As a doctor and a small business owner, dealing with insurance is getting harder and harder. Patients premiums, copays and deductibles go up every year and the amount I am paid for the same services goes down EVERY year.

I doubled my gross income last year but my personal income stayed the same because my taxes doubled due to my gross. You make headway and the state takes it away, that is a different subject though.

Health Insurance is soley a business and is there to make profits. They are good at it too.

For example, if a business has $150,000 of net profit and $350,000 of total revenue, the net profit margin would be $150,000 divided by $350,000 multiplied by 100, or 42.857 percent

This I understand, what I am unsure is if Net profit means the same thing as operating.

what I also am unclear of, is how they calulate total revenue versus net profit and how this relates to net investment return.

Consider that in month A they generate 8% net profit off a million in revenue. They take all the money in fees and then pay 92% back out. Their actual investment is nil but they make $80,000. If we assume their net investment at risk is only $100,000 in capital expense and the rest is paid as they go from monthly payments, full return on investment would be 80% a month. Since they probably have reserves calculated into their expense model, what I want to know is what is their yearly return on capital at risk. Since they probably have no personal guaranties, then the capital is the only risk. If they are leasing the facilities and equipment, the actual capital expenses could be quite low making the return on investment huge.

Do you mind explaining this? I've heard other people say this but no one can ever give me specifics. For example, what sort of dollar figures make this senario possible?

Every business is different depending how you file( sole p., s corp, llc). In my field particularly you have to change to grow. I added different services, which meant I needed to hire a more employees and added different technology to my practice.

Even though my overhead went up it does not justify myself making the same (my take home) as the year before.

Each quarter there is a B&O tax, L&I tax, 941 federal tax and UI tax.
As you can imagine, the more you make(Gross) the more you are taxed. You are not only taxed more because of added employees and gross income, but because it is a different year and taxes for small business (especially B&O tax) has gone up yearly.

I went back and looked at some numbers. My major change was adding 1 employee, going from 2 to 3. My payroll doubled due to increase business but my payroll taxes more than trippled and my Annual tax return did about the same. All the money I saved for the year to put back into the business went towards the 4th quarter and annual taxes putting me back at square one.

I realize that there are things I could probably due (legally) to help decrease my overall tax, but that is small business you learn and change or go bankrupt.

I hope this answered at least part of your question.

One thing to think about, the amount they pay providers is their choice not the providers. Providers sign the contract to accept the insurances fee for a particular service.

The fee schedule for services provided have consistantly gone down for years, at least the 6 I have been in business.

Again, the premiums go up and the amount they pay providers goes down.

As a provider, I have a choice to sign or not to sign the contract allowing them to pay me less. That is the difference between health insurance and providers, I sign because patients need and deserve care. Health insurances care about their investors.

"Big or small, businesses operate on the same principle. Provide goods or services someone wants or needs and make a profit. Pretty simple concept."

Yes Hank, the concept is simple. And that's the problem. Health insurance is a bad fit with the capitalist business model. The business model has nothing to do with promoting or even providing "health." It's strictly about return on investment. Well that and aiding the less than 1%er CEOs, etc. become even richer. Health insurance is a much better fit with a socialist model. Obamacare with a public provider would have been close to the ideal. But insurance corporations for some reason didn't want to compete with a government health public corporation, even though we all know based on what we've heard forever that government businesses are hopelessly inefficient. If that is invariably true, then the insurance industry had(has) nothing to worry about. Yet they made sure there was no public provider in the bill.

By coincidence I joined Group Health when I went to work for the gov't. A lot of people don't like it and refer to it as "group death." So they buy higher cost insurance plans. That's OK; that's personal freedom. I like the GH concept. It's a health cooperative, wherein our premiums are described as "pre-paid" benefits. I haven't found GH doctors, nurses, or other health care professionals to be any less competent than others in the industry, so I'm satisfied with it. And it's a model that delivers quality health care at what appears to be a significantly lower cost than other insurance alternatives here in WA, which may account for it's growth in recent years.

I accept medicare and other insurance standards because the patients need care.

A lot of providers are turning away medicare patients because of the effort it takes to get paid very little and the ever increasing medicare audits. I wouldn't be surprised if all carriers will pay like medicare in the near future.

On a different note, there are doctors out there who have cash only practices and will give the patient a superbill in which they give to their carrier and the carrier will pay them. The doctor gets full payment at the time of service and the patient accepts a partial payment back from the their insurance company.

The provision was if you didn't sign up for insurance you would be fined(taxed) about $500 a year.

If people are not working or able to otherwise provide for their families immediate needs healthcare becomes a luxury beyond their grasp.
If they don't have it they cannot spend it.

I am sure there are many other facets to this issue.

Fishy

Wow Hank, that's a pretty sensible post from you at 6:24 yesterday, evidence that you might be a rational human being despite your RWWJ tendencies.

I don't know if Kaiser Health is like the Kaiser Permanente around here, but I hear plenty of unfavorable comments about it for denying claims. As far as I know GH doesn't deny claims because there are no claims. GH offers treatment for members, so I suppose the downside is when a patient wants a treatment that GH doesn't provide. I had that experience 5 years ago when I blew a disc in my neck. Funny how things work sometimes. GH allowed me all the PT I wanted ($15 co-pay), acupuncture ($15 co-pay), and I saw a surgeon about getting neck vertebrae fused. Surgery would have been something like a $15 co-pay as far as I know, yet they would not approve treatment by an "outside the GH system" chiropracter who has a traction-like device because GH "doesn't think it works." After talking with Aunty's husband, who told me to avoid surgery if possible and to try anything else first, I decided to pay $3,000 out of pocket for the traction. Considering that nothing was going to make me 100%, I'm satisfied with the 90% or better that I got from using the traction alternative. What's funny about GH in this case is that vertebrae fusing surgery is only about 80% successful or thereabouts, I could have had the surgery that must cost over $10,000 for my co-pay, but they wouldn't spend a dime on the traction machine.

