San Diego UT: Insurance ills put squeeze on consumers

[question everything]

Sliding benefits, soaring costs swell providers' profits

By Leslie Berestein
STAFF WRITER

August 22, 2004

Anyone who was paying for health insurance in 1988 will remember the last great American health insurance crisis, the one so severe it sparked a national debate on the cost of private insurance and even led to an ill-fated attempt at a national health plan. It was the year premiums shot up 12 percent, and it was followed a year later by an even steeper, still-unmatched increase of 18 percent. Also, 1988 was the year when an average insurance policy for a family of four cost $179 a month, or $286 in today's inflation-adjusted dollars, according to the Chicago-based Health Research and Educational Trust. This is roughly a third of the $829 a month it took to insure the same family last year. And for that higher price, today's policy typically comes with higher office-visit co-payments, additional hospital deductibles, extra fees for brand-name prescription drugs and other out-of-pocket expenses.


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Out of the almost $550 billion in premium dollars spent by insurers nationwide in 2002 – the most recent year for which such statistics are available – nearly three-fourths went toward the three major drivers of health care costs: hospital services, physician and clinical services, and prescription drugs, according to a recent report from the California HealthCare Foundation in Oakland. Experts say all of these services cost more today than they did 15 years ago, even accounting for inflation, as technological innovation has changed the way medicine is practiced in hospital operating rooms, doctors' offices and pharmaceutical labs.

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Hospitals, which have faced recent labor shortages, are competing for nurses and other hard-to-find professionals by offering higher salaries and bonuses. Pharmaceutical companies are spending money not just on research and development, but on TV ads urging consumers to "ask your doctor" about new medications. Physicians are paying billing companies to handle complicated insurance paperwork.

When these costs go up for health care providers, so do insurance premiums. "It's called cost-shifting," said Jan Emerson, a spokeswoman for the California Healthcare Association in Sacramento, which represents the hospital industry. "We are cost-shifting to cover the uninsured, . . . to cover shortfalls from Medicare and Medi-Cal, . . . to pay for unfunded mandates... These increasing costs are passed along to employers and consumers in the form of higher premiums, which the insurance industry contends are necessary because of rising medical costs... Net income for the nation's health insurers was $10.2 billion last year, according to Weiss Ratings Inc., which rates the strength of financial institutions. That's almost twice the profits earned in 2002, and almost 14 times the $736 million earned in 1999. Since that year, net profit margins for the health insurance industry have risen to 3.78 percent from 0.38 percent, nearly a tenfold increase.



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Find this article at:
http://www.signonsandiego.com/uniontrib/20040822/news_1n22health.html

[dumpster_baby]

1. Hang all these bastard Insurance Co. CEOs. Literally, hang them

After indicting and trying them in a recognized court of law, of course.