Monday, January 25, 2010

Why people hate insurance companies.

So back in October my little guy went in to the doc for a minor operation.

It really was minor, the removal of a tiny skin tag which, had it been anywhere else, would have involved a local dab of xylocaine, a snip, a band-aid and a lollipop. But this one was on his eyelid, so we had to go the entire operating theatre route to keep him still enough for the plastic surgeon to whack it and throw a single stitch.He did a great job, and you can't even see where this goofy thing was. And his classmates no longer tease the Peep about his freaky eye booger.

But while the skin tag is gone, the medical bills keep coming, reminders of the Byzantine fucking complexity of our medical system.

There's the hospital bill, the surgeon's bill, the lab bill, the anaesthesiologist's bill...

And then there's the insurance claim, and that's where the REAL frigging mess begins.

Because nothing's simple there. There's the billed amounts, the "provider's discount" (WTF? So you're telling me that the physicians, surgeons and the hospital had padded the bastard enough to knock the official billed price down 30% or so and STILL make a profit?), the amount we have to pay on our personal deductible, the amount not covered because it's part of our family deductible, the part not covered because it's part of our "total-out-of-pocket" expenses, the part the insurance plan covers at 80% and the part that it covers at 60% (forget 100%, Giacomo...that don't happen...)I've been calling the insurance company and talking to all of these very helpful, very knowledgable's hard for me to hate them personally. But the entire system requires a tremendous amount of unpaid time on my part to track down this information and try and apply it to everyone's bills.

And then I talk to my parents, who lived in Dusseldorf for many years, and they tell me that when my mother saw the doctors there she got a single bill, with a cost, the amount paid by the national health (usually something like 90% or better) and the amount they owed. They were done with the nonsense when they walked out of the clinic or the hospital.

Plus there's the irritation factor. Why the hell didn't Blue Cross apply the $500 that Mojo paid upfront to Peep's deductible? And once they do, and once we pay off the remaining $750 we owe to cover our $2K "out-of-pocket" costs, why do they then not pay their expected 80% of the anesthesiologist's bill, on which they have payed nothing?Add this all together and I'm left doing a slow burn; hating the insurance company for doing what private insurers have to do - making it difficult for me to spend their money and fuck up their balance sheet - and causing me to spend all this time on the phone, hating the medical providers for complicating the billing process and padding their costs, and hating the people who are so worried that this wonderful system is going to be "changed" by health care reform.

And I'm a pretty sharp guy. Makes me wonder what the dull-normal people do when they have to deal with this stuff..?

I mean, it's better than bleeding and purging, but, still...


Ael said...

Remember, all those nice people were being paid to talk to you. I suspect that they talk to a lot of people.

It's all pensionable time, I suppose.

Anyone know what the tooth/tail ratio for medical insurance is? All that paperwork has to incur a high overhead.

Lisa said...

It is so needlessly frustrating.

I had a similar run-around recently, and when I finally spoke with a representative in a government agency and explained the scenario, I heard a snicker, and was then the recipient of one knowing word: "bureaucracy".

"It is difficult to get a man to understand something when his job depends on not understanding it" (Upton Sinclair).

Pluto said...

I've been on all sides of this issue, Chief, and I feel your pain.

The amount of paperwork the clinics and hospitals are required to fill out to get paid is extraordinary. There are some insurance companies that will automatically reject a claim 3 times before looking at it and require a fresh set of paperwork with each submission.

When I left the insurance industry in 2002 they were under huge stress to meet two goals:
1. Keep insurance affordable for fear that companies would start dropping their employees (which has started happening)
2. Keep making extremely large amounts of money

The best way to measure the stress on the employees was that the company paid considerably better than average wages but employee turnover was more than 100% per year. Petty criminal activity against the people in the next cube was common where I worked.

On the occasions I've had to be the patient I thought my head would explode when I jumped through the hoops the insurance company puts before me. And its gotten progressively worse in the last few years.

Based on past experience, I can answer your question about what less proactive people do:
1. They frequently overpay the bill to get it over sooner (and because they think they have no recourse)
2. They get really upset about this, abusing clinical and insurance billing people, making really stupid threats (my congressman will put you out of business when he hears about this)
3. They forget about it and go about their lives as if nothing had happened

Pluto said...


When I was in the clinical/hospital end (ended in 1993) the tooth/tail ratio was about 5/1 and the doctors earned a LOT more than the billing specialists.

I gather the ratio is now about 3/1 and knowledgeable billing specialists are very highly valued.

Big Daddy said...

The financial tooth/tail is pretty sad. According to one article I saw, US health insurers typically spend 20% of their premium on "administrative costs" versus around 5% in France. Also keep in mind that some of that 20% pays the lovely people in rescission department whose job is to find pretexts to cancel coverage when people file large claims.

Pluto said...

I did some *very* quick research on the web and found the following figures:

- Healthcare expenses as a % of GDP in 2008: 16% (this was the most recent published year)
- Annual growth of healthcare expenses: 5.5% overall, 6.5% since 2000

Using those statistics, I did some straightline projections and discovered that we will reach 20% of GDP by 2012 and 25% by 2015-16.

Apparently we aren't suffering enough pain this year (estimated 18% of GDP) to pass healthcare reform. I wonder when we will get desperate enough to do something about the system; will it be 20% or 25% or even 33%?

In case you were wondering, 33% will occur between 2020-22 if current trends hold up.

FDChief said...

The other thing to factor in is the "lost time" for people like me. Between my wife and myself we've probably spent 4-5 hours on the phone and computer trying to figure all this stuff out.

Now I bill out at $100/hour and my wife is more expensive than I am.

Figure that time as utterly wasted, then multiply that by all the other people doing the same thing.

Pretty damn silly.

And what's irritating is that the REAL cost-driver isn't the insurance companies but the providers. The insurance companies are just scavengers. The real predators are the fee-for-service providers.

Honestly! And the big "fear" is that "health care reform" is somehow going to make this wonderful Swiss-clockwork system WORSE???

rangeragainstwar said...

The time i had my shoulder scrapped my insurance paid a very large amount of money for my use of the recovery room. I occupied it for 45 minutes. It cost about as much as we paid for a pound of KSM's flesh.
I'm hesitant to go under anesthetic unless absolutely necessary- i'm always afraid that i won't wake up.

FDChief said...

Jim: You are a sensible man - I can tell you from both experience working in hospital as well as knowing the stats that the two most common complications of surgery are post-op infections and problems with anaesthesia.