Two related ideas come together in this Health Tip and I want to convey why this is all happening. First, a large part of our day at WholeHealth Chicago is spent dealing with insurance companies denying you benefits. Second, many patients have been telling me about the wave of anxiety they feel every time a letter arrives from their health insurer, especially when the envelope is marked “Important News About Your Insurance.”
This “news,” you learn, is virtually never good. There might be a dramatic increase in your monthly premium or an equally dramatic rise in your deductible. You might learn that the hospital system where you’ve been a patient for decades is no longer covered by your insurance. You might hear the same about your primary care physician or the specialist to whom she referred you. Because of this, you get word your scheduled appointment is cancelled. Now you need a different hospital and a new surgeon.
You scramble through your new “provider directory” and see a blur of names. In the back of your mind, you wonder what will happen to your medical records.
Then you get word that the medication you’ve been taking is no longer on your insurance company’s formulary. Whoever your new doctor turns out to be needs to make a change within 30 days or you’ll have to pay out of pocket for your meds. Oh, and don’t forget to take your new prescription to the approved pharmacy because your regular pharmacy, and the pharmacist you’ve known for years, is no longer in the network.
“Why is this happening?” you wonder. Is this a result of Obamacare/the Affordable Care Act (ACA)?
The answer is greed
The answer was predicted several years ago by investigative journalist Steven Brill when Time magazine devoted an entire issue to his report on the US healthcare crisis in a piece called Bitter Pill: Why Medical Bills Are Killing Us (click here for the short version), later turned into the excellent book America’s Bitter Pill. The heart of the matter was good old-fashioned greed, not so much from the health insurance industry, but rather from the healthcare industry itself.
Much of Brill’s wrath was aimed at hospitals with their bloated price gouging, egregiously overpaid executives, and architecturally overwrought buildings. Case in point: a visit to Northwestern’s emergency room for a bladder infection cost one of my patients more than $5,000. Brill was also incensed by physician fees, overuse of surgery, the cost of medical equipment, and runaway prescription drug price increases.
It doesn’t add up
What went wrong was this: when Obamacare/ACA went into effect and everyone could get insurance and nobody could be denied coverage for a pre-existing condition, the insurance industry braced itself for a lot of potentially expensive patients. They counted on these costs being offset by the premiums they’d receive from millions of healthy new enrollees who would rarely use the healthcare system.
They were correct with the first prediction. Suddenly there was a flood of chronically ill patients needing a lot of expensive care because they’d been kept out of the system for years. Call them Group A.
The second prediction misfired completely. Even though many of the premiums for healthy new enrollees (Group B) were federally subsidized under the ACA, there still wasn’t enough revenue coming in to the insurers. Group B wasn’t able to cover Group A, especially with price-gouging from hospitals and Big Pharma and over-utilization of medical services by physicians themselves.
For the first time in their history, health insurance companies began losing serious amounts of money. In 2016, small insurers like Land of Lincoln went bankrupt. Larger insurers, like Aetna and United, announced that they would no longer participate in the Obamacare/ACA insurance exchange in Illinois.
Then, when Blue Cross of Illinois announced that its 2015 losses selling individual health policies exceeded $1.5 billion, you could predict what would follow. The blowback isn’t surprising to anyone who follows health care economics, but it’s painful nonetheless:
- The super-expensive hospitals (Northwestern, Rush, U of C) are dropped from Blue Cross’s roster. They’re basically told “We get better rates and equal quality from your competitors. Sure, you guys are good, but not that good.”
- The overpriced specialists at these hospitals are dropped as well or choose to resign because they refuse to lower their fees.
- CVS is dropped because Walgreens offered a better deal.
- Big Pharma is told, “You can’t be serious about those prices. We’re dropping dozens of your overpriced ‘new and improved drugs’ from our formulary.”
- Last but not least, you with the Blue Cross card in your wallet receive a letter. Let us share some of our losses with you, it says. Here’s this year’s premium bump. Here’s your new deductible.
Yes, it’s all pretty grim and if Obamacare/ACA is repealed without a replacement, the situation could leave millions with no insurance at all. Just a few days ago President Obama weighed in on the implications of this in the New England Journal of Medicine.
For today, it’s useful to understand the why behind that unopened “Important News” envelope on your kitchen table. Next week I’ll offer some suggestions about how to deal with these changes.
Be well,
David Edelberg, MD
I love the way you write, David Edelberg. Thank you.
Deborah Beien
Great article Dr E!
Makes me sad and angry…and even sadder is I am self-employed and need Obamacare. The result is this year I am forced to change insurance companies to manage the higher rates (and I am so bummed I can’t be your patient anymore), but worse is next year looks like I will lose my insurance. All for someone else’s greed.
Joann S.
I was in the same boat Joann back in the 90’s when I turned 55 and self-employed. My insurance carrier dumped me because it told me they no longer insured businesses as small as mine, and when I sought insurance on my own, no company would insure me because of a common procedure I had done fifteen years earlier. As a result, I was forced to go without any insurance for over two years until I became eligible for Traditional Medicare. Now, Republicans want to privatize and gut that program. I suggest you do what I’m now doing in Utah ……organize, organize and organize!
