[Winona Online Democracy] Maybe CEO pay was calculated into the 8% overhead...Even 1% of some of the numbers previously stated in this thread by other posters would lead to exorbitant CEO salaries. Afterall, 1% of a billion dollars is a lot of money!
(at least to me it is...) :) -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Duane Peterson Sent: Tuesday, March 07, 2006 2:46 PM To: Davis, William MD; [email protected] Subject: Re: [Winona] Health Care and Insurance [Winona Online Democracy] After subtracting the 8% overhead charge, the insurance companies do not pay the balance of 92% in benefits. Somewhere in that 92% is profit and exhorbitant salaries for CEO's. ----- Original Message ----- From: "Davis, William MD" <[EMAIL PROTECTED]> To: <[email protected]> Sent: Monday, March 06, 2006 9:41 PM Subject: [Winona] Health Care and Insurance > [Winona Online Democracy] > > ------------------------------------------------------------------------ -------- >A few comments from a physician perspective. First, the "overhead" of >commercial insurance varies considerably. The best companies spend 8% on >administration (they pay out 92% of the premiums for health care) and the >worst may have an overhead of 50%. Currently Medicare and Medicaid are >running about 3% overhead. > > Second, physician offices and hospitals have a "price list" for every > procedure they perform (office visits, shots, office surgeries, hospital > ER visits, operating room costs, etc.). They are all keyed to the CPT > codes (Common Procedural Terminology), a coding system developed by the > AMA to permit standardization. The CPT code for an "average" office visit > is 99213. This makes it possible to compare charges accross communities > and states for the same service. There is a detailed description of each > code in a manual that is published annually to allow "coders" to determine > which code to apply to a particular service. When new procedures are > developed (like laparoscopic appendectomy"), a code(s) is created for the > procedure so that insurance companies and the government can be billed. > > What happens is that big payers (Medicare, Medicaid, BCBS, etc.) can > dictate to physician offices and hospitals what they will pay. It is > similar to Walmart telling its suppliers what they are going to pay for > goods Walmart will sell. It is a take it or leave it kind of deal. If we > don't agree to the contract that BCBS sends us, we can't see their > patients (we are "out of network"). For example, the charge for a 99213 > at our office, based on our "charge master" (price list) might be $75. We > currently experience about 50% "discounts" from the big payers. > > All patients get billed the same amount ($75 for a 99213) but what they > owe will depend on the deal with their insurance company. So BCBS may > have told us that they will pay only $40 and we cannot "balance bill" the > rest to the patient. You can see this on your insurance EOB (explanation > of benefits) that comes to you after a visit to the doctor. It gets more > complicated if you have a co-pay. You may have to pay $35 to your doctor > and BCBS only pays $5. The office is forced to "write off" the > difference. However, if you have no insurance, you get the bill for $75 > and end up paying the whole bill. This is not so bad for a $75 office > visit but it can be a catastrophe for a $50,000 coronary artery bypass > surgery. > > Some hospitals and clinics are discounting bills to patients without > insurance to match the discounts they give to the insurance companies but > most are not doing that. Fortunately, the number of uninsured patients is > still small in Minnesota but it is a growing number as employers stop > offering insurance to their employees. > > Sorry for this long note but it may be helpful to see what is going on > from an "insiders" perspective. > > William Davis MD > [EMAIL PROTECTED] > > ------------------------------------------------------------------------ -------- > _______________________________________________ > This message was posted to Winona Online Democracy > All messages must be signed by the senders actual name. > No commercial solicitations are allowed on this list. > To manage your subscription or view the message archives, please visit > http://mapnp.mnforum.org/mailman/listinfo/winona > Any problems or suggestions can be directed to > mailto:[EMAIL PROTECTED] > If you want help on how to contact elected officials, go to the Contact > page at > http://www.winonaonlinedemocracy.org _______________________________________________ This message was posted to Winona Online Democracy All messages must be signed by the senders actual name. No commercial solicitations are allowed on this list. To manage your subscription or view the message archives, please visit http://mapnp.mnforum.org/mailman/listinfo/winona Any problems or suggestions can be directed to mailto:[EMAIL PROTECTED] If you want help on how to contact elected officials, go to the Contact page at http://www.winonaonlinedemocracy.org _______________________________________________ This message was posted to Winona Online Democracy All messages must be signed by the senders actual name. No commercial solicitations are allowed on this list. To manage your subscription or view the message archives, please visit http://mapnp.mnforum.org/mailman/listinfo/winona Any problems or suggestions can be directed to mailto:[EMAIL PROTECTED] If you want help on how to contact elected officials, go to the Contact page at http://www.winonaonlinedemocracy.org
