Health care costs continue to increase and everyone is concerned. The question is where is the money going?
I looked on the internet at the Blue Cross web site, but there was only a basic summary. Hospitals, no luck. Pharmaceutical companies are a little more transparent, listing the total for each of their drugs. Physicians are a confusing mix with winners and losers. Medical equipment suppliers? Medicare?
This is too complex to understand, so we should just follow the money. The insurance agent is the first to get a small piece of each premium. The insurance company pays to process and medically evaluate your application to see if you are eligible for insurance, to list excluded conditions, and to rate your coverage. They pay to cover their advertisement cost and public relations. They have a medical department to help manage your preventive care and to approve hospital care, length of stay and covered outpatient tests. The billing department processes the claims.
The hospital pays for advertisement and public relations. They pay for a utilization department to monitor a patient’s care to confirm coverage for the admission, length of stay, and any special services. They pay for a billing department to generate a bill and collect from both the insurance company and patient.
Laboratories have advertisement, couriers, and billing departments, etc.
And, of course, everyone has legal expenses.
Notice that I have not included the costs for nurses, etc., who actually provide medical care. Everyone plays a role and has a justification for their expenses. However, when one pays X dollars for health care, they assume that most of the money is going toward providing health care. This is not the case. (Another good question; who are the providers?)
This is called, “Death by duck bite.” Only a small portion of the money remains for providing the care