Healthcare in America: Affordability, pt 5

Good day, family and friends!

Sorry about the delay in posting this installment. Real Life can be a real grizzly bear.

Now, let's continue our look at the costs associated with litigation, insurance fraud, and special interest legislation....

Ambulance-chasing weasels aren't the only thing negatively impacting healthcare costs. Insurance fraud being perpetrated by both, larcenous patients and unscrupulous doctors, is a major problem in the 21st Century. The FBI estimates that fraudulent billings make up between 3% and 10% of total healthcare expenditures every year. In 2007, for example, total healthcare expenditures in the U.S. were $2.26 trillion. If the FBI's best case is true, that means that in 2007, U.S. healthcare insurance providers were ripped off for nearly $68 billion. At worst, it was $226 billion. This loss is automatically passed on to the consumer in the form of higher premiums.

But the problem is only growing. Last year, the Government Accountability Office (formerly known as the General Accounting Office) stated that they have been unable to definitively identify the scope of the fraud and systemic abuse being perpetrated within the Medicaid/Medicare system. Their best case guess is that, in 2008 alone, taxpayers were robbed of a minimum of $69 billion by people intentionally defrauding the system. This is an increase of over 200% from only the year before. The FBI estimates that this will only get worse as people live longer and make more demands on the Medicare system. And this doesn't include the honest mistakes made every year by tens of thousands of Medicaid/Medicare recipients overwhelmed by the complexity of the bureaucratic maze they have to negotiate just to see a primary care physician.

These increasingly sophisticated ways of 'gaming the system' have created a layer of bureaucracy within many insurance companies that have evolved into something resembling systemic abuse in its own right. I'm speaking of what are sometimes called 'Benefits Coverage Panels'. These are the panels or committees employed by the insurance companies to review the diagnoses and treatments doctors propose for their patients covered by that insurer. In order to protect their slim profit margins, some insurance companies now have accountants and bureaucrats (who were never physicians themselves) reviewing medical cases and second-guessing experienced physicians, often denying treatment because, in their humble opinion as a bean-counter or paper-pusher, the treatment wasn't necessary. These coverage panels are just another unnecessary expense adding to the cost of healthcare insurance.

Next time, the impact your political heroes have on the cost of your healthcare coverage.

Until then, best regards...



© James P. Rice 2010