By Evan Falchuk
It’s a secret, hiding in plain sight.
A recently-released GAO study of the health insurance market (.pdf) found:
- The median market share of the largest insurer in each state was about 47%
- The five largest insurers in each state control 75% or more of the market
- In 23 states, the five largest insurers control 90% of the market
Health insurers look like — and some might say, act like — your cable company. They’re pretty much regulated that way.
But it’s not just insurers. In the last two decades, there has been an equivalent consolidation of hospitals.
It shouldn’t be a surprise, then, to find hospitals and insurers cutting highly questionable deals that make each other lots of money at the expense of everyone else.
We know what to do about this. In America, we try to introduce competition to fix problems like these. Maybe this is one of the motivations behind the idea of a government-sponsored health insurer. But wouldn’t it be much simpler to open up these markets to real competition?
Indeed it would! A “Public Option” run by the Fed will not work. Why? Firstly, the private sector can not compete with a Public Option. So the lie that it will just create “healthy competition” is just that. An INSIDIOUS Lie perpetrated by a Government with an unholy lust for even more power. Why is it a lie?
Because unlike the Federal Government who can tap in to the U.S. Treasury (as they have been doing feverishly lately) when claims surpass revenue. The private sector is held to a higher standard. Namely, fiscal responsibility. If claims supercede revenue, an insurance company must be held to the ramifications that happen to any company that does not balance it’s portfolio correctly. Namely, FAILURE (except, of course if that company is AIG who gets bailed out over AND OVER again by our precious BLOOD SWEAT and TEARS)!
Once the insurance companies fail (shortly after the “Public Option” starts promoting “Healthy Competition”) we will be left with “Medicare” for all! But wait! How’s Medicaid & Medicare working now? Let’s see. At the current rate of Medicare expenditures, by the time I am 65 there will be no Medicare for me according to ALL economist (on both sides of the isle). Why? Because they have been robbed for other expenditures by a fiscally irresponsible, over burdensome Federal Government. Who’s answer to EVERYTHING is to throw money at it! Easy to throw when it’s not yours.
The private sector does not have the luxury to play with America’s BLOOD SWEAT & TEARS. We must balance our portfolios responsibly and consistently or we will not have the the funds to pay the big claims when they arise (and they do arise, and they do so often). This being the case, it comes down to who the American Tax Payers (again, I stress the 50% that actually pay income taxes) want to handle their medical care. And overwhelming, those tax payers want choice and fiscal responsibility. They will receive neither through a government run “Public Option.”
Ok, well then we’ll just lean on Medicaid. Really? Will that be before or after the recent Medicaid Expansion of $87 Billion is used up or after the 78.2 MILLION Baby Boomers suck it dry to care for their long term care expenses? I’m just wondering. Want even more reasons why a “Public Option” will not work? Read: http://www.heritage.org/Research/HealthCare/bg2267.cfm
Even though a Single Payer or Public option won’t work. We still definitely need health care reform on many levels and the federal government can play an integral part in this reform. Here’s what needs to be done.
1.) Weed out all of the illegals who are sucking on the Federal “teet” through the Medicaid system such as in Illinois. Good old “Blago” enrolled millions of Illegals in to our Medicaid system, thereby running the program in the ground & leaving our Illinois Medicaid system approx. $1.5 BILLION behind in payment of claims to physicians who have been providing “free” care to all illegals who were lucky enough to flock to the State of Illinois to insure themselves for “free”. By the way, this is the reason he was impeached so quickly. The Illinois Senate didn’t need the Federal Wire Taps to get that done.
2.) Establish a Federal oversight committee to regulate and hold accountable physicians who make medical mistakes. What’s one of the biggest reasons why health care is so expensive? Hint: It’s not “rich CEO’s” and “outdated medical records transfer processes.” It’s Medical Mistakes! Here’s the real facts you won’t find in the main stream media:
1999: Institute of Medicine (IOM) releases its first report on healthcare quality and medical errors. http://www.iom.edu/?id=12735
a. Medical errors are responsible for injury in as many as 1 out of every 25 hospital patients.
b. Between 44,000 and 98,000 Americans die each year from preventable medical errors in hospitals alone.
c. The deaths from preventable medical mistakes are equivalent to the number of people who would die if a jumbo jet crashed each and every day of the year, and all its passengers died.
d. Medical errors cause more deaths than motor vehicle accidents, breast cancer or AIDS…..and this study is TEN YEARS OLD and STILL no Federal oversight committee! Oh wait! It gets worse!
