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Farseeker
Skeptic Friend
Canada
76 Posts |
 Posted - 08/05/2010 : 14:33:13
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I am a very simple person and to get along in the world, I tend to break down issues into simpler issues and then deal with them in turn.
My understanding of insurance is that it is a mechanism to spread risk.
Simply put, if the chance of my house burning up in my particular neighborhood is one in a 1,000, then many of us will contribute to a fund that will pay to have my house rebuilt if it burns down.
In some historical communities people got together and helped to rebuild a burnt up house. Of course, the homeowner would have to buy the building materials, or find donations.
So far so good, I am willing to lose the sense of community for the financial wherewithall to build a new house.
When I buy insurance, an inspector may check to ensure by house is "up to fire code". This is good, I want my house up to code. The insurance company has done me a good turn by pointing out fire hazards.
If my house burns down anyway, the insurance company does an investigation. With any luck, they will find out what happened and this will tell me if the last contractor I hired did a bad job of wiring, or if my jealous neighbor set the fire since he wanted to buy my land, or whatever. Again, the insurance company has provided a service beyond just giving me money. True, they are also making sure I did not set the fire myself to collect the insurance, but if I had, I deserve it.
Now we move to health insurance.
I would expect that the insurance company has my back again. Yes, yes, it is ultimately in their best interests that I get the best treatment to make me healthy, but is this happening.
As a hypothetical example.
If I am an American and it will cost $200,000 to fix my problem, will the insurance company try to find an excuse not to pay, or will it send me to Alberta, Canada to get the treatment for only $100,000? This is would be good for both the company and its policy holders, as it means lower payment of premiums for others in my risk category, and less money paid in claims by the insurance company.
Even more compelling, what if a cure for my condition has been discovered in Russia, has gone through their medical process, and is now part of THEIR standard of care for my condition. By definition, it is not experimental there. Will I be offered to have a cure, save the company money and become a productive, tax paying member of American society again?
In other words, will my insurance company, with vastly more resources at their disposal than I have, search the world for a solution to my problem that benefits them, me and my government (as I will be paying taxes again once healed).
This does not seem to be happening. Insurance companies, supposedly there to benefit me, benefit their shareholders, benefit the community... are not doing this. (if I am wrong, I would appreciate being informed).
T.
BTW.
In the interest of disclosure, I worked for life insurance, general insurance companies but never for a health insurance company.
Furthermore, in the interest of disclosure, I created and sold insurance software around the world. America, Canada, New Zealand, Australia, Brazil. None of it was specifically health insurance.
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Dave W.
Info Junkie
USA
26022 Posts |
Posted - 08/05/2010 : 14:45:44 [Permalink]
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Insurance companies exist to generate profits for their shareholders. Giving you (the customer) benefits short-changes the shareholders, so there's a clear conflict, there.
Besides, insurance is for things that shouldn't happen, but might. However, everyone needs health care at some point in their lives. Health insurance is thus a bad idea from the get-go. |
- Dave W. (Private Msg, EMail)
Evidently, I rock!
Why not question something for a change?
Visit Dave's Psoriasis Info, too. |
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Ebone4rock
SFN Regular
USA
894 Posts |
Posted - 08/05/2010 : 14:59:30 [Permalink]
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Now we move to health insurance.
I would expect that the insurance company has my back again. Yes, yes, it is ultimately in their best interests that I get the best treatment to make me healthy, but is this happening.
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Health insurance companies will never have your back. They have one interest and one interest only, making a huge profit. They will do anything and everything to deny claims. Sometimes it is a fight just to get something simple covered. But dammit, we need them otherwise every American would be even more broke than we are now.
An anecdote about the lunacy. A couple of years ago my wife and I had to go without health insurance for a number of months. During that time my wife had a kidney stone. Went to the Dr. and they gave her a CT scan (whatever that means). We get the bill and it is $2500. Recently she had the same thing, same hospital, same scan, same machine. I get the insurance statement and they give the insurance company a $1900 discount (the discount amount was itemized on the statement)! The insurance company paid only $600!
