Is the Entity Responsible for the High Cost of Healthcare the Entity Itself?

11/17/2008 | Unfair Insurance Practices/Bad Faith

The Courier-Journal's Fourm section clued me in to a recent New York Times article by Princeton economics professor Paul Krugman. Krugman writes about a comprehensive insurance study about healthcare in the United States. The article was in response to a recent lawsuit brought by two New York hospitals against UnitedHealth Group (and several of its affiliates). The lawsuit charges that resources that could be used to pay for medical care are, instead, wasted in a "zero-sum struggle over who ends up with the bill." The two hospitals accuse UnitedHealth of operating a "rogue business plan" in order to avoid paying medical bills on behalf of its insureds. Now, here is the million dollar question. Why do insurance companies continue to blame lawyers and lawsuits for the high costs of insurance when the insurance consulting company they hire attribute it to $98 billion a year (yes, billion with a "b") in administrative costs, more than half of which consist of marketing and underwriting. When will the insurance company stop blaming victims and start being truthful with consumers? My guess is never. It's much easier to blame victims and their lawyers than face the truth...the entity responsible for the high cost of healthcare is the entity itself.

hp

p.s. Here is a link to a blog with the New York Times article by Princeton economics professor Paul Krugman (on someone else's blog).

p.p.s Here is a link to the actual McKinsey report