Healthcare For Dummies

   Don't allow yourself to be confused or offended by the title of this post.  I am, in no way, implying that you're a dummy.  That being said, I think few Americans actually understand how Healthcare works, and therefore, few understand where the actual problems lie.  I'm not drawing this information from any talk show or radio network, but rather from my own experience from working in the healthcare industry.

   My last job before the one God gave me, was as a Chiropractic Assistant.  I remember sitting there that first week being trained by the girl I was replacing.  She kept talking about "auditing accounts" and I was so confused.  It wasn't until after she left and I was figuring things out on my own when I realized the truth:  

FACT:  A doctor doesn't collect the full amount billed to an Insurance Company.

   I always thought: "If my doctor bills the Insurance company $100 for my visit, and the Insurance pays 80%, they pay $80 and I pay the remaining $20."  Sounds logical, right?  How many of you understood it to work that way also?  Well, it's not the case.  When an Insurance says they'll pay 80%, it means they'll pay on the allowable amount.  You see, when a Dr. says: "I accept _____ Insurance" what he means is:  "I'm under contract with _______ Insurance company to accept their clients."  The Dr. and the Insurance company then come to an agreement as to what they'll pay/accept for various services.  So, if a Dr. bills $100 for an office visit, Insurance Company #1 says they'll pay no more than $50 for the office visit, Insurance Company #2 says they'll pay no more than $65 for the office visit, so on and so forth.  The Dr. can look at those reimbursement levels and has the option to say, "Insurance Company #1 doesn't pay me enough to keep me viable, therefore, if your Insurance Company is #1, I don't accept your Insurance."

   The Dr. I worked for received about $45 a visit from any given Insurance company (on average).  Did you know it is against the law to offer Cash patients a different price than patients with Insurance?  Isn't that messed up?  The man I worked for was of the very best caliber.  His way around this law?  He offered what he called "A same-day discount".  If you were going to pay for the visit at the time of service, your adjustment was a flat $35.  He offered Insurance Companies the same deal, but of course, they never paid on the same day of service.

MYTH:  "My doctor is rich and overpaid because he's corrupt and the Health Insurance Companies are corrupt." 

   Do you have any idea how much it costs to run a Business, let alone a Medical Practice?  Did you know that any employer must match your Taxes?  That's right.  That means the Government is double-dipping into your taxes!  If you earned $1000.00 in your last pay period, and the Government took  $400 of that, your employer also pays $400.  That means in a pay period the Government collected $800 on your behalf. I bet you didn't know that.  Think about how much it costs to run your household.  A place of business is very similar.  You have cleaning costs, utility bills, payroll, taxes, advertising, and student loans.  It's quite overwhelming when you conceive of the expense.

   I think the reason a lot of people carry an angst against Doctors is because they see them as opportunistic bad guys:  "I got sick, so I had to see a Doctor and it cost me $450.  He's capitalizing on my misfortune!"  It's easy to fall into this way of thinking, but it doesn't justify it.  Do you know how much time and schooling the Doctor took in order to help you in your moment of need?  Do you know much money he's paid to have the vital knowledge to return you to health?  I think it's safe to say that a majority of Doctors enter the field because they have altruistic personalities.  They want to help people.  End of story (i.e. "Do No Harm").  However, they also live in a very real world that has bills and overhead and student loans.  They have to collect enough money to pay off Student Loans and keep their business running and provide for their families in the meantime.

   I know what you're thinking, "But do they have to charge so much?!"  Sadly, the answer is yes.  And I'll tell you why.

   At the end of the day, a hospital is a business; it's a very large, very extensive and expensive Business.  It has all of the workings of a major hotel and a restaurant and a doctor's office.  It's a pricey place to be.  It always was and it always will be.  If you think of all of the aspects of your last hospital stay, you'll soon become overwhelmed.  The utilities alone of such an establishment must be hefty, not to mention staff, medicine, laundry, food, supplies, equipment, and the never ending taxes on all of those employees! etc.  It also has to help shoulder the cost of the pharmaceutical and research companies.  Do you know how much money it costs to develop these new breakthrough procedures and medication?  There is a cost of having access to the best healthcare in the world.  It doesn't just spring out of the ground in a spout of knowledge.  It takes testing, patience, facilities, know-how and lots and lots of money.   