Don Schoenbeck
Here’s one that will make your “blood boil” (a common medical condition caused by dealing with the “greed” of the healthcare system in particular).
https://www.truth-out.org/news/item/37111-the-100-000-per-year-pill-how-us-health-agencies-choose-pharma-over-patients
MP
Yes. Media and doctors and everyone blame the big bad insurance companies, but it is actually the costs of the services and products in “health care” that are the problem. Who’s going to take a pay cut? Who’s going to go without a new building? I want a system where I don’t have to subsidize a new building, Northwestern’s $11m bonus to its hospital president, wood paneling, fountains (Lake Forest Hospital), etc. It would be one thing if everyone were “covered” and we just accepted being ripped-off. As it stands, health care is a system of extortion on the American people – pay huge fees to the money collectors, a small number of people will profit extremely, and if you don’t pay up, you’ll be bankrupted you when you get sick.
To “Dan” – you’re going to have to find better examples of “greed” benefiting society. A fountain? A private university? A museum with almost nothing significant except a captured German sub? If you want to leverage “greed,” make it so everyone can leverage their own “greed” and not just a few. That’ll improve lives more than a fountain.
Phillip
It has always been a bit beyond me why we don’t have a common sense approach to health care. The medical, political and economic “establishments” have never supported a stepped approach to health care, which begins with a community based nurse-directed approach to health. So much more affordable and accessible, especially when used to monitor chronic conditions, well child care and minor problems and keep them from escalating into serious health issues requiring higher levels of specialized expertise and intervention.
A progression from community based health care provider to urgent care to more specialized ER type triage/treatment to inpatient care and intervention could (and should) keep sniffles, anti-coagulation monitoring and A1c checks out of the ER and would save a lot of health care dollars – but likely cut into profits of all the pockets currently being lined.
It could also alleviate a lot of “accessibility” issues. Somehow, insurance has become equated with health care accessibility. While the ACA has allowed many to access some form of care, high deductibles, changing providers and similar factors provide obstacles. This really isn’t any different than before ACA – when I was involved in home nursing, I often had patients not taking meds because they couldn’t afford the co-pay or allowing a serious condition to deteriorate because they couldn’t afford the deductible. I had an insurance company deny appropriate post-surgical wound care to an elderly patient – expecting his partially disabled spouse to do complex dressing changes. It’s still about the money – while insurers may be losing in the ACA sector, they are still turning huge profits in all other sectors.
As far as HSA’s – how does that work for a low income individual? If a working mom has a choice of skipping dinner for her kids one night a week so she can contribute to the HSA, I think she would feed the kids and continue to go to the ER if one gets sick.
Market driven choices? If you can afford it you got it, otherwise don’t get sick.
Gotta agree with Dr. E – it’s all about profit and greed.
Patti Woodbury Kuvik
Thank you Dr. Edelberg. Although I recently moved to New Orleans (weather is just a touch better at this time) I still read your great e-blasts and appreciate your honesty and insight into important matters such as today’s post.
Take care and keep up the great work,
~S.
Stacey Pfingsten
You are forgetting that mostly all of the Republican Governors refused to open exchanges in their states. They also refused to increase medicaid which is being paid for by the US government (at least for 5 years if I remember correctly.) So the insured pool (those premiums that were supposed to cover Group A) was cut by more than half with over 30 red states not participating in the ACA (Obamacare for the confused.)
Sam
Dr. E
I agree that greed can be bad, but there is another side to that coin.
John D. Rockefeller, the founder of Standard Oil, was the early face for greed, and yet one result of his financial accumulations was the University of Chicago, which he founded with his considerable fortune. Clarence Buckingham was a greedy businessman, but he left us with Chicago’s wonderful downtown fountain. Julius Rosenwald, whose avarice gave us the city’s Museum of Science and Industry, managed to build Sears and Roebuck into the world’s largest retailer, and he didn’t do it by being a nice guy.
Many years ago, Frederick Engels wrote that, “from the first day to this, sheer greed was the driving spirit of civilization.” Maybe what we should try doing is harnessing rather than eliminating this sometimes unattractive human attribute.
dan krause
Folks we love HSA accounts as they give us the freedom to choose our care.
Love Ben Carson who is so smart.
calle
Thank you. What’s to become of all of us? It’s like back door death squads.
Teresa
Excellent assessment David. I’ve been interested with the economics of health care since writing a paper about it at the U of I in 1964. While Obamacare (Actually, it should be called Romneycare for the Massachusetts governor’s plan of 2006) made some improvements, it was too much of a patchwork to try and accommodate everyone’s interests. (Anyone who thinks it’s bad now, wait till you see what happens next including the privatizing and vouchering of Medicare.). The first step in any REAL reform is to remove or significantly reduce the role of the insurance industry. It simply complicates and adds to the greed and the inefficiency of the system.
Don Schoenbeck