Toe Saga Enters Health Insurance Maze

The first bill of sorts came today for my young not-so-invincible son for his recent torn off big toe (previous post). The letter is in reference to a $17 radiology charge from the emergency department of the university-affiliated hospital where he was seen. I assume this charge was for flipping the switch to warm up the X-ray machine, but it doesn’t specify what it was for.

The letter came from his student health insurance company. They are requesting documentation that my son’s missing toe was not a preexisting condition. Their specific wording: “Has (dearest son of mine) received any medical care or medicine for diagnosis code 729.5–pain in limb (for the three months preceding the X-ray)?”  Like what, he’s been running around for the past three months with his
toe in the refrigerator just waiting for his health insurance to kick in
so he can have his toe reattached?

Do U.S. health insurance companies purposefully hire stupid people so they can spend even more on administrative overhead and pass those charges on to us, the mostly overwhelmed and confused health care consumers? At least 15% of our country’s total healthcare expenditures is spent on this sort of inept health insurance administration. That’s over $360 billion annually just for paper pushing. Medicare’s administrative costs are less than 2% of total Medicare expenditures. Meaning: that paper pushing can be done a lot more efficiently.

As Jeffrey Pfeffer wrote in his Bloomberg Business Week News article (4-10-13), “Because insurers are paid a fixed percentage of the claims they administer, they have no incentive to hold down costs. Worse than that, they have no incentives to do their jobs with even a modicum of competence.”

A good overview of the obstacles to reducing administrative costs within our healthcare system is included in this brief NEJM article. The authors point out that Obamacare/ACA has some provisions to address these problems. Here’s hoping.