A few years ago, my podiatrist was fitting me for an orthotic insert for a surprisingly large amount of money. When we found out my insurance wouldn’t cover the device, that’d I’d have to pay cash, she chopped the price by one-third.
Lesson learned? Insurance makes healthcare one-third more expensive.
Insurance companies are easy to label as villains in our byzantine, unaffordable healthcare system. No one wants to villainize doctors or other providers — because we need them — or patients — because everyone is a patient. But insurance companies make for nice bad guys, because they seem like they’re the ones who interfere with healthcare delivery rather than facilitating it: insurance companies have been villains in our pop culture, from serious dramas like "John Q." to fantasies like "The Incredibles."
There’s a measure to which this is unfair, because insurance fills a vital role in our system.
Virtually no one could afford catastrophic care, and almost no one needs it, so insurance is the best way to distribute the cost (like car insurance). But the problem is insurance has become so entrenched in our system it’s now essential for basic care, and catastrophic care is unaffordable even with it.
While every industry has an understandable profit motive, the insurance companies’ is particularly troubling: it is in the financial interest of the insurance companies to limit their expenses for your care. The more access and treatments you receive, the less profit insurers turn.
And it’s gotten worse since 2010 with Obamacare, which is helping insurance companies rake in record profits and driving doctors out of medicine. The largest insurers in the country have seen enormous growth while premiums have skyrocketed, costs for providers have gone up, and hospitals have struggled to keep their doors open — all of which adds up to a much sicker healthcare industry.
To try to survive, many hospitals are merging and consolidating to cut costs and relieve the financial strain faced by particularly small hospitals. But hospitals saving money directly translates to insurance companies making less, so insurance companies uniformly oppose mergers, no matter the circumstances.
It’s depressingly more cost effective for insurance companies to spend millions of dollars to maintain the status quo rather than billions to make healthcare more affordable and accessible by their customers.
Funneling money through an “advocacy group” allows insurance companies to operate for their own interests without the obvious baggage of insurance companies. It’s clever, but it’s bad — and it needs to be stopped. Hospital mergers are not inherently good or bad — each should be evaluated as an individual action — but when one has a group with a nice-sounding name, it’s easy to just do whatever they say, when there should be more critical thinking about the issue.
Jared Whitley is a long-time politico who has worked in the U.S. Congress, White House, and defense industry. He is an award-winning writer, having won best blogger in the state from the Utah Society of Professional Journalists (2018) and best columnist from Best of the West (2016). He earned his MBA from Hult International Business School in Dubai. To read more of his reports — Click Here Now.
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