Reply #139: HOW INSURANCE COMPANIES WORK - HOW YOU CAN HELP

[Th1onein]

When the hospital notified us about the ethics committee meeting, we knew what the outcome would be. We had tried to put off that meeting so that we could have more time to find a hospital that would admit Andrea as a patient, but we were not successful in that regard. We are still trying to find a hospital to take Andrea as a patient. However, none of this would have come about if it were up to the hospital alone.

Andrea's attorney explained it to us this way:

An insurance company negotiates with the hospital how much they will pay for certain services. Say, for instance, someone in the ICU costs $10,000 for treatment per day. The insurance company says to the hospital, "Okay, we will pay you $7500 for you to provide that service to our insured patient."

There's a catch, though. The insurance company will pay the negotiated amount to the hospital, but if a patient goes on and on, needing that service, the insurance company begins making noise. This insured patient is costing them too much; they are losing profit. They begin to put pressure on the hospital to get that patient off of their books. The hospital either does this by getting aggressive with the patient's treatment, getting them well, and discharging them, OR by "pulling the plug" on that patient.

In other words, that patient has now become, in terms of profit, both for the hospital and the insurance company "worth more dead." If that patient continues to receive that intensive care, it costs the hospital in terms of where they stand the next time they negotiate prices with the insurance company. The next time negotiations come up, the insurance company will say, "Hey, we would give you the going rate on an intensive care patient this year, but you gouged us for 90 days on Andrea Clark last year, so we are lowering our starting point for payment to $7000, to make up for it."

St. Luke's Episcopal Hospital, in my opinion, is heartless and cold, and only concerned about the bottom line. But the insurance company, Blue Cross Blue Shield, is also a party to this kind of thing. That's where the pressure needs to be applied. I am sure Blue Cross Blue Shield is suffering no negative publicity in this battle. But they should.

Most people don't know how this system works. And I wouldn't have known, either, had I not been faced with this horrible situation. Poor Andrea, knowing that her health was delicate, bought supplemental insurance policies right and left--most of which do not cover this type of situation at all (she didn't know--she was just doing her best, to protect herself). The sad thing is that Andrea spent large pieces of her limited income in order to avoid just such a situation, and here she is faced with it anyway.