A bit of thread drift, but I'm trying to illustrate that no model is going to be perfect. I think a useful model on a national scale would provide basic health care to all citizens, and if a person wants something that is significantly beyond basic, then they can buy additional coverage or pay out of pocket. This way everyone from the richer than 1%ers to the poorest of the poor receives a reasonable level of health care, and the rich receive an extreme level if they need or want it. Yeah, I heard about the Death Panels, which we already have in the form of insurance boards who decide to deny claims and care. Big deal, already. Meanwhile, the cost of health care can go to providing health care instead of syphoning off billions for CEO salaries, stock dividends, and the incredible insurance overhead.

All of which is made more important by your post above that providers raised prices in response to people seeking less health care in the recession. If it were truly free market driven, they would lower their prices to attract business like auto manufacturers do.

Sg

A few good posts in there, Hank. Just giving credit where it is due.

Jerry, it sounds like you'd agree with me then that it is beneficial to get all of those young people in a health care plan. Would you then favor a higher penalty for those that choose the penalty over healthcare? Are we even on the same page in thinking that it is best if EVERYONE is insured?

There's a lot I don't know about this stuff, but it seems to me that a Capitalist approach to healthcare has been the root of every ill that plagues our ridiculously unsustainable system. Every player in the game, like any good Capitalist, is constantly out to increase his profit margin, with the lone exception being the contingent of doctors who haven't lost sight of the promise they made when they took the Hippocratic Oath. The art of medicine is, in principle, a Socialistic endeavor, which makes it, at a very basic level, incompatible with a Capitalist system. In order to make the increased profits all business owners strive for, providers are forced to either refuse care to Medicare/Medicaid patients or raise their prices to keep pace with the ever-increasing costs to insure their practices and the ever-decreasing payouts from insurers. Refusal to care for any person is a direct violation of the Hippocratic Oath, so the ethical doctor has only one choice.

Something else that I can't imagine has helped matters has been the introduction of corporate ownership of medical practices in the past few decades. My father's group practice was purchased by a corporation in the mid 90s. Not long after being "acquired," my father was called into his "manager"'s office (a 30-something administrator, earning about $250K per year while providing ZERO healthcare) and was fired because he had "too many Medicare patients." He has since started a new private practice and continues to serve his Medicare and Medicaid patients, but he's earning less than he did 20 years ago....

In summary, a mish-mash of insurance companies, big pharmaceutical producers, corporate overhead (and greed), malpractice attorneys, and the greedy contingent of providers has probably accounted for at least a good portion of the drivers behind the hopeless misery that is our healthcare system.

I don't pretend to have a solution, but I think some of the more moderate changes proposed in this thread would be a good start.

I would favor a much higher penalty.

It is best that everyone has health insurance but where we might differ is that I think everybody should pay so0mething toward the insurance

We all wish health care costs weren't so high, and more specifically the insurance premiums we pay to shield us from those costs. It would be nice to be able to go back to prices we paid in the '70s but with all the advancements modern, up-to-date medicine is today.

In '74 I bought a brand-spanking new Chevy pickup for $5400. Two years later traded it for a new 3/4 ton, 4 wheel drive Ford that had a price tag of $7600. Bought my first house (1974), 3Br 2Ba on 3 ac. and w/ a 30 x 50 finished shop on it, for the wapping price of $37,000. The house was only 6 years old and I was young. The last couple of houses I have bought have been in the mid 6 figure price. Pickups $50,000.

What would you be willing pay for a sure cure of cancer if you were afflicted with it? What would you pay to get you sight back if you lost it? Would the answer be any amount?
The good-old-days are gone. Everything has gone up and up and up.

I would be in the camp with everyone having health insurance but we know that that isn't going to happen. What would happen is that the upper and middle class would have to subsidize the poor. That is already happening. Hospitals have indigent funds to help those people.

The way this Obamacare is set up or is going to be implemented is going to be nothing more than a TAX. We know that 47-48% of the population does not pay taxes. Federal income taxes to be precise. For the rest, pay the tax or pay the fine. The trouble with this program is that it will be too burdensome on the people that generate income in this economy because it will limit the people they can hire. The break point right now is 50 people. A lot of businesses would like to hire more people but they stick with there 47-48 person work force. The fear of the exact costs of Health Care Act is killing jobs right now.

Having young people in the health care plan would spread the cost and lower the price of insurance nationally but they are young and healthy and bullet proof. They are also buying their first houses and having another payment would too often put them over their income limits.

Higher deductible policies reduce monthly premiums, and for most of us, is the way we elect to configure our insurance.
Higher fines if Omabacare is fully enacted would make some stop to consider what would be the cheapest way to go and yet stay in business.

I am not sure what the best solution is. The thought that the "collective" would spread out and reduce health care cost is admirable, but, when the exemptions are excluded from that "collective" pool, who will be left to pay?

What if the AHCA were mostly upheld, but the individual mandate were tossed out?

Then we'd have to go back to "how to pay for this"...and single payer would be back on the table...and will look a LOT better this time around.

Wouldn't have been a bad stratagery from the beginning, were I conspiracy type.

Fish on...

Todd