Our attention, sadly, needs to examine this horrific assassination. Among other things, it's a manifestation of results of the presence of many, many ill-parented, ill-educated youth. I don't recognize these possessed minds as being fully human. Their presence among us is a grave danger to what America the beautiful and free, means. Sad and tragic that these zombie legions never learned what love is; any one who investigates and contemplates deeply what they are, would love themself, and others as they do themself. This loss of connection leads only to catastrophe for themselves and civilization. Let's pray for a major transformation.
Thanks for this informative piece. And a Happy New Year all!
Btw, citizen journalist George Webb has been burning a lot of shoe leather lately reporting on the murder of Thompson committed by Mangione, and the purported "suicide" of Suchir Balaji who was named to testify in the AI court case just prior to his likely execution--and the possible connections between the two crimes. One of Webb's contentions is that Thompson was to use AI to root out the mafia style "protection"/extortion racket that has been looting the health insurance industry, thus preciptating his demise--If I have it right. Webb's views and yours, Dr. P, seem to mesh quite well in terms of good and bad players in the insurance industry and the recent related crime spectacles.
I'm surprised at your view of healthcare insurance companies. You educated me. Thank you. I still don't like them being the middle man between me and my doctor. Thanks
The problem with your perspective is that it assumes doctors and hospitals have only your best interests in mind and that they are fully knowledgeable. In reality, doctors and hospitals, like pharmaceutical companies and the purveyors of durable medical equipment, are all for profit enterprises.
Insurance companies have massive amounts of data and medical staff that work with big data analysts to understand what works for patients and what doesn't. Your doctor and hospital are operating based on whatever they learned in medical school, perhaps years ago and whatever is the practice in their local community. Furthermore, when they invest in expensive technology, they must use it to obtain an ROI on that investment. That means they are, de facto, a man with an expensive hammer (the tech) to whom every patient looks like a nail. So someone needs to keep them in check in order to keep patients safe and receiving the best level of care, but also to keep costs down. Treatment must be the most medically appropriate and the most cost effective. That job of regulator falls on insurance.
Insurance companies create reimbursement contracts with care providers at the diagnosis and procedure level and what will be covered. and what will not, is based on science. Insurance staff Medical Directors (doctors) take the proposed list of covered treatments for given diagnoses out to the care provider community and both sides sit down and agree on the list and reimbursement schedule after a little massaging of the proposal.
So, no one is getting between you and your doctor unless your doctor is being greedy and practicing inappropriately due to ignorance or greed. When we are experiencing a serious illness we want every last iota of care possible that might make us better, but much of that care that a doctor says "might" work, doesn't. In fact, it may harm. For sure, it all raises costs and those costs will be passed along to everyone by way of higher premiums.
Healthcare insurance companies' competencies are variable these days. They've become a more complicated system as the "healthcare/pharma" industry costs came to dominate insurance policies, over decades. Politicians, doctors, coders, hospital administrators, nursing and medical schools and others are contributing factors in a mess we have today, it seems to me. I do trust numbers, and therefore have a lot of respect for individual analysts whose job is to gather and study accurate data to track trends that necessarily affect insurance premiums. For example, there is Josh Sterling, an ex-Wall Street analyst whose research, in part, contributed to Ed Dowd's raising the alarm of excess mortality rates among "the healthiest" demographic of our population following the engineered jab. You probably know that their research was censored. That censorship is a crime, one that life and medical insurance actuaries cannot be held accountable for.
Technology is the primary driving factor in healthcare cost increases. New tech makes it possible to treat more people, each more intensively, for a wider range of conditions. That is a good thing from a health perspective is utilized judiciously. The problem is that it isn't. The new tech is almost always more expensive. It must be financed by care providers. Therefore, it must be utilized more.
But even if it were utilized 100% appropriately, it would still be a cost driver due to expansion on the intensive and extensive margins of utilization.
Furthermore, the new tech has a marginal cost that exceeds the marginal benefit that it delivers.
Tech is everything from pharmaceuticals, to all those machines in a hospital room that go "beep", to the air glide beds in the room, to the computer guided surgical lasers and scopes in every inpatient and outpatient surgical room, to the latest and greatest titanium hip and knee joints, to space age incubators for premature infants and so much more. That stuff isn't free, you know. And healthcare is very much price inelastic from the patient's standpoint. There has to be limits on utilization or we will all be priced out of the market. The US is very bad with utilization of the latest and greatest. The socialized systems don't have it, which is why they are a bit cheaper (that's their version of denying claims and services). When insurance tries to set limits, they are demonized by the doctors and hospitals who invest in it and the developers who sell it. The patients pick up on that propaganda and think that insurance is evil. They just don't understand.
