Post date: Nov 22, 2010 6:59:10 PM
Perhaps a legacy of the indemnity plan, US health insurance continues to work on a "balance-after-insurance" model. The patient nor the provider has little or no idea on what will be covered until the insurance company decides. Even pre-approvals don't mean much because apparently an insurer can claim: "Verification or authorization of benefits is not a guarantee of payment".
What value-added does "balance-after-insurance" offer the patient or the provider? When at best only 80 to 85 cents of the healthcare dollar (e.g., medical loss ratio) goes to actual healthcare services, it would seem those insurer's administrative expenses should be adding value. I've told the story earlier of the insurance company saying they only pay the claims not advocate on behalf of the patient to make sure the claim is correct. I've also asked my insurance company to tell me what services are covered and how much they pay. The insurer says talk to the employer and the employer says talk to the insurer. So what value is added by our current health insurance model?
I've worked with health systems that use "balance-in-advance" in which insurers determine in advance what they will pay so that the patient portion is collected before services rendered. Modern HCIT is being used (rule-based algorithms if you must know) that allows a provider to query the various insurer plans and find out if a treatment is covered. These aren't first world countries doing this - so if they can do it then why can't the US? My guess - structural reasons. Such balance-in-advance systems means coverage rules have to be transparent - if an insurer pre-approves then it is approved which apparently isn't the case now. Transaction-wise it seems pretty simple. A provider queries what treatments are covered for a diagnosis. The insurer pre-approves or denies those treatments. When the services are rendered for the pre-approved treatments then payment is made. Well considering many insurance companies still require paper forms to be submitted that have to be manually input it makes sense ... I guess these developing countries have a leg up since they moved directly from no insurance to IT-enabled insurance processes bypassing our legacy models of reimbursing healthcare.
Balance-in-advance has an entire set of different social ramifications (such as the R word) but if healthcare costs are going to be kept in check by improving efficiencies - the system must be looked at. At the moment, some EMR/EHR vendors are touting the ability to better charge the payers ... while increasing revenue for the provider - how does this lower healthcare costs? You can find more on my healthcare prices page.