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Do you think you have health insurance?
You probably do not have insurance at all. Most Americans have no health insurance they have health benefit plans. Their health benefit plans limit their ability to access and pay for health care services when they need them most - when they are sick or injured and need diagnostic and treatment services immediately. You should find out whether you have insurance or something less before it costs you, or your loved ones, your/their health or lives.

Cheap HMO plans are fine for well people because well people do not need insurance. HMOs are not particularly good for sick people because the quality and quantity of care HMOs can provide, per dollar of premium revenue, is far lower than for traditional insurance. HMOs and capitated health care providers can be life threatening for people with high cost illnesses that require speedy diagnosis and treatment. This is because the primary way HMOs control costs are by delaying and denying the most effective, and often the most costly, diagnostic and treatment services. While this saves money it can cause debility, decrease client's chances of recovering and even cost your life or the life of a loved one, so that the HMO can save a few dollars. This is not insurance at all.

Why are managed care and capitation flawed methods of financing health care? Large insurers manage risk more efficiently than small insurers because they write more policies than smaller insurers. While insurers like years in which their loss ratios are lower than average, their real objective is predictability - consistently being close to average. Small insurance companies have problems because their loss ratios vary around average by too great an amount. This makes it difficult to attract investors and/or policyholders, because their losses may be so high that they will become insolvent.

In essence, even though small insurers operating in competitive markets, can charge slightly more than large insurers and still attract policyholders and investors, they cannot add "adequate" risk premiums for their additional exposure to excessive losses. In the long run, small insurers are more likely to fail because their premium revenues are inadequate for the risk they are assuming. Each year is a gamble with the odds stacked against small companies...

When health care providers (e.g. physicians, hospitals, nursing homes) agreed to accept capitation contracts, accepting fixed payments and agreeing to cover the insurance risks of their clients, the system became fundamentally flawed. Health care providers became very small, very inefficient, health insurers, compromising their ethical duties to clients, and reducing their clinical and financial efficiency.

 Thomas Cox PhD, RN
Mathematician
Statistician
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Nurse
Researcher
Author
Psychotherapist
Chartered Property Casualty Underwriter
SMQT Health Facility Surveyor

Critical Issues

Insurers handle insurance risks more efficiently than individuals.

Large insurers handle insurance risks better than small insurers.

Managed care operations use capitation contracts, utilization review, and other tricks of the trade to handle insurance risks by transferring them to smaller organizations and employed health care providers.

Clients/Patients of managed care and integrated health care delivery systems are relying on their health care providers to correctly diagnose and treat them at the same time that these providers are acting as these patients health insurance companies - not a good idea at all.

Health Care Providers should not be acting as health insurers.

Health Care Providers are very inefficient insurers.

Managed Care Organizations do not provide better or more efficient care - they provide less care and less efficient care than care  financed by indemnity insurance products.

Tax deductions of $5,000 for purchasing individual health insurance are wasteful, inefficient, and a regressive tax. Most families cannot afford the price of individual health insurance and most insurers do not want to waste time and money writing individual policies.

Individual health account tax benefits are useful for people earning more than $250,000/year. I don't know many people making less than that who expect to benefit from these high income tax breaks.

Health Care Intermediaries - the companies that unnecessarily stand between health care providers and health care payors are a lot like ENRON - they provide no intrinsically valuable products or services, divert funds away from health care providers and consumers, and reduce the availability of health care services  - Billions of dollars wasted each and  every year with no benefit to anyone but these companies while health care costs more and people receive fewer services.








 
Professional Caregiver Insurance Risk (PCIR) is the term used to describe the financial and insurance risks assumed by Health Care Providers in capitation contracts, Diagnosis Related Groups (DRG) finance mechanisms, and the relationships between Health Maintenance Organization (HMO) and Integrated Healthcare Delivery Systems and their employed or contract health care providers. In the final analysis, it also describes the relationships between nurses and their patients in hospitals, clinics, home health, and private practice.

Most Americans and most people around the world do not have health insurance. Instead, they are clients of managed care organizations, integrated health care delivery systems, or subject to exclusions, deductibles, and co-payments that have systematically destroyed the concept of health insurance. When they are sick or injured they begin to realize that the benefits they assumed would be available to them are not going to be available because there are long approval process, excessive and unaffordable deductions, or their co-payments are out of their reach. They will, when time is of the essence, wait months or years to access diagnostic and treatment services as their health declines.

Professional Caregiver Insurance Risk necessarily reduces net operating revenues and obligates Health Care Providers to perform uncertain levels of future service for payments that will, on average, prove inadequate to meet the costs of doing so in a clinically appropriate and ethical manner.

The results of inadequate financing and excessive risk assumption have already severely constrained health provider operations and reduced services to their clients in order to compensate for these carefully constructed revenue inadequacies.

Professional Caregiver Insurance Risk disadvantages consumers and Health Care Providers by eliminating true insurance benefits, destabilizing Health Care Providers financially and compromising ethical health care providers.  and by moving insurance claims management to the bedside, and promotinng decreased operational efficiencies.

Much like the financial system collapse of September, 2008 Professional Caregiver Insurance Risk involves excessive risk assumption by people who are incapable of handling risk at all. Much like gullible homeowners who chose to finance with Adjustable Rate Mortgages and Wall Street tycoons who compromised their companies and clients by their excessive assumption of risk, assuming, incorrectly, that there would always be another ARM available at a cheap rate or another company willing to accept their illiquid asset transfers, Health Care Providers who accept health insurance risks assume that their revenues will be adequate.

However, rate adequacy is impossible because the companies that contract with health care providers using these mechanisms cannot compete with legitimate insurance operations who do not transfer insurance risks to health care providers, if they were fairly and adequately compensating their providers for the risks they are assuming.

This site is a resource for anyone (Consumers, Providers, Insurers, Politicians, and the Media) who want to understand the core flaws in our health care finance system that will, just as risky mortgages have with banking and finance, destroy the viability of our health care system. While the flaws are severe and should never have been accepted, they are difficult to understand only because all of us assume that the people who designed our current system of health care finance did the best job they could. This, unfortunately is not true.

The designers of our health care system and health care finance system built a system that emphasized profit rather than efficiency in every dimension. The core problem with risk transfers to health care professionals are that they are incredibly inefficient. If you do not drive your car with the emergency brake on you know what this means.

If you are willing to take a few minutes, have some grasp of statistics, averages, and variation, the flaws are easily understood. If you lack those pre-requisites, coming to understand the flaws will prove a bit more challenging, but most certainly not impossible. The position of risk assuming health care providers is simple enough to understand if you consider common activities such as buying a lottery ticket or visiting a casino. Most lottery ticket buyers and casino visitors lose their money. Most health care providers who accept insurance risk transfers will lose money as well, unless they start restricting their client's access to needed diagnostic and treatment services.
Why you might want to check this site out more thoroughly
Are you trying to understand why your 'health insurer' is denying your benefits?

Are you trying to understand why your health provider seems more interested in delaying your care than providing it?

Are you running out of time or money but you are still sick?

Do you wonder whether Managed Care or Capitation contracts are compromising your care?

Are you an attorney wondering how to best represent clients denied health care access, benefits, timely diagnosis and treatment?

Are you a health care educator or researcher trying to understand the impact of health care finance issues on access to health care?

Are you on Medicare or Medicaid and cannot find a physician in your local community at a fee you can afford?

Are you a community/health care advocate who is trying to understand why health care services are collapsing in your area?

Are you a doctor, advanced practice, registered or practice nurse

This is where you need to be!    

Click on the Quick links menu for answers to all your questions.

 


 

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