A Common Sense Understanding of Our Health Care System

This is an excellent piece written by Jeff Seiler in response to an article published by an “expert” in the health care industryhealth-care-reform
Dear Ms. Harrop,
I read with interest you editorial on unfurling a national health plan. I have no doubt that health care costs are a major concern for every corporation, or for that matter the government as well as many individuals. I also think you do recognize that everyone having health insurance will not lower the cost of health care. In the medical insurance business, we have a saying….”claims are claims.” No matter what, somebody is going to be paying for the claims.
However, the assertion that putting primary care physicians (PCPs) on a capitated system that would pay them $250,000 (or whatever dollar amount) has already been proven to be a faulty assumption for lowering costs. HMO coverage was by and large based on that system and from being in the business and from personal experience, I can tell you that it doesn’t work. Primary care may lower some costs, but PCPs being paid on capitation does not save a dime. In fact, PCPs basically turned into triage physicians. They saw as many patients as they could for their capitation payments and quickly referred those with any complaint on to a specialty physician or gave them a prescription to get them out of the office. More or less, “Get out of my office so I can make more money on non-capitated patients.” To say that they would do more on a straight capitated system is pure folly. They would have no incentive to make more money. In fact, like most people with no incentive, they would do very little. If you are going to get $250 K for seeing patients regardless, where is the incentive to do anything more than the minimum?
In the medical care business, 20% of the people cause 80% of the claims. It has been true for 30 years  or more and will continue to be true. Those 20% don’t have minor ailments where they need to see a PCP. They have major ailments requiring lots of specialty treatment. The big dollars that are being spent are really being spent on technology that keeps people alive that would have been dead 20 or 30 years ago.
I’m not saying I have a solution to the cost of health care, but cutting down on the number of uninsured will not lower the cost (their claims will still be there), and neither will a PCP based capitation system. I  am just hoping  (against all hope) that whoever they put in charge of any changes to be made will consult with someone who is actually in the front lines of the business and who understands how the money flows and the system works, because Hillary and her gang did not. McCain obviously didn’t know and it’s pretty clear that Obama knows very little as well.
By the way, in general, insurance company executives and hospital executives and doctors also know very little about how the costs are generated and who gets paid, so don’t count on much realistic help from them in formulating a plan. The executives are far above the fray and managing other things and doctors are notoriously poor at understanding how the system works. It’s a far more complicated subject than most people who are not in the front lines of the business can comprehend and if it’s one thing I am personally tired of, it’s having a government that can’t run itself well, telling other people how things should work.
Thanks for your article though.
Best regards,
Jeff Seiler
S&S Benefits Consulting, Inc.

219 Darien Ln.
Dundee, IL 60118






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