We witness on a daily basis an almost sociopathic willingness by HMOs to ignore laws and regulations originally promulgated to protect consumers and providers. Their ability to avoid effective regulatory enforcement and meaningful penalties, including the possibility of revocation of their license to operate within our State, has only emboldened these HMOs. Avoiding payments to hospitals and other providers of care by placing barriers to appropriate care, refusing payments (i.e. denials) or indefinitely delaying payments for appropriate services already provided in good faith, refusing to recognize inquiries or to fairly negotiate, are just some of the consequences which without doubt have severely compromised the availability and quality of health care as well as patient and provider satisfaction. Their demonstrated standard business practices and policies have progressively crippled hospitals struggling to continue to provide excellent care in the face of decreasing reimbursements and increased costs of operation.
When you look around at the systems used by the rest of the advanced industrialized world, you can't help but wonder how we can continue to be so blindingly stupid. Our system is both objectively and subjectively awful.
UPDATE: More here:
U.S. insurance companies systematically overcharge customers and underpay home and auto claims to pad their already-fat bottom lines, a consumer group said Thursday.The Consumer Federation of America’s insurance director, Robert Hunter, said insurance companies have enjoyed robust profits and contained losses largely by “methodically overcharging consumers, cutting back on coverage, underpaying claims and getting taxpayers to pick up some of the tab for risks the insurers should cover.”
Not to continue to beat a very dead horse, but...
It really amazes me how so many people who are otherwise very smart refuse to see how this situation is both entirely predictable and inevitable given the current structure of our insurance markets. Insurers don't make money by insuring people; they make money by denying their claims. The more claims they can find ways to "legitimately" deny, the more money they will make. This is an inevitable market failure that can only be corrected through regulation. If our regulations were better designed, our insurance markets would function more efficiently. That would inevitably lower insurance company profits, of course, but that seems to me to be a small price to pay for the broader economic efficiencies that would inevitably result.
My favorite part of this entire debate always comes when "free market conservatives" read and respond to posts like this. Only "free" markets can function efficiently, they will inevitably tell me, so the answer clearly is less regulation, not more. As if the insurance markets are somehow possible in the absence of regulation. As if less regulation will magically prompt insurers to stop overcharging consumers. As if the regulations weren't instituted in the first place in response to precisely these sorts of bad (i.e economically inefficient) behaviors. Oh well...
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