   Like a business, a hospital is forced to balance its books or it becomes solvent and guess how many people a hospital could help when it can't function.  But, for better or for worse, this Business can "do no harm".  It cannot reserve the right to refuse service.  So, if you're a complete jerk, they still have to treat you.  If you are a drug addict who tried to kill yourself, they still have to treat you.  If you have absolutely no money to pay for your visit, they still have to treat you!  But, if there are people that aren't paying for their services, the hospital has to eat the cost.  What's that?  The Hospital pays for you to come and be treated if you can't pay.  It's inherently impossible for a hospital to continue to do this for any length of time without it affecting every other aspect of care.  This means the more a hospital pays for your care, the less staff it can hire, the less money it has for equipment, food, medicine and beds.  Eventually, they have to make money somehow.  The answer lies in Insurance Companies.

   An Insurance Company will always have more money than the average patient.  So, a hospital can get away with charging the Insurance Company enough to make their books balanced.  For example, let's say (for simplicity's sake) that it cost $1 million to completely run X Hospital for one year.  But, they were only able to collect half a million from all of the patients they treated.  How do they make up the other $500,000? They ask for charitable donations from their worthy sponsors and affluent members of Society, but that still leaves a $250,000 hole in their bank account.  Remember, if they don't fill this hole, they'll go out of business!  So, they say, "we have to spread this $250,000 cost to all of our paying patients."  So, that means what would have cost you $200 becomes a $2000 bill.  Do you understand, yet?

   Did you know that most movies in Hollywood cost upwards of $100 and $200 MILLION dollars?!  Yet, how much money did you pay for your last movie ticket.  $10?  How much were paying for a movie ticket a decade ago?  The price to make a movie is increasing (as is inflation) so the price you pay reflects that.  Imagine how much money your movie ticket would be though if the first 100 people in line didn't have to pay for their ticket.  Your $10 movie ticket would instantly skyrocket to what, $20?  $30?  $50?  And how much money do you think an actor makes for each movie they make?  How about TV Actors?  No one accuses an actor of being greedy and corrupt but they'll never hesitate to throw their Doctor under the bus.  What about your favorite Sporting event?  How much money would you pay for a ticket to the Super Bowl?  What if only half of the people had to pay for their ticket, how much would you pay then?  How much does each player make?  Does it affect the way they play or the way you see them?

   I'm sure that there are corrupt and overpriced doctors.  I'm sure that hospitals are mismanaged.  But, never forget that behind all of these practices, hospitals, multi-million dollar corporations, etc. there's just a bunch of people.  And guess what?  Nobody is perfect.  Not your doctor, not the Hospital Administrators, and not the CEO of Google.  

   So, if you didn't get the whole point of this long post, it's that the reason your healthcare is so expensive, is because the number of nonpaying patients outnumber the paying ones.  It's because the industry itself has had to inflate their costs in order to remain viable.  It's because too many people go to the Emergency Room when they should go to Urgent Care.  It's because too many people live unhealthy lifestyles and crowd the hospitals with the consequences of their bad decisions.  

   "But, Jane!  My cousin has cancer, how dare you imply that they're in the hospital because of a bad lifestyle choice!"  If that thought (or something like it) crossed your mind, then you were looking to be offended.  In no way did I imply that all people who are suffering from an illness  automatically contracted it due to lifestyle choices.  I merely meant that a lot of problems seen in hospitals are due to lifestyle choices individuals make.  Capisce?

   So, what is the solution?  It's not Universal Healthcare, because then, overnight, the patient load increases while everything else stays the same.  What I mean by that is: what deters you from going to the ER when you don't have insurance but you do have a stomach flu?  The answer almost invariably comes back: "Cost."  If that cost were removed, how many more people would visit the ER in any given day for common ailments?  If you go to your Grocery Store, and they're having "Customer Appreciation Day" complete with a free hot dog lunch, do you stop and enjoy a wiener?  What if they had a "Customer Appreciation Day" lunch but now the hot dogs were $1?  Would you still stop, or would you find yourself thinking, "Meh.  I'm not really that hungry..."  

   In Universal Healthcare, the costs to run these Hospitals (which, in case you forgot, are private Businesses)  are distributed to the entire population (by way of a large increase of taxes). We'll see rationing of care, medicine, facilities and coverage as well as Government involvement in the care you receive.  In addition, what happens to medical research?  We'll see a decrease in new, innovative surgeries and medicine.  How many aspiring doctors will see the restrictive limitations and the decrease in salary to pay back their staggering student loans and choose to pursue a more lucrative career?  And honestly, who could blame them?  Again, I know it's a knee-jerk reaction to blame the Doctors ("They're so greedy!")  But would you do it?  If you are going to accrue upwards of $150,000 of Student Debt, would you still do it if there was a possibility you couldn't pay it all back?

   It's unfair and unrealistic to expect Doctors to treat you for free.  Would you work for free?  Could you? Exactly...