Monday, June 13, 2005


A System Nobody Would Design

The Girl will be a year old next month, which I mention because this story won’t make sense without knowing that.

I’m still fighting my health insurance provider to get payments for the doctors who attended her birth. I’ve been denied several times now, on the grounds that The Girl’s name was not on the original enrollment form from two years ago. When I counter that the reason for that is that she hadn’t been BORN YET, I get told to send a letter to that effect.


So I do, which occasions another denial.

The insurance provider, which is technically a nonprofit but you’d never know it (it rhymes with ‘shoe floss’), suffers absolutely no harm in denying payment for the birth of my daughter. In fact, quite the opposite; it continues to earn interest on the money it isn’t paying my doctors. It’s immune from lawsuit (on the novel grounds that lawsuits would drive up costs – wouldn’t want that!), immune from damages, and effectively monopolistic (I can’t shop around for another provider retroactively), so it can dawdle all it wants. In the meantime, my daughter’s doctors don’t get paid, and my credit rating is just sitting there...

By any objective standard, this is insane.

Start with the obvious: the medical literature is fairly clear on finding that childbirth often results in a child. Ergo, if childbirth is covered, you’d expect the insurance company to recognize the possibility of a resultant child. You’d think.

I tried to construct a scenario in which I played by the (retroactive) rules the company told me. Prior to birth, I would apply for a social security number for Little One. I’d get turned down, since I couldn’t specify a date of birth that hadn’t happened yet. So I’d schedule an induced labor (sorry, honey!), guess a gender, pick a name, and apply. I’d get turned down, on the grounds that there’s no birth certificate, because Little One hadn’t been BORN YET.

Meanwhile, my college struggles financially because health insurance premiums have been going up at double-digit rates for years.

Where is the money going? It obviously isn’t going to the doctors or the hospitals. It certainly isn’t going to the patients.

I have noticed lots of ads for pills that cause anal leakage and/or four-hour erections, so I assume some of the money is going into marketing. I can only assume the rest is divided between profits (the nonprofit I used is under investigation for building windfall reserves, preparatory to going for-profit) and marketing.

Nobody would design this system. It’s a money sink, and it’s starving out just about every other part of the economy (except the parts that don’t provide health insurance, like temp agencies). If rates increase 15% a year, they double in five years. That’s about the pace we’re on.

(In fact, nobody designed this system. It emerged during World War II, as employers needed to compete for employees during a wage freeze. "Fringe benefits" became the method for doing that. After the war, the interests in favor of maintaining that system blocked Truman's proposal for national health care. The insanity has mushroomed since.)

The sad thing is, higher ed gets raked over the coals for tuition increases that are far slower than health insurance increases. Our tuition increases are read as signs of waste; health insurance increases are taken as facts of nature. So we cut, and cut, and cut, and it’s never enough. We have contract negotiations coming up soon – I don’t even want to imagine how tense those will be. Nobody wants their benefits cut, but at the rate we’re going, what else is there to do?

I read that Canada just repealed its ban on private health insurance. Note to Canadian readers: are you sure?

That's outrageous. And they say the reform the US needs is 'tort reform'. Ha.

After 10 years in the States living with a type of health insurance familiar to many americans (which I called the 'Don't ever get sick' plan) I now live in the UK, where I'm covered by national health...people complain about it constantly, but my god is it good. I call my doctor, I make an appointment, I see him, get treated, and leave. NO PAPERWORK. None. It's magnificent. Everyone should have it.
I know exactly what you're talking about. My daughter has a traumatic brain injury, so she needs a lot of care. She's on my wife's coverage, so whenever she changes jobs (in Bush's America, unfortunately, that's mroe often than we'd like) we have to go through a hugh investigation to make sure we're not trying to cheat the insurance company out of precious resources. God forbid they pay for the medicine she needs to stop her seizures!
That, as they say, sucks. But I don't get how they can deny it when it's standard to add new family members, through birth, marriage, adoption, during open season. Well, it's standard where I work. . . What does your benefits office say? Is there a National Health Insurance consumer rights organization? And don't forget the local new stations.
Guy -- I don't see how tort reform could possibly help, since the HMO's are already immune from lawsuits. It's a smokescreen, used in bad faith by bad people.

Greg -- I'm sorry to hear about your daughter. The whole "pre-existing condition" issue really shows what's wrong with making health care a market good. The classic argument for free-market economics is the efficiency of consumer choice. I doubt very much that you freely chose your daughter's brain injury. The entire argument collapses of its own absurdity, yet we behave as if it were true, anyway. So we pretend not to notice when insurance companies try to 'cherry-pick' only the youngest and healthiest people to cover. Morally, it's a crime.

Joanna -- 'during open season' is the key phrase. Open enrollment here is in October; The Girl was born in July.
More to the point, assiduousness isn't the issue. I've enrolled the aid of some tireless people in H.R. to fight for these claims, and they've done quite a bit. They're just outgunned.

A national patients' organization? Not a bad idea. To make it really effective, let's call it a political party...
Agreed. What the US needs is a health system that's geared around patients and not industry.
I think that there is such a place or something akin to it in DC. I'll try to figure out what it's called and get back to you.
As a Canadian, I nearly cried when I read the court decision that struck down the ban on private health insurance. Currently, it affects only the province of Quebec, but opens the door wide to national privatization of health care.

When my sons were born, I showed up at the hospital, they took care of me for three days (two in the case of my second son), patted me on the head and sent me on my way. I received a bill for $50 per night, one half of the cost of an upgrade to a private room (the other half was covered by my health insurance, which also covers 80% of prescription drugs, for which I pay $10 a month).

The scenario you describe terrifies me. It is what I fear most about privatizing health care.

Our system is far from perfect, but this seems like the worst possible way to fix it.
The best first step would be to remove the tax subsidy from health insurance (deductible as compensation by the employer, not taxable by the employee). This also is a WW II artifact, and it has created tremendous pricing distortions and perverse incentives.

As to the advent of legal private health insurance in Canada, why isn't this additional choice a good thing? No one will be forced to buy it, will they? No one will be allowed to opt out of funding the public system, will they? Where's the harm?
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