Whenever healthcare bills arrive, my inner George Carlin kicks in, flying wild with cynical thoughts and cuss words. Then, I start the process of coping with the numbers.

One calming thought is this: Yes, I’m disgusted by the complexity of health insurance, but I’m really grateful other purchases aren’t as insane and confusing as health insurance. Imagine buying food in this crazy manner.

Well, one writer did just that. “What if we paid for food like we do healthcare,” by a doctor, Ryan Neuhofel, details this type of dystopia. (Google the title and the author’s name if you want to read it.)

Neuhofel imagines you as a grocery store shopper with a Green Cross Green Shield (GCGS) Bronze-Select food plan with a $680 a month premium.

“FoodMart’s entrance is not easy to find, but you finally make your way into the store,” writes Neuhofel. “You are first greeted by a few women sitting behind a glass-enclosed desk. By greeted, I mean they ask you for your photo ID and food plan card and hand you a clipboard with a stack of forms to complete. The lobby is crowded, but you manage to find a seat amid the sea of impatient shoppers.”

Eventually, you get a cart. You know you can’t afford everything on your list, but unfortunately, no prices are listed on anything. So, you buy a bunch of eggs, which you know are OK on your plan. But you don’t know much, because there are no labels mentioning what is a “Bronze-Select” item.

“During check-out, the cashier rings up the items and asks you for a $30 copay,” writes Neuhofel. “You are given a six-page receipt with indecipherable codes and then asked to sign a few other forms because some of your items will be billed to you later.”

Several months later, you get a $276 bill from FoodMart.

On another day, you decide to eat at Lola’s Cocina, but learn that it is not in network, so you eat at Burrito King, which has a sign saying it accepts “GCGS Bronze-Select” members.

“Upon checkout, you present the waiter your GCGS card, and you are asked to pay a $10 copay,” writes Neuhofel. “(The billing statement weeks later reveals that the ‘plan discount’ did reduce the initial charge from $64 to $37 and that GCGS paid Burrito King another $27 a few months later, which was applied to your deductible.) You question how a simple burrito can cost $37, but nobody, including the majority of food policy experts, knows exactly why.”

Ah, those bills that don’t make any sense. We’ve all had them. And I like Neuhofel’s food analogy. It puts the craziness in clear terms.

President Trump talked about bringing price transparency to medical billing. If his administration could actually make that a reality, I would absolutely applaud this. But I’m skeptical that this tangled web of healthcare billing will clear up anytime soon. I’m truly not interested in who gets credit or blame. I just want a functioning system. And we don’t have that now. Healthcare should transcend Republican or Democratic allegiances for all of us. That’s because we all need to live, to get care at times, and to pay for that care however we can. All of this needs to happen as efficiently as possible, whatever your political color. (As an aside, if you’re looking at upcoming healthcare expenses, you might check out healthcarebluebook.com.)

It seems self evident that right now we have some people making massive profits off of huge structural inefficiencies in the healthcare market, while others are crushed by absurd bills for those inefficiencies.

We know that even if we are healthy, we are going to see our health insurance premiums rise. But why? In car insurance, if we drive safely over time, we can see some premium relief. But that’s not so with healthcare.

Naturally, we assume that health insurance companies want to cut costs while increasing profits. That’s true, of course, but it’s also not quite as simple as that. There’s a perverse incentive at play in the health insurance market. Inflationary expenses are actually good for insurance companies. What?!

Here’s what I mean: Any business that is traded on Wall Street has one primary objective — to grow. And insurance companies are good at that. For instance, Blue Cross Blue Shield is traded under Anthem Inc. (ANTM). As I write this, ANTM is trading at $251.40 a share. In 1998, it was $15 a share. It was $65 in 2010, $164 in 2015 and as high as $311 earlier this year. Shareholders respond to growth. If a company is growing, investors pour money in. If it appears that growth is stagnating, then investors don’t want to be stuck with deflating share prices. So, they jump ship.

Health insurance share prices rise if there’s more volume. But volume only rises with more costs. Is this healthy? Literally, is this healthy for America?

The dual incentive structure of health insurance companies is absurd. On the one hand, insurance companies want to keep costs down. Obviously, they don’t want to pay for everything. So, they’ll fight on the particulars of any bill. But they don’t want to be so good at cutting expenses that they affect growth in a way that scares shareholders. If they can see increased healthcare expenses every year, then they can justify another 10 percent premium hike every year. Think about it. Ten percent of $1 million yields one number, while 10 percent of $100 million yields a much higher number. So, it makes sense for insurance companies to see healthcare costs continue to swell. That’s a perverse incentive. It leads to others in healthcare running up costs, issuing more tests, and using health insurance payments as a means of recouping lost revenues from other sources. This system benefits those who qualify for government assistance and those so rich that they are immune to fluctuations. But everyone else is punched in the gut. And these gut blows are hard to endure. So when does the middle class eventually hit the mat on healthcare?

This perverse incentive healthcare economy is not sustainable. But it is held in place by contributions to your favorite politicians. It’s not addressed in any real way by politicians because too many people are getting fat off this gravy train, while others starve. For some, this is great, but for the country, it’s as poor an economic model as you can find in any developed nation. Doubt me?

OK, let’s extend this system outside of healthcare. How about we take the price tag off all food items? How about you pay hundreds a month for a Green Cross Green Shield Bronze Select Plan and start trying to determine if your favorite burrito is “in network” or “out of network.”

Nah, you don’t like that, do you? Me neither. So, why keep this awful insurance system? Forget red and blue. Let’s address this together. It’s so stupid — which begs the question: are we?

Zach Mitcham is editor of The Madison County Journal. He can be reached at zach@mainstreetnews.com.

(1) comment

Beth Mattox

Loved you analogy!!!. I've been in medical billing for over 40 years in various medical specialties. To me health care and health insurance coverage is a vicious cycle. Let's say a physician bills $200 for his services. The patient's insurance plan, which the physician is contracted or participating, allows $57 for this service which by contract he/she have agreed to accept as payment in full unless it is deemed to be patient deductible or copay (as you explained very well in your article). This means the physician must write off the remaining $143 of his billed charge. Please keep in mind there are many components that contribute to the fee charged by medical providers; office rent/building upkeep, malpractice insurance, employee benefits supplies needed to perform the service and the medical staff and support staff (receptionist, billing personnel, etc) , monthly upkeep of government required computer systems (YES! - look up cms.gov ). I am all for healthcare INSURANCE reform. Lots of folks blame the healthcare providers for the high cost of medical care. Not so. When there were no "managed" care contracts or provider agreements, we simply sent in a bill and the insurance company sent us a check. Back then providers -regardless of specialty - rarely billed more than $75-$100 for an office visit. Yes this was a while back, but maybe healthcare costs would lower if medical providers didn't have to "play the game" between insurance companies and government programs.


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