(Newswire.net — April 7, 2015) — In their best selling book “Dying to Make a Profit,” Chris Ryan and Charles St-Onge eloquently highlight a perceived inherent conflict between the health insurance industry’s obligations to policy holders and duties of fiduciary care owed to an insurer’s own shareholders. The well researched and thoroughly documented paper casts this tension in terms of a complex romantic liaison. A married man (the insurance company) must negotiate a veritable minefield which results when his wife (the company’s policy holders) discover his love affair with a mistress (the company’s stockholders)
Dying to Make a Profit: The Conflict of Interest that Publicly Traded Health Insurance Companies Don’t Want You to Know!
.
The analogy used so effectively in the paper might describe many of the remarkable paradoxes encountered by health care providers today. Physicians and others engaged in the provision of medical services often chafe beneath a mound of regulations, detailed provisions that control the way in which they practice medicine, especially when dealing with hospitalized or institutionalized patients.
In responding to the treatment needs of the wife, the legitimate recipient of professional medical interest, will members of the health care community discover her husband answering to another, undisclosed party’s interests? Will the longstanding love affair take precedence over the marriage?
The Rapidly Changing Health Care World
The article’s premise cogently suggests that in the modern era, the wife and the mistress already encountered one another just a few years ago. Third parties to the relationship need to tread carefully amidst the pitfalls of this potentially explosive domestic scene. Some long standing societal truths may be on the verge of unraveling, the authors imply.
Perhaps to a great degree, they pinpointed a powerful undercurrent which today, just a few short years later, shapes the rapidly transforming world of health care provision. Despite the legal changes which now accompany extensive new federal health-care related legislation, consumers and many others still worry about the potential impact of rising health care costs on U. S. society.
Media reports surface concerning millions of people recently enrolling in government subsidized Medicaid programs. And private insurance plan premiums climb also in some states. Many industry leaders anxiously await definitive statistical results of the track record of the new legislation in controlling spiraling costs.
The Six Sources of Rising Health Care Costs
In “Dying to Make a Profit,” Chris Ryan and Charles St-Onge cite six basic reasons for the upward surge in health care costs prior to 2009. They suggest that three reasons relate directly to an internal dichotomy within the health care insurance industry, while the other reasons do not relate to insurance provision at all:
Insurance-Related Reasons for Health Care Expense Increases:
- Different insurance companies charge different amounts for exactly the same treatments, leading to rising costs;
- Some insurers offer unnecessary new services to customers in order to attain a bigger percentage of the health care insurance market;
- Sometimes insurers endeavor to classify additional services as medical in nature, thus expanding insurance market coverage.
Non-Insurance Related Reasons for Health Care Expense Increases:
- An aging population places heavier demands on health care services;
- Many new medical technologies have arisen recently, some of them costly;
- Environmental and lifestyle factors, such as sedentary modern lifestyles and high calorie, high sodium processed foods, sometimes contribute to poor health.
The article suggests that the insurance-related cost increases center upon an inherent dichotomy within the health insurance industry. While policies must provide many services to appeal to a broad base of consumers, in order to earn profits, insurance companies seek to minimize the health care costs reimbursed by them.
The recent legislative changes requiring mandatory insurance coverage in the United States could indicate that legislators hoped this internal tension within the insurance industry would function as a cost-reduction mechanism. Unfortunately, “Dying to Make a Profit” might imply that the opposite tendency could occur, since not giving roses to a wife does not mean a man might not spend extravagantly on his mistress.
Conclusion
The extent to which the new federal health care legislation will succeed in curtailing rising health care industry costs remains unestablished at this time, since the law changed only a few years ago and comprehensive health care cost containment may require some time to evaluate. Yet the article does present a (today) quite startling fact: when the first indemnity insurance plan went into effect in Texas in 1929, teachers could receive 21 full days of hospital care for the hefty annual sum of $6. Even low cost federally subsidized plans cannot accomplish that feat in this era.