Saturday, November 04, 2006

 

Inflating the Cost of Health Care

I got a statement from my health insurance company for a chiropractic visit. This was one of those "Explanation of Benefits" reports that shows how much the provider charges, how much the provider lops off the price for the insurance company, how much the copay is, and, finally, how much the insurance company pays. I was astounded at how much the chiropractor charged - $126. Let's bold that - $126!!!! For the barest of adjustments. The chiropractor lopped off $46.77. I paid $25 as a copay. The insurance company paid $54.23.

Let's think about that $126 for a moment. The chiropractor needs to make enough money to make the business pay. If the insurance company decides it's only going to reimburse a certain amount and no more, but that amount won't cover what the chiropractor needs to charge, what do you think the natural reaction of the chiropractor is going to be? To raise the overall cost, of course.

Now, what happens when an uninsured person comes into the office? They get charged that exhorbitant $126 fee. The chiropractor can't not charge that fee, because the insurance company is supposed to be getting a deal.

In essence, the insurance companies, along with government medical programs, inflate the true cost of health care because they refuse to pay the full cost of what the chiropractor charges. You might argue that if insurance companies and government programs don't cap what they are willing to pay, health care providers will rake them over the coals. As it sits now, the ones getting raked over the coals are the uninsured - along with the rest of society that has to pay for a broken health care system.

Between my copay and the amount reimbursed by insurance, the actual amount paid to the chiropractor was approximately 65% of that $126. If $80 is what an appointment actually costs, then why aren't we all paying $80, instead of $126?

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