In response to Another Atlas Shrugs – Small Business Owners Chime In I received still more emails from business owners regarding healthcare costs.

In contrast to the CEO of a healthcare consulting company who blames Obama, a CEO Therapist in New York, says healthcare insurers are the problem.

“Therapist CEO” writes ….

Hello Mish,

I’m a long time reader of you blog. Thanks for keeping some sanity in an otherwise economically insane world.

I’m writing in response to your post regarding small business owners, specifically the letter from “Healthcare CEO”.

I am also a small business owner. I share many of the same difficulties that he discussed. One point he made did surprise me though, when he mentioned that he didn’t “blame the insurers too much”. On that point I couldn’t disagree more.

As a small business owner, I have been feeling the pinch of ever rising healthcare premiums; our premiums went up 26% last November and I can’t imagine what they will be this year when we renew. I have another perspective though. The small business that I am in is physical therapy; I own two outpatient clinics in New York. Over the past year while health insurance premiums have been going through the roof, I have watched insurers do one more thing to help their bottom line. They have shifted payment for healthcare to the patient, in some cases entirely.

As an example, here in New York, there are some Oxford and Blue Cross Blue Shield plans that by contract “reimburse” $50 per physical therapy visit. Here’s the kicker. The patients co-pay has been raised from $15-$25 per therapy visit to $50 per therapy visit, so what the patient pays is all we get. The insurance companies pay nothing additionally.

This is what insurance companies “sell” as insurance for these elevated premiums and I don’t know how that’s even legal. It’s a joke when patients come in and present their insurance card like that provides them any benefit at all. The insurance companies also still have the audacity to require us to submit continued requests for them to authorize care, and in many cases they won’t give us that authorization even though they aren’t paying a dime for the service (yes, we are currently in the process of exiting some of these contracts).

The way I see it, the insurance industry has taken advantage of the turmoil in Washington to stick it to patients and healthcare providers. While we still can’t buy drugs from overseas, and we still can’t buy insurance across states lines, at least we can stick it to healthcare providers to “cut healthcare costs”. Providers don’t share the same strength in lobbyists so we’re doomed to be the goats.

This shift to high co-pays ($50/visit three times per week is high) coming on during a depression has taken a toll on patient volume. Furthermore, many private insurers have been decreasing what they pay us overall. In New York, workers comp and no fault cases have paid us the same rate for care since 1996. The only other avenue for us to make money is Medicare, and CMS (the body who controls Medicare/Medicaid) is proposing cuts of over 40% by January. If these cuts go through I’m out of business and so are many other ancillary healthcare providers and primary care physicians throughout this country of ours. I know these things happen to businesses during times like these, but these changes to providers of healthcare are being jammed down our throats by the unrestrained insurance industry. The whole thing is a mess and while I do place blame on the idiots in Washington, I also blame the opportunistic insurance industry.

We’ll try to survive be transitioning to a more cash based model (good luck in this economy) and diversifying our business, but I’m aware that unless someone reigns in the insurance industry, I’ll probably be flipping pizzas this time next year. The bigger question is what happens if the network of private healthcare delivery simply collapses from an inability to remain solvent? This as we bring on board an additional 35 million newly “insured”. Good luck with that one.

Keep up the good work. We can’t get accurate news assessments from the mainstream press anymore, so thanks again.

Therapist in New York

So Who’s To Blame?

  • Obama
  • Congressional Republicans
  • Democrats
  • Insurers
  • Public Unions
  • State Government

President Obama just wanted a bill. He did not really give a damn what was in it, as long as it did not upset public unions. Moreover, Obama sold the youth vote right down the river. There is nothing but pain for them.

Public unions do not give a damn about healthcare costs because they and their families pay next to nothing with deductibles that are next to nothing. Taxpayers pick up the cost.

Democrats also did not want to upset the unions.

Republicans refused to allow competition between states or cheaper drugs coming in from Canada.

State governments pander to unions and also act to restrict competition.

The insurers bribed both parties to get what they wanted out of the legislation.

Fresh Blood

In short, there was nothing in the bill to reduce costs.

It should not be surprising at all that costs are still going up, especially as the insurers have fresh blood from those Obama sold down the river to get the legislation passed.

Mike “Mish” Shedlock
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