01-31-2013, 07:02 AM
So...any economists out there want to take a stab at explaining how insurance companies can survive after they price most of us out of the market?
If I ran my old factory the way they run hospitals and doctors offices, I'd have been out of business/out of a job my first year. Waste is rampant in our medical industry, and sadly, punaticbychoice nailed it: insurance companies create conditions whereby the provider and insurer are at odds, a reality that results in lots of waste: the insurer wants to minimize its costs while the medical establishment wants as much revenue as they can get. It's much easier for medical providers to "game" the insurance company than to try squeezing dollars from the average Joe.
Admittedly I'm not knowledgeable about the medical industry. But as a "customer" anyone with half a brain can see the waste. I saw the same kind of waste in the car insurance industry when, years ago, my team analyzed the operations of a body (repair) shop at a dealership in the Deep South. We were flabbergasted to discover that some of their repair guys were making $150,000+/year in a rural Podunk town. How? By gaming the system. Here's one way they did it: their minimum billable time unit was one hour. So the body guys would spend 15 minutes to half an hour on one car (this is all "on paper," not at all a reflection of reality), bill for an hour, then go to the next car and do the same thing. The insurance companies were naturally suspicious because they know how the game is played. So they were always sending in auditors to make sure only work was done on what was "covered," costs weren't misrepresented, etc. Well, the dealer knew this so they hired staff for the sole purpose of hiding the waste, through complicated paperwork, misrepresentation of hours worked, etc. The end result is that both sides increased their costs to maximize their own benefit. In the end the customer got screwed.
I'll admit I'm not smart enough to solve this problem. But I am learning from this thread. So veering the discussion back to Hawaii, how can Kaiser survive after most folks can't afford them anymore?
If I ran my old factory the way they run hospitals and doctors offices, I'd have been out of business/out of a job my first year. Waste is rampant in our medical industry, and sadly, punaticbychoice nailed it: insurance companies create conditions whereby the provider and insurer are at odds, a reality that results in lots of waste: the insurer wants to minimize its costs while the medical establishment wants as much revenue as they can get. It's much easier for medical providers to "game" the insurance company than to try squeezing dollars from the average Joe.
Admittedly I'm not knowledgeable about the medical industry. But as a "customer" anyone with half a brain can see the waste. I saw the same kind of waste in the car insurance industry when, years ago, my team analyzed the operations of a body (repair) shop at a dealership in the Deep South. We were flabbergasted to discover that some of their repair guys were making $150,000+/year in a rural Podunk town. How? By gaming the system. Here's one way they did it: their minimum billable time unit was one hour. So the body guys would spend 15 minutes to half an hour on one car (this is all "on paper," not at all a reflection of reality), bill for an hour, then go to the next car and do the same thing. The insurance companies were naturally suspicious because they know how the game is played. So they were always sending in auditors to make sure only work was done on what was "covered," costs weren't misrepresented, etc. Well, the dealer knew this so they hired staff for the sole purpose of hiding the waste, through complicated paperwork, misrepresentation of hours worked, etc. The end result is that both sides increased their costs to maximize their own benefit. In the end the customer got screwed.
I'll admit I'm not smart enough to solve this problem. But I am learning from this thread. So veering the discussion back to Hawaii, how can Kaiser survive after most folks can't afford them anymore?
Tim
A superior man is modest in his speech, but exceeds in his actions--Confucius
A superior man is modest in his speech, but exceeds in his actions--Confucius