Amy Traub
Another Insurance Industry Boondoggle
Why is health care so much more expensive in the United States than other economically-advanced countries? One reason is our system of private insurance, which piles the cost of administrative red tape and billions of dollars in profit on top of the cost of actually providing medical care.
An article in today's New York Times vividly illustrates how the red tape impacts costs. The gist is that denying or delaying payment of legitimate claims is built into the way insurance companies do business. Late payments and outright refusal to pay claims can add as much as 20 percent to doctors' overhead costs. And of course, as Dr. William F. Jessee is quoted as saying "it winds up getting passed on to consumers and employers who purchase health insurance."
How can we reign in these costs? The New York Times suggests the disinfecting power of sunlight, in the form of a website which will periodically report on the best and worst insurance companies on various measures of processing claims. That's great as far as it goes, but regulation of insurance company claims practices is potentially more effective. And overhauling the entire system of privately-financed and insured health care could be more successful still.
Posted at 5:40 PM, May 25, 2006 in Health Care | Insurance Industry | Permalink | Comments (1) | TrackBack (0)
Comments
As has often been discussed, the profitable and administratively burdensome insurance industry poses the biggest obsticle for success to two recent health care proposals. Both the Massachusetts plan and the Fair Share proposal leave in place the costly, bloated insurance industry. Those interested in a simpler, but more politically difficult way of ensuring universal coverage -- Medicare coverage for all -- may want to hear Paul Krugman speak on it at New York's Community Church, 40 East 35th Street, 7PM on May 30, 2006.
Posted by: Daniel Millstone | May 26, 2006 01:48 PM