Health Insurance Consumers Should Seize More Control

The uninsured and underinsured in this country will be a top focus in the run-up to next year’s presidential elections as competing candidates face off over who has the best plan to solve the burgeoning problem.

One doesn’t have to wait until the primaries are held, though, to know that whatever candidate — and his or her plan — is nominated, the government, contrary to bogeyman fear-mongering in some quarters, will not be taking over healthcare insurance any time soon. In short, consumers will still be dealing with the private sector.

To cut the best deal possible, though, consumers need far more information than they currently have about insurance companies and the cost of medical procedures. Pricing about the latter is surprisingly opaque: comparison shopping among hospitals and doctors for say, open heart surgery or breast cancer treatment, is simply not done. To be sure, some insurance companies have started providing this information to consumers who participate in high deductible plans to better help them make the purchase decision.

As more consumers fall off the corporate health insurance rolls, such information is sure to become increasingly commoditized.

The other dark spot, though, in this equation — the insurance company and its underwriting policies — is unlikely to ever be addressed by a heavily lobbied Congress or the industry itself.

Yet this piece of puzzle — which insurance companies pay up for which tests and procedures, how difficult they can be in making those payments (an important factor when you are battling cancer, for instance) and other such minutia — is just as important as the cost of the healthcare service itself.

Dragging Feet, Other Tricks

Reports of insurance companies dragging their feet on payments, or declining coverage automatically for certain procedures, are legion. Some of it is a byproduct of the bureaucracy and regulations that are part of the insurance industry. And some of it is a de facto cost control process. While they may pay out for the most determined customers who are willing to wade through the red tape, they certainly save some money when others go away after the first refusal.

The only way to get this information — some of it, admittedly anecdotal — is from consumers themselves.

Web 2.0 technology — such as a forum or a wiki — could be the answer.

With such a site, someone buying private health insurance on their own — or even small businesses seeking the best deal for their employees — could log onto the site to see which carriers are most responsive in claims paying, for instance. On a more granular level, a policyholder diagnosed with a certain disease could log on to see the criteria that his particular carrier uses to approve treatment. In both cases, this information has been provided by other policyholders.

Other Models

There are a few models already available to copy. Salary sharing sites, for instance, are becoming popular. If someone wants to find out what a certain salary for a particular job is in, say, New York City, all she has to do is provide her current salary and job information to be entered into the database. In return, she gets access to the information that other people have already provided.

It could work for the healthcare industry as well, some experts say.

“There is a lot of good technology out there within the open source community that can build this type of structure,” Bernard Golden, CEO of Navica and author of Succeeding with Open Source told CRM Buyer.

“I wouldn’t necessarily recommend a wiki though. With forum software people can start topics, chime in on subjects they know about.”

This could then be incorporated into a larger Web site, he continued.

Policies and Procedures

The technology piece would be relatively easy, agreed Michael R. Overly, an attorney with Foley & Lardner. It is the policies supporting how the site would be run that will be the rub, he told CRM Buyer.

“First off, the information that the insured provides might be confidential under an insurance health policy. So you have to make sure you can reveal it. It is possible an insurer would take the position that its underwriting policies are confidential,” Overly said.

Also, people contributing to the project would need assurances that their identities would remain confidential, he noted.

“Much of this information will be extremely sensitive so you want to be very careful about what information is provided — and more importantly that that information cannot be linked up with a particular name,” he said.

The entity running the database would have to be careful that respondents couldn’t be identified in other ways, Overly continued.

“For instance, if the site aggregated trends on a regional or age basis, it could be easy to figure out who a participant is in a small town,” he said. “Craft the questions very carefully and with a lawyer looking over the shoulder.”

For all the potential wrinkles, Overly likes the idea.

“Sure, it would be interesting to find out that XYZ company routinely requires people to submit claims four times before a payment is made. In many instances, people don’t have a choice of carriers but this could also influence employers as well,” he added.

The use of open source technology would be appropriate in such a project for reasons beyond cost and convenience, Overly said.

“One of the founding reasons for the open source movement was that source code was completely closed. People wanted to know what was in that black box,” he added.

To be sure, getting such a project off the ground — beginning with identifying a suitable sponsoring entity and then convincing people to participate — would be very difficult. Then again, when it first started, very few people thought the open source software movement would ever gain traction, Overly noted.