So while my wife and I ate mac&cheese for months to pay for the scan 2 years ago they gave the damn bastards a $1900 discount! |
Haole with heart, thats all I'll ever be. I'm not a part of the North Shore society. Stuck on the shoulder, that's where you'll find me. Digging for scraps with the kooks in line. -Offspring |
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Farseeker
Skeptic Friend
Canada
76 Posts |
Posted - 08/05/2010 : 15:51:13 [Permalink]
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Posted - 08/05/2010 : 14:59:30 [Permalink] Show Profile Email Poster Send Ebone4rock a Private Message Reply with Quote
Now we move to health insurance.
I would expect that the insurance company has my back again. Yes, yes, it is ultimately in their best interests that I get the best treatment to make me healthy, but is this happening.
Health insurance companies will never have your back. They have one interest and one interest only, making a huge profit. They will do anything and everything to deny claims. Sometimes it is a fight just to get something simple covered. But dammit, we need them otherwise every American would be even more broke than we are now.
An anecdote about the lunacy. A couple of years ago my wife and I had to go without health insurance for a number of months. During that time my wife had a kidney stone. Went to the Dr. and they gave her a CT scan (whatever that means). We get the bill and it is $2500. Recently she had the same thing, same hospital, same scan, same machine. I get the insurance statement and they give the insurance company a $1900 discount (the discount amount was itemized on the statement)! The insurance company paid only $600!
So while my wife and I ate mac&cheese for months to pay for the scan 2 years ago they gave the damn bastards a $1900 discount! |
Never is a long time.
It seems you agree with me, they don't have our back.
Still, I do not understand why. It is in THEIR best interests, and thus in their shareholder's best interests, thus in long term profit's best interest, that they handle your problems well.
I bought extended warranty car insurance. Kind of like "health" insurance for cars. When I had a problem, they did not pay for the minimal patch work to fix my car, but rather they paid for an overhaul. They did not want future bills.
Are they idiots, or are the health insurance companies idiots?
I do like the idea that the health insurance companies got a discount on your behalf. Of course, the discount seems out of proportion to the standard idea of quantity discount. But it seems to me, your hospital ripped you off.
Am I just to simple to get it? It seems to me the problem in this particular situation, is that the hospital ripped you off.
T. |
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Farseeker
Skeptic Friend
Canada
76 Posts |
Posted - 08/05/2010 : 15:57:53 [Permalink]
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Insurance companies exist to generate profits for their shareholders. Giving you (the customer) benefits short-changes the shareholders, so there's a clear conflict, there.
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You state a good point, but I do not see how it is different from similar services. Warranty. Money back guarantees. Maybe even loyalty programs (frequent buyer/fliers points.
Why does my ...oh... for example tv maker fix my tv for free?
It seems to me, because they have done the math and determined it is better to fix the product at their expense than have me tell all my friends what twits they are. It is a mathematical calculation that ends up benefiting me, benefiting them. Why else would they do it? |
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Farseeker
Skeptic Friend
Canada
76 Posts |
Posted - 08/05/2010 : 16:05:55 [Permalink]
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| Besides, insurance is for things that shouldn't happen, but might. However, everyone needs health care at some point in their lives. Health insurance is thus a bad idea from the get-go. |
Did you mean to say, private health insurance is bad, or all health insurance is bad?
You are right, we all wish bad things did not happen. I wish my computer did not crash. I wish my car did not blow a piston. I wish my tv did not fry.
But I have warranty for much of the above (TV, computer, car). When manufacturer's warranty expires, I have the option of buying an extended warranty. I assume of those companies made a profit, paid taxes, paid their employees, or else disappeared.
Why do I not see health insurance working at this level of mutual benefit? What am I missing?
(yes, I know Sony, or Ford, or HP make a profit, I have no problem with that as it serves me. I have a problem with why I can not see Health Insurance doing the same... to our mutual benefit. I am not asking for a free lunch!
T. |
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Dave W.
Info Junkie
USA
26022 Posts |
Posted - 08/05/2010 : 18:00:29 [Permalink]
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Originally posted by Farseeker
You state a good point, but I do not see how it is different from similar services. Warranty. Money back guarantees. Maybe even loyalty programs (frequent buyer/fliers points.
