Profit-oriented insurers make access to health care more difficult
According to a recent Harvard CAPS-Harris poll, 52 percent of registered voters said they approve of President Joe Biden’s handling of COVID-19. I also agree. This is excellent news for the President. What this survey doesn’t reflect, however, is how the COVID-19 pandemic has exposed some of the ugliest problems in America’s healthcare system.
Even if dr. Anthony Fauci says our country is “out of the pandemic phase,” issues highlighted by coronavirus remain front and center. Most notably, medical offices, healthcare systems and hospitals — especially in our most vulnerable communities — that were already struggling to stay afloat are now on the brink of closure.
In order for healthcare facilities to keep their doors open and provide quality patient care, they need adequate staffing, adequate funding, and reliable resources. But even before the pandemic, the nursing shortage in hospitals was a nationwide crisis. According to a 2018 Healthcare Financial Management Association study, about 78% of hospitals said they were facing a worsening shortage of healthcare professionals, forcing them to fill the gaps with traveling nurses and other temp workers that are growing exponentially cost more than routine staff. Increased demand has provided recruiting agencies with an opportunity to raise prices disproportionately, with travel nurse costs nearly tripling and hospitals spending almost 40% of their working budget on travel nurses alone by 2022. It is therefore not surprising that many of these recruitment agencies are currently under investigation for predatory practices.
As a former member of Congress and a former hospital administrator, I believe that one solution to protecting Americans’ access to healthcare would be to ensure healthcare systems are adequately funded and predatory behavior by recruitment agencies, insurance companies, pharmaceutical companies, etc. is investigated and stopped .
Insurance companies got richer during the pandemic through their desire to create value for their shareholders. Unfortunately, hospitals and patients have been fighting on unprecedented levels. Over the past 10 years, the average increase in the cost of coverage has been about 5.3%, but in 2021 the price of health insurance rose 10.4% — almost twice the rate of headline healthcare inflation. Where does all the money go if it doesn’t help patients? I applaud the success of the CEOs of the top seven insurers in the United States, who made $283 million in 2021, and in the first quarter of 2022 alone, the top five insurers made $262.8 billion. However, success should be offset by measuring outcomes and improving inequalities for the patients you serve.
In other words, Big Insurance has created value for corporate governance while creating unintended consequences for the allocation of funds and resources that would otherwise have been available to patients and healthcare systems across the country.
But for some reason, the media, patients, and even healthcare workers have wrongly blamed healthcare systems and hospitals for rising costs and understaffing. This is what happened just now in Indiana, where insurance advocacy groups were trying to blame Indiana hospitals for rising costs of care, while Indiana insurance plans have profited nearly twice the national average for the past few years, earning $300 each year in pure profit for each member . while the national average is $170 per member per year.
During the same period, 2018-2020, Indiana insurance companies received $140 million per year in drug rebates, which accounted for 91% of their profits. According to the Federal Trade Commission, these gains are “post-release rebates” that offer little relief to patients.
It goes without saying that hospitals, healthcare systems, healthcare workers and patients are fed up with these issues that plague our healthcare industry. If nothing is done about practices that focus on making a profit to patients, more hospitals will close, staff levels will continue to decline, and patients will lose access to care, especially in our most vulnerable communities.
As insurance companies count their billions of dollars, hospitals serving urban and rural areas are closing, leaving large gaps in care. A 2021 study found that nearly 47% of counties in the US are considered hospital bed deserts.
We must stand up for this and ensure that our corporate leaders not only have insight into healthy financial statements, but also into healthy living.
Former Ed Towns Assemblyman represented New York for 15 terms. He was director of the Metropolitan Hospital for a decade and then assistant administrator of Beth Israel Hospital. He served in the army and as an educator at Fordham University.