Healthcare has been the topic of debate for most of the last few years. From the boardroom to the water cooler, costs and quality of care are hot topics that impact everyone in this country. Young and old, Americans are feeling the squeeze and most are finding it difficult to come up with solutions. In the boardrooms of corporations both large and small, employers are struggling to cope with reality of rising premiums and declining benefits. Meanwhile employees are left with the prospect of going without health insurance. Currently it is estimated that 50 to 60 million adults in this country are walking the tightrope of living without health insurance. With such widespread reach for ripples created by this healthcare debacle, everyone is looking for answers. How can we afford coverage? Can we go without? What can be done to curb the costs and get this problem under control?
In the workplace, employers and employees often feel as if they’re on opposite sides of the fence. Employers feel as if their subordinates take no consideration of how difficult it can be to turn a profit while facing spiraling costs and a difficult economic environment. While large corporations may be able to ride out the storm, small businesses rarely have this luxury (especially at a time when credit is difficult to obtain). Most small businesses would close their doors if the balance sheet goes in the red for more than a few months or quarters. On the other hand, employees often adopt a near-sighted approach. How could they expect me to afford a premium increase? Should I just try to float without insurance for a while? These questions often lead to resentment on both sides of the coin, but are the employers or employees to take the blame and the higher cost?
Looking for answers to this growing problem is not easy. Where did the system go wrong? Why is it so expensive? Who’s to blame?
Many people blame healthcare providers for the rising costs of quality care. I can assure you this is not the case. Providers are facing a myriad of challenges and roadblocks. More so than ever, running a profitable medical practice is daunting task. Like any other business, a medical practice will close if it can not cover expenses and afford to pay salaries. Labor and leasing expenses are only the tip of the iceberg. Practitioners are forced to pay for equipment, insurance, hardware, software, licensing, and more. After establishing an office with all the appropriate resources, medical practices and hospitals must then attract patients in a very competitive marketplace.
Yet with all these costs and challenges in their way, healthcare providers are not complaining about patients or labor or costs! The largest problem facing healthcare providers is the insurance reimbursement process. Contradictory goals of payers and providers are resulting in inefficient and difficult payment systems. Insurance companies are more concerned with bottom-line profits and shareholders than they are about the care their members receive. How can we expect doctors and healthcare providers to keep their offices open if they can hardly get paid for the services they perform? Individuals believe that because they pay premiums, the insurance company will pay their doctor. Unfortunately, this is hardly the case. Health insurance claim denial rates can reach as high as 25% or more. Many providers have outstanding receivables measured in the millions of dollars. The insurance reimbursement process is so arduous that many medical practices never get paid and as a result close their doors forever.
Insurance companies use a wide variety of tactics to delay payments and deny claims. Payers employ hoards of representatives charged with the task of fielding calls and scrutinizing claims. Due to these tactics, insurance claims take anywhere from 30 days to more than 1 year to reach a completed status. In most cases claims are delayed and denied due to inconsequential, irrelevant errors. These errors result solely from the many difficult and senseless hoops that are placed in the way of the provider’s billing representatives. This extremely labor intensive process of collecting from insurance companies costs providers a great deal of time and money.
The only beneficiaries of this process are the shareholders of insurance companies. The delays in payments result in interest earned for the time period in which the claim was delayed. In many cases, providers never receive reimbursement for the services they perform. These claims must be written-off as a loss by providers while insurance companies see these cases as victories leaving more cash on their balance sheets. It appears that the primary goal of insurance companies may be to deny as many claims as possible; after all they answer to shareholders not providers or individual policy holders. This gross abuse of power by insurance companies may be the biggest problem we face in the healthcare sector.
The days when doctors sat on golf courses all day while making millions per year are over. Now they must battle insurance companies tooth and nail for every claim. If insurance companies paid doctors for the services they perform, perhaps we would see a reduction in costs related to providing care.
Surely there is no easy fix to this problem. We may find the answers by addressing the goals of big insurance companies. Providing oversight and incentives for paying healthcare providers for the services they perform would be a good start. If insurance companies focus on weeding out fraud rather than just delaying and denying payments, we could see an increase in efficiency and productivity in the healthcare sector that could be the start of controlling costs while maintaining a high standard of care. For the sake of all Americans, hopefully we find an answer soon!