One more 2 cents from me - the haters keep repeating a "statistic" that United denies 32% of claims and competitors deny 16% of claims. That is BS. I have no idea where it is coming from.
Full disclosure, I work in actuarial for one of the big national for profit HC insurance companies (not United) and years ago I worked for a not-for-profit regional Blue Cross/Blue Shield company.
By my definition a claim denial is that a service was rendered, the member (patient) expected insurance to pay for it. Insurance received the claim (bill) from the care provider and then declined to pay it.
I described in another comment here why denials can and do occur. However, claim denials are around 6% to 8% depending on various factors having to do with care provider network composition, contracting, demographics, product design and some random stuff. So, again, no idea how 16% or 32%! is being cited. IMO, someone is deliberately lying and the lie is being believed and repeated. Denial rates are reported to the feds and state governments (insurance is highly regulated).
If an insurance company was denying 16 out of every 100 claims, let alone 32 out of 100, members would have a valid reason to be upset that they pay premiums and roll the dice as to whether or not their claims would be paid (if the claims aren't paid, the member is on the hook to pay the medical bill). Members and/or their employer group would simply seek to sign up with a competitor and United - or even the alleged 16% deniers - would go out of business. Insurance companies compete on more than price. Benefit mix and claims payment are other points of competition. There are plenty of options; other national insurance companies, regional not-for profits (which, btw, also deny something like 6% to 7% of claims) or - this is important - the employers could go for ASO arrangements with insurance.
What is an ASO? = Administrative Services Only. The employer wants to offer insurance as a benefit to employees, but thinks they can do it cheaper than the insurance companies (sometimes that is even true, but mostly not). Employers pay out of pocket for employee health benefits. The employer contracts with insurance to leverage claims processing systems, medical policies, provider networks and various analytics, but the employer ultimately chooses the basket of benefits and insurance is usually paid on a per member per month basis. Think of insurance saying something like, "we will charge you $30 per month for each of your employees and we will process their claims, apply our medical policies to our usual contracted providers, who your employees will use when they need services". Voila! The imagined incentive to deny claims to increase profits, on insurance's part, is no longer a problem (not that it is in reality). Depending on region of the country, the companies involved, the economy, over the past twenty years or so at any time, up to 25% of healthcare coverage for employees has been through ASO arrangements.
32% 16% denied claims is garbage. It doesn't happen and can't for several reasons, but especially due to ample competition in the sector and the ASO option.
Oh, and the idea that insurance delays paying claims is also 180 degrees from how it happens in the real world. All healthcare insurance companies that I am aware of have late pay penalties in their contracts with care providers. Claims must be paid within 15 to 30 days of receipt (depending on contracts, etc). or they begin to accrue interest, a penalty that must be paid to the care provider who submitted the claim. A slow claims processing department can cost an insurance company tens of $millions every month in late pay penalties. Therefore, management of the processing operations emphasizes quick payment. Paying claims fast and paying accurately is a big thing in my world.
Can we stop calling it "health care"? That is right up there with calling these hip pocket computers "phones". Or the electronic database quagmire a "voter roll".
My husband taught me so long ago (not poetically, he could be remarkably blunt and at times so cleverly funny) that doctors "can cut on you or give you pills." I found that statement remarkable. Both of those things to me are a far cry from helping me cultivate my health. Reading the comments on these excellent write-ups is good for my health. I have decided that learning is good for my health. Thank you & Happy New Year!
Lots of ignorance around this topic. Insurance has not communicated what it does, how and why very well. Healthcare insurance does deny claims. The main reasons are as follows:
1. Member (=patient) hadn't paid premiums and wasn't enrolled with insurance at the time the medical service was incurred
2. The member went out of network without permission. Insurance keeps costs down by contracting with care providers to perform services for pre-agreed upon reimbursement rates. This is at the diagnosis/procedure level. If a member (patient) goes outside that network, they will likely incur higher costs than they would have staying in network, which impacts everyone in their risk pool (like everyone getting the same insurance benefit via an employer, or everyone purchasing Obamacare (ACA) or everyone in a Medicare risk pool. If people actually read their insurance contract, they would see that insurance will only pay for out of network care IF the care is critical and is, for reason, not timely available in-network.
