Current Healthcare Reform Proposal Fails to Address Existing Problems

Former Healthcare, Medical Equipment Exec Not Sold On Democrats' Proposed Reforms

By: Peter Egan Jr.

The thing that is being overlooked in the heated debate over healthcare reform currently raging across America, is that a major flaw in the current system is the excessive claims and billing procedures which involve multiple third-parties thereby increasing the costs unnecessarily. I'm not talking about just major surgeries or medical procedures either, and the "reforms" being proposed in Washington do nothing to address the actual problem at hand.

Here's an example: Your grandmother needs an antimicrobial shower chair and rubber shower mat to help her avoid the fall that could break her hip.  The wholesale cost of the item is $15-$20.  This same chair would sell (and does sell regularly online and elsewhere) for $30-$40 retail (a fair price considering how tiny the retail market is compared to insurance and Medicare reimbursement market, and hence, the relatively low sales volumes by comparison, etc.). Now, your grandmother goes in to buy the chair, but is informed by the sales rep at the DME (Durable Medical Equipment) store that her insurance plan (or Medicare) covers that particular shower chair and all she has to pay is a $15 copay.

Naturally, she'd rather pay the $15 than the $40. Here's where it gets fun. The DME store has a highly trained employee manage the insurance/Medicare claim and file the paperwork (or electronic paperwork nowadays - it takes the same amount of time).That employee spends 40 minutes processing the claim from start-to-finish. Let's say for the sake of discussion the employee is paid $21 per hour. $14 in costs to the DME company has just been added to the transaction.

Now, the insurance company also has to have a highly trained employee review the documentation prepared by the employee of the medical equipment company, also adding to the total cost of the transaction.

Finally, since the claims process usually takes several hours to a day, the medical equipment company has one of its delivery drivers deliver the shower chair to the patient/customer's home, which let's say takes an additional 10-15 minutes.  This is actually very common procedure as many of the higher-dollar referrals come from case managers in the discharge units of long-term and acute care hospitals who are motivated to dole out business to the companies that are willing to 'go the extra mile' for them, so to speak, and deliver the item to the patient rather than asking them to come back the next day (or in several hours) to pick it up.

By the time your grandmother actually gets the original shower chair that she initially anticipated she would by buying retail, the $40 retail purchase has ballooned up to $85, most of which is paid in the form of premiums and deductibles. Remember, she only had to pay the $15 copay as long as she filed the insurance claim as opposed to just walking into the store and buying it for $40.

The inherent flaw with the proposals being put forth by Obama, Pelosi and the democrats is that the problem is not at all corrected, merely shifted from one party to another.  Instead of the insurance companies working with the healthcare firms to complete the claims and billing processes, the plans merely shift the responsibility to an even less-accountable bureaucracy in the federal government. In other words, the plan does nothing to reduce costs, it merely adds an extra layer into the process in between the confiscation of the money (taxes) and the actual rendering of payments.

Nothing in the plans currently on the table will actually help solve anything, in fact the result will be quite the opposite. Some people may not have to pay as much, but others will have to pay more as a result, and they will resent it and actively seek out ways around it.

I'm all for healthcare reform. What Obama and Pelosi are suggesting is not a reform, merely the replacement of certain players with certain other players. Meanwhile, the fundamental flaw in the system remains intact, and for an already bankrupt government, the amount of money they're looking to spend on this with no real plan for improvement is nothing if not a recipe for complete and total disaster.

Peter Egan Jr. is a former Home Healthcare and Medical Equipment Company executive whose professional experience within the respective industries spanned more than a decade. Peter has worked in a variety of different capacities, starting out as a low-level warehouse employee and serving in an executive capacity when he left the industry to start his own business. He now owns a domain name registrar and web hosting services company. His commercial website is http://godotyourself.com. His blog and associated non-commercial website can be found at http://www.fatlester.com.

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