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A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

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Re: A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

#41

Post by aaavl2821 »

maxerickson wrote: post #16
aaavl2821 wrote: post #12

This is a good article, but it only shows a few parts of a much more complex whole, and extrapolating from these anecdotes to a broader system is not really accurate Many hospitals lose money on every Medicare and Medicaid patient. The only reason they survive is because they can charge private insurance companies more. So hospitals and health systems have been consolidating to strengthen their negotiating position a…

I think it'd be a good sport to make hospitals eat denied claims. If two giant institutions want to argue about whether something is covered, the patient should not be the loser. We should also better fund Medicare and Medicaid. Taxes should be apparent.

a lot of hospitals do eat denied claims. look at this [0], the annual financial report for HCA, the biggest publicly traded hospital company. ctrl-f for "provision for doubtful accounts". this represents denied claims / treatments for uninsured patients. this is ~7-10% of revenue.

now look at EBITDA, a common metric representing cash flow. look at EBITDA / revenue, ie cash profit margin. this is around 20%, which is massive. this profitability is around the level of big tech and big pharma. however, most hospitals in the US have almost no profit. the profitability of large hospital companies is mostly due to their bargaining power. in fact, a decade ago, big hospital systems were some of the best private equity / LBO investments, bc they were massively profitabel, stable businesses that could take on a lot of debt. and this is before the ACA

before the ACA, this was even worse, especially for smaller hospitals. see [1], financial statements for Community Health Systems, a massive (but smaller than HCA) public hospital company, from 2009. for some hospitals this figure was 30% or higher

the problem is that not all hospitals are equal. the companies i mentioned are some of the biggest, most powerful hospital companies. however, many hospitals are completely different (often independent urban hospitals), and just bleed money. sometimes its because they have more under/uninsured pts, sometimes its because their contracted rates are lower, sometiems its bc they dont have enough commercial pts (instead having more medicare / medicaid). so a blanket law making hospitals eat more costs would just help the rich get richer and kill the little guys

i worked in investment banking and these big hospital systems were some of our best clients. a business that can write of 10-30% of its revenue as bad debt and still generate 20-25% profit margins is an incredible borrower, and we'd underwrite multi billion dollar bond issuances for these companies, so they could issue dividends to shareholders, and because they were so profitable they could afford tons of high yield debt without breaking a sweat

[0] https://www.sec.gov/Archives/edgar/data/860730/0001193125180...

[1] https://www.sec.gov/Archives/edgar/data/1108109/000095012310...

Re: A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

#42

Post by tptacek »

mobilefriendly wrote: post #36
tptacek wrote: post #32

Earlier quoted context omitted.

The rate of increase for health insurance prices went down after the ACA was enacted. The motivation for enacting the ACA was, in large part, the untenable increase in insurance prices in the 10 years leading up to it. People have a bad habit of blaming the ACA for insurance prices. The ACA failed at its goal of making individual health insurance affordable, that is true. But it didn't cause that problem, and it did…

No it didn't, it reduced choice and drove up insurance costs by mandating that all private insurance cover everything + kitchen sink. My single brother's cheap catastrophic plan was OUTLAWED to force him onto the ACA exchange. The only thing ACA has done on prices is pass rising costs to taxpayers (more than 80% of ACA participates are subsidized) and the exchanges are in a death spiral because anyone who can escape…

I'm sorry you feel that way, but that's simply not what happened. I cofounded a company that provided insurance to ~40 full-time employees (and provided insurance before the ACA was passed), and the costs you're seeing today are in line with where costs were outside the ACA and prior to the ACA.

No matter what you think about prices, though, the most important thing the ACA did was create a nationwide requirement for guaranteed-issue insurance. However expensive you think insurance is, it's more expensive to be flatly and irrevocably restricted from buying your own insurance at all, which was the status quo ante of the ACA.

Re: A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

#43

Post by maxxxxx »

knieveltech wrote: post #28
ThrustVectoring wrote: post #19

Earlier quoted context omitted.

My long-term plan is to get something like a million dollars in retirement accounts and a home and retire in Texas, where your retirement accounts have unlimited protection against creditors. If any random incident can bankrupt you, then your best bet is to ensure that you cannot be forced into bankruptcy.

I don't know if this is relevant to your plan but you are aware that Texas has like the 3rd worst healthcare system in the country and maternal and infant death rates on par with most 3rd world countries, right? Good luck, don't get sick.

As long as you have enough money Texas health care is perfectly fine.

Re: A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

#44

Post by Spooky23 »

maxerickson wrote: post #16
aaavl2821 wrote: post #12

This is a good article, but it only shows a few parts of a much more complex whole, and extrapolating from these anecdotes to a broader system is not really accurate Many hospitals lose money on every Medicare and Medicaid patient. The only reason they survive is because they can charge private insurance companies more. So hospitals and health systems have been consolidating to strengthen their negotiating position a…

I think it'd be a good sport to make hospitals eat denied claims. If two giant institutions want to argue about whether something is covered, the patient should not be the loser. We should also better fund Medicare and Medicaid. Taxes should be apparent.

It’s more complex. Medicare is outcome-based. Providers who do a shitty job don’t get paid, which is why hospitals complain about reimbursement.

Medicaid is like an ATM machine for providers in many states. There is usually little or no correlation between outcome and payment, and poor fraud controls. That’s why you always hear about providers in NYC and Miami who “visit” 900 patients a day. Additionally, you have the institutional racism aspect of Medicaid where services are unavailable in some red states.

IMO, the biggest issues in healthcare are for profit institutions and insurers and the trade guild practices associated with Doctors.

Single payer or regional systems supported by taxes are the way to go. Medicaid should be an institution that is replaced by something better.

