There is no discrimination involved; the provider agrees to discount his fees to the payor in exchange for the referrals he gains.
I must admit, that before I spent the last couple decades dealing with these issues, I had the same view that you do.
You still don't have it remotely correct. The reason providers stiff people lacking the club discount is because they often fail to collect from them, and that group has no negotiating position.
People yap a lot about the uninsured, but hospitals must treat emergency room visits, and the uninsured consequently turn all needs into "emergencies" and the hospitals still turn a profit, so how does that happen? One way it happens is to DISCRIMINATE against people who do pay, but who lack a negotiating position, i.e. the walk up customer who pays without insurance. Oddly enough, this is the customer most interested in getting a good deal. Hence my claim that the current system is fundamentally screwed because it has removed cost containment from the one sector (the consumer) most motivated to enforce it. Insurance companies DO NOT have a long term motivation for cost containment. I'm assuming you can figure out the dynamics of that. Hint: Since they effectively get a cut of the total $ volume, they aren't opposed to inflating prices. They just need to make sure that premiums inflate as fast or faster than expenses. That is their only concern.
The simplest thing Obama could do would be to require all current insurers to offer Zero Coverage Policies (or Infinite Deductible Polices). A ZCP would look identical to the providers (my Doc has no idea what my deductible is) so everyone gets the club discount and the ZCP should have minimal cost because you claim the billing is so cheap. I actually doubt the latter, I suspect the ZCP would still cost 20% of a normal policy, because that is the inefficiency of insurance. What do you think the ZCP could retail for?
And even though a provider loses money on just about every Medicare patient,
They give a discount, that is far from "losing money". I happen to consume around $30K of surgical expenses/year at good discounts, and the provider still makes money. Its astonishing how cheap surgery can be despite all the education involved if you eliminate most the nonsense from insurance to liability. |
