Harold Pollock just covered a story that has been kicking around the media and the blogs for the last few days. In this story, an ASU grad student ran up medical bills well over his insurance cap.
Brad Flansbaum draws my attention via Twitter to a remarkable story reported by Lela Moore in the New York Times. Arizona State doctoral student Arijit Guha has a bad cancer and a bad insurance plan. He was covered under his $400/month ASU Aetna Student Health plan that included a $300,000 dollar caps. He’s hit that dollar cap through surgery that removed most of his colon, chemotherapy, and other costly and physically traumatic treatments.
As his denied claims reached $118,000, he took his case to Twitter, under the ironic moniker @Poop_Strong.
The student then took to social media and exchanges were made between him and many other people, including his insurer, Aetna. In the end, Aetna agreed to pick up his remaining bills. This, predictably, led to a lot of moralizing. People have lined up behind the student or the insurance company based upon their own ideology, but I think they are missing the larger point. Insurance companies have a very difficult time holding down costs.
In my own small area of the world, and if you read, you can find many similar stories. Just coincidentally, we had a similar event with Aetna in our area many years ago. They had decided to not cover some procedures in order to cut costs. This resulted in negative publicity in the local papers that people still remember more than ten years ago. It also meant that Aetna had significant loss of market share in our area. Their push to become a dominant player in our area ended.
Similar stories often hit the media. A celebrity, or an appealing child is denied coverage. Negative press coverage ensues. Frequently, the insurer folds. They almost have to fold because they cannot afford to lose much market share. Without a large enough share of the market, they are unable to negotiate for lower rates with providers. If they cannot negotiate lower fees, premiums rise and they lose even more business.
While I have had my disagreements with health insurance companies over the years, they are not evil. They are mostly decent people trying to do good work and make some money at it. They have a few rotten eggs among them just like the rest of us, but I have also seen them do exceptionally good and honorable things which will never reach the front pages of any newspaper. That said, I think they are trapped with this coverage issue. I suspect it was one reason why they did not vigorously oppose the ACA. If what is to be covered by one insurance company is the same for all other insurance companies, for the same level of insurance, it will immunize them from complaints about lack of coverage.
My good Steve,
If what you say is true, the only realities we are left with are
a) government health care insurance such as Medicare and Medicaid, which will be bankrupt within the next decades and which doctors are increasingly refusing to accept as payment, does a better job of holding down ever-inflating medical pricing than private health care insurance; or that
b) neither private nor public health insurance is capable of holding down ever-inflating medical pricing
H. M. Stuart
Alexandria
http://theincidentaleconomist.com/wordpress/doctors-arent-accepting-new-patients-with-private-insurance-either/
“What did the researchers do? They examined data from a representative sample pf physicians. Specifically, they looked at how often physicians accepted new patients by insurance type and year.
What did they find? The overall acceptance rate of new patients was pretty static from 2005-2008, going from 94.2% to 95.3%. The percentage of physicians accepting new Medicare patients dropped from 95.5% from 92.9% (about 2.5%). But here’s the thing. There was a bigger drop in physician acceptance of patients with private noncapitated insurance from 93.3% to 87.8% (about 5.5%). In fact, they found that over 90% of physicians accepted new Medicare patients. Reports of reimbursement rates driving away physicians may be more anecdotal than widespread.
So, yes, Medicare acceptance rates dropped, but private insurance acceptance rates dropped more overall. Interesting.”
Other OECD countries have found a way to have lower health care costs. When it becomes important enough, we will control them also.
Steve
“Other OECD countries have found a way to have lower health care costs.”
That’s an interesting point. So, you are arguing that exact same procedure with same technology, same wait time, same quality doctors would cost more in other OECD countries than in US. Mind you, cost is not same as price.
So, does it mean that you personally ask for more money than a European doctor? If so, why?