Here in the US, HMO’s have been around a long time despite all of the complaints that they’re run by bean counters who care more about money than your health. And although I was around before the rise of HMO’s, I was too young to have anything to do with a doctor or hospital bill. My mother took care of all that.
So, for those of you who remember the health care system before HMO’s took over, what was it like? Was it better, the same, or worse in terms of being affordable?
Whether it was more or less affordable back then depended on what kind of health insurance you had. Here in California, Kaiser has been around for quite some time so there were always lower cost alternatives to standard Blue Cross kind of coverage.
In general, I think, health insurance was more affordable in the past because health care was much less expensive than it is now. Also I think companies had more generous health plans in the 60’s, 70’s and 80’s in order to attract and keep employees. They would pay more and the employee would pay less as a percentage. For example, I don’t remember having a co-pay when I first started working in the early 80’s.
So much has changed in the last 25 years in terms of costs Iit’s hard to compare the past with the present.
What about getting coverage? A couple of months ago, I went in and got a note from my doctor saying that I can’t stand more than 5 hours per shift (I work 10). That alone, and nothing else, cost my $90 :eek: :rolleyes: . After paying the co-pay, and the doctor’s office sending insurance a bill for the rest, I got a letter back saying that my plan doesn’t cover non medical foot procedures. I wonder though, were there just as many limitations as to what was covered and what wasn’t? I know in some part it probably depended on your plan, but I’m talking in general here.
That alone, and nothing else, cost my $90 :eek: :rolleyes:
Should read
That alone, and nothing else, cost me $90 :eek: :rolleyes:
of course.
The main difference about insurance in the past was that it was considered as, well, insurance. Its purpose was to protect you from large, unexpected expenses in case you were injured or got really sick. You don’t need insurance for predictable or affordable expenses. What changed was the expectation of consumers. People started to think that if they get a little sick and see a doctor, that the insurance should cover it, because if they didn’t see a doctor and got really sick, it would cost the insurance company a lot more. HMOs responded to this by providing comprehensive coverage.
That’s the philosophical difference IMO. The practical difference is that we learned new ways to treat people, and everyone thinks they have a basic right to any available treatment. Of course many of these treatments are very expensive. HMOs helped keep expenses from rising as fast because they always started with a primary care doctor who was the gatekeeper to the more expensive services, and he had incentives to reduce how many people got referred.
It wasn’t just one thing that lead to the health insurance mess the U.S. is in, it’s a combination of many things.
Health insurance evolved during the wage freezes of World War II. Employers couldn’t increase worker’s wages, but they could improve benefits. Health insurance was seen as a low-cost perk to keep employees happy.
The reason it was low-cost because health care itself was pretty low cost. If you got sick, you waited a few days to see if you’d get over it. If not, you went to a doctor who looked down your throat, listened to your heart and tested your reflexes. A doctor’s visit cost $5-$10, usually affordable (at least on an occasional basis) even in 1950s dollars.
The most advanced diagnostic tool was an x-ray, and the most sophisticated treatment was usually antibiotics. Surgery primarily involved cutting something out – no transplants or replacements – and was a treatment of last resort.
So people didn’t use the doctor as much, because a lot of times, there wasn’t much that a doctor could DO.
By the time the 70s rolled around, doctors could order a CAT scan and treat cancer patients with radiation or chemotherapy. Psychiatrists began to prescribe the first generation of psychotropic medications. Kidney patients had dialysis and surgeons were experimenting with transplants.
And the insurance companies were still paying anywhere from 80% - 100% of the bill, depending on the policy. Needless to say, the insurance companies costs started to skyrocket, and with that, their premiums.
Something had to give. As dolphinby noted, the Kaiser HMO system had grown alongside the traditional insurance system, and was reasonably successful. That was the model conventional insurers began looking at. Even at that, however, expensive technology became so much easier to obtain that it wiped out the cost savings of an HMO system almost immediately.
Please note that what are called HMOs in the US are a perversion of the original intent of HMOs.
The original HMOs (I was a member of one for many years) was essentially a clinic. A large group of doctors were hired by the HMO in one location. You paid an insurance fee, and a nominal fee each time you visited. The doctors were employees of the HMO (which was a nonprofit), not independent contractors. They system actually worked quite well. It cost less than other plans; in exchange you had far less choice of physicians.
It was also dangerous to doctors’ income. (Doctors have consistently been the group in the US with the greatest year-to-year increase in income.) So there was a big push for “choice” (as though people could even make and informed choice about a doctor: medical societies wouldn’t give you information if you tortured them, so you’re stuck with what your friends say is good or just trying pot luck.)
