Yesterday the billionaire Mark Cuban proposed his plan for making the US healthcare system better than ever. His plan, in short, is to get rid of private insurance companies and use federal funding to increase the number of medical staff so that healthcare is more widely available. Would this work? Well let us take a quick look.
Would it help to get rid of the private insurance companies? I’m a physician, so I’m going to say YES!
All kidding aside though if we were to eliminate the entire private insurance industry there would of course, be some significant administrative savings some estimate that insurance adds an additional overhead of approximately 18-27%. But would it be the solution that would guide us to a more functional healthcare system? I’m sure there would be some positives as well as some negatives so lets look at a few glaring ones.
On the positive side I believe that we could save a significant amount of money by administering healthcare cost in a more economical fashion. As I have blogged before administrative healthcare costs are estimated to be somewhere between 18 and 27% of the US healthcare dollar. That is money that is NOT directly associated with taking care of patients, or paying for taking care of patients. It is money that is spent moving data and paper. At approximately $10,000 per person in the US with around 320 million people we are spending approximately $3.207 Trillion dollars (2016) so says the CMS. This amounts to approximately $128 Billion dollars a year. Again, $128 Billion dollars to administer care, not to actually take care of patients.
Conversely, on the negative side the elimination of private insurance companies would leave us at the mercy of government bureaucracy and the compassion that it engenders. I’ll give you one very simple example of governmental bureaucracy.
The coding system that we use for medical billing and procedures has been updated, you may have heard of ICD 10. The system was worked, and reworked with the help of governmental health experts and put into place for clinical billing in 2015. Work began on ICD-10 in 1983 and was completed in 1992. It was finally enacted in the US in 2015. Yes you read that right….a mere 32 years after conception ICD-10 hit the US healthcare market. Nothing is as less responsive, than the US government. Remember this when you are dealing with healthcare. The slogan of the governmental healthcare could be, “When time matters, you don’t”. If you don’t believe me ask someone seeking care at a VA medical center.
As a side-note after 30 plus years of development ICD-10 was put into place. Almost instantly, it was obvious that some of the most common codes and procedures were left out… However some of the most random diagnoses were included. Codes such as Y92.253 – Injured at an Opera House, W61.43 – Pecked by a turkey and who could forget V97.33 – Sucked into a jet engine.
I’m not kidding, these are codes that are real and billable. For a more detailed (and sadly hilarious) list of the strangest ICD 10 codes go to the following link at Medical Economics.
My point is, that the elimination of private insurance as the administrative body for healthcare is not the panacea that Mark Cuban is looking for. However, I do agree that keeping healthcare insurance companies as they are is also not good for the US healthcare consumer. So what is a better solution?
I have always wondered why we have not taken the approach of overseeing healthcare companies like we do private utility companies. Certainly, insurance company is entitled to make a profit however the interests of the public are not being served one companies are having year-over-year returns in the high double digits. How come we do not have a governing body that can review the profits and keep them in line with utility companies? It would seem to me that this would be a simple solution, and one that is achievable. It allows the insurance companies to make a profit, but there profit margin is limited. The same as it is for hospitals, and providers. Oddly, we never even consider this simple solution.