The "Free" Market - Myth and Reality - Taking on Blue Cross - USA Today

Taking on Blue Cross - USA Today

Last month, the U.S. Justice Department sued Michigan's Blue Cross, accusing the insurer of a different kind of anticompetitive behavior: paying hospitals higher prices for medical care in exchange for a promise they would charge competing insurers as much as 40% more than they charge Blue Cross. Blue Cross says the suit is without merit.

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Like many major employers, Ford has a "self-funded" health plan. Ford pays Blue Cross an administrative fee to handle paper work and maintain a provider network, but Ford — not the insurer — is responsible for the medical bills. In 2003-04, Ford paid Blue Cross a $54 million administrative fee, plus other costs, a Blue Cross memo says.

TheraMatrix saved Ford money by creating a network of physical therapists willing to accept $68 per visit — significantly less than what Ford had been paying under Blue Cross. TheraMatrix also reviews treatment plans so patients don't get too many or too few visits.

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Michigan hospitals, which provide outpatient physical therapy, weren't happy about the lost business, records indicate. They could have joined the TheraMatrix provider network, but most wouldn't agree to the lower rate, says Whitton, TheraMatrix's CEO.
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Conservatives like to talk about the "free" market. HOw is functions efficiently and "will police itself".

THis of course is a fairy tale. Businesses are run by people. People are known to cheat. That's why we have laws and police to enforce them and attorneys general to prosecute those who break the law. Without regulations ensuring fair business practices, the "free" market quickly becomes a free-for-all where the Bernie Madoffs run the honest businessmen out of existence, and the customers get screwed. Rational regulations constrain the bad apples from getting away with scamming people and contribute to economic growth.

...she appears at that point in the discussion where one of these Randroids waves their hands and says only good things happen.