Current plans are usually provider plans. Very often, the doctors are part of it, or a profit making corporation is running things with the bottom line (HMOs were generaly nonprofit). Using the wedge of “choice,” doctors put the HMOs out of business and ensured they would continue to make big money.
Here’s an interesting insurance thing.
In 1979, when I had a baby, the pediatrician visits were $8, with an extra charge for certain immunizations, but the clinic offered a one-year plan that covered all visits, immunizations, panicky phone calls, and even home visits if warranted, and for that one-year plan the cost was $80.
In 1995, when I had a baby, the pediatrician visits were $80 per visit but the expectation was that you would have a much lower co-pay. Same clinic (although, interestingly enough, in a much bigger, brand-new building).
The hospital bill for delivery of the 1979 model was $780, which meant that I got a $120 refund on the $800 deposit I had to pay two weeks before my due date.
The hospital bill for the 1995 model is not really comparable, because you’re comparing hospital-phobic 1979 me (“get me out of here! quick!”) to ancient high-risk-pregnancy 1995 me who ended up having a c-section, but I can assure you that it was a great deal more than 10x what the 1979 delivery cost. The drugs alone were roughly $1000 more than the whole 1979 delivery.
In the first instance, I had no insurance because my employer had not been paying (although they’d been deducting an amount from my paychecks), and rather than retroactively pay up the insurance they retroactively returned my deductions, which more than covered the cost, and all the prenatal care was a lump sum–I think $250. I believe that, had the delivery cost some exceptional amount, I could have made a case for my employer forking over the insurance premiums, and I think the insurance co. would have accepted this from a company, but I’m not sure.
In the last instance I did have insurance, and my total cost for the delivery was $100. The prenatal was $15 copay per visit, one visit per month until the 8th, then one every two weeks, then one every week. I’m thinking it ended up roughly the same in cost to me although it included a bunch of fancy stuff like amniocentesis and ultrasounds that would have been expensive add-ons in 1979.
A good deal of the price increase in medical bills and medical insurance comes from the doctors’ own insurance. About 15 years ago, I was chatting with a doctor who mentioned that his malpractice insurance cost him over $50,000 per year. He had been practicing for 20 years and had never had a lawsuit. From what I’ve heard, that would be considered a very low rate for malpractice insurance today. Add in the cost of equipment, rent, and everything else he needs to pay, and it’s no wonder the rates are sky-high.
Doctors also frequently charge patients without insurance significantly less than patients with insurance. This leads to a cycle where insurance companies get billed more to subsidize care for the uninsured, thus forcing them to raise their rates, so that fewer people can afford insurance, thus becoming uninsured and getting their health care for less so that insurance companies get billed more…
Also, people on juries get caught up in the “it’s just a big company, we’re not hurting anybody” syndrome on lawsuits. They give someone a few hundred million dollars without doing the math. If the insurance company has a million customers, and they give a $300,000,000 award, then everybody’s rate goes up by $300 to pay for it.
Our system in the U.S. is clearly broken, but I have no clue as to how to fix it.
Yes, pre-HMO insurance paid for really large bills. It almost never paid for preventive care such as immunizations or routine checkups. Some doctors became quite adept at being able to come up with a “diagnosis” for a routine visit so that it would be covered by the insurance. Example: every routine gyno visit includes a question about menstrual difficulties. Since almost everyone has at least a cramp once in a while, there was always a diagnosis of “dysmenhoria.” And yes, I know I probably spelled that wrong.
When my kids were babies, their well-baby checkups and shots were *never * covered, nor were visits for earaches or sore throats. Injuries would have been covered, as well as hospitalization for an illness, but not the test that checks for strep throat. Interestingly, however, treatment for a nasty case of poison ivy was covered, since it counted as an injury. Oh, and it was quite a while before we got pharmaceutical coverage. So the penicillin to treat the strep throat was paid for in cash. However, the insurance premiums were much lower and were paid almost entirely by my husband’s employer.
One of the ideas behind the HMO concept was that if the doctors got paid a similar amount per patient regardless of whether the person was sick or well, the doctor would be inspired to engage in more effective, and presumably cost effective, preventive medicine. This did not work out as intended. Also, under the HMO umbrella, the concept was that one person would be the primary organizer of all your care so that s/he would know all of your difficulties and coordinate them. This did also not work out as intended. Even if you knew already that you needed, say, a dermatologist, you had to first visit your HMO doctor, say “May I?” and then get a referral to someone the HMO approved of, regardless of whether you liked that doctor or not. It really was too restrictive.
Maybe that’s true with doctors in private practices, but with hospitals (where many uninsured people end up going for primary care) the opposite is often true. People without insurance are often billed more then an insurance company would get billed for the same service.
