Health Insurance Is Complicated. Here's How Patients Can Retain Some Power In The Arrangement

Insurance is boring and hard to understand for a reason. As soon as the insurance companies bother you, they try to screw you over. This way, you'll miss out on finer details.

By the end of this column, I hope to change the way you look at the insurance industry, especially health insurance. I want you to understand that even though they should work for you, they don't.

Let's start with the basics. All insurance companies have the same goal: to collect money in the form of premiums and pay as little as possible in the event of an accident. The less insurance companies pay, the more they can earn for their executives and shareholders. Most insurance policies cover damage that occurs in rare events, such as if your house catches fire. Your insurance coverage is meant to cover the costs of rebuilding your home.

It's different with health insurance. Because everyone needs health services at one point or another in their life. After you pay your monthly premium, your health insurance company chooses which parts of your medical bills are necessary and which parts they will cover. If you are excluded from health insurance, you will have to pay out of pocket. Often, we only become aware of these additional costs after learning about them.

Unfortunately, health insurance can also be difficult for doctors to understand, partly because health insurance companies are unwilling to pay for services provided by doctors.

For example, if a health insurance company pays more than expected, it tries to reduce costs. Instead of asking its executives to take pay cuts, they asked several health care providers. Insurance companies catch the small fish before the big fish. Small private practices are easier to lobby than large companies or hospitals with more bargaining power. Insurance companies are betting that few patients will notice or care if the doctor is out of "network." But in communities like Kitsap, where there are fewer doctors and fewer clinics to choose from, their gamble doesn't always pay off.

As a personal example, Kitsap Physician Services insurance does not pay.

About 15 years ago, KPS tried to reduce payments to patients treated at the clinic where my father and I operated together. We refused to accept a reduction in their payments. To negotiate with their management team, we sat down in their conference room, formerly located on the corner of Fourth Street and Warren Avenue in downtown Bremerton. The negotiations failed. KPS has terminated the contract with our company.

The truth is, these managers don't value the service we provide to our patients. Fortunately, our patients think otherwise. And they talk openly about it. Strong enough to make a difference. Six months later, the PPP returned to the negotiating table and reached an agreement. KPS believes our patients will go elsewhere. They are wrong.

Health insurer Regence now wants to end its contract with Olympic Internal Medicine after announcing a move to charge patients an annual subscription, which I discussed in my last column. And this, even though this IOM is one of the last practices of internal medicine in the mainland. As you can imagine, many patients were outraged by Regency's decision. Many readers have written to me with their frustrations and asked me to contact Régence. Regence has contracts with other subscription practices in Kitsap County. Why not IMO? Regence is based on patient loyalty. And they can make bad bets.

How could Regency lose? Some small clinics in our community survive for one main reason: the loyalty of our patients. The clinics that still survive like IOM are the best of the best. Without the bargaining power of the big companies, we are at the mercy of the insurance companies. Compared to payments to large healthcare companies, we receive less money for each patient we treat. As a result, many private practices closed their doors.

But patients have the power when medical practices collide with insurance companies.

Regence is in business to make money. And they do a lot. Former Regence Insurance Washington and Oregon CEO Mark Ganz took home $4.1 million for his work in 2019. That doesn't include his salary for running Regence in Idaho and Utah, though his salary there exceeds seven figures. In order to function, insurance companies need you and your money. You need to choose your insurance plan. You have to pay a premium to stay in business. Without your money, they can't continue to pay millions of dollars to their executives who earn 10 to 20 times more than doctors.

Even though insurance companies don't care if you lose your doctor, they assume it won't happen to you either. Remember that insurance companies are intermediaries. Without a doubt, they notice that their income is falling. You are free to choose your own insurer. You can change your insurance company. And that may force your health insurance company to look at things differently. PPP finally did. If enough patients complain, Regence can do the same.

Now is the time to contact Regence and let them know that delisting internal medicine specialists is not good for our community. It's your money. How do you want to spend?

Dr. Niran Al-Agba is a pediatrician in Silverdale and writes a regular opinion column for the Kitsap Sun. Contact niranalagba@gmail.com.

This article originally appeared in the Kitsap Sun: Patients cut costs from health insurance companies or local clinics.

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