3. A pre-authorization for an expensive, complicated, potentially dangerous, experimental or otherwise unusual procedure was not obtained. Insurance companies have staff physicians who work with internal analysis and the larger medical community to establish best practice guidelines for a huge list of medical conditions. The guidelines are science based. When a patient presents at a doctor's office or hospital with one of the conditions on the list and doctors want to perform procedures, they must let insurance know. Insurance clinicians will go through a medical symptoms, demographics, etc. checklist with the external doctor. If the boxes on the list are checked off, then go ahead with the procedure. If not, some other course of treatment must be explored. This ensures that patients are only subjected to medically appropriate care and keeps costs down. Fail to obtain the pre-auth for a condition/treatment on the list and the claim will be denied. This explained, in detail, on both the agreement the hospitals and doctors signed with insurance and on the agreement the member (patient) received when signing up.
4. Care provider failed to send complete data on the claim form. That failure is like your auto mechanic just sending you a bill for work on your car and maybe refusing to show you the part he said was bad and needed replacing. Medical services are rife with fraud. Failure to, essentially, itemize the bill (claim) with all required info is inexcusable and cannot be tolerated. Medical fraud is in the realm of hundreds of $billions each year. Those costs get passed onto you via higher premiums. Insurance works hard to prevent fraud and punish it when it is detected.
5. Treatment was medically unnecessary or inappropriate. There is an assumption that doctors and hospitals are only there to do what is best for their patients. That assumption is far from the truth. Doctors and hospitals are for profit enterprises and too often do what is best for their bank accounts, whether or not is best medically or most cost effective for the patient. Usually, this issue results in a denial of a pre-service authorization, but does sometimes cause a claim denial after the service was rendered.
Insurance does not randomly - or systematically - deny claims simply to increase the bottom line. That is a vicious lie propagated, no doubt, by socialists or other intellectually challenged rabble rousers. When insurance keeps costs down, we all benefit b/c savings are passed along to consumers in terms of lower premiums - and better care quality.
Our attention, sadly, needs to examine this horrific assassination. Among other things, it's a manifestation of results of the presence of many, many ill-parented, ill-educated youth. I don't recognize these possessed minds as being fully human. Their presence among us is a grave danger to what America the beautiful and free, means. Sad and tragic that these zombie legions never learned what love is; any one who investigates and contemplates deeply what they are, would love themself, and others as they do themself. This loss of connection leads only to catastrophe for themselves and civilization. Let's pray for a major transformation.
Thanks for this informative piece. And a Happy New Year all!
Btw, citizen journalist George Webb has been burning a lot of shoe leather lately reporting on the murder of Thompson committed by Mangione, and the purported "suicide" of Suchir Balaji who was named to testify in the AI court case just prior to his likely execution--and the possible connections between the two crimes. One of Webb's contentions is that Thompson was to use AI to root out the mafia style "protection"/extortion racket that has been looting the health insurance industry, thus preciptating his demise--If I have it right. Webb's views and yours, Dr. P, seem to mesh quite well in terms of good and bad players in the insurance industry and the recent related crime spectacles.
I'm surprised at your view of healthcare insurance companies. You educated me. Thank you. I still don't like them being the middle man between me and my doctor. Thanks
Hi Thomas,
The problem with your perspective is that it assumes doctors and hospitals have only your best interests in mind and that they are fully knowledgeable. In reality, doctors and hospitals, like pharmaceutical companies and the purveyors of durable medical equipment, are all for profit enterprises.
Insurance companies have massive amounts of data and medical staff that work with big data analysts to understand what works for patients and what doesn't. Your doctor and hospital are operating based on whatever they learned in medical school, perhaps years ago and whatever is the practice in their local community. Furthermore, when they invest in expensive technology, they must use it to obtain an ROI on that investment. That means they are, de facto, a man with an expensive hammer (the tech) to whom every patient looks like a nail. So someone needs to keep them in check in order to keep patients safe and receiving the best level of care, but also to keep costs down. Treatment must be the most medically appropriate and the most cost effective. That job of regulator falls on insurance.