Here’s an article on the phenomena (it’s on a “liberal” website but note that it was published in the WSJ):
http://reclaimdemocracy.org/weekly_2003/uninsured_pay_most.html
You just jumped off the deep end into GD territory. The link between increased insurance premiums and increased malpractice awards isn’t nearly as strong as insurance industry spokesman lobbiests would have you believe.
Cites:
http://www.factcheck.org/article320.html
http://reclaimdemocracy.org/articles_2004/study_debunks_lawsuit_explosion.html
http://www.chron.com/cs/CDA/ssistory.mpl/metropolitan/2067895
There’s a lot more out there.
This year I have non-HMO insurance. In my case it was significantly cheaper than the HMO per month and I figured I would come out ahead if I switched. (I did not due to a stupid accident.)
The way it works is:
- Go to the doctor. No payment at this time.
- Receive a statement from the insurance company saying what they’ll pay. This is based on a schedule of percentages and a deductible. This only takes a couple of days, and they do it online now too.
- Get a bill from the doctor in a month or two, with the remaining part due. Assuming the insurance company has finished their bit, which they might not have, in which case you have another month to pay.
One interesting thing is that the amount I have to pay of preventative care, 15%, is less than the $20 co-pay I had with the HMO before. Which is crazy. Also, the insurance company has negotiated rates with the doctors and the bill gets adjusted to that amount – the doctor writes off the remainder. If I got the same services without the insurance company involved, the total payment would be about double.
[QUOTE=Metacom]
Maybe that’s true with doctors in private practices, but with hospitals (where many uninsured people end up going for primary care) the opposite is often true.</QUOTE>
My statement was based entirely on my experience with private practice doctors, from a time when my medical insurance didn’t cover optomotrists, dentists, chiropractors, and the like. Virtually all of them cut the bill back when they found out my insurance didn’t cover their services.
Thank you for the links. They provided some interesting reading. None of them really addressed what I was trying to say, though, which I don’t think is GD-worthy. My point is not based on what the insurance lobbyists say. I tend not to believe what any lobbyist says, and I think the insurance companies and law firms share culpability for the current problem.
My point is that when a jury awards someone millions of dollars, the insurance company will pass that on to its customers. I don’t know how much of my medical insurance cost comes from those passed-on legal costs, but I can’t see how anyone could argue with my basic premise. The insurance company has to get the money to pay those big awards from somewhere, and their customers are pretty much their only source of income.
One of these days I’ll learn to preview before posting. Let’s try it this way:
My statement was based entirely on my experience with private practice doctors, from a time when my medical insurance didn’t cover optomotrists, dentists, chiropractors, and the like. Virtually all of them cut the bill back when they found out my insurance didn’t cover their services.
Thank you for the links. They provided some interesting reading. None of them really addressed what I was trying to say, though, which I don’t think is GD-worthy. My point is not based on what the insurance lobbyists say. I tend not to believe what any lobbyist says, and I think the insurance companies and law firms share culpability for the current problem.
My point is that when a jury awards someone millions of dollars, the insurance company will pass that on to its customers. I don’t know how much of my medical insurance cost comes from those passed-on legal costs, but I can’t see how anyone could argue with my basic premise. The insurance company has to get the money to pay those big awards from somewhere, and their customers are pretty much their only source of income.
[Hijack cont’d, can’t resist this]
Malpractice insurance seems to have issues, but unfortunately I have no cites; I do remember reading a few things.
One is, there is a doctor (in Nevada?) who has had multiple juries find him negligent to the tune of several million dollars per case over several years, and the carrier was still insuring him (timeframe within the last five years). WTH?
Insurance usually makes it an issue between the covered and them (ie, me and my auto carrier, via premium increases or ceasing coverage). What gives with doctors?
I used to work for a legal newspaper in San Francisco and pick up the verdicts. Medical lawsuits brought to the jury more often than not got a verdict, “Judgment for defendant, plaintiff takes nothing”, and most awards were on the order of $10,000 or $20,000 for permanent impairments. This was 20-30 years ago, but still.
So all this emphasis on talk radio and elsewhere about the high jury awards sounded odd to someone with years of observation of the 20 Superior Courts in San Francisco.
By the rules of this Board, I should prepare a case on this and take it to Great Debates, and there’s no good excuse for not doing that, so kindly ignore this rant. [/hijack]
There are no awards I’ve heard of for $300,000,000 (I understand that was just tossed in for discussion), or anything close. I don’t know how many awards per year are for a million or above, but there may not be as many as is widely believed.
Respectable discussion of the causes for high medical costs usually refer to many more treatments available (you used to die a lot quicker from cancer); the requirement that emergency rooms take the uninsured and give them standard care; the support of MRI’s and all the other hi-tech; longer life spans; and I dunno what-all.