Beer League

How many times has this happened to you?

It’s a warm summer evening. You’ve had a long day at work. You sit down in your favorite chair. The ballgame is on the TV, You think ro yourself “I need a cold beer”. But do you?

Probably not. Sure, you may WANT a beer, maybe even DESIRE a beer, but unless you are an alcoholic you probably don’t actually NEED a beer.

Makes sense, doesn’t it?

There are actually many things that we all think we NEED, but upon closer analysis, it turns out that we really don’t NEED them at all. It may come as a surprise to many of you that one such perceived NEED is Health Insurance.

Well, let me back up – this is not entirely true. With the high costs of health care and prescription drugs that we have nowadays, very few of us can afford to be without health insurance. But, this was not the case just 20 or 30 years ago.

Way back in the 1970’s and early 1980’s, ,most of us did not have health insurance like what we have today. Back then, the well insured had something called ‘Major Medical’ or ‘Hospitalization’ which covered catastrophic events. Practically no one had health insurance that covered doctor visits or medications – and there was no real need to have such insurance. Back then, basic, front line health care was affordable. Prescription drugs cost maybe $10 or $15 for a 30 day supply. A Doctor’s visit might set you back $30.00. Even when you had insurance that covered a doctor’s visit, chances are the doctor’s office did not get involved with filling out and submitting your claim – you paid the doctor up front, filled out and submitted your claim, and then waited for your carrier to reimburse you. If your carrier did not want to pay for a particulate procedure, that was between you and the carrier and it did not affect the doctor’s office. (Of course, if they did not pay you back, you were less likely to renew your policy with them, so it behooved them to reimburse most claims at the billed price.)

Back then, there was no ‘health care crisis’. Then things started to change.

Health insurance started to evolve into the lucrative business that it is today, and the evolution started with the HMO. Instead of paying $35 to see a doctor, you could now pay as little as $2 for your visit. The doctor was convinced (or coerced) to participate in this HMO plan as a way to ensure that their business would still remain viable. If they didn’t, all of their existing patients who signed up for an HMO would leave them for a doctor who did participate with the HMO. You see, Americans love a bargain, so almost everyone wanted to join the HMO for the low per visit fee. By the way, HMO’s were not a cheap insurance – the premiums were as high if not higher then traditional plans – but the low per visit outlay was what appealed to most people.

This rise of the HMO caused a fundamental shift in medical practice economics. Offices soon became overloaded with non-essential visits – people would see their doctor for things that they never would have bothered them about before – things like sprained fingers and cuts from shaving. Hey, it was only $2, so why not. Facing a drop in their income, doctor’s started to compensate by raising the rates of their non-HMO patients. Soon, it became necessary to have full-spectrum health insurance for everyone, since the cost of a doctor’s visit doubled or tripled I just a few years time. In order to retain these non-HMO insurance patients, doctor’s started to process insurance claims for the patient, and wait for the carrier to reimburse them. Doctor’s now needed to hire extra staff to handle the increase in paperwork. In order to pay for these new salaries, they had to raise their rates even more. Soon, their were Preferred Provider Plans (PPO’s) where a doctor would agree to a fixed lower rate per visit, and patients would pay a lower, fixed amount per visit – perhaps $35.00. Soon, HMO plans raised their copays up to a present average of – you guessed it – around $35.00 a visit.

Here we are, now, twenty some years down the line, and we are paying the same amount per visit that we used to pay, but now we are paying huge monthly premiums to our health insurance carriers on top of it. Where we used to pay perhaps $200 a month for our ‘major medical’ coverage, we now pay perhaps ten times that amount. Doctor’s income, adjusted for inflation, is about the same or less as it was way back then. The only clear winner here are our friends the insurance carriers.

It’s really too bad – like alcoholics, we all got ‘hooked’ on something we really didn’t need, but now we are all addicted to it, and can’t easily change, even if we wanted to. But we got to start somewhere, so I think I am going to start having meetings, 2 or 3 times a week, in the church basement. All are welcome, but it’s your turn to bring the coffee (we drink a lot of coffee). Just tell them at the door that “I’m a friend of Rick’s”

(Please bear in mind that this is an oversimplification of what has happened in medical economics over the past 20 to 30 years, but it should give everyone somewhat of an answer to the question “Why is health care so expensive?”)

I don’t know about you, but my head is spinning from all of this. I think I NEED a beer!

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