Why Did the Cost of Healthcare Become So Inflated? #3

Another one of the costs of operating HMOs that use up healthcare dollars is an entity known as a physician database; something that would have been considered strictly Orwellian in the years prior too 1965. The attorney general of the state of New York has managed to rid that state of one such system only to replace it with another; all at the expense of healthcare dollars.
United Health Group (UHG), the nation’s foremost health insurance company, recently settled a suit filed by the American Medical Association against that particular HMO for $350 million; money that could have been used to cover some of the uninsured in our country. The suit, pending since 2000, was based upon the HMO’s unscrupulous methods of reimbursement, whereby the organization grossly underpaid physicians for services. They refused to pay the nationally recognized standard of “usual and customary and reasonable” charges for medical care and also undercut the nationally acceptable reimbursement for patients who had obtained medical services outside of that HMO’s network. NY Attorney General Andrew Cuomo said that many insurers were underpaying their groups of client/consumer’s out of network medical expenses by 10 to 28 percent. Physicians, hospitals and ancillary service units (labs and X-ray), not in the HMOs select group (where their fees are fixed by the HMO), are called “out of network.”
UHG is now ordered to shut down its national physician database and pay $50 million per year to the state of New York in order to help defray the expense of starting a new physician database that will be used to determine reasonable reimbursements to out of network physicians, ancillary establishments and hospitals. Aetna, the nations 2nd largest HMO will contribute $20 million per year over the next five years. Those companies will undoubtedly pay for those expenses by reducing care or reimbursements to physicians and consumers.
If these HMOs were eliminated altogether the money spent by employers to buy health coverage for their employees from these big time bureaucracies, only 75% of which actually goes into paying for healthcare, the removal of those multiple, expensive bureaucratic layers would go a long way to give our nation’s employed better coverage at a lower cost.
Attorney General Cuomo called the collective insurance industry’s Health Management Organizations a “conflict ridden system that has been owned, operated and manipulated by the health insurance industry.“ That multifaceted combined insurance industry (which includes auto, home, fire and theft, life, malpractice, liability, etc) is the largest industry in the world. Can we expect less unprincipled activities if our healthcare is taken over by a group of medically ignorant politicians in Washington?