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Pay Hospital for Coverage (instead of insurance co.)

Hospitals and Doctors offer coverage plans, like tech support agreements, and we forget about health insurance in the US
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[I aplogize if this is not the kind of thing that belongs here. I'm still new at this. So please be kind. ;-)]

The problem: As a small-business owner, my 2- person company (my wife and I) are hit hard by $700 per month for medical insurance here in the US. This is "group" coverage with a 2,000 deductable, per person, and a 5,000 max-out-of-pocket clause. Which means if I get in a car wreck today and have a 7,000 hospital bill, my insurance only pays for 2,000. The plan does however cover maternity (after we pay 5,000 out of pocket).

At any rate, medical insurance is stiffling entrepeneurship and saddling "mom & pop" businesses with either unaffordable premiums or the choice to go uninsured.

The Big Idea: A hospital, or preferable a consortum of hospitals and doctors, would offer a direct coverage plan. With this plan, I would pay the hospital a couple hundred dollars a month and if I need anything from them, I get full care.

A bit like buying a tech support agreement.

The plan could extend to included groups of doctors, dentists, etc. I might have to pay one agreement to my doctor and one to my local hospital.

But the big new idea is that hospitals and doctors are providing [edit: replaced word "insurance" with"coverage"] coverage and making treatment decisions rather than insurance companies.

Some possible problems:

1. Hospitals would no longer have an incentive to treat you with expensive technologies since they get a couple hundred bucks from you a month-- and are not getting extra revenue for expensive tests. (I don't mean the Doctors and nurses who care about your health would do this; I mean the adminstrative pencil pushers would).

2. Doctor's staffs (not the Doctors themselves mind you) might put you off since your appoint with the Doctor doesn't bring in any new revenue.

However, both #1 and #2 would be eliminated with free-market competition. Just sign up with a new hospital or doctor if you don't like the current one.

3. You would still need some type of insurance or plan for medical emergencies while travelling.

[Added Clarification of Details]: This is NOT an HMO. In this new idea, I would pay a monthly or yearly fee directly to the hospital and that money would go into the operating fund of the said hospital. No Insurance Companies! If I go to the hospital they dont' charge me a dime. I'm covered. Like a tech- support agreement for my person.

jballard, May 03 2004

Baked http://members.kais...turekp/entrypage.do
(choose Northern California, it will lead you to a page about their corporate structure) [Worldgineer, Oct 04 2004, last modified Oct 06 2004]

1999 Data on HOHMOs http://www.managedc...2001c03s02g02.shtml
Make of it what you will. [dpsyplc, Oct 04 2004, last modified Oct 06 2004]

Banfield http://www.petsmart...anfield/index.shtml
The pet hospital. [dpsyplc, Oct 04 2004, last modified Oct 06 2004]

"Your Child, MD" http://sportsillust.../06/life_of_reilly/
Like this idea, probably fun to write. [dpsyplc, Oct 04 2004, last modified Oct 06 2004]

Comparative info on US health system http://dll.umaine.e...le/U.S.%20HCweb.pdf
This should cause blushes Stateside, but doesn't seem to. [suctionpad, Oct 04 2004, last modified Oct 06 2004]

[link]






       Kaiser (in California, a few other areas) or Group Health (Washington, a few other areas) bakes this exactly. My wife has this coverage and loves it. They cut a lot of red tape, but the problems you listed do exist to some extent.   

       #1 they have been criticized for, though I have no idea if this is a real or percieved problem.
#2 doesn't exist so much, because of an efficient system. Most of the basic workup is done by non-doctors, and my wife is rarely kept waiting at any point of her visit.
#3 we haven't had a problem with. When she visited Washington from California they covered Group Health hospitals. I assume they have a similar coverage plan in other areas.
Worldgineer, May 03 2004
  

       I often wonder how much worse off you would be if you adopted some kind of national health service. I can't imagine the average person would be that much worse off if they payed more taxes and less insurance.   

       I don't supose anyone here happens to have looked at the numbers?
RobertKidney, May 03 2004
  

       //I often wonder how much worse off you would be if you adopted some kind of national health service. I can't imagine the average person would be that much worse off if they payed more taxes and less insurance.// [RobertKidney]   

       Myself, I don't think getting the governement involved in anything improves the cost benefit. Insurance companies have (at least a tiny bit) of incentive to try to keep costs down and services up. Otherwise they go out of business. Government has no such incentive.
GenYus, May 03 2004
  

       Yah, [jb]. You describe an HMO. There are bound to be HMOs in Houston.
bungston, May 03 2004
  

       //You describe an HMO.//   

       Seriously? I must have misunderstood what an HMO is supposed to be. If what I described is an HMO, then ouch! HMOs are terrible. --Almost as bad as having the government run something! ;-)
jballard, May 03 2004
  

       Your challenge is to both fragment a market and bring on efficiency. I don't envy you; you won't get much sleep. HMOs now in place most nearly represent what you're after -- some do so exactly -- but they, like other regional powerbrokers, dissuade entry to their markets while being self limiting by virtue of their regulatory environs.   

       <link> Your pets have this now.
dpsyplc, May 03 2004
  

       Medicine has to be paid for. An insurance can only spread the risk between individuals and to a limited extent a deductable can make people think twice about going to the hospital, so they don't go for every sneeze.   

       Joining a mutual insurance will cut out the stock holders and can save some money (if it is managed efficiently), but not much.
kbecker, May 03 2004
  

       This is not an HMO. Those are still run by the insurance companies. My understanding is the author wants to get away from them.   

