Single Channel is Cheaper
June 13, 2012
Mr. Brock’s idea of increasing the number of medical insurance companies for greater “competition” as a counter to the current health reform is a bad idea. One of the major problems in our current medical care delivery system is the insurance industry. Each insurance company negotiates a different payment/charge for every hospital. In fact the same insurance company can negotiate a different payment rate for all procedures/tests for every contract it writes for any given company.
This means employees of a college may pay a different rate for a bronchoscopy than employees of a small manufacturing company have to pay for the same bronchoscopy, even though it’s the same insurance company. Such a system becomes an administrative nightmare for a hospital to manage and really does nothing to contain costs.
A recent Newsweek article “The Cost of Hope” by Amanda Bennett discusses her evaluation of the costs of her husband’s medical care during the last years of his life. She commented, “We didn’t realize that the same CT scan in the same hospital cost $776 or $2,586, depending on which insurance company was paying.” So adding more insurance companies will not address the issue of cost savings and quality of care in our medical system. A single channel payment using the same payment rates for all, applied consistently, will reduce the administrative cost to hospitals and lead to better financial control of medical costs.