Health Insurance Companies: An Endangered Species?

Health Insurance Companies: An Endangered Species?
February 13, 2012

By 2020, “the American health insurance industry will be extinct,” writes Ezekiel Emanuel, on the New York Times opinion blog. Is this sometime advisor to the Obama White House saying that the insurance companies who were “at the table” with Obama are being treated like prostitutes, used then discarded?

Time will tell. Perhaps five of the black-robed Supreme Court justices will go all the way back to the precedent called the Constitution and rule that the individual mandate is unconstitutional, and that it is not severable, and the Patient Protections and Affordable Care Act (PPACA or “ Obamacare”) will be thrown in the trash bin like so many unwanted body parts.

Perhaps the insurance companies will wake up, repudiate their support of Obamacare, and present a real medical insurance policy (not the prepaid medical plans now sold as insurance) that includes the catastrophic coverage that most families need, and, as an option, a health savings account (HSA) that the individual owns to pay for routine medical expenses.

Perhaps the American Medical Association (AMA) and the American Osteopathic Association (AOA) will repudiate their support for this abomination, which brings crushing compliance costs, enforced through draconian fines and prison terms, on their members.

Not likely, since the AMA makes more than $70 million a year from their exclusive government-granted monopoly on code books (Current Procedural Terminology or “CPT”). CPT is actually unnecessary because insurers could pay claims from an itemized bill, as they did before CPT. An insurance clerk, after all, can read the English note and determine whether the service matches the code. Claiming that it does not allows the insurer to earn interest as payment is delayed until the doctor provides the “proper” code. Often, the code game saves the insurer from paying the claim at all by discouraging the doctor from re-filing. Thus, CPT benefits the AMA and insurers while increasing doctors’ costs and risks.

The AOA is also unlikely to recant their support, as its officials want to be seen at the table with the President.

Perhaps doctors will finally realize that they were brainwashed to believe they could not succeed unless they signed all the insurance contracts. Doctors will suddenly realize that patients need doctors, not insurance companies, and patients will gladly pay a fair, transparent price, not the inflated price caused by the insurance game. Doctors will learn to trust each other and their patients, and boot out the lying insurance companies and politicians. Perhaps.

Perhaps patients will realize that the Patient Protection and Affordable Care Act is government fraud, since their most personal health data will not be protected from multiple levels of bureaucrats, and the system will not be affordable, but rather much more costly than what they have available now. Perhaps they will demand its repeal.

Emanuel writes, “Accountable care organizations [ACOs] will increase coordination of patient’s care and shift the focus of medicine away from treating sickness and toward keeping people healthy.” Referring to the “enhanced information system”, he says, “but this analytic capacity will be directed at improving health outcomes, not at imposing barriers to those seeking treatment.” Have you noticed how the government tells you what won’t happen, and then it does?

Emanuel writes, “In the 1990s, we lacked the information technology and proven models of integrated care delivery that we have now.”  The only models are scale models—experiments, with patients as guinea pigs.

Emanuel writes, “A final bonus of A.C.O.’s is that they will lead to a better form of competition in health care markets.” Here he says what will happen, but it won’t. There will be no competition, since insurance companies, by Emanuel’s prediction, will be extinct. Patients will be locked into the ACO that owns their doctor. Remember, “If you have a health plan you like, you will get to keep it.” Unless it is extinct.

The third-party payment model has failed. Managed care didn’t save it, and neither can ACOs. It deserves to be extinct, and it will be if patients and physicians return to the direct-payment model that has always worked, and true insurance is allowed to compete fairly.

Dr. George Watson (drgeorge@watsonmedicalgroup.com) is the former president of the Association of American Physicians.