       (Problem is that he/she'll end up paying the exhorbitant rates that hospitals charge the non-insured, which ought to be illegal.)
waugsqueke, May 04 2004
  

       [RobertKidney], [GenYus] the US healthcare system is by far the most expensive per capita in the world, yet it only ranks as the 37th best overall. Link below shows in detail (see particularly table 1).
suctionpad, May 04 2004
  

       <semi-offtopic rant>You can thank us for bankrolling drug development costs for the rest of the world.   

       Anything that destroys evil insurance conglomerates that do nothing but collect money gets a + from me.
RayfordSteele, May 04 2004
  

       // You can thank us for bankrolling drug development costs for the rest of the world.//   

       That is such total horseshit, Ray.   

       That's the standard drug company excuse and the one everyone rolls out whenever drug price controls are bandied about in the US. It's bogus.   

       Two reasons why. 1- drug companies spend more on advertising than they do on R&D. 2- if the profits were cut into a 10th of what they are now, they'd still find ways to develop and manufacture the drugs they do now. With the amount of money they are making on drugs like Viagra and Vioxx, rest assured that someone would find a way to create them cheap.   

       It is absolutely insane what drugs cost in the US, for no reason other than greedy profit grabbing, which the drug co's can get away with here.
waugsqueke, May 04 2004
  

       Sure, drug costs add significantly to healthcare bills:   

       The Office of National Drug Control Policy (ONDCP) found that, between 1988 and 1995, Americans spent $57.3 billion on drugs, broken down as follows: $38 billion on cocaine, $9.6 billion on heroin, $7 billion on marijuana, and $2.7 billion on other illegal drugs and on the misuse of legal drugs.   

       Overseas (and over-the-border) states generally have several alternative treatments approved for disease treatment that were never approved for US patients due to bad science or whatever. One of the stipulations of patent law is that a company facing competing alternative treatments risks its patent. Naturally, Lilly has to make a decision to defend its Prozac against infringement by not only chemical derivatives, but also against redirection from foreign markets where it was priced to compete against snake oil (i.e., extract of St John's Wort) and blue smoke based treatments.   

       Wasn't this idea about how to socialize hospital costs?
dpsyplc, May 05 2004
  

       //Wasn't this idea about how to socialize hospital costs?//   

       From the idea's author: It depends on what you mean by "socialize." In the sense of "socialist" theory; NO.   

       This is a free-market capitalist idea.   

       If you mean it in the strict sense that grouped funds are used to treat individuals, then I suppose you could use the term "Socialize" in a a very narrow sense.
jballard, May 05 2004
  

       See my proposal "Healthcare "Club"" It is similar to yours except that it is owned by the membership granting it more control. One thing I would add to yours is that there should always be some sort of office visit charge to avoid the "Free milk from a cow" effect, that is discourage people from overusing the services. In my plan as well as yours I would also make it a forced requirement for yearly exams and blood tests to be proactive, thereby reducing long term costs.
tomyaz, Aug 13 2004
  

       Some HMOs in the U.S. have their own doctors and facilities, thus baking this pretty well.   

       That having been said, one of the biggest problems in the U.S. is that "medical insurance" is actually "doctor-bill" insurance rather than "medical-problem" insurance. If it were really "medical-problem" insurance, all costs resulting from a condition that started when a person was with a particular insurer would be paid by that insurer under the terms in effect when the condition started, regardless of whether the moved to another insurance company. As it is, however, that's not how things work.   

       Consequently, the very notion of "insurance" is thrown out the window. Insurance is supposed to provide coverage for UNEXPECTED events. I don't know what term would properly describe health plans in the U.S., but in many cases it certainly isn't "insurance".
supercat, Aug 13 2004
  

       That is a great idea, [supercat]. The event stays with the insurer who insured it.   

       I agree with your description of health insurance, too; it's not really "insurance" at all unless you buy cancer-specific or heart disease-specific coverage. Canada treats health insurance like a right, not a decision, and I think that makes more sense.
phundug, Aug 13 2004
  

       //I agree with your description of health insurance, too; it's not really "insurance" at all unless you buy cancer-specific or heart disease-specific coverage. Canada treats health insurance like a right, not a decision, and I think that makes more sense.//   

       Unfortunately, the socialized health care systems of many countries, including Canada, are experiencing some severe and fundamental problems. The more of something it is necessary to produce, beyond a certain optimum level, the more it will cost; the lower the price of something to consumers, the more they will demand. By reducing the price of health care to consumers, governments have increased the demand to the point that it cannot be affordably supplied. The only remedy has been to wait-list people (in the hope that some of them will either get better or die off before they have to be treated).   

       As for the idea of insurers having to cover conditions that appear under their watch, that might be a good model to move toward but no policies to date have been actuarially planned for such a system and I don't see any good migration path.   

       One thing that would help, though, would be for non-catastrophic medical coverage to be entirely separate from the so-called "insurance" industry. If I know that I'm going to need a certain amount of medical treatment each year, and my "insurance" knows about it, what is gained by me paying them to pay my bills, rather than me paying them directly?<p>   

       It seems to me that with almost every type of insurance, save medical insurance, the median annual payout per insured is ZERO [i.e. more than half of all insured won't have any claims whatsoever in a typical year]. How is a system that has to pay out something to most clients "insurance"?
supercat, Aug 14 2004
  

       Again, well put [supercat]. Are you an actuary, by any chance?   

       P.S. how many actuaries does it take to change a light bulb? 1.00000001. Because the probability that the first actuary will get electrocuted is .00000001.
phundug, Aug 15 2004
  

       //Again, well put [supercat]. Are you an actuary, by any chance?//   

       Nah. Don't play one on TV either. But I do know some of the concepts.
supercat, Aug 20 2004
  
      
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