Insurance companies create reimbursement contracts with care providers at the diagnosis and procedure level and what will be covered. and what will not, is based on science. Insurance staff Medical Directors (doctors) take the proposed list of covered treatments for given diagnoses out to the care provider community and both sides sit down and agree on the list and reimbursement schedule after a little massaging of the proposal.
So, no one is getting between you and your doctor unless your doctor is being greedy and practicing inappropriately due to ignorance or greed. When we are experiencing a serious illness we want every last iota of care possible that might make us better, but much of that care that a doctor says "might" work, doesn't. In fact, it may harm. For sure, it all raises costs and those costs will be passed along to everyone by way of higher premiums.
Healthcare insurance companies' competencies are variable these days. They've become a more complicated system as the "healthcare/pharma" industry costs came to dominate insurance policies, over decades. Politicians, doctors, coders, hospital administrators, nursing and medical schools and others are contributing factors in a mess we have today, it seems to me. I do trust numbers, and therefore have a lot of respect for individual analysts whose job is to gather and study accurate data to track trends that necessarily affect insurance premiums. For example, there is Josh Sterling, an ex-Wall Street analyst whose research, in part, contributed to Ed Dowd's raising the alarm of excess mortality rates among "the healthiest" demographic of our population following the engineered jab. You probably know that their research was censored. That censorship is a crime, one that life and medical insurance actuaries cannot be held accountable for.
Spectra,
Technology is the primary driving factor in healthcare cost increases. New tech makes it possible to treat more people, each more intensively, for a wider range of conditions. That is a good thing from a health perspective is utilized judiciously. The problem is that it isn't. The new tech is almost always more expensive. It must be financed by care providers. Therefore, it must be utilized more.
But even if it were utilized 100% appropriately, it would still be a cost driver due to expansion on the intensive and extensive margins of utilization.
Furthermore, the new tech has a marginal cost that exceeds the marginal benefit that it delivers.
Tech is everything from pharmaceuticals, to all those machines in a hospital room that go "beep", to the air glide beds in the room, to the computer guided surgical lasers and scopes in every inpatient and outpatient surgical room, to the latest and greatest titanium hip and knee joints, to space age incubators for premature infants and so much more. That stuff isn't free, you know. And healthcare is very much price inelastic from the patient's standpoint. There has to be limits on utilization or we will all be priced out of the market. The US is very bad with utilization of the latest and greatest. The socialized systems don't have it, which is why they are a bit cheaper (that's their version of denying claims and services). When insurance tries to set limits, they are demonized by the doctors and hospitals who invest in it and the developers who sell it. The patients pick up on that propaganda and think that insurance is evil. They just don't understand.
One more 2 cents from me - the haters keep repeating a "statistic" that United denies 32% of claims and competitors deny 16% of claims. That is BS. I have no idea where it is coming from.
Full disclosure, I work in actuarial for one of the big national for profit HC insurance companies (not United) and years ago I worked for a not-for-profit regional Blue Cross/Blue Shield company.
By my definition a claim denial is that a service was rendered, the member (patient) expected insurance to pay for it. Insurance received the claim (bill) from the care provider and then declined to pay it.
I described in another comment here why denials can and do occur. However, claim denials are around 6% to 8% depending on various factors having to do with care provider network composition, contracting, demographics, product design and some random stuff. So, again, no idea how 16% or 32%! is being cited. IMO, someone is deliberately lying and the lie is being believed and repeated. Denial rates are reported to the feds and state governments (insurance is highly regulated).
If an insurance company was denying 16 out of every 100 claims, let alone 32 out of 100, members would have a valid reason to be upset that they pay premiums and roll the dice as to whether or not their claims would be paid (if the claims aren't paid, the member is on the hook to pay the medical bill). Members and/or their employer group would simply seek to sign up with a competitor and United - or even the alleged 16% deniers - would go out of business. Insurance companies compete on more than price. Benefit mix and claims payment are other points of competition. There are plenty of options; other national insurance companies, regional not-for profits (which, btw, also deny something like 6% to 7% of claims) or - this is important - the employers could go for ASO arrangements with insurance.
