An insurance company is an insurance company is an insurance company

This blog is primarily a personal one.  I don’t usually write about political events or issues.  That is not because I am not interested in politics and world events, but rather because I don’t feel that I can add much to the excellent discussions of blogs like Darlene’s Hodge-podge and Time Goes By. 


I am making an exception here, partly because I do have something personal to add to the topic of health care reform.


I live in the Pacific Northwest, near the city of Bellingham, which is about 90 miles north of Seattle.  Many people in this area are insured by a company called Group Health.  My husband Jerry insured his late wife, Susy, with Group Health.  He himself had Medicare, but she was too young.


Group Health is being held up as an example of a model for a “cooperative” health care plan that would be a “compromise” solution to the Republicans’ objection to a government health plan.  There is an article in today’s New York Times discussing Group Health.  Toward the end of the article it states that “Technically, Group Health was misnamed. . . . . Structured as a not-for-profit corporation, its revenues (2.6 billion last year) are reinvested rather than redistributed among members.  But it is governed like a cooperative – and calls itself one – because its board consists of and is elected by members.”  In fact, according to the article, only seven-tenths of 1 percent of enrollees voted in the last board election.


In fact, Group Health is an insurance company.  Apparently its fees are slightly lower than other insurance companies, supposedly because its records are computerized and its doctors are paid a salary (not fee for service).  Salaries are based on “performance.”  The article does not say who evaluates performance, or what criteria are used in the evaluation.  But I’d be willing to bet my bottom dollar that keeping cost down is a biggie!


At Group Health, according to the Times article, patients are assigned a team of primary care practitioners who are responsible for their health.  Notice that they are assigned practitioners.  What that means is that you don’t choose your own doctor, and you don’t even choose whether or not you see a doctor.  You may see a nurse, and you don’t have a say in which it is. 


Suppose you were a doctor working for Group Health and your salary was based on your performance.  Your performance would be measured by the administrators running the insurance company (Group Health).  These administrators would be very interested in keeping costs down, and probably secondarily, in keeping patients healthy (or perhaps in keeping healthy patients).  You would be disinclined to order tests for patients, especially expensive tests.  You would prefer not to treat the really sick ones.


The Times article states further: “Medical practices, and insurance coverage decisions, are driven by the company’s own research into which drugs and procedures are most effective.” 


Don’t let them fool you.  It’s an insurance company, pure and simple.


Here’s what happened to Jerry’s wife.  Some years after he took out the insurance she discovered that she had metastasized breast cancer, the same thing Elizabeth Edwards has.  It would eventually kill her, but there were treatments which could significantly prolong her life.  She was given chemotherapy and the cancer went into remission.  The tumors were not gone, but they were no longer growing.  After another year they came back.  Jerry got a letter from Group Health saying they would no longer cover Susy’s cancer.  He read the policy, which had been sold to him by an insurance broker (because Group Health is an insurance company) and it had a lot of language in it that was difficult to understand, but which did seem to indicate that the insurance company could terminate coverage under various conditions.


Is anyone surprised by this story?  Isn’t this standard insurance company practice?  Don’t get really sick because the doctors will get paid less and the insurance company will get less money.


Jerry made a fuss.  The original broker got involved.  (“This is outrageous!” is what he said to Jerry.)  Eventually he got coverage reinstated, and Susy lived another 5 years. 


Jerry and I both have Medicare.  He wouldn’t be paid to have Group Health.  Medicare isn’t perfect, but it is the best health insurance I ever had.  We supplement it with a medigap policy.  That is not cheap, but it allows us to choose our own doctor and to decide when to go.  We can see a specialist when we need to, and the insurance company has nothing to do with the decision.  We decide, with the recommendation of our doctor, which specialists to see.

President Obama said that if we like the insurance we have we can keep it.  I sure hope he keeps that promise, because I really don’t want to be forced into something like Group Health.      



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10 Responses to An insurance company is an insurance company is an insurance company

  1. Annie says:

    Hi Old Woman,

    I appreciate your introductory comment about this blog being personal not political, on so many levels!

    I also appreciate your insight into Group Health, it’s interesting to hear how personal experience contradicts high-flown editorial opinion.

    In Toronto, I see a doctor at a community health centre. When I signed up there, I was assigned a doctor, I could not choose one. But I can go elsewhere if I don’t like it and my medical coverage isn’t tied to that centre. I believe the doctors there are on salary, I don’t know how they calculate those salaries. They have a Board of Directors, technically they are elected by members but I expect the reality is like most non-profits, not enough members care to make it a real election, and so directors are selected by a kind of arm-twisting process.

    Any business, even conducted by a not-for-profit organization, tends to be run on business principles by its paid staff. So even a not-for-profit insurance company is going to be run on insurance business principles, as you outline. In Canada, health insurance is run by the government, it has certain restrictions imposed on it (like, you can’t withdraw coverage if a patient becomes unprofitable), but otherwise it is run as a business. I suppose if Group Health is truly a not-for-profit run by its members, it could impose such restrictions on its business, but it has to compete with other insurance companies so it is not likely to do so. Competition does not necessarily provide the best outcomes for customers.