Why does my ...oh... for example tv maker fix my tv for free? |
These programs are different because not everyone takes advantage of them, while everyone needs health care.
There are plenty of people who feel that taking their TV in for repair is more of an annoyance than buying a whole new TV (especially since the new ones have features that the six-month-old one doesn't), so the money that the TV company set aside for warranty repair on that TV either becomes pure profit or someone else's repair. Loyalty programs, airline miles, guarantees aren't as often cashed in as they should be if people were always rational.
My local grocery store's loyalty program offers free sandwiches from the deli for buying so much stuff. Since I'm not interested, they get to keep the cash they'd otherwise spend on me.
My wife got us into a "coupon" program last year that sounded fantastic to us, and apparently to everyone else, too: the company that created the program went bankrupt less than a month after we joined because they expected a response rate far lower than the rate they got, so they didn't have enough money to give out the gas coupons they'd promised.
The important point is this: all these other programs have their estimated costs worked into the prices we all pay for their services and goods. A $500 warranty repair on a TV is paid for with an extra penny's cost on 50,000 TVs. And it's all calculated in directly by the companies providing the services, all up front. There are no monthly premiums, deductibles or copays. And the end-point is easily seen: your TV is fixed, period. Perhaps even more importantly, if the TVs are all crappy, the company takes a big profit hit by doing lots of warranty work and so will be motivated to ensure their products outlast the warranty.
With health insurance, however, the insurer is a middle-man whose primary motive is to profit and who does not have direct control over the quality of the end product (which they do not create). And in fact, by negotiating lower rates (the "discount" you see), the insurance companies ensure lower quality health services. And because insurance companies run on razor-thin margins (2-3% instead of the 20-30% of a TV maker), every increase in costs needs to be passed immediately along to the consumers or face a loss.
But really, insurances companies try to spread the risk around (as you know), but the "risk" of someone needing health care is 100%. What needs to be spread around, instead, are the simple health costs. We can do that with national health care (not national health insurance). |
- Dave W. (Private Msg, EMail)
Evidently, I rock!
Why not question something for a change?
Visit Dave's Psoriasis Info, too. |
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H. Humbert
SFN Die Hard
USA
4574 Posts |
Posted - 08/05/2010 : 18:15:21 [Permalink]
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Another quick point regarding warranties. Television companies know up front the maximum amount of money they'll need to spend to honor the warranty, which is the cost of a new TV. If the cost of the repair is greater than the cost of replacing it, they don't bother. Not so with people. You can't just replace a person. So warranty programs aren't analogous to health care because there is no upper ceiling on what "people repairs" (medical treatment) might cost.
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"A man is his own easiest dupe, for what he wishes to be true he generally believes to be true." --Demosthenes
"The first principle is that you must not fool yourself - and you are the easiest person to fool." --Richard P. Feynman
"Face facts with dignity." --found inside a fortune cookie |
| Edited by - H. Humbert on 08/05/2010 18:16:24 |
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Farseeker
Skeptic Friend
Canada
76 Posts |
Posted - 08/05/2010 : 20:33:56 [Permalink]
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Dave W., my impression is, you agree with me, our health insurance companies are failing us.
Now, the devil is often in the details. Unless people in the health professions want to work for free, or minimum wage, how do we fund this?
Personally, based on my knowledge on other types of insurance, it seems to me the health insurance companies are just idiots. I could be wrong.
Perhaps someone could explain to me why thay are not, that in fact they are smart.
Do not bother mentioning that they are profit motivate. So is my doctor. So is my plumber. So is my car mechanic.
A good point was made, I do not need to buy/own a tv. (assuming I could survive the mutiny from my kids, wife and beer buddies).
I could avoid the need for health insurance, by the same mechanism that I can with the life insurance lottery. I could die in a plane crash. Or fall off a cliff. Or drown while partying with... well, you get the point.
Please do not take this as condescending, but for those who do not know, I will explain how a general insurance company makes money for it's shareholder. I know noting about health insurance companies.
Unlike most businesses, an insurance company collects its money up front. (exceptions exist, I am speaking about generally)
For example. John Doe gets a fire insurance policy for his house. It costs $100 per month, or $1,200 per year. In most cases, he pays up front.
