H. Gilbert Welch, a professor of medicine at the Dartmouth Institute for Health Policy and Clinical Practice, is on to something. Writing in The New York Times on July 4, 2013, Welch says the cost of medical care in the United States is, or nearly is, criminal. And he says care providers (hospitals, MDs, universities, and drug and device companies) "are the ones benefiting."
Right, but they're not alone.
Payers are part of the crew.
As a former employer, I know first hand what it costs for a small business to insure its employees. As a former employee of several large organizations, I know the deep discounts that big employers and government agencies qualify for—easily 50%—and pass along to their employees.
Also, having worked for several insurance companies, or payers as they are becoming known, I've seen the other side. Maybe you have, too. If you get statements from your health insurance company, you can get a feel for how payors negotiate reimbursements with the some of the providers that Welch fingers. And if you read business journals or job postings, you know how health insurance is dominated by huge companies and can get an idea of the salaries they pay.
Small fry? You're screwed.
Add Welch's provider set to the payor set and WOW. Let's just say there's plenty of money being made on the backs of employers of all sizes, but mostly on the backs of the rest of us.
Small-fries pay through the nose: employers, people who buy their own insurance and, God help them, people without insurance who need medical care but don't qualify for free care.
What's wrong with this picture?
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