Wednesday, December 26, 2007

American Goy's INVESTIGATIVE JOURNALISM SERIES: American Healthcare System - the Insurance edition (with bonus material of a young girl dying)

Hi it's your favorite idiot here (or I hope that I make your idiot top 10 by now).

Today I will tackle the American Healthcare System. I will concentrate on the money aspect of it (as I was told long ago by Cuba Gooding jr. to always follow the money). So have a sit, grab a high fructose corn syrup beverage of your choice , and prepare for my breaking down this very complicated issue into idiot level, so that I and anybody who reads this blog can understand what the problem is with the best care in the world (tm by American TV and corporations, as well as associated lobbyists and assorted scum). I will go slow I promise.

Here's how American healthcare insurance works.
American Insurance companies are a for profit organizations - meaning they exist to make money for their owners and shareholders, the more money they make, the happier everybody is. This is standard corporate stuff, and in this instance they are no different than Ford Motor Company or Walmart or your local 7-11 store. They are in it to make the most money for themselves.

Got that so far? I will not do anything too complicated here, so please follow along at your own pace.

Lets take a look at how those insurance companies MAKE money and how they LOSE money.

First, how they make money. An insurance company, such as an HMO or a PPO, makes money by collecting a periodical sum of money from a person that belongs to that company, i.e. is insured by them for healthcare needs. Easy peasy. The majority of employed Americans have a chunk of our paycheck stubs wages taken out to cover the medical insurance. I said the majority, because not every American is insured for medical needs and emergencies, which makes us, the Yoo Ess of Ey, unique in the world. Which is a big word that means that only we do it that way. Obviously the rest of the world are idiots and we are correct, but I digress.

So, you work, you get your paycheck every week, two weeks, monthly, whatever, and you see that a % of your wages goes to the insurance company of your (employer's actually, not your own) choice.

The more that are insured by an insurance company, the more pay their dues to them, the richer the insurance company becomes.


But each company has expenses, so let's talk about how an insurance company LOSES money.
First, they need to pay for their employees' salaries, their corporate buildings upkeep - the usual stuff. This is what's called sunk cost and there ain't anything they, the company, can do about it. Think about you renting a place to live in- as long as you are in contract, you have to pay monthly whatever amount of $$$ you and your landlord signed the contract for, so you can continue to live there. Same thing.

Medical insurance companies exist (in principle) to pay money when there is a medical emergency for you, their client (and customer). When you visit a doctor, when you need a surgery, some kind of treatment, if you need to buy medicines - the medical insurance companies step in and pay the doctor who treated or operated on you, and they also pay a portion of the cost for the medicines needed by you.

That is how they LOSE money.

Hmm I am getting too wordy and complicated. Let me break it down for you in a little table for you:

If you are insured under a medical insurance company then
if you pay your dues they make money
if you have a surgery then they lose money
if you go to a doctor then they lose money
if you buy medicines then they lose money.

Fortunately for our American healthcare insurance companies, these are NOT sunk costs, and something can be done about them. The insurance company can DENY you, their customer, the surgery, doctor visit, or medicines that you NEED to survive. The medical insurance has people who's job is to evaluate if what the doctor told you you need to live is REALLY what you need to do.

So now our table looks like this:
If you are insured under a medical insurance company then
if you pay your dues they make money
if you have a surgery then they lose money BUT if they deny you they KEEP the money
if you go to a doctor then they lose money BUT if they deny you they KEEP the money
if you buy medicines then they lose money BUT if they deny you they KEEP the money.

This is not rocket science, and it should be obvious to you, the reader, as it is obvious to me, the idiot who writes this, that to maximize their profits (which is the true goal of the American medical insurance companies) it is generally better to DENY you the treatment you need.

Now, many Americans who were never sick will say that the insurance companies generally pay them for their visits to the doctor. And that is in general true, because the evaluators in the medical insurance industry came to the conclusion that the fees they must pay the doctors for their standard patient visits are small and piddly and not worth the hassle of millions of Americans being pissed off.

However, the bigger the charge for a medical service, the bigger the hassle. If you need an operation, a rare procedure, an expensive medicinal drug, then the nice people at the insurance company will stall, outright deny or perhaps recommend a cheaper alternative.

So you have a situation where a doctor tells you 'Mr. AmericanGoy, you need to have ABC medicine for your condition XYZ', and the insurance will actually call the doctor and say 'No, Mr. Doctor, who was in medical school for 7 years and then had 3 years practice internship, our people here are looking at an Excel spreadsheet and according to them AmericanGoy does not need ABC medicine - too expensive. In fact, substitute the FEG drug or we won't pay.'

This is true life here in America people. In the final analysis, it is NOT the doctor who decides on your medicines, your surgeries and your hospital stay - it is the people at the insurance companies.

And, like I wrote before, those people at the medical insurance companies have a different goal than your doctor.

The doctor wants you to live and to treat you so you won't become sick or die, because he does not want to be sued (by you or your family).
The medical insurance wants to NOT treat you, because they do not want to LOSE money.

This is not rocket science - simple common sense. Hence why I will only provide you one link to back up my claims here, which are based on my own experiences and observations.

Now, let's see how this works in practice.

A young girl needed a surgery done. The doctors decided that for her to have a chance at life, she needed a liver transplant - as quickly as possible. Now, the people at the medical insurance company decided that the transplant was an experimental procedure, and not warranted under the circumstances. Some bloggers (Daily Kos, et al) decided that they will practice mob rule and call and email the medical insurance (CIGNA, if it matters to you - they are all the same though, because they are all about maximizing profits; but I digress) and force them to pay for the surgery for the girl. CIGNA, with a heavy heart, agreed to pay for the procedure.

Fortunately, and this is very good news,the girl died before the liver transplant could take place.

And this is VERY good news.

You see, the girl was very sick, and chances are that if the operation was successful, she would be a huge drain on CIGNA's profits in the future, as they would have to pay for her doctor visits, medicines, and possibly other, life saving operations (gasp!). Obviously, her (or really her parents') dues paid to the insurance company would be much less than the expense of treating this girl and keeping her alive. In fact, just the cost of the procedure itself (and the hospital stay, inevitable post operation doctor visits) is probably more than what the parents paid in dues to the company.

Now imagine if the liver transplant was successful AND the girl lived for say 5, 10 or (gasp!) more years, and she was sick for the majority of that time. Imagine the cost to the company!

Fortunately, the girl died before the liver transplant operation could take place, after it was approved by CIGNA under heavy public pressure to save this girl's life.

So we have a win win: the company agreed to the operation (positive public relations there) but was just smart enough to deny the treatment for long enough for her to DIE (profit!).

See - the American healthcare system works fine. Perhaps those stupid Europeans and Canadians can learn something from this example, how a SUPERIOR, the BEST IN THE WORLD, healthcare really works.

Please read about Nataline Sarkisyan here.

Please join me in congratulating CIGNA on their fantastic business sense and maximizing profits for their shareholders here.

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2 comments:

Darvin said...

I found your blog rather interesting. Cigna Insurance is one of the few insurance companies which does not have too many negative reports. It seems to pay out the reimbursement in time, in full amount. The customer service is also impressively good. www.pissedconsumer.com though displays people’s dissatisfaction with the company. Obviously, there are some gaps in the way the company provides its services.

Dana said...

You write very well.