Now the insurance company only earns that money 1/365 per day. But is has John's money right away.
This is similar to magazine subscription, but few other business models.
Now, to be an insurance company, a corporation must conduct business within government regulations. This varies by state, but let's say a typical value is it must not have more customer liability than 10 times it's underlying capital. This is not the technically correct term, but it might convey the general idea
So, if I break even in any one year, in any other business I would be a poor CEO. But in an insurance company, I would use the money that I received before I earned it (since I earn it at the rate of 1/365 per day) but get the money day one, to earn money for me.
Put simply, if you gave me $100 on May 1 for cutting your grass all summer and I put that $100 in a daily interest account in a bank, if I paid people throughout the summer to cut your grass and at the end of the summer I had paid out $100, then there would be some money left in the account. It would be the money the bank put in the account for daily interest.
This is what an insurance company does. If it gives out every dollar it takes in in premium, less overhead (salaries for employees, rent and such), it still makes a huge profit by using money given it early.
So, why do they not have our back and find us cost effective solutions for our problems? Maybe, because that is not where the majority of their profit comes from.
What I am saying is, they derive more profit by maximizing the value of their investments than by saving a few dollars by reducing claims.
Remember, my expertise is not in health insurance. It may work differently.
T.
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Farseeker
Skeptic Friend
Canada
76 Posts |
Posted - 08/05/2010 : 20:49:28 [Permalink]
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| Another quick point regarding warranties. Television companies know up front the maximum amount of money they'll need to spend to honor the warranty, which is the cost of a new TV. If the cost of the repair is greater than the cost of replacing it, they don't bother. Not so with people. You can't just replace a person. So warranty programs aren't analogous to health care because there is no upper ceiling on what "people repairs" (medical treatment) might cost. |
Another good point. Again, it seems our health insurance companies do not have our back.
The excuse that a human is not a machine applies to life insurance too. They seem to be able to calculate the odds and set prices. I used to work for a life insurance company.
It is true that when AIDS came around, this was something unexpected. But the life insurance companies, as a generality, adapted and few, if any, failed.
My point, the life insurance companies generally did what we paid them for, while still generating profit for their shareholders.
Can we say the same for the health insurance companies?
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Farseeker
Skeptic Friend
Canada
76 Posts |
Posted - 08/05/2010 : 21:14:25 [Permalink]
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These programs are different because not everyone takes advantage of them, while everyone needs health care.
There are plenty of people who feel that taking their TV in for repair is more of an annoyance than buying a whole new TV (especially since the new ones have features that the six-month-old one doesn't), so the money that the TV company set aside for warranty repair on that TV either becomes pure profit or someone else's repair. Loyalty programs, airline miles, guarantees aren't as often cashed in as they should be if people were always rational.
My local grocery store's loyalty program offers free sandwiches from the deli for buying so much stuff. Since I'm not interested, they get to keep the cash they'd otherwise spend on me.
My wife got us into a "coupon" program last year that sounded fantastic to us, and apparently to everyone else, too: the company that created the program went bankrupt less than a month after we joined because they expected a response rate far lower than the rate they got, so they didn't have enough money to give out the gas coupons they'd promised.
The important point is this: all these other programs have their estimated costs worked into the prices we all pay for their services and goods. A $500 warranty repair on a TV is paid for with an extra penny's cost on 50,000 TVs. And it's all calculated in directly by the companies providing the services, all up front. There are no monthly premiums, deductibles or copays. And the end-point is easily seen: your TV is fixed, period. Perhaps even more importantly, if the TVs are all crappy, the company takes a big profit hit by doing lots of warranty work and so will be motivated to ensure their products outlast the warranty.
With health insurance, however, the insurer is a middle-man whose primary motive is to profit and who does not have direct control over the quality of the end product (which they do not create). And in fact, by negotiating lower rates (the "discount" you see), the insurance companies ensure lower quality health services. And because insurance companies run on razor-thin margins (2-3% instead of the 20-30% of a TV maker), every increase in costs needs to be passed immediately along to the consumers or face a loss.
