High level politicians like to choose catchy phrases about an issue that have little commonly understood meaning. Such expressions quickly circulated by the media hopefully divert the dawdling attention of the public and keep the curious from asking questions that are impossible to answer.
During the heated discussion of Obamacare, two issues were deliberately avoided or ignored by politicians. The first one: the rationing of healthcare that has gone on since the first health insurance policy was drawn up. The second one: who was going to pay for the cost of admitting so many uninsured patients to our local clinics, hospitals, and emergency rooms for medical attention.
One political party familiar with the common practice of “rationing” medical services by insurance companies came up with the non-euphemistic title, “Death Council,” for the internal committee in each insurance company that was responsible for determining the following general criteria for each of their health insurance policies:
1.) How healthy must an employee be in order to be eligible for coverage under the policy?
2.) Which illnesses, sicknesses, and injuries would be covered by the policy?
3.) Which medical procedures would be authorized for each specific treatment?
4.) How much would the insurance company reimburse the healthcare provider for a treatment?
5.) How much co-pay would be demanded from an employee for each visit to a healthcare provider?
6.) How long a period could a treatment be administered without success and how long a patient could be hospitalized for an approved treatment?
7.) What would be the average premium cost for each employee covered: single, married, or family?
These committees of professional medical experts put on their God hats each year and reviewed their offerings based on recent experience in the healthcare industry and their own history of payments for the healthcare of those insured by each policy. A couple of months before the annual renewal date of a policy, the insurance company would make a proposal to the company buying the policy. These proposals covered any changes in the criteria and increases in the average premium cost. I won’t bother you with the options of HMO or PPO services that altered the cost for each employee covered.
For seven years, I was C.O.O. (Chief Operating Officer) of a retail property management company that managed shopping centers and malls in the State of California. When the company was sold at the end of 1998, it was managing 38 centers and had over 180 employees on its payroll. The company had been paying 85% of the cost of a health insurance policy for a single employee and 50% of the cost of an employee’s family policy.
Each year the Director of Human Resources and I had to negotiate with the insurance company the premium increases demanded by the health insurance company. Usually these premium increases were double the CPI rate of inflation and towards the end of that period as high as 30% year over year. Once during my participation in those negotiations, our company made the tough decision to change insurance companies because another insurance company offered us a much lower premium for essentially the same healthcare coverage. That decision required changing insurance forms for all employees and all medical activities, booklets describing what was covered and the co-pays for each visit, and classes to educate all employees enrolled how to follow the new insurance company’s procedures.
From what I have generally described, it can easily be observed how many ways medical procedures and prescription drugs were rationed. “Complete coverage” for any illness was a loose term that expected recovery before the limiting cost of a medical procedure was exceeded.
Open ended coverage was rare, and exotic procedures were strictly controlled. Consequently, little was actually discussed with the insurance company about the possibility of “running out of coverage” and allowing the patient to succumb to his or her illness. Fortunately, no employee died during the period that I was involved with choosing the health insurance company.
Were there truly “death councils” who made life and death decisions about any patient covered? What an insurance company did with patients threatened with incurable terminal illnesses was an internal insurance company decision. Each member of a “death council” was well aware that every insured patient might not return home alive and cured. How medical mistakes were covered up was kept a secret. Comments about how pleased employees were with their medical provider’s service, claims handling, and approvals for treatment came back to us. All complaints from our employees were handled by our Director of Human Resources.
From a company’s standpoint, we did what other small companies did each year, and before the company was sold, we reduced the portion the company was paying of the premiums for a single employee. There was little we could do to change anything in the policy or control the cost of premiums except change insurance companies and face the hassle of doing that. Threatening that we would do so during annual negotiations with an insurance company didn’t do much to reduce premium demands.
Was my small role part of the complicated activity of the dreaded “death councils?” Some might say so. Two people in our company bought healthcare coverage for all our employees who had very little to say about what we actually did on their behalf.
The only alternative employees had was to “opt out” by not accepting the healthcare plan our company offered them. He or she could rely on their spouse’s healthcare coverage or buy an expensive individual policy in the market. In that case, my company would not pay any portion of the premium cost. Indirectly this act on our part forced an employee, who was not motivated to check out his or her options in the market, to accept our healthcare plan.
The consequence of all these activities created a healthcare system that was managed by an untouchable “healthcare council” who supposedly made decisions in the best interest of the average patient, but did not guarantee that what was allowed under each policy would prevent a patient’s death. Very little information was shared with our company when some new procedure or medicine became available and was not approved by the insurance company.
That was how rationing was handled by the system. Who was to pay for the cost increases for the healthcare covered by insurance? The company and the employee. But as the increase demanded for coverage escalated, the cost per employee paid for by the company became an issue for negotiations. Since my company was not dealing with any employee unions, that decision was left to the owners of my company.
The decision for choosing personal healthcare insurance coverage should be left to the individual and not his or her employer. In our capitalistic democracy, any expenditure of personal income should be made by the individual even though a decision about health insurance is far from simple today. Under the present system, what is most likely to happen to control healthcare costs in the future is further rationing by committees in insurance companies or in government agencies like the one that supervises Medicare for those seniors who qualify.
In America individuals are expected to take care of themselves. The unanswered question in such a situation is who will pay the cost of emergency rooms in clinics and hospitals that must serve the public? Some patients have no health insurance and some have no money to cover the costs of treatment, tests, and drugs! Should we fine those who gamble with their health by not buying some healthcare insurance knowing that there are ERs that must admit them in an emergency?
Whatever the government finally decides to do about the spiraling costs of healthcare, the work of the “death council” in rationing services will continue in some well-lit conference room. Unfortunately, there is no way one citizen can improve “the system.”