1994: Five years after a groundbreaking Institute of Medicine report focused attention on medical errors in hospitals, Americans say that they do not believe that the nation’s quality of care has improved. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.534
a. One out of three patients state that they have experienced a serious medical error.
1995: A Study published in the Journal of American Medical Association (JAMA) found that only two percent of medication errors that occurred during the medication administration process were intercepted.
a. More people die from medication errors than from work place injuries
b. Medication errors account for approximately one out of 131 outpatient deaths and one out of 854 inpatient deaths.
2002: A Study issued by the United States Pharmacopeia (USP) concluded that more than 200,000 medication errors occurred during 2002
2004: CDC reports that 90,000 patient deaths occur each year due to patients contracting hospital acquired infections. http://www.cdc.gov/ncidod/dhqp/pdf/nnis/2004NNISreport.pdf
a. Many hospital acquired infections are caused by health care workers who fail to wash their hands in between patients.
2006: Studies assessing the state of hospital patient safety conclude that current progress is slow, results in general are at best modest, and the gap between the best possible care and actual care remains large. http://www.healthgrades.com/media/dms/pdf/PatientSafetyInAmericanHospitalsStudy2006.pdf
More Facts:
Preventable medical errors result in extended hospital stays, expensive treatment for chronic medical conditions and astronomical medical costs that are associated with treating debilitating life-long illnesses. Some experts state that these costs may be in the range of $150-200 Billion dollars per year. Gee, where else could we spend that money??? Quick reminder:
ALL of the aforementioned happened under the nose of our Federal Government. And we want them to regulate Health Care?? Let’s not save ALL of our anger for the “greedy” insurance companies and “over paid” doctors and CEO’s. Let’s focus our Anger on our GOVERNMENT who has allowed this systemic problem to continue over three administrations!
Ask yourself, why does the health care industry basically regulate and report on itself? Why is certification and accreditation voluntary? Why don’t we have a Federal agency that acts like the FAA and investigate medical mistakes, just like airline accidents or near misses? Why do only some states have mandatory reporting requirements of medical errors? All Good Questions that need to be answered before we hand over our very health freedoms to the Government to “regulate”.
Speaking of Government. This brings me to the third thing we need to do to truly “reform” health care. And this is another positive role that the Government could play (plus they love to mandate stuff so this should be easy to get done).
3.) Pass a mandatory law that states that all American’s, who can afford to purchase Health Insurance (remember the 35 Million?) actually do so! Pass a law that states that they must purchase some basic level of Health Insurance coverage for themselves and their dependents. Why would this work?
Remember car insurance? It used to be that you could drive around like a moron without it. Congress then mandated (and rightfully) so that ALL drivers purchase some basic level of Car insurance to protect themselves and those who they may injure. This accomplished wonders for the car insurance industry and it would do the EXACT same thing for the Health Insurance industry. Adding to the national risk pool 35 Million more American’s (remember them from earlier?) This would drive down Health Insurance premiums for all American’s. It’s just an actuarial fact. By the way, ever wonder why those 35 Million don’t purchase Health Insurance? Because it’s FREE!!!
There are 217 “Free” Hospitals and Clinics around the United States: http://www.healthcentral.com/diabetes/c/17/66884/affordable-medical
Add to that the “compassionate care” that any one can get at every Emergency Room in the U.S. and is there any wonder why so many chose not to insure themselves?
But that’s the point here. NOTHING is “free”! It’s all on the backs of the 50% of American’s who actually pay income taxes and this already MASSIVE burden will increase exponentially once Health Care is “FREE” for everyone!
Mr. Tucker’s response is spot on. The questions however are why mandatory health insurance purchase is not working in Massachusetts and how persons who make less than the monthly medical premium will cope with buying health insurance.
[...] The cost of insurance for these groups is a burden, and it’s especially bad if you’re a very small employer or are an individual. There isn’t much you can do about it if you’re in this category, other than make employees pay more of the premium, or buy more limited policies that cost less – the market is not very competitive. [...]
[...] Business Week and Schwitzer are right that the market for health insurance is not especially competitive. Most states have one or two dominant health insurers, and a number of other much smaller players. The smaller insurers are often at a big disadvantage. I blogged about this a couple of months ago. [...]
[...] Business Week and Schwitzer are right that the market for health insurance is not especially competitive. Most states have one or two dominant health insurers, and a number of other much smaller players. The smaller insurers are often a big disadvantage. I blogged about this a couple of months ago. [...]
