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tj444 -> RE: Taking Insurance Companies Out of Healthcare (10/12/2014 7:51:03 PM)
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quote:
ORIGINAL: Zonie63
Boeing experiment will be closely watched by business CEOs and insurers alike
quote:
There are many Americans who are beginning to question the contributions big insurance companies make to our health care system. And I’m not just talking about lefty advocates of a single-payer system. Corporate executives are also wondering why we need the big insurers and whether higher-quality and more cost-effective care could be provided to employees if they didn’t have to deal with health insurers at all.
I wrote a few months back that my former CEO at Cigna once said that what kept him up at night was the possibility that Americans — business leaders in particular — would ultimately conclude that insurers were an unnecessary expense. He used the term “disintermediation,” a fancy word that means “cutting out the middle man.”
News out of Seattle this summer undoubtedly has caused the big insurance CEOs to lose more than a bit of sleep. Boeing, the world’s largest aerospace company and one of the Seattle area’s largest employers, announced that it has decided to forego the services of an insurance company and to contract directly with two of the Northwest’s largest hospital systems to provide care to its 27,000 employees and 3,000 retirees in the region.
This looks like it might have promise. The "middle man" has absolutely zero value in this process, so why not cut out the middle man? "Disintermediation" sounds interesting.
umm.. getting rid of the insurance corps isn't anything new tho.. its call "self-insuring".. (you don't need an insurance corp for insurance to drive a car either.. you can self insure if you want to (& have the money/assets to do that)).. ..self insured health plans have been allowed since 1974... so whats so new about this then?
"In self-funded health care, the employer assumes the direct risk for payment of the claims for benefits. The terms of eligibility and covered benefits are set forth in a plan document which includes provisions similar to those found in a typical group health insurance policy. Unless exempted, such plans create rights and obligations under the Employee Retirement Income Security Act of 1974 ("ERISA")."
Historically self-funding has been most effective for large corporations and Fortune 500 companies with over 1,000 employees but with the rising cost of healthcare over the past ten years at a rate of close to 10%, self-funding has become an option for smaller employers. It is now estimated that the average self-funded plan covers 300-400 employees and that 59% of companies within the U.S. self-fund part of their healthcare plan
https://en.wikipedia.org/wiki/Self-funded_health_care
http://www.siia.org/i4a/pages/Index.cfm?pageID=4546
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