Are Insurance Companies Crazy?
By Andrew Senske, President CPAP-Supply.com
Last Updated 4/08/2009 1:46:00 PM
Okay, I know the article title is ridiculous. Of course insurance companies aren't crazy. It's the people running them who are crazy... or just plain lazy. I haven't figured that one out, yet, but I think it's a combination of the two to be honest with you. Either way, insurance companies are making poor decisions every single day on a potentially massive scale. Do you want to be able to buy CPAP equipment from the suplier of your choice and have your insurance company pay for it? Are you interested in lowering the cost of healthcare in the United States? Are you tired of hearing about bureaucratic ineffeciency and waste leading to economic trouble? Are you wondering how the government could ever possibly manage healthcare for everyone? Me, too. So, here we go.
If you've ever called your insurance company to ask about your policy or the benefits available in your policy you've probably heard the terms "in-network" and "out-of-network". These terms are designations your insurance company has for all the various healthcare providers and suppliers who submit claims to them. With PPO and HMO type insurance plans it's basically a given that there are providers and suppliers designated by the insurance company as in-network, and that there are a whole lot more providers and suppliers designated as out-of-network. With a PPO plan you may get some sort of insurance benefit regardless of the provider or supplier you choose but the benefit is usually much lower when you choose a provider or supplier that's not part of the club, so to speak. With HMO type insurance plans (don't get me started on HMOs...) the designation exists, but the main problem is that you have no choice if you want coverage. You either go in-network - often without any choice even within the network - or you have no insurance coverage at all.
That's just the way it is. Seems logical. Everybody pretty much accepts it. It must be the right way to do things. Cool.
It's not cool. It's just plain old-fashioned stupidity. And here's why.
For a few years we've been trying to convince major insurance companies to designate CPAP-Supply.com as an in-network supplier of medical equipment. We've been unsuccessful at doing this, as have many of our online competitors, I'm sure. The typical response we've received goes something like this: "We're sorry but it appears that we have enough suppliers in your zip code already".
What was that? Say again? Did you just say something about Apria?
Did that person just turn down savings of hundreds or thousands of dollars per piece of equipment sold to beneficiaries because the insurance company thinks they've got our zip code covered already? What does our zip code have to do with anything? We service every zip code in the United States, but offering up that kind of information to an insurance company credentialing department literally overloads the insurance company employee and brings the conversation to a grinding halt. It seems there's no script yet for this type of conversation.
Every day insurance companies are making the decision to pay more for services and equipment - equipment purchased from their in-network suppliers - rather than allowing their beneficiaries to do a little legwork and find better service and better pricing from providers and suppliers that aren't on the network list. We hear this story all the time when talking to customers on the phone. Sometimes would-be customers decide they can't buy from us because their insurance company won't pay or won't provide a sufficient level of coverage. The customer has to buy locally for five times the price and the insurance company is completely willing to pay the inflated price. And believe me. Most conscientious customers are outraged and frustrated by having to do this. This type of nonsense significantly contributes to the rising cost of health insurance that most of us are experiencing every year.
It's not the only contributing factor, though. Local government might enact laws and regulations that make insurance companies provide ridiculous levels of insurance coverage as minimum requirements for policies (thus forcing insurance companies to charge a lot for even the most basic of plans, and potentially driving insurance companies out of your state). So there are a few factors contributing to rising insurance costs, but the easiest one to fix right now is the in-network versus out-of-network designation. If I were in charge of an insurance company - or a socialist country for that matter - I'd make that designation go away in a heartbeat. I would not only allow my beneficiaries to go find better service and lower prices, I'd encourage them to do it and reward them for doing it.
So why aren't insurance companies operating the way they should be? Why do insurance companies discriminate to their own detriment and to the detriment of their beneficiaries, and essentially to the detriment of our entire society? Why doesn't an insurance company representative look at our prices - and the prices of each and every one of our competitors, because it's not just about CPAP-Supply.com - and say, "we'll ABSOLUTELY pay less for services and equipment purchased from these companies"?
We need to expect the insurance providers we pay to act responsibly to help lower the cost of healthcare. Follow this link to find information about the insurance commission in your state and let your commissioner know what you think.
CPAP-Supply.com is a leading online retailer of CPAP equipment. Located in Spokane, WA CPAP-Supply.com has been serving thousands of customers around the world since 2001. Founded on a belief that patients are their own best primary care providers, CPAP-Supply.com understands the importance of educating patients and customers on both the effects of and treatment for obstructive sleep apnea. For more information visit CPAP-Supply.com or call toll free 1-888-955-2727.