At 10:04 AM 10/6/98 , you wrote:
>\|y. What I can do - and hope that I have succeeded
>>in doing - is explain why HMO's have appeared and how some control must be
>>placed on insurance costs.
>>
>>Art
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>
> Art - I don't see how you think you may have shown insurance costs need
>controls placed on them with your illustration. You must have left
>something out. All you showed to me was that insurance costs are high.
In trying to be brief about a complicated subject, I'm sure that I did
leave something out, so here is the boring detail.. I started out by
creating a spread sheet. As an illustration, I assumed that Ken had a
salary package of $1100 (cell A1) in year one. The cost of his insurance
was $100 (Cell B1) that year, so his pay check was $1000 (Cell C1 =
(A1-B1)(before taxes, of course).
Assuming that Ken was given a 10% increase in the salary package each year
- perhaps that's a bit much, Ken? - then his package at the second year
would be $1210 - (Cell A2) = 1.1*(A1). And with the price of medical care
going up faster than wages, let's say 20% per year, though that too is sort
of high , then (Cell B2) = 1.2*(B1) - or $120. Take home pay would be the
difference again, (Cell C2) = (A2-B2), or $1090. Continue constructing
the spread sheet in this way. (Cell A3) = 1.1*A2; (Cell B3) = 1.2*(B2);
(Cell C3) = (A3 -B3) ... etc.
You are undoubtedly aware that you can easily construct a simple spread
sheet like this using Lotus 1-2-3, Quattro Pro or Excel. You could even do
it with a pencil and a slipstick. As you "live out" the spread sheet, some
year it will come to your attention, and you'll say, "This is too much!"
And you'll try to do something to reduce the cost.
> You would have to address the issue of how you reduce the cost of
>medical care in order to lower the costs of insurance. If you are going to
>say its the fraud, waste & high bonuses paid to insurance company employees,
>I don't buy it. Any saving there is offset many times by the cost of such
>things as $30,000 pallidotomies - rare, as someone pointed out this morning,
>just 4 years ago.
Bruce, for one thing, you won't let just anybody get a pallidotomy - or any
other surgical procedure, for that matter. And you'll limit the stay in
the hospital. And you'll negotiate a better fee from the doctor and a
better rate from the hospital than a walk-in would get. That's why most
doctors don't like HMO's - because they get paid less. And why many of us
don't like them - because we often have to make our case before elective
surgery is approved.
But doctors make their deals - else they might not get any business at all.
And that's why we get into HMO's - because we save money. Yes there's a
limited choice of doctors and there are restrictions on the other options
we get - that's a part of the price we pay.
This thread started off with reference to Kaiser, and it is apparent from
the supporting letters that have come in recently that Kaiser, possibly
because they've been around long enough to learn the ropes, has become
kinder and gentler (at least in some regards) than our experiences with
other HMO's would lead us to expect.
Art
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Arthur Hirsch {} [log in to unmask] {} Lewisville, TX {} 972-434-2377
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Always Remember This: Happiness Is Right, So Choose Happiness
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