Paul Krugman: The Health Care Racket

Is the health insurance business a racket? Yes, literally — or so say two New York hospitals, which have filed a racketeering lawsuit against UnitedHealth Group and several of its affiliates. I don’t know how the case will turn out. But whatever happens in court, the lawsuit illustrates perfectly the dysfunctional nature of our health insurance system, a system in which resources that could have been used to pay for medical care are instead wasted in a zero-sum struggle over who ends up with the bill.

The two hospitals accuse UnitedHealth of operating a “rogue business plan” designed to avoid paying clients’ medical bills. For example, the suit alleges that patients were falsely told that Flushing Hospital was “not a network provider” so UnitedHealth did not pay the full network rate. UnitedHealth has already settled charges of misleading clients about providers’ status brought by New York’s attorney general: the company paid restitution to plan members, while attributing the problem to computer errors.

The legal outcome will presumably turn on whether there was deception as well as denial — on whether it can be proved that UnitedHealth deliberately misled plan members. But it’s a fact that insurers spend a lot of money looking for ways to reject insurance claims. And health care providers, in turn, spend billions on “denial management,” employing specialist firms — including Ingenix, a subsidiary of, yes, UnitedHealth — to fight the insurers.

So it’s an arms race between insurers, who deploy software and manpower trying to find claims they can reject, and doctors and hospitals, who deploy their own forces in an effort to outsmart or challenge the insurers. And the cost of this arms race ends up being borne by the public, in the form of higher health care prices and higher insurance premiums.



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I would say big medicine, big pharma, and big insurance all deserve each other, and I would be happy to stand aside and watch them make war on each other, except that we are all get caught in the resulting disfunctional mess.

and increase premiums at double digit rates annually while providing a minimum of services. The entire USA health care system is corrupt and is in need of a complete overhaul; abolish the HMOs and convert to universal health care provided by a nonprofit organization or agency with oversight.

stand the job, the lying, the deception.

First thing I was told during training, don't ever admit that you're going to pay the claim, even if you are.

We spent more money sending for medical records and crap to disallow a claim that we often did just paying the thing. And this was just a frigging supplemental policy for medicare patients.

I quit. There was no way that I could justify to myself how I was making a living.

trying to rip old people (and in some cases the families of dead old people)off.

And the kicker?? The medicare supplemental insurance company was owned by, get this one, AMOCO OIL. Yep, the giant oil behemoth that Standard Oil was turned into after Judge Kenesaw Mountain Landis ordered the breakup of the corrupt monopolistic corporation. (Which, as it turned out, was the best thing that ever happened to corporate America.)

Gee it would be great to sell a product that everyone needed and know one ever wants to use. But imagine if you will, you purchased say a fire extinguisher that when you used it not only didn’t put out the fire but made it worse. Or you’ve found out to late that you’ve purchased a concrete life jacket. George went down to the gulf coast (eventually) last year proud to announce he was going to build Trent Lott a brand new house! News Flash! No he’s not, and if a senior Republican Senator from Republican Mississippi can’t get the insurance company to honor his claim even with his pal George promising. Guess what kind of luck other Mississippians are having?

The good hands people have are operating under the legal principle of Aetas voluntas intermorior antes ambo actio or you will die before we will! The administration moving with their usual speed and efficiency to help these afflicted people by appointing one, count him one judge to handle twenty thousand insurance law suits in Mississippi. Now lets say hypothetically you’re case number fifteen thousand four hundred and thirty and each case lasts only one day (yes, mother raised an optimist) or two hundred calendar days a year. Call the contractor we can start repairing your home in the year 2083! Or if you choose to be just a little less cantankerous they will give a fair settlement of say eleven cents on the dollar.

Come on don’t you understand these folks are trying to stick it to the man! They didn’t buy flood insurance and who’s to say that flood damage didn’t come from a leaky pipe!
They claim their damage came after the hurricane ripped the roof off the house and dumped two feet of rain water in to it and we say it was a flood! True it wasn’t a flood in the purest definition of the word it was more of a tidal surge caused by the hurricane and you did after all buy hurricane insurance. But hey! A floods a flood in our book! Why one family went so far as to move their house from its previous location! But it doesn’t matter if the water comes to you or you go to the water its flood damage! We are the good hands people not the good-hearted people!

But that doesn’t mean we don’t have no heart at all, why when the ninety year old gentleman who had his homeowners policy with us for forty six years brought us his claim for a total loss of his home we cut him a check for eight hundred and sixty dollars. Fair is fair keeping claims down helps to keep your premiums down! If we can eliminate claims altogether that’s real savings for everyone, God Bless America



Some people, whiners and complainers mainly are crying foul saying the company is abusing its policyholders. But we are the good hands people, and what do we want in our good hands? Dollars and lots of them! The year 2005 was a record year for hurricanes we faced many challenges and record damages. Our people were depending on us and we did not fail them. We still managed to increase our profit margin over 2004 all while the company bought back stock shares. Very few can share in this record of accomplishments and very few did. Our CEO made only five million dollars last year plus the usual stock options and bonuses.

Want to play again? Figures don’t lie but liars figure, politicians like to throw around the figure 46 million Americans have no healthcare coverage! But that’s is not the truth that isn’t even part of the truth in fact it’s closer to a lie than the truth. It’s a lie to hide the truth 46 million have no insurance another 146 million have coverage that isn’t worth the paper it’s printed on, a thousand or fifteen hundred dollar deductible with a fifty or a hundred thousand dollar maximum. You break your arm total cost not serious just a minor fracture total cost $2000. You pay $1000. to $1500 they pay $500. to $ 1000
For a technician to x-ray you a doctor to look at it and office staff to put it in a cast. What? You want a sling for it? That will be extra! It’s a good thing you pay a hundred and fifty dollars a month for insurance.

But wait you say my insurance is better than that! Maybe so, but it’s all a percentage game they more you pay they more they get. Your deductible is only $250 but you pay three grand a year for the coverage while the poor shulb who pays eighteen hundred has a net cost including deductible of a $1000 to 1500 is $2800 to 3300 but you’ve got the good insurance your net cost is $3250 per year. It is all percentage game just like a casino the suckers are going to win once in a while but we will always get it back in the end.

I had been treated for allergies and was completely without symptoms for years. I then changed jobs I asked my new employer, “does your insurance cover allergy treatment?”
I was assured it did, I went for my testing with the HMO doctor. He diagnosed that I didn’t have allergies and didn’t need treatment. I asked how could that be? I could make you test positive he said to which I answered or you could make me not test positive!
I wondered how could and allergist make money not treating people? The HMO pays physicians a bonus for keeping cost down! If it won’t kill you, you aren’t sick.

Want to play again? I broke my arm, I went to the doctor’s office they took me into the back their office and x-rayed me. They took me up front to the desk and I paid what I was billed Thirty days later I get a bill for X-rays. If you have spent any time in the hospital you’ve played this game. Independent contractors, multiple bills, multiple billings for the same services.

I could go on forever, we spend millions of dollars to keep a brain dead woman alive but we don’t have the money to immunize school children. 80 to 90 percent of every dollar that will be spent on you in your life will be in the last ninety days of your life.

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