Re: A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

#45

Post by charleslmunger »

twoodfin wrote: post #9
ModernMech wrote: post #4

Earlier quoted context omitted.

Is it really hard to believe though? The ones who are lucky and have the money are fine with the situation. The unlucky ones with no money are too busy fighting diseases, insurance companies, and bill collectors, they don't have time to change the system. Dealing with insurance when you have a serious illness is a full time job. The people who need change most are literally fighting for their lives. Meanwhile, health…

Ryan’s point was that Obamacare’s guaranteed-issue requirement means that exchange plans can only be viable if they attract enough healthy people to cover the costs of the currently or chronically ill. Both groups must be offered the same rates. Surely you can see how that is different from (say) fire or auto insurance, where no one would expect to pay the same to insure two houses, only one of which is actually burn…

Isn't that why the individual mandate and the minimum coverage standard existed?

Re: A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

#46

Post by mobilefriendly »

tptacek wrote: post #42
mobilefriendly wrote: post #36

Earlier quoted context omitted.

No it didn't, it reduced choice and drove up insurance costs by mandating that all private insurance cover everything + kitchen sink. My single brother's cheap catastrophic plan was OUTLAWED to force him onto the ACA exchange. The only thing ACA has done on prices is pass rising costs to taxpayers (more than 80% of ACA participates are subsidized) and the exchanges are in a death spiral because anyone who can escape…

I'm sorry you feel that way, but that's simply not what happened. I cofounded a company that provided insurance to ~40 full-time employees (and provided insurance before the ACA was passed ), and the costs you're seeing today are in line with where costs were outside the ACA and prior to the ACA. No matter what you think about prices, though, the most important thing the ACA did was create a nationwide requirement fo…

It isn't what I think about prices, it is the facts, ACA exchanges up 34% YoY. https://www.cnbc.com/2017/10/25/most-popular-obamacare-plans...

Re: A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

#47

Post by snuxoll »

tptacek wrote: post #40
zitterbewegung wrote: post #34

Earlier quoted context omitted.

If you want a lower payment per year go pick a really large company (the larger the pool the less you will pay). My mom pays half of what I pay and she gets family insurance while I get a single person insurance. Her pool is a large grocery store company.

$18,000 for a family is high but within the range of what insurance costs today. Family coverage on the small group market ( (I just looked it up and, weirdly, average premiums on the large group market in 2017 were higher than those in the small group market; on the small market, they're around $17,000, and in the large market, $19,000).

That’s still roughly the case, I work for a medical billing company owned by a physician group, we have a pretty large group and are essentially self-insured.

I pay ~$220-ish a month for my family of three, the company pays $800+/mo. Boy am I glad to work for a company that pays such a large chunk of my benefits, many other places cover maybe 50% of your dependent costs.

Re: A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

#48

Post by DoreenMichele »

mobilefriendly wrote: post #36
tptacek wrote: post #32

Earlier quoted context omitted.

The rate of increase for health insurance prices went down after the ACA was enacted. The motivation for enacting the ACA was, in large part, the untenable increase in insurance prices in the 10 years leading up to it. People have a bad habit of blaming the ACA for insurance prices. The ACA failed at its goal of making individual health insurance affordable, that is true. But it didn't cause that problem, and it did…

No it didn't, it reduced choice and drove up insurance costs by mandating that all private insurance cover everything + kitchen sink. My single brother's cheap catastrophic plan was OUTLAWED to force him onto the ACA exchange. The only thing ACA has done on prices is pass rising costs to taxpayers (more than 80% of ACA participates are subsidized) and the exchanges are in a death spiral because anyone who can escape…

A little data that agrees with your impression:

https://www.forbes.com/sites/theapothecary/2016/07/28/overwh...

Re: A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

#49

Post by Spooky23 »

aaavl2821 wrote: post #41
maxerickson wrote: post #16

Earlier quoted context omitted.

I think it'd be a good sport to make hospitals eat denied claims. If two giant institutions want to argue about whether something is covered, the patient should not be the loser. We should also better fund Medicare and Medicaid. Taxes should be apparent.

a lot of hospitals do eat denied claims. look at this [0], the annual financial report for HCA, the biggest publicly traded hospital company. ctrl-f for "provision for doubtful accounts". this represents denied claims / treatments for uninsured patients. this is ~7-10% of revenue. now look at EBITDA, a common metric representing cash flow. look at EBITDA / revenue, ie cash profit margin. this is around 20%, which is…

Did you get any sense of how they ran their businesses?

My doctor was part of a medium sized practice that was swallowed up by a big regional system. Since that acquisition, they make the .gov that I work for look efficient and streamlined. They literally added 5-6 non-billable staff to an office that was staffed by 2. Per my doctor, that’s typical in most offices!

Re: A Glimpse into the Bureaucratic Hell of Denying Health Insurance Claims

#50

Post by ModernMech »

wyager wrote: post #21
maxxxxx wrote: post #7

Earlier quoted context omitted.

"The whole idea of Obamacare is...the people who are healthy pay for the...sick" This is the whole point of health insurance! What a stupid idiot (I am overly nice to Paul Ryan. His budget plan was the most ridiculous thing I have ever read).

> This is the whole point of health insurance! This is a serious misunderstanding of what insurance is. Insurance is a net benefit for society because it linearizes individual risk curves even if you have to pay in proportionally to your expected costs, not because it makes less risky people subsidize more risky people. Perhaps you should avoid calling people “stupid” for misunderstanding insurance.

And by what mechanism does insurance linearize individual risk? The fact that if I get cancer, it's less likely to bankrupt me. But if it's not bankrupting me, someone else is paying for it. Who's paying for it? Someone who didn't get caner. So how is this not "less risky people subsidizing more risky people"?
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