Crossville Chronicle, Crossville, TN

January 13, 2014

Stumptalk: Understanding the cause of a problem

By Jim Sykes
Chronicle contributor

CROSSVILLE — The first requirement when trying to solve a problem is to make sure you understand the cause of the problem. If you don’t understand the cause of the problem, you have no chance of determining what is needed to correct it. The Affordable Care Act (ACA) did nothing to correct the cause of the problem it attempted to solve. When politicians don’t understand the problem, there is no hope that they will solve it.

The primary cause of the health care problem in America is the cost. The problem is NOT the insurance companies; it’s the healthcare and pharmaceutical companies! They basically have no competition and can charge whatever the market will bear. The insurance companies have no control over the cost of health care other than to try to reduce them through negotiations with the healthcare providers.

A recent article in Time magazine that examined our healthcare system found that the “non-profit” healthcare companies are making enormous profits and paying their company executives enormous salaries. The profits of these companies are higher than most “for profit” companies and the costs to patients are determined by an arbitrary list of charges not on their expenses. There is no relationship between these charges and what they are willing to actually accept if these charges are challenged. They reduce these charges to insurance companies, Medicare, Medicaid and other groups who pay for covered patients but are not willing to voluntarily reduce these charges for individual patients. Hospitals are required by law to treat every patient who presents for treatment, but some hospitals will not treat certain conditions until large sums are paid in advance.

Please find a copy of the March 4, 2013 Time magazine and read "Bitter Pill" by Steven Brill. Mr. Brill explains in detail the basic problem with our healthcare system. The article points out the amount of over-charging and excessive profits by the healthcare industry corporations and some of the ways these charges could be reduced. Since the healthcare industry doesn't have any competition, they can — and do — charge what is considered outrageous prices until challenged. Only then will they reduce their charges to what is considered reasonable. The biggest problem is that when an individual needs their services, the cost is not usually even questioned until the bill arrives. We should be able to compare the costs of services at several hospitals and doctor’s offices before we need their services. We are able to do this with almost everything else we buy.

If you have any doubt that the healthcare industry is making excessive profits, take a look at the number of hospitals they are buying and the additions they are making to those hospitals and ask how these “non-profit” companies are able to buy all of those hospitals and then build such expensive additions.

Health insurance should be individual, portable across jobs, states and providers; lifelong and guaranteed-renewable, meaning you have the right to continue with no unexpected increase in premiums if you get sick. Insurance should protect the buyer against large, unforeseen, necessary expenses, rather than be a wildly inefficient payment plan for routine expenses.

People want to buy this type of insurance, and companies want to sell it. It would be far less expensive, and would solve the pre-existing conditions problem. The only reason that we do not have such health insurance is because it has been regulated out of existence.

Knowing they will abandon individual insurance when they get a job, and without cross-state portability, there is little reason for young people to invest in lifelong, portable health insurance. Mandated coverage, dysfunctional cash markets and pressure against full risk rating, prevent reasonably priced health insurance.

My personal experience with the health care system resulted in charges of $4,226.57 for 3 hours in the local emergency room. The service was excellent but the charges did not seem logical. The providers accepted a total payment of $675.06.

If you would like to learn more, please “search” the web and read the following: “The ‘Bitter Pill’: Time’s Steven Brill on ‘Why Medical Bills Are Killing Us’” and “20-Year Old Man Overcharged $45,000 for Appendectomy.”