Sunday, September 21, 2008

Who Really Subsidizes Our "World Class" Health Care?

by Pa Rock
Health Care Consumer

Several years ago I listened to a classmate in the Social Work Graduate Program at the University of Missouri make a kick-ass presentation on Health Maintenance Organizations, commonly referred to as HMOs. For those of us fortunate enough to be a member of an HMO, or any insurance plan for that matter, we appreciate the fact that they save us money and insure that we will be able to receive health care, no matter how marginal it may be.

But until I heard my friend's detailed report, I had no appreciation for just how ruthless these organizations are. HMOs, it seems, develop their clout in exactly the same way as unions - through large memberships.

Here's how an HMO works: Let's say that a certain HMO has one hundred thousand members in a specific geographic area. The HMO will then contact all of the providers, clinics, hospitals, and laboratories, in that area and offer to put them on their approved list. That will give those doctors and facilities access to the one hundred thousand members of the HMO. The catch is (there's always a catch!) in return for access to the vast pool of customers, the HMO will tell providers and facilities how much they can charge for each procedure. And those charges will be considerably less than for non-HMO members. So, the poor, those without insurance or HMO memberships, wind up being charged full price and subsidizing everybody else.

What follows is an actual example taken from a bill that I received yesterday. Last month I had a routine blood and urine sample taken at a local clinic. Sonora Quest Laboratories of Hollister, Missouri (yeah, homies!) said that those two simple analyses were worth $742.41. Of that total, they wrote off $658.53, charged my insurance company (Blue Cross - Blue Shield) $60.90, and billed me the remainder of $23.18. The muscle of the insurance company got the lab to write down all but $84 dollars of the entire cost!

But what if I had no insurance and was responsible for my own bills? The amount that I would have had to come up with would have been $742.41! And if I didn't have that kind of money my name would have been turned over to a collection agency. I would have been harassed at home and at work, and eventually I would have been sued.

What needs to happen, and what insurance companies will fight to the death to prevent, is that all Americans need to be insured or included in an enormous HMO that could compete for fair charges for all. But, if that happens, there will no longer be a poor class to subsidize those who are insured.

And with medical charges, as with sales taxes, we are all very dependent on the poor to pay their bills and keep our rates low.

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