire amount, individual can stop contributing.  Or can transfer some to anyone else’s account that he/she would like to or may donate the excess or may simply hold on to it and leave it as part of his/her will.   
So this is a win/win situation.  With proper planning, just as we save up for food and shelter, we can save up for healthcare and who better than us to manage the saving and expenditure of the funds allocated for that purpose?  We would have a national institute allocated and dedicated for the purpose of managing these savings.  We could have a saving for dental healthcare and another one for medical healthcare and maybe one for Psychological healthcare and maybe one for legal fees if we feel that it is primary need in our lives.  This institute has the responsibility ofproviding each individual with access to the account online and means of depositing money into the account either directly or by transferring from other banks and access for healthcare providers for debiting the individual’s account for the payment for services rendered.  Only the individual owning the account would have the ability to authorize such debit and as such every expense needs to be justified to patient and verified by patient prior to dispersing funds.  The savings in this institute are not to be gambled with by investing them on stocks or any other similar risky venues.  No one should make money off of these savings, only the individuals are to profit from the long term saving and any interest earned on the money will be used to manage the operation of the institute and implementation of secure systems and other administrative fees.  Individuals can contribute a fixed or variable amount as they deem necessary but as a guideline, they can donate the minimum amount reported by the corresponding national association.  Individuals cannot any time stop contributing if they feel there is enough money saved up and not enough costs associated. 
This model puts the individual in charge his/her own health.  By being responsible for costs related to healthcare, we all will take the preventive advice more seriously and by doing so the long term costs of healthcare  will significantly go down resulting in healthier individuals who have saved up money for the healthcare that they need instead of being at the mercy of insurance companies and not receiving what they need but paying for the benefit of a company which has nothing to do with the patient or the healthcare provider. 
Now of course in some cases, where an individual has higher health liabilities and anticipates potential situations which may be very costly, he/she is encouraged to take advantage of coverage offered by medical liability insurance companies for such instances where in return of a monthly premium, the insurance company will share the liability with the individual in case it happens.
In this model, you pay as you need and if you have healthy teeth and healthy gum and only need preventive services annually, you only pay as much as you need to spend. Or you may not pay at all and if you have health coverage through your employer, what the employer pays would suffice and would never burn if not used by end of the calendar year. 
On the other hand those who have more dental issues and need more money to address those would pay more and save more.  Have you even been in a situation where you are paying $20.00 a month premiums for dental benefits and your employer is paying $60.00 a month as well for a total of $960.00 every year and you have a dental coverage with a maximum of $1500.00 annually and you get two free cleanings per year, then your dental provider tells you that it would be best if you’d come in every 4 months instead of six and you would find out that even though you have $1500 per year and you only use $300 of it for your two cleanings, now that you need a third one, the price for that should come out of your pocket because your plan only pays for two… you feel baffled that even though you get an annual allowance but you can’t spend it on any dental services that you need and it should be spend only on services that are covered, and even though you spend $240 out of pocket per year in premiums, you still have to spend another $100 out of pocket for the third cleaning. Let’s do the math: 
  • You have paid $240 out of pocket for having dental insurance to the insurance company 
  • Your employer has paid $960 out of pocket for your coverage to the dental insurance company 
  • Insurance company collected $1200 from you and your employer 
  • Your dental provider charged your insurance $300 for two cleanings during the year 
  • Your dental provider charged you $100 for an additional cleaning during the year which came out of your pocket as well 
  • Total cost of your dental care during the whole year: $400.0
  • Total cost out of your pocket for your dental care:  $340 
  • Total cost out of your employer’s pocket for your dental care during the year:  $960.00 
  • Total cost of out insurance’s pocket for your dental care:  $300 
  • Total benefit to you: $60 but if you look closer your benefit is zero because whatever benefits you don't use, you would lose by end of the calendar year 
  • Total benefit to the insurance company:  $900 
Now imagine if you and your employer would put the same premiums in an account which was owned and managed by you.  This money would be all yours to be used at any time for the purpose of providing you with dental care.  So this year, you would use $400 and if the following year for any reason you didn't have a job, you would still have $800 in your dental saving account to spend for your dental care.  This means you could potentially receive your three cleanings per year, without a penny coming out of your pocket for the next two years!  

Why do we give the money to a middleman who is only there to make profit from the relationship that exists between the individual and the healthcare provider?  Why do we allow them to manage our money and employer provided benefits in exchange of some outrageous limitations and exceptions in providing coverage, yet we feel so helpless without them?  Why are we OK with this arrangement that every year we pay the insurance companies money, then they pay back for a coverage that is by far less than what they collected cause that is what a good CEO does to show more profit for shareholders and on top of that, we let them tell us which doctors to see and what facilities to use otherwise they won't pay any of our healthcare costs!

I think it is time to wake up and take charge and control of the most important primary need we all share, our health!

I hope we all take a close look at why and how did we ever allow this entity become a party to the relationship we have with the healthcare provider!

I hope we all ask ourselves: if there is profit to be made, off of the relationship between the individual and the healthcare provider....the only ones entitled to that profit are the parties involved and the one least entitled to that is the insurance company, because the insurance company's margin of profit is directly related to the loss of the healthcare provider or the individual or both!

I hope this blog triggers ideas and plans which would ultimately lead to the change that is much needed in our healthcare system. 

Enhanced by Zemanta