Wednesday, January 05, 2005

"We Don't Accept Uninsured Patients"


One of the more ridiculous arguments on health care costs is that a lot of the woes of the system would be magically cured if we reduced the scale and scope of medical insurance, such that most basic health care costs were paid directly by the patient. Part of the problem with that "logic" is that health insurance isn't really insurance in the classic sense - it is more accurately a prepaid package of health care services, which will be provided under contract for a fixed price (plus applicable copayments). This can create an incentive for a person - particularly somebody who is paying out of pocket for health insurance as opposed to obtaining it as an employee benefit - to seek to maximize his use of medical services while insured, to "get his money's worth". But more typically, what you see are people who are uninsured or underinsured going without medical care that would be beneficial (and in some cases is necessary) in order to avoid the high cost of health care.

The stupidity of the essential argument is of Gingrichian proportions - there are, at present, about 45 million uninsured Americans, and about as many underinsured Americans. That is, there are at least 45 million people who are already forced to buy medical services as needed at "market prices", and tens of millions more who routinely must do so - unless, of course, they choose to go without those services. If the "free market" were a magic cure for the high cost of health care, the growing market of uninsured and underinsured should have doctors lining up to treat them. But they don't. And when they try to obtain medical care from an estabished provider, they will often be told, "We don't accept uninsured patients".

Meanwhile, a doctor recently complained on another blog that he feels squeezed by malpractice premiums because health insurance companies limit what he can charge - so as to justify surcharging patients a fee for the cost of malpractice insurance. The typical medical insurance company applies some mechanism to determine a "market rate" for a given area, and then reimburses participating physicians at a portion of that "market rate". (So yes, the uninsured and underinsured patients would pay a higher fee for the same service - often remarkably higher - than an insured patient.) Nobody was forcing this doctor to accept insured patients, or to agree to the terms of any given insurance company - if he truly believed the "market" would support a higher rate of payment, he would be within his rights to decline to participate in the insurance plans which so "limited" his income. But the reality is, patients find it convenient to work through their own health insurance networks, so as to minimize copayments and to avoid having to pay out of pocket and seek reimbursement for medical services. And doctors know full well that the "market rate" for services is an artificial construct. The doctor who made that claim chose to participate in health insurance plans not because they limit his income, but because they help him maximize his income. I would not be at all surprised if, despite his complaints, his practice only accepts insured patients.

Also, given the high cost of health care, a typical physician, clinic or hospital that treats and uninsured or underinsured patient wants to be paid up-front. Many even offer "credit counseling" to help people finance their medical care. When uninsured emergency patients come to a hospital, protected by anti-dumping laws, and receive tens of thousands of dollars in treatment before they can be transferred or discharged, hospitals often have to eat those costs. When they can check your credit and arrange financing in advance, perhaps secured against your home, they have the ability to collect their fees - or to refuse service if you aren't going to be able to pay. That's pretty mercenary when it comes, for example, to somebody with cancer, but that's the way the market works. In most western nations, people aren't asked to choose between their homes, savings, and livelihoods and obtaining necessary health services. In this nation, our present political leaders want to make that choice even more stark.

Ironically, the satisfaction of one of the Bush Administration's wet dreams, the elimination of an employer deduction for health insurance premiums, might be just what it takes to force a national health care program. The "big three" auto manufacturers, for example, are already stressed by the costs of health care. Take away the deduction, and you'll force them to choose between absorbing a massive increase in employee compensation or lobbying for a national health care plan. I think that, given the choice, they'll opt for the latter.

2 comments:

  1. Actually, I have dealt with many physicians who accept uninsured patients, for cash at time of services--and many who give a discount to uninsured patients. That's because insurance companies also make money by stalling and delaying payment to doctors. Plenty of doctors would rather have $100 today than wait for months for an insurance company to get around to cutting them a $200 check.

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  2. Yes - some doctors are happy to work with uninsured patients, although absent a relationship, as you note, prepayment is usually required.

    Even with a discount, the doctor's fee may well be higher than the insurance company is paying. I've heard of discounts for insurers in excess of 40% for certain procedures. Perhaps somebody here can fill us in on typical discounts for insurers.

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