Comprehensive & Affordable Medical Cover…a Trainwreck Foretold?

After water to drink, food to eat and a roof over our heads, the next major concern for most of us is affordable and effective health care. Right now we are not headed in a good direction with any of the above. There is every reason to be concerned, but not for despair. Human ingenuity and capacity for effective co-operation can, if we are smart, find solutions to these problems. It’s a big “if”, however, and looming above it all lies the biggest question of them all, climate change.

Macro figures for world health show us things are getting better.

More people survive disease than ever before. An encouraging demographic, but one with a long way to go and that starts from a low baseline. Higher up the demographic scale, things are not so rosy. Healthcare is becoming unsustainable and unaffordable, driven by runaway medical costs. Public medicine is being run down with potentially dire results in the face of major pandemics to come. In the US public hospitals are closing down because they can’t afford or refuse to discharge their legal obligation to treat emergency cases for the poor. Where they exist, national health care systems are being forced to ration services or partially privatize themselves and in countries where medicine for profit is the norm, tens of millions can’t afford treatment.

US studies for 2013-14 show 84 million people, almost 30% of the population, are either uninsured, partially insured or under-insured. Over half that number have no insurance at all. Another 75 million are in debt as a result of medical bills. Obamacare, a limited step in the right direction, now has 9.5 million of the previously uninsured covered.

People living outside their country of origin, particularly in places where standards of medical diagnostics and treatment are rudimentary yet often expensive, medical health insurance with evacuation are vital. The choice of medical insurer is therefore a key decision.

Medical costs increase significantly every year and these costs are passed on to us. Terms governing cover are changed as suits the insurer with little recourse for the insured. Indeed, existing insurers can be bought out or even go out of business altogether, leaving us with diminished cover or no cover at all. In Australia and Europe the insured may have some recourse to independent national organizations set up to give us a fair deal but for customers outside these areas there is little we can do. At the end of the day, however carefully you read the small print, it is your insurance company who made the rules and decides how they are applied.

Some eight years ago I wrote an article in an English language newspaper in Asia on the subject of medical insurance comparing two reputable medical insurance plans that I called Company A and Company B. Company A was what I termed the Rolls Royce of health cover and Company B was a budget alternative. They were respectively IHI, a Danish company and Goodhealth based in the UK. The article obviously hit a nerve because I got over 300 e.mails from people based in Asia seeking more information asking the identity of Company A and B respectively.

What I found back then was that while IHI charged about 30% more, it really stood by their patients. Something you never really know until you actually face a serious health challenge. Once you were accepted they covered you 100% without any exclusions at all. They imposed no age increases over age 60. You were covered everywhere in the world including the US without loading and could elect to consult and be treated by the doctor of your choice. They issued payment guarantees for treatment as required as apropriate without argument and paid reimbursement claims promptly. Any administrational difficulties encountered with hospitals and doctors wherever you happened to be were handled within 24 hours. They were in short, superb. Exactly the kind of company you want in your corner when the medical chips are down.

Goodhealth on the other hand were a horror show. But, they were the least expensive. A good option if you get hit by a bus say, but beyond that everything becomes a hassle. Processing claims was a nightmare. They questioned everything. They harassed doctors to the extent that some doctors even refused to treat patients covered by them. Goodhealth coverage was just plain stressful. God help you, if you faced a life-threatening illness.

So stark was the difference I spoke to the Goodhealth managing Director in London. He was refreshingly forthcoming. He admitted his company questioned everything. By way of explanation he said, with some justice, that medical costs in a place like Hong Kong for example, were grossly inflated and that doctors and patients colluded when it came to claiming insurance; that they had a responsibility to question whether or not tests ordered and treatment was appropriate. He had a point, and went on to say that it was a matter of business approach. Their competitors charged more but questioned less. They charged less and questioned more.

That was eight years ago and the world of medical insurance has headed a lot more in the Goodhealth direction. Sad to say IHI was bought out by BUPA, a large British organisation who, despite being what’s called a mutual provident fund and a non-profit organization without shareholders, nonetheless is on the expansion trail and clearly follows the Anglo-Saxon business model over the Continental system. Continental Europe (exclude the UK) still retains a much clearer sense of their dual responsibility to patients and shareholders. BUPA promised IHI clients that nothing would change with their cover, in fact things would improve. Not true, it was the standard corporate doublespeak. In short order, age increases were increased up to age 80, exclusions were introduced, standard BUPA procedures were adopted across the board and a much more aggressive stance was adopted toward tests and procedures “second guessing” doctors. They even stopped covering reconstructive surgery in breast cancer cases. Remnants of the Scandinavian approach remained in for IHI patients but overall the standard Anglo-American approach ruled. And this for an organization with no shareholders….

Today alas, companies like IHI, a Danish company owned by the traditionally social-minded Wallenberg Group of Sweden and who were able to marry good business with good medicine, are a thing of the past. It is all business now.

While insurance companies today have a case to answer and could do a lot better, they are not the only ones driven primarily by profit. Private and even non-profit hospitals are often notorious for overcharging. They feather-bed senior executives with profit performance incentives and pay low wages to nurses and service staff; tests in hospital and use of facilities are hugely inflated, as are drugs sold in-hospital. A box of tissues in hospital can be seven times as expensive as buying it yourself downtown. Doctors are no slouches either at sticking it to the insurance companies. Daily hospital visits lasting a few minutes by internists and specialists can cost thousands of dollars, not to mention exhaustive tests, even unnecessary surgical procedures.

Somehow these vested interests rub along together well enough, and why wouldn’t they? At the end of the day it is we, the public, who have to pay for it all. As medical costs soar we pay more in premiums, which increase every year usually somewhere between 5 and 12 percent. Governments increasingly seek ways to privatize medicine to reduce public exposure. It is an unsustainable model, which requires re-balancing, expanding the public sector while retaining private medicine for those who want and can afford it. That cannot work while government panders to the private sector.

Meantime what can we do but do our utmost to keep well, have the discipline to avoid ‘elective’ life-style diseases and find a good insurance broker. One smart enough to guide us through the complexities of medical cover honestly, while earning a decent living on the commission fees he or she earns through us.

That and hope the great global pandemic doesn’t hit anytime soon, for the great public health systems of the 20th Century are now on their uppers and effective private treatment will soon be affordable only by the 1.0 percent of us who are seriously rich.