[...] Health insurance is one of the most heavily regulated industries in America. State governments limit competition in their markets by mandating what insurers must cover and how much they can charge. It’s a combination that leads to high prices, anti-competitive practices, and a market that looks like this: [...]
Like the financial industry did?
Hi Jack,
What?
Hi Jack,
What?
[...] would use this power if it became law, but I suspect the many states in which one or two insurers dominate their markets would be rich targets for antitrust [...]
Group Health Captives for Mid-Sized Employers
Current Healthcare State:
* For many employers, the cost of health insurance continues to rise and is now the second largest expense item, trailing only payroll. The average annual cost per family is almost $13,000 per year.
* This puts medium sized employers in a difficult position as they have very few product options and scarce information about the healthcare system. They often don't even know what claims they have or where their premium dollars go.
* The lack of transparency inherent in the system prevents employers from taking control of the cost of health insurance. The only thing clear to them are the annual increases they experience each year.
How The Becker Benefit Group Can Help:
* Our Group Health Captive allows these medium sized employers to address these annual increases and access the alternative insurance techniques currently used by larger 1000+ employer companies.
* Providing complete control over health insurance costs by offering transparency and the opportunity to reduce these costs, the Group Health Captive actually creates stability and helps to increase profits.
* Our Group Health Captive encourages a healthier workplace and provides employees with a better quality of life, both at work and at home.
How The Group Health Captive Works:
* A group of employers form a Group Health Captive in an effort to reduce the cost of health insurance. It can be formed with a variety of employer groups such as:
1. Existing Group Captives or Risk Retention Groups
2. Existing Self-Insured Groups for Workers Compensation
3. Clients of an Agency or Broker
4. Trade Associations
5. Franchisees
6. Portfolio Companies of Private Equity Firms
Key Features:
* Provides access to the same tools, techniques, and risk reduction strategies offered by the largest of employers
* Eliminates carrier profit
* Minimizes state premium taxes
* Offers ability to eliminate or modify state mandated benefits
* Offers complete plan flexibility and transparency
* Encourages working together with “like-minded” employers
* All wellness, coaching, and EAP plan included
* All monies not spent on claims are returned or retained by employer
We anticipate an employer's savings of 13% in year one and 22% by year five.
Considering 5-10% of your employees can account for 50% of your claims, is your company doing anything to mitigate this risk?
Considering that 7% of adults are diabetic and an additional 26% are pre-diabetic, is your company doing anything to help at-risk employees improve their health?
This group health captive program allows mid-sized employers to offer a partially self-funded health plan and enjoy the significant underwriting profit an insurance company earns.
Proven tools, techniques, and incentives are put into place to help employees better manage their health.
I am convinced that if your company has the financial wherewithal, this approach can make a lot more sense than fully insured health plans.
If you are interested in more information about Group Health Captives, or if your company is interested in participating in our Group Health Captive please contact our office.
Gary Becker is the President of Becker Benefit Group, Inc., specializing in employee benefit solutions for the mid-size marketplace.
Becker Benefit Group is a forward-thinking employee benefit insurance agency. We have established the first Group Health Captive in the State of Maryland … and one of the first Group Health Captives in the country.
The purpose of the Group Health Captive is eliminate insurance carrier profit, minimize administrative expenses, implement proven risk reduction strategies, and to help improve the health of the covered employees … in an effort to provide employees excellent healthcare coverage at the very lowest cost possible.
Gary Becker is the President of Becker Benefit Group, Inc., specializing in employee benefit solutions for the mid-size marketplace. Becker Benefit Group is a forward-thinking employee benefit insurance agency. We have established the first Group Health Captive in the State of Maryland … and one of the first Group Health Captives in the country. The purpose of the Group Health Captive is eliminate insurance carrier profit, minimize administrative expenses, implement proven risk reduction strategies, and to help improve the health of the covered employees … in an effort to provide employees excellent healthcare coverage at the very lowest cost possible. Feel free to contact me by phone or email if your company is interested in additional information.
Gary C. Becker, President
Becker Benefit Group, Inc.
11000 Owings Mills Boulevard, Suite 6A
Owings Mills, MD 21117
Bus: 888-502-8800
gary @beckerbenefit.com
Group Captives for Medical Benefits, Savings and Profits for Mid-Sized Employers. Call me for information.
“Always do right. This will gratify some people and astonish the rest.” Mark Twain
I don't like this. Pay high rate for cheap health insurance.
Now a days most of the people are worried about their health and health insurance is one of the best for the people.I think it also help people for free of tension which is the a major reason health down….Thanks for the nice post and keep up blogging.
Thanks for this info.