Monday, September 17, 2012

Must See TV

Interesting view on health care transparency. Skip ahead to 2 minutes in to the video.

There are certainly some good ideas floated here but at the same time there is a bit of spin. Here are a few observations.

Obama should not pretend to be a doctor (2:50 in the video).

Real "meat" starts at 5:50.

The spin starts around 7:45. The doctor is using exaggeration based on fact. If everyone paid their hospital and doctor bill in full and on time, there would be no reason for cost shifting and "over-charging" to make up for deadbeat losses.

At 9:05 the doctors nose starts to grow. Health insurance carriers are essentially finance companies for health care. Carriers DO NOT WANT their policyholders to use the most expensive services. Doing so would require the carrier to charge higher premiums, leading to non-competitive pricing, less market share and less opportunity to operate profitably.

His claim is tantamount to saying grocery stores, restaurants and other businesses seek the highest cost products in hopes of charging a higher price and inflating their profits.

I don't know what this guy is smoking, but carriers do not "profit" by charging employers 35% of the savings generated on repricing of claims.

At 12:00 in the video he finally introduces his "secret sauce". They don't take insurance payments, including Medicare and Medicaid, which allows them to set their own pricing structure.

They also deal only in cash.

At 13:52 you can skip ahead to 16:00 unless you want to see hot chicks.

The rest of the video offers more detail on how this hospital is able to truly lower the cost of health care.

All in all there are some very good ideas here but this business model relies on cash patients with the ability to pay. Therein lies the rub.

This model will only work with a small percentage of the population, but still, this is an idea whose time has come.
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