Weapons of Mass Corruption: The Explanation of Benefits

“Secrecy is the linchpin of abuse of power…its enabling force. Transparency is the only real antidote.”
Glenn Greenwald, American Journalism and Author

What if I told you that you and/or your company, depending on where you get your health insurance, are spending more than $1,500 a year just to have your health insurance claims processed?

That’s half a trillion dollars out of Americans’ pockets each year just to process health insurance claims.

Well, it’s true. We spend about two-thirds of what we spend on our entire defense budget on healthcare administration, not on healthcare. And what do we get for it? The answer is selective information at best, and a shroud of secrecy at its worst.

 The Unnecessary Costs of Insurance

The concept of health insurance in America, the belief that everything we get from the healthcare system must run through an insurance carrier and be scrutinized, is preposterous, not to mention wasteful. But it serves a purpose. It creates a layer of secrecy between us and our medical providers, and in most cases makes it impossible for us to know what is being paid for and why.

Why is every claim reviewed to see if my physician knows what she is doing? When an insurance carrier says, “that was not medically necessary,” they are telling me that they know medicine — and my medical needs — better than my physician.

That’s preposterous.

It’s not about insurance companies courageously combating medical fraud. It’s about creating an unnecessary layer of administration to facilitate a massive system of bureaucracy and confusion that allows unethical profits to persist. It is the most un-American of systems.

In most cases, I’m paying the bills, either through high deductible plans or because I’m the employer. I don’t want, or need, an insurance company to judge the decisions made between patients and doctors.

The insurance industry’s grasp on the system is a big part of the reason for our high costs. How do they do it?

The Explanation of Benefits Scam

Have you ever received an Explanation of Benefits (EOB) from your insurance carrier that said you saved 50% or 60% or more because of the fantastic rates your insurance carrier has negotiated with the provider?

For example, several years ago, I received an EOB that said I saved 92%. Amazing! What would I do without insurance?

That was the first bill that really caught my attention. It was an ER bill for $12,154.70. But with insurance, I was entitled to a 92% discount, meaning I only owed $980. Having health insurance really pays off, doesn’t it? Do they think we’re fools? Apparently so. And that’s why we refer to the EOB as a Weapon of Mass Corruption.

Under our current paradigm, we really do “save” a great deal with insurance, but only because of the collusion between insurance companies and providers — primarily hospitals, laboratories, imaging centers, and other ancillary services. And of course the huge premiums we are paying to receive those discounts are being used to generate millions of meaningless EOBs every day. The printing of EOBs has evolved into an entire industry unto itself. It’s insane.

We can change this–first by understanding what is NOT included in our EOBs and then, by asking questions about the information we actually need, which includes billing codes, the actual price paid for the services (not just our portion), and the rates negotiated between insurance carriers and medical providers–rates negotiated on behalf of employers and patients who are not privy to the information. It’s a crazy world we live in. And the first step toward changing is education on how the system works.

That’s where Amaze comes in–educating employers, their employees and their families on how to navigate the maze of American healthcare.