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Monday, January 26, 2009

Cutting out the Muddle Men

By Keith R. Schmitz

Let's throw this one out for batting around.

Health insurance companies have been with us since roughly World War II, when wages were frozen and companies had to come up with an alternative perk for their employees.

The war ended but the health insurance companies have lived on, becoming a major player in our health care system, with combined revenues for the top five insurance groups of $404 billion and profits hitting nearly $17 billion. Bear in mind we spend $2.5 trillion on health care in this country.

Not surprisingly as unemployment rises and while many companies are dropping this high priced coverage the numbers of policies written is declining. Net premiums written for these companies though grew an average of nearly 6 percent even as total members declined by almost 2 percent. Total revenue and net premiums written for the health industry as a whole grew 8.7 percent and 8.5 percent, respectively.

Availability of insurance to cover medical procedures has probably led to the rise in the cost of medical treatment. I am old enough to remember when a doctor made house calls. Something I feared since it often meant an injection in the backside.

No more as physician time has become too expensive, and it has risen because health insurance companies were able in part to make the payouts that grew the salaries.

No doubt about it. We have the best health care system on earth in terms of technology but one of the worst when it comes to access. Basically if you can't afford treatment there is a possibility you don't get it, because health insurance companies for many have become the gatekeepers.

As much as bold capitalist types tout the empowerment of "consumer health care," none of them have answers to the problem of health insurance companies employing armies of experts just to deny claims or even prevent people in the first place from getting coverage due to pre-existing conditions. Maybe I'm wrong on this point and would love being corrected.

Health insurance companies introduce waste into a system that suffers enough from productivity issues. Every medical office has to have at least one FTE to deal with the insurance paperwork and physicians are continually on the phone fighting denials of claims, taking away valuable time from patients.

So the question is, what would happen to us as a country as if health insurance companies were subtracted from our health care equation? Are these companies barnacles on our economy that need to be scraped off or do they serve a valid function?

Answers such as the government doesn't do anything right is a great ideology but not an answer.

Though we would feel for people in the health insurance industry loosing their jobs, for many that champion health care insurance companies there seem to be little concern about workers loosing their jobs on the altar of free trade.

So have at it.

UPDATE -- One irrelevant reply on this topic. Looks like insurance companies have no place in the health care system.

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