What is an ASO? = Administrative Services Only. The employer wants to offer insurance as a benefit to employees, but thinks they can do it cheaper than the insurance companies (sometimes that is even true, but mostly not). Employers pay out of pocket for employee health benefits. The employer contracts with insurance to leverage claims processing systems, medical policies, provider networks and various analytics, but the employer ultimately chooses the basket of benefits and insurance is usually paid on a per member per month basis. Think of insurance saying something like, "we will charge you $30 per month for each of your employees and we will process their claims, apply our medical policies to our usual contracted providers, who your employees will use when they need services". Voila! The imagined incentive to deny claims to increase profits, on insurance's part, is no longer a problem (not that it is in reality). Depending on region of the country, the companies involved, the economy, over the past twenty years or so at any time, up to 25% of healthcare coverage for employees has been through ASO arrangements.
32% 16% denied claims is garbage. It doesn't happen and can't for several reasons, but especially due to ample competition in the sector and the ASO option.
Oh, and the idea that insurance delays paying claims is also 180 degrees from how it happens in the real world. All healthcare insurance companies that I am aware of have late pay penalties in their contracts with care providers. Claims must be paid within 15 to 30 days of receipt (depending on contracts, etc). or they begin to accrue interest, a penalty that must be paid to the care provider who submitted the claim. A slow claims processing department can cost an insurance company tens of $millions every month in late pay penalties. Therefore, management of the processing operations emphasizes quick payment. Paying claims fast and paying accurately is a big thing in my world.
Can we stop calling it "health care"? That is right up there with calling these hip pocket computers "phones". Or the electronic database quagmire a "voter roll".
My husband taught me so long ago (not poetically, he could be remarkably blunt and at times so cleverly funny) that doctors "can cut on you or give you pills." I found that statement remarkable. Both of those things to me are a far cry from helping me cultivate my health. Reading the comments on these excellent write-ups is good for my health. I have decided that learning is good for my health. Thank you & Happy New Year!
Great piece Andrew.
Lots of ignorance around this topic. Insurance has not communicated what it does, how and why very well. Healthcare insurance does deny claims. The main reasons are as follows:
1. Member (=patient) hadn't paid premiums and wasn't enrolled with insurance at the time the medical service was incurred
2. The member went out of network without permission. Insurance keeps costs down by contracting with care providers to perform services for pre-agreed upon reimbursement rates. This is at the diagnosis/procedure level. If a member (patient) goes outside that network, they will likely incur higher costs than they would have staying in network, which impacts everyone in their risk pool (like everyone getting the same insurance benefit via an employer, or everyone purchasing Obamacare (ACA) or everyone in a Medicare risk pool. If people actually read their insurance contract, they would see that insurance will only pay for out of network care IF the care is critical and is, for reason, not timely available in-network.
3. A pre-authorization for an expensive, complicated, potentially dangerous, experimental or otherwise unusual procedure was not obtained. Insurance companies have staff physicians who work with internal analysis and the larger medical community to establish best practice guidelines for a huge list of medical conditions. The guidelines are science based. When a patient presents at a doctor's office or hospital with one of the conditions on the list and doctors want to perform procedures, they must let insurance know. Insurance clinicians will go through a medical symptoms, demographics, etc. checklist with the external doctor. If the boxes on the list are checked off, then go ahead with the procedure. If not, some other course of treatment must be explored. This ensures that patients are only subjected to medically appropriate care and keeps costs down. Fail to obtain the pre-auth for a condition/treatment on the list and the claim will be denied. This explained, in detail, on both the agreement the hospitals and doctors signed with insurance and on the agreement the member (patient) received when signing up.
4. Care provider failed to send complete data on the claim form. That failure is like your auto mechanic just sending you a bill for work on your car and maybe refusing to show you the part he said was bad and needed replacing. Medical services are rife with fraud. Failure to, essentially, itemize the bill (claim) with all required info is inexcusable and cannot be tolerated. Medical fraud is in the realm of hundreds of $billions each year. Those costs get passed onto you via higher premiums. Insurance works hard to prevent fraud and punish it when it is detected.
5. Treatment was medically unnecessary or inappropriate. There is an assumption that doctors and hospitals are only there to do what is best for their patients. That assumption is far from the truth. Doctors and hospitals are for profit enterprises and too often do what is best for their bank accounts, whether or not is best medically or most cost effective for the patient. Usually, this issue results in a denial of a pre-service authorization, but does sometimes cause a claim denial after the service was rendered.
Insurance does not randomly - or systematically - deny claims simply to increase the bottom line. That is a vicious lie propagated, no doubt, by socialists or other intellectually challenged rabble rousers. When insurance keeps costs down, we all benefit b/c savings are passed along to consumers in terms of lower premiums - and better care quality.