    I’ve been following the healthcare issue in your country somewhat, I am glad there is some movement on the issue but like many, disappointed that it probably won’t go far enough. I hope that is only temporary and there will be further movement toward universal coverage at reasonable cost in the future.

  2. neile says:


    SINGLE PAYER! or maybe, you’ll BE the next story!


  3. Wow, Anne — That’s an appalling story. You should think about writing about it even more widely. People needs to hear about it.

  4. annie says:

    This story is the nightmare that I fear at some point in my life.

  5. Duchess says:

    Here we have the National Institute of Clinical Excellence (NICE). They evaluate every treatment based on Quality Adjusted Life Year (QALY) to measure the efficacy of any particular treatment.

    The QALY calculation meant that life prolonging drugs for breast cancer were only approved here many years after US insurance companies were routinely paying for them.

    Right now it means that Alzheimers sufferers can’t get an effective drug in early or middle stages of the disease. It is only available to late stage patients.

    It’s fair in a way your paying system isn’t. But it’s also pretty hard when they decide your year, quality adjusted, doesn’t look worth charging the tax payer for.

    Our life expectancy is, on average, lower than yours, though no one is bankrupted in the dying. Americans grumble, but I have seen it from both sides.

    What I have seen, over and over, is that Americans with insurance get a LOT better care than I do, even if they sometimes have to fight the insurance companies.

    The trick is to work out how to extend at least decent care to the rest of the population. When you do, there is going to be a new kind of rationing that takes the place of the insurance (= having a job or being old) rationing you have now.

    Good health care costs money and somebody pays. In the end it coms down to some pretty arbitrary decisions and very hard choices.

    I don’t think you would like our QALYs a lot better than your insurance companies.

  6. Old Woman says:

    Annie, you are right, it makes no sense to try to let the “market” run health care. In then end somebody has to pay. We have a system that needs to be improved. It creates too many inequities as it now exists, and it is inefficient and expensive. I believe the insurance companies are a big part of the problem.

    Niele, I have included your first comment. The second is just too long for this blog, but I am sure you can find a place on the net for it. There are so many difficulties with insurance comapnies. Your story is a sad one.

    Ruth, yes. It was bad. Ultimately they paid, but it was a hassel, and pretty terrible for Susy to have to deal with that and breast cancer too.

    Annie, I hope the system gets fixed before any of us has that kind of experience again.

    Duchess, I am certainly not advocating the British system. I like, as I said, what I have, which is Medicare. Because I can afford it I supplement it with private medigap insurance. For those who cannot afford it there are now, to some degree, medicaid suppliments. I think there should be a public option available to those who want it. That was the kind of system I became familiar with in Germany. There I chose the public option, but many of the people I worked with had private insurance. Their incomes were higher than mine.

  7. Duchess says:

    Germans pay a lot more taxes than you do. That’s not just the rich people, that’s everyone who gets income. I think it is fairer, and the health system is very, very good, but it comes at a price and most Americans baulk at paying it. If Medicare were extended to all either your taxes would go up or your care would go down. As you say, in the end someone’s got to pay.

  8. Alan G says:

    Thanks for sharing this experience Anne. We are so much at the mercy of our Representatives and Senators and the insurance companies weld such a powerful lobbyist organization I remain somewhat pessimistic on the final outcome….or even if there is one!

  9. wisewebwoman says:

    Excellent article Anne. I believe so strongly in universal health care. It should be like police, fire department, education, an absolute right. It has nothing to do with profitability. Richard Nixon was the first president to call universal HC ‘socialist’ and did it deliberately to divert Americans away from their increasing demands for a universal plan. Naturally the insurance company lobbies were his pals.
    all my American friends are entitled to this and I sure hope BO does not let you all down but my inner cynic tells me he will. The insurance companies are so powerful.
    Ironically your health care costs twice as much as ours. It is scandalous.

  10. wynne says:

    Thanks for posting this, Anne. And thanks to all for thoughtfully written comments. I had a letter to the editor in the Bellingham Herald last week, prompted by my not-for-profit insurance company, Regence, raising next year’s rate by 14% (after 12%, 13% etc etc the past few years). A few of the many responses were reasonable, most of them inarticulate rants of one sort or another. So I really appreciate the intelligence of comments here.

    The Washington State Insurance Company responded to a complaint I made said that unfortunately, under state law, if an insurance company can demonstrate “need” they can raise their rates however much they want. Regence, doubtless due to investment losses — and perhaps because they insure even fewer people these days than before — demonstrated a loss last year that justified raising their rates.

    Too bad the *rest* of us can’t get raises on OUR salaries, Social Security, CDs, payments from insurance companies etc when *we* can ‘demonstrate losses’ for the past year, eh?

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