Saturday, April 18, 2009
The client was in full rant. I was seated in front of his cluttered desk. He was too agitated to sit. His Anthem Blue Cross policy, scheduled to renew in May, had taken a significant premium increase. Bill Jones (name changed to keep the attorneys impoverished) wanted me to know how unhappy he was with me, Anthem, and the entire system.
I've been doing this for thirty years. This isn't the first time I have been used for target practice. There are times you just have to let the clients vent.
What made this unusual is that Bill Jones is a licensed insurance agent! He has twenty-five successful years in the business. Even though he specializes in life insurance and investments, Bill still sells five to ten health policies each year. He knows the rules. He understands the concepts. He is a true believer, just as long as we are talking about your money and not his.
Fairness is the key issue of the health care debate. The question is always the same. Is this solution fair to me? We don't want to pay for someone else's claims, but we demand to be part of a pool, hopefully a really big pool, if we have problems.
Health policies, especially small group policies, are underwritten during the application process. The renewals reflect, in part, the group's claims experience. In part, but no where near in total. Still, unhealthy groups pay more than healthy ones. I've had clients tell me that the insurance company shouldn't penalize them just because they have had a triple by-pass, or cancer, or a three month stay at Hazelton, 0r... You get the idea. They are nice people. Money spent on their health care by the insurance companies isn't like money spent on someone else's care.
Let's look at Mr. Jones' company. Officially, the business consists of Bill and one employee. In truth, we are insuring Bill, his wife, and two kids. They take 15 prescription medications. That number increases during allergy season. Some of these prescriptions may be inexpensive generics, but even if all of the medications were cheap, think about the medical conditions these four people must have. Plus, there are a large number of office visits, lab tests and x-rays to diagnose and treat these maladies.
Given the opportunity to insure Mr. Jones and his business, Medical Mutual of Ohio, Aetna, and other companies were hundreds of dollars per month higher than the current carrier. So he will stay with Anthem.
But is it Fair? Depends. Once he cools down, and before he reads this, Mr. Jones may decide that he is getting a fair price. He is getting more in benefit than he is paying in premium. If you are a fellow Anthem policyholder, you might think that it is unfair that you are being forced to subsidize his family's coverage.
Rate increases are proof that insurance companies are doing their job. If costs increase, and they are, then premiums must also increase. That is a tad simplistic, but you get the point. If, or when, the government controls health care, will premiums increase uniformly as cost increase? If not, then the system will spiral towards bankruptcy until someone has the courage to raise premiums (TAXES) to cover escalating costs.
Some day in the future, when the cost of your health insurance increases, will you complain to your agent, your congressional representative, or the President? Which one will come to your office to listen to you vent?
Sunday, April 5, 2009
My son paid for my cruise.
My son paid for my cruise, too.
My son is a doctor.
What a coincidence. My son is also a doctor.
My son is a cardiologist.
Wasn't the fish dry last night?
So it goes for those parents whose children attended Tootsie Tech. Podiatrists may provide needed medical care, but they will never receive the respect other physicians take for granted. Today's blog is not going to help.
The exchange that begins this piece is fictitious. The rest of this is not. My attorney, Michael Saltzman, forbids me to use the real names of the patient or doctor involved in this episode. In fact, he won't even let me mention the actual suburb where this took place.
The patient is a nineteen year old college student. He had an ingrown nail on each of his big toes. This is not terribly unusual. He went to the doctor's office, located on a side street in a small building in a Cleveland suburb, the first Tuesday of last September. He returned to the same nondescript office the next day for the procedure.
How much does it cost to have two ingrown toenails fixed?
Nope. You're wrong. Did you include the following charges:
- Office visits
- Free standing surgery center
The actual charge for two "Partial or Total Maxtrixectomy"(sic) was $8,225. Let that sink in for a second. $8,225.
No, the nineteen year old was not given gas, but the charge for the anesthesiologist was $1,100. The podiatrist charged $6,120 for the Surgery Center. I wouldn't have believed it had I not seen the bill. The doctor's fees for seeing the potential patient and performing the surgery were totaled $1,005.
My client, the patient's father, was billed $8,225, but he didn't owe nearly that much. His son is insured. Insurance companies do not practice medicine. What they do, and actually do very well, is transfer money and weed out waste, corruption and fraud.
The doctor and his facility have a contract with the insurance company, Medical Mutual of Ohio. I don't know if MMO suspects that there may be some bogus charges here or if they are reviewing their contract with this podiatrist, but even the existing contract protected my client, and by extension, you.
There was a separate $3,060 facility charge for each toe! By contract, agreed upon by the podiatrist and the insurer in advance, the total allowed was $2,142. This may still be excessive, but it is 65% less than the original bill.
The anesthesiologist's fees were reduced by 40% to $437. The podiatrist's $1,005 bill became a more realistic $631. The total contractual bill for the two ingrown nails was $3,210. Some of that was paid by Medical Mutual of Ohio. Some was applied towards the family's deductible.
What was the real cost of these two visits to the doctor and the repair of two ingrown toenails? Depends. had the family not had insurance, they would have been obligated to pay $8,225. Since they had MMO, the real cost to my client was $3,210. If he had had a different insurer, the price might have been a little more or a little less depending on the contract.
When I had the same procedure performed in a doctor's office twenty years ago the total cost was $500.
Your health insurance premiums reflect the escalating costs of procedures, testing, and surgery centers. How medical providers are paid and what they can charge for the use of their offices is a major concern as we contemplate a change in payers. Will you, as the taxpayer, be billed $8,225 or $3,210 for some future nineteen year old's visit?
Picking on the ridiculous billing practices of a podiatrist is easy. Do you want a real challenge? See if you can even get a complete breakdown for the charges of a triple by-pass.