But really, insurances companies try to spread the risk around (as you know), but the "risk" of someone needing health care is 100%. What needs to be spread around, instead, are the simple health costs. We can do that with national health care (not national health insurance). |
In so many areas you seem to see so clearly.
And in this area we seem to agree, the health insurance companies do not have our back.
But I still seem to fail to see the reason. Maybe I am slow. (though frankly, my opinion is that the health insurance companies are short term focused and "they" miss the point.
Your last point confuses me
| But really, insurances companies try to spread the risk around (as you know), but the "risk" of someone needing health care is 100%. What needs to be spread around, instead, are the simple health costs. We can do that with national health care (not national health insurance). |
I respect your intellect too much to believe you are playing word games.
So, the insurance model (spreading risk) does not seem to apply because of the 100% probability of need. Not to quibble, but people die on the road and are dead on arrival. Their payment into the system does follow the typical insurance model.
Nevertheless, you have a good point.
SOMEONE will have to pay for my $500,000 cancer death, or my heart surgery, or my liver transplant, etc. I will be dead, but what have I left for my children?
Where does the money go?
Assuming national health care pays for it. Who provided the funds originally? Who ends up with the money in their pocket?
Assuming a "law of conservation of money", (yes I know, they can just print the stuff and suffer the consequences) do you as an individual pay into this fund, like a pension plan, as you go through life? Or do you figure to get a free ride by getting services your neighbor paid for?
I am unclear on this.
I live in a socialist medical system, and the pressures to "just let you die" are embedded in the system. Personally, I do not know the moral correctness of this. But I do not want to die! (I am 59). That said, neither do I want to burden my children (or my neighbors children, or other new taxpayers), with the expense of my care.
Think deeply...
T.
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Farseeker
Skeptic Friend
Canada
76 Posts |
Posted - 08/05/2010 : 21:40:55 [Permalink]
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Humbert| Another quick point regarding warranties. Television companies know up front the maximum amount of money they'll need to spend to honor the warranty, which is the cost of a new TV. If the cost of the repair is greater than the cost of replacing it, they don't bother. Not so with people. You can't just replace a person. So warranty programs aren't analogous to health care because there is no upper ceiling on what "people repairs" (medical treatment) might cost. |
That is a reasonable point. Though to be fair, do you not have life insurance? It has a maximum payout. Does not your house's fire insurance have a maximum payout?
Personally, I think my just burnt out house had a rare Jackson Pollack in it.
As a society, we know how to provide services up to a limit. How is this different to "warranty services"?
Personally, my car insurance has a 2 million dollar liability limit. The insurance company prices my premium on that basis.
Am I just too simple, or does that principle not apply to health insurance? How about a 2 million dollar mandatory minimum limit? Not perfect, but a start.
T. |
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sailingsoul
SFN Addict
2830 Posts |
Posted - 08/06/2010 : 07:21:40 [Permalink]
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It might be stated that we all view the world from different observation points which gives us different views. We also have random and different experiences which shapes our interpretation of the world. You said "But I still seem to fail to see the reason. Maybe I am slow. (though frankly, my opinion is that the health insurance companies are short term focused and "they" miss the point." I suggest that seeing how they are in the business and your not, that they are not the one's missing the point but you are, in this case. I believe, that your are wrong to believe that they care about you, they don't know you. I believe some don't care a flip about you beyond your payments. Judging by their treatment of customer and claims. "Listen" to their actions, which has been said speaks louder that words, not their commercials or policy writes. I don't see that insurance companies are mechanism that spread risk as you stated here My understanding of insurance is that it is a mechanism to spread risk. I point to the fact that they screen applicants. They want healthy people who are not likely to cost them to start with. The world can never be as we understand it because we all understand it differently and we can't all be right with different views. I think it's better to observe and let the observations shape your beliefs, rather than the other way around. If your observations confirmed your belief on this, than you wouldn't be thinking that it is they that are missing the point.
