The Cavalcade of Risk is up at My Wealth Builder. The Colorado Health Insurance Insider article about who we blame for high health care costs was included in the Cav, as was an article from Joe Paduda regarding the same study I referenced in my article. The study we both wrote about found that Americans blame health insurance companies for rising health care costs far more than any other single entity in the health care system. My take on it – admittedly from within the health insurance industry – was that our health care system with third party payers has created a situation where people are largely unaware of the actual costs of health care. But at the same time, we are all painfully aware of how much we pay for health insurance – and how much our premiums increase every year. So it makes sense that people would tend to blame the rising costs on the health insurance companies, since that’s who we interface with when it comes to the dollars and cents of health care.
Joe has a different perspective, and makes some very good points about mistakes that the health insurance industry has made, leading them to be so reviled by the American people. Rescinded policies, exorbitant CEO compensation, complicated policy language, hidden caps and limitations on treatment… there are all sorts of issues that go beyond the ever-increasing premiums and serve to diminish the public opinion of health insurance companies. I agree with Joe that the health insurance industry has some major work to do in order to create a positive public image, but I don’t think that it’s too late. I believe that we do need an expansion of the current government-run health insurance systems (Medicare and Medicaid), but I also believe that our current private health insurance system can continue to exist in tandem with increased government health care.
Without a major intervention from the government to help pick up the tab for increased claims, I don’t think it’s realistic to just flip a switch and automatically have all health insurance companies start covering pre-existing conditions in the individual market. The result of such a change would drive premiums into the unaffordable range for a lot of people who currently struggle to pay for their policies. But even if health insurance companies continue to use medical underwriting, I think that there are some changes that can be made within the confines of our existing health insurance system that would result in increased public goodwill towards health insurance companies.
A dramatic paycut for high level executives would be a good start. Nobody in the health insurance industry should be earning 8-figure salaries (or even 7-figure, in my opinion) while millions of Americans are unable to afford coverage.
Simplified policies would be another good change. When health insurance policies are 30 page booklets, things have gotten way too complicated. A deductible, coinsurance (although I’m a big fan of 100% plans), maybe copays for office visits and prescriptions, and then dependable coverage that kicks in when we need it. We’ve found that the more complicated a policy is, the less satisfied the insured is likely to be (and the more likely they are to be caught by unexpected out of pocket charges). Separate deductibles for pharmacy and medical coverage, limits on physical therapy or other specialized treatment, convoluted wording on exclusions and benefits… none of these things make health insurance easy to navigate. And yet it would be relatively easy for health insurance carriers to make things much simpler and easier to use and understand.
A more simplified health care/health insurance interface would also help. We live in a highly computerized era, and yet health insurance claims often take weeks to be processed and paid, and are accompanied by mountains of paperwork, especially for complicated medical situations. When Jay had relatively simple knee surgery done, we received bills (and corresponding EOBs from our health insurance company) from the surgeon, the assistant surgeon, the hospital, the anesthesiologist, the medical equipment supplier, and the lab. Someone with a chronic illness who requires on-going care will be faced with mountains of paperwork to wade through.
A focus on customer service is vitally important for health insurance companies looking to revamp their public image. Phone trees, multiple transfers, and long hold times are always frustrating. But when you’re already stressed about a health problem, they are maddening.
In addition to cutting executive pay, I think that health insurance carriers should strive to cut expenses in all non-claims areas (denying claims to cut costs will not generate public goodwill). Then they should make their efforts public, showing insureds that while the rising cost of health care is impacting all of us, the health insurance carriers are doing as much as they can to mitigate the effects. Insureds should be privvy to exactly how a health insurance company is spending their premium dollars.
The report card that the AMA released earlier this year, rating health insurance carriers on numerous issues from claim denials to speed of payment, would be a good starting place for health insurance carriers looking to improve their efficiency and reputation. A renewed focus on customer service, simplicity, speedy payment of claims and lowered overhead expenses would go a long way towards improving public opinion of health insurance companies. Health insurance carriers are in a unique position in the business world – they literally hold lives and livlihoods in their hands. This is a tremendous responsibility, and one that cannot be taken lightly. Nor can the primary focus be profit when a company is involved in a business that has moral obligations to society. I do still believe that part of the reason that so many people blame health insurance companies for rising health care prices has to do with the fact that most Americans are removed from the realities of health care costs when the bills are paid by insurance companies. But Joe’s article serves as a much needed reminder to health insurance companies that their public image could use a makeover, and that they are indeed partially responsible for the fact that so many Americans have a negative view of health insurance companies.