The legal "protection" (extortion) racket in place today.
The various mafias that started organized crime began to invest money in legal (but often immoral) enterprises as they accumulated greater wealth. They preferred to invest in sure things such as services that people could not do without. Health care was and is one of those services. Health care is needed for survival and health insurance companies make excessive profits which can be loaned to the government to increase the national debt. Congress will not interfere because its members need the dollars for pork barrel spending.
In many locations, hospitals are monopolies - and in other locations, they are so few that they may act like monopolies. This is something that also appeals to the mafia mentality.
1. Hospitals, doctors, testing labs, etc. routinely bill those who cannot afford health insurance - at a rate that is more than double the actual cost of services rendered.
2. Hospitals refuse to provide a list of prices for services so that the first time one discovers how much these services cost is billing time. For those without health insurance, the bill is far in excess of the actual cost of the services. For instance, if hospital personnel are asked what the room is costing the patient, they refuse to answer and do not come back to be asked again. Calling the billing department results a runaround, and the patient is not allowed to escape.
3. The agencies mentioned do not bill until many months have passed, hoping that the patients will have fuzzy memories at billing time and will not realize that they are being billed for many services which were never rendered. Overcharging, charging twice for one service (double billing), and billing for services not rendered are the norm. Hospitals have become criminal rackets.
4. The health insurers make their money by overcharging for health insurance and underpaying for services rendered. The uninsured are the ones who shoulder the costs for the services.
What follows is a letter sent to various politicians in February, 2002. Since that time things have not improved and have, in fact, become worse. Needless to say the politicians did not even answer the letters, much less do anything about the problem.
The war on terrorism is important, but there are other matters of equal import that must be addressed if we are to maintain a republic in which living is worth the effort. Of these, our healthcare debacle is one of the foremost. Its whole structure is a cancer on the face of our nation.
In case you do not already know, HMOs and similar health insurance companies demand that hospitals, testing labs, and doctors accept 40% of the amount they bill as payment for their services. This is standard practice. It means that a hospital room, for instance, may be billed at $1,000 per day while the HMO pays only $400 per day. Truthfully, a hospital room should cost about $400 per day, but the rate is inflated to $1,000 because the hospital administrators know that they will be cut back to 40% by each HMO. This is typical of all services furnished, including testing.
When HMOs are approached for health insurance by older people, they inflate their rates or refuse to insure those applying. The result is that many of us have no health insurance whatsoever. This is bad enough, but it gets worse.
Those of us without health insurance are forced to either do without medical care of any kind or pay the inflated costs of the hospitals and the doctors. So those who have no health insurance and who must pay cash, are charged the $1,000 per day for a hospital room, while the HMOs are charged only the $400 per day.
This is even more unfair because the HMOs delay payment to those they owe, and force the hospitals and doctors to pay a staff to manage their billing to the HMOs and to argue their case. So the cash customers, who do nothing to create extra staff members for the hospitals, testing labs, and doctors, are paying 2.5 times as much as the greedy, God-forsaken HMOs.
Perhaps this cannot all be cured at once, but one thing that can be done is to create legislation that levels the playing field by insisting that the actual amounts paid to hospitals, testing labs, and doctors by the health insurers be NO LESS than the amounts paid by the cash customers. In fact, the reality is that the cash customers should be given a discount below that which the HMOs pay. Furthermore, the hospitals, testing labs, and doctors should be forced to divulge their prices in advance and in plain language, and there should be sizable penalties for double billing, billing without explaining the reason for the bill, and any other forms of corruption in which they currently indulge.
In hopes that you will strongly encourage and sign appropriate legislation,
Signature
The National Review addressed this problem in their August 4, 2008, issue with a book review, The Right Remedies written by Richard Nadler. Some of the paragraphs from the review follow.
As chairman of Golden Rule Insurance, [J. Patrick] Rooney built an empire on individual health insurance policies. He was a close student of health-care economics, and he concluded that the laws passed to promote universal coverage had quite the opposite effect. Indeed, the whole system was structurally tilted to favor those institutionally protected, while forcing others out of the health-insurance market. High-premium, low-deductible policies meant higher profits for the insurance companies, and bigger commissions for the agents selling them. Medicare reimbursement based on plant as well as procedure encouraged a building binge in the hospital industry, just as it had in utilities. Legislation passed during the Clinton administration to force small businesses covering some employees to cover all drove many firms to eliminate health-care plans altogether.
The impetus of the entire system was to increase insurance prices, drive people out of the insurance market, and then gouge them with even higher prices while they were unprotected. The growth of the uninsured population (most of it neither elderly nor poor) would then form one political base in the demand for a "national" plan. The other base was business itself - those crushed by the double-digit inflation in employer-provided coverage, and those driven out of the market by mandate.
"Hospitals," wrote Rooney and Perrin, "are the trend-setters for the health-care industry." As major employers in almost every congressional district, and as institutions shrouded in a mantle of good works, they generate many increases in public-protector outlays (notably in Medicare) through capital spending. But they have kept their profits healthy by extorting the unprotected - the 27 million Americans with individual, rather than employer-provided, policies, and the 47 million with no insurance at all. "The unwritten rule," our authors write, "is to avoided uninsured when possible, and when not, to gouge them with prices three to five times higher than what others pay. Almost all our hospitals are doing this."
Those Americans not under the umbrella of Medicare, Medicaid, or employer-provided group coverage are systematically overcharged, not on the basis of their percentage of default, but on the basis of their insurance status alone. The uninsured and individually insured, who make up less than a quarter of the population, regularly generate one-third to one-half of hospital profits. It is this gouging of the unshielded that has enabled the health-care insurance industry to evolve seamlessly from a risk pool to an extortion racket...
The title of the book that Nadler reviewed is America's Health Care Crisis Solved by J. Patrick Rooney and Dan Perrin. It is "a book of theory, a historical narrative, and a manual of practical advice. The reader who tackles it will come away richer, sometimes literally."
[Some of us had to learn these lessons the hard way - which is what happened with my wife and I when we were badly mauled financially by Marshall Hospital in Placerville, California. We learned our lesson and went heavily into alternative medicine, refusing to use the hospital any further than absolutely necessary. Many people we know have chosen this path for the same reasons. Marshall Hospital conformed perfectly to the mold given above and bullied their way into forcing payment that was at least 2.5 times the actual amount paid by HMOs. The hospital also attempted to bill us at least twice for some services and to bill for services not rendered. There was no way to properly expose the hospital as the state agency which should have been responsible could not legally go after the hospital for overcharging. A lawsuit is too expensive to consider as a rule. Unfortunately, Marshall Hospital is probably no worse in this regard than the other hospitals in Northern California. This became increasingly apparent when I was the co-executor the of my parent's estate and able to look at their past medical expenses.]