I think you are trying to understand this with incorrect beliefs about the nature of health insurance. Like they are interested in your health, would not break their commitment and want to pay for all your heath needs. I suggest any insurance shopper to choose their provider carefully, as they are not equal. There are companies that are better providers more than others, what you might expect but they are not the cheapest. SS |
There are only two types of religious people, the deceivers and the deceived. SS |
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Farseeker
Skeptic Friend
Canada
76 Posts |
Posted - 08/06/2010 : 08:05:30 [Permalink]
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| I suggest that seeing how they are in the business and your not, that they are not the one's missing the point but you are, in this case. |
Considering how unhappy their customers are, I will still argue they are missing the point.
I do not believe in life insurance for myself, so I have none directly. However I have fire insurance. The fire insurance company does not want to pay out monies either. That is why they send out an inspector to check my property. On the other hand, they pay huge amounts for marketing and advertising. If, in the case I have a fire, they screw me over, I will take them to court. The bad publicity will render all that advertising money wasted, especially now, with the internet so readily available. And yes, I have worked for a company that offered fire insurance. And yes, they had executives and shareholders who prided themselves on being a good corporate citizen. And yes, we worked to streamline the payment process and even provide help for families, such as putting them up in a motel. Call it good public relations if you will, but they understood the power of a good reputation. And no, there was little discussion about them in the media, since the media tends not to report very much about good companies.
I do not understand why health insurance companies (or, shall we say, some)don't see that if they piss off their customers enough, there will be a rebellion.
Perhaps the legislation controlling health insurance companies is different from fire insurance companies. In that case, we need to fix the system. |
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Ebone4rock
SFN Regular
USA
894 Posts |
Posted - 08/06/2010 : 08:44:57 [Permalink]
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I do not understand why health insurance companies (or, shall we say, some)don't see that if they piss off their customers enough, there will be a rebellion.
Perhaps the legislation controlling health insurance companies is different from fire insurance companies. In that case, we need to fix the system. |
Because the health insurance companies have us by the short and curleys. There is a misconception that we have a choice about which health insurance providers we use. Well, I guess there is a choice....you can go with the provider your employer uses which is really expensive or you can purchase insurance from another source which is really really expensive...or you can go with " Don't get sick" insurance which will most likely result in bankruptcy.
I think that rather than legislating the insurance companies they should legislate how the hopitals do their billing. The situation I used in my anecdote earlier in this thread I could have easily afforded if the hospital would have billed me $600 instead of $2500. I could afford then to just pay the medical bills as they came but also carry Some type of catastrophic coverage in case of a major medical problem.
There are just too many motherfuckers with their hands in this healthcare cookie jar. The billing process needs to be streamlined. It does not need to be this complicated.
*EDITED BECAUSE OF MY AVERSION TO SPELLCHECK |
Haole with heart, thats all I'll ever be. I'm not a part of the North Shore society. Stuck on the shoulder, that's where you'll find me. Digging for scraps with the kooks in line. -Offspring |
| Edited by - Ebone4rock on 08/06/2010 08:52:59 |
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sailingsoul
SFN Addict
2830 Posts |
Posted - 08/06/2010 : 11:31:14 [Permalink]
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Farseeker, I've spoke to people who have blue cross and blue shield and they always are very happy, from what they say. I suspect Blue Cross $B.S. gets your point better than others. I know one man who has their coverage for years and has had both hip joint replaced, at separate times, in the last ten years. He says they covered everything. Even home nurse visits after. To hear him tell it, he is very satisfied, he says the treat him like a king. Obviously not all providers are the same and there are differences.
Ebone, insurance companies get to choose where their clients get their ct scans. There is competition. So they negotiate more favorable costs with the hospitals. Volume discounts. They pay reduced rate on all services.
People rarely do this but you can discuss charges at hospitals before you commit to having any procedure in one hospital or another. It's the old rule, you don't get, if you don't ask. I dated a girl who worked for a hospital and would contact larger employers in the region, to have medical emergencies sent to her hospital with reduced rates and or discounts if the signed up. Discounts are there for the asking a lot more often than those who don't ask realize.
This won't work in corporate owned store but small shops are the best. Someday before you buy ask "Is that the best you can do"? The worse you'll get is , no. SS |
There are only two types of religious people, the deceivers and the deceived. SS |
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Health Insurance Companies - failing us?
