Why is Insurance so Dang Expensive?!?!?!

For many years, employers have been selecting between dizzying options of HMO's, PPO's, POS plans, and now EPO's.  All claimed they were getting the best discounts from the health care providers in the network, and would yield the greatest savings year to year.  The formation of these networks encouraged clinics and hospitals to start acquiring or pushing out the independent doctors in favor of a corporate streamlined approach to health care. 

The temptation for the independent doctor to join a chain clinic was strong.  The big clinic handled the administration and the doctor just treated patients, removing many titles from the doctor such as HR, business manager, and accounts receivable.  The added bonuses included paid holidays, retirement plans, health insurance, and of course the promise of higher reimbursement due to the negotiating power of big numbers.

The trade-off initially to doctors remitting their practice and joining large corporate structures was freedom.  Freedom to set their own pricing, freedom to practice the way they wished, and freedom to tailor their business model to the needs of the community.  30 years later, the negatives of independent doctors joining conglomerates has become more apparent.  The large clinic chains have MORE overhead, operating expenses, and issues meeting the needs of the community they are in.  In other words, the one-size-fits-all model has failed through eliminating competition, price collusion, and generally driving up costs.

This is certainly not the only reason that going to the doctor is expensive, many other variables contribute to that cost.   However, due to the cost and the lack of provider freedom, we are now seeing a level of entrepreneurship in health care that has been absent for 30 years.  New competition is being created due to the shocking cost of doctor bills.  In Medford, WI, Dr. Rebecca Gilbertson started an independent clinic called Taylored Family Care.  In Marathon County, Astia Health is available for telehealth or home visits.  That's right, home visits.  Is this 1950?  The ability of independent doctors and other health care providers to trim the fat, eliminate waste, and be flexible has brought back the viability of the local independent doctor. 

To illustrate how Dr. Gilbertson's clinic is helping the community, I'll share a personal example.  In January, my son had a sore throat, after looking at his throat, it was obvious it was Strep.  The cost to go to the "chain clinic" in Medford would be over $500 due to the office visit charge, the strep test, and any other lab work they may perform.  However, taking him to Taylored Family Care cost less than $100.   

With everyone talking about the run-away costs of health insurance, the spotlight needs to be pointed at why health insurance is expensive.  Health insurance is expensive because going to the doctor is expensive.  More competition in the insurance market place will not help.  We need more independent providers with lean administration costs, low overhead, and the ability to be flexible with the services they provide. 

The Cost of Health Care

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