Is the term “Payor” healthcare’s oxymoron?

One of the great things about fall is that as I prune back the vestiges of my virtual garden I am able to collect basketful upon basketful of overly ripe metaphorical tomatoes, perfect for tossing at aberrant analogies and inappropriate idioms.

It’s a curious time.  We give away money to the middle class and rich so they can upgrade their BMWs on the backs of the poor.  The feds market that idea as though that pittance will either jump start the economy, or to hide the fact that that the administration has managed to budget for a nine trillion dollar deficit gap over ten years.

By now we know there are no quick fixes, no magic formulas for fixing the economy.  Finding a formula that works will be more difficult than learning how to neatly fold a fitted bed sheet.

“Is it the essential paradox of the age of Obama that we have to destroy the village in order to save it, bust the budget in hopes someday we’ll balance it?” Nancy Gibbs, Time, September 9, 2009.

“It takes an idiot to raze a village.” Paul Roemer, today.

Congress is trying to decide what the final bill will look like without ever having read the first draft.  How will we know when they have something that makes sense?  Do we watch the Congressional chimney to see if the smoke is white or black?  Does that mean we have a bill, or is it simply that the chef burnt the Peking Duck?

Then there are the payors.  Get me started, or don’t.  We all know that one of the driving factors for reform is the behavior of the payors.  A friend asks—for full disclosure I note that she is one of “them”—why do people view health insurers differently from auto, life, or home owners insurance.  She was serious.

Here’s my take on the answer.  If the health insurance firms provided life insurance they’d be exhuming the deceased and trying to prove they weren’t dead.  Car smashed, get a check.  House leaks, get a check.  Die, get a check.  Need surgery.  Not so fast.  Let’s see if you’re covered for that.  If not, whew.  If yes, let our doctors decide if you really need the surgery.  It won’t cost you a minute of your time as our doctors don’t even need to examine you.  You see how this plays out?

It happened to me after my heart attack, albeit with my disability payor, sort of the evil step sister of the health side.  My doctor put me on six months disability, naturally, the payor declined to pay.  There doctor, who never examined me decided I was fine, at least that’s what their letter stated.  How do we know these doctors even exist?  Have they ever been seen in the daylight?

Most Americans don’t believe that insurance companies are interested in helping people.  They like us fine when people are payors.  They are much less fond of us when people become patients.  It’s a simple matter of flow theory.  As long as the flow of cash is in-bound, all is well.  When people move to the dark side, from payors to patients, payors have no patience.

Is there anyone who believes that there is a single payor in the country whose mission statement says anything about doing all we can to help those who need us?  Of course not.  Payors have claims adjusters.  What is their role?  It’s certainly not to adjust the payment higher.

Do payors incent their employees to pay out as little as possible?  I believe they do.  Do payors penalize or retrain people who pay out too much?  I believe they do.  Do they design the claims and dispute process so as to make it so cumbersome on patients and doctors that parties give up prior to settling?  I believe they do.

I believe the payor business model is not much different from that of tobacco companies.  For years tobacco firms claimed there was no public evidence to support the fact that nicotine was addictive.  It turns out they buried the evidence.  Payors claim they are not bad actors.  Some claim the moon landing was faked.

I am a firm believer that pictures can sometimes convey more than mere words.  To me, this link explains a lot about what’s wrong with healthcare. Start playing at 6 minutes and 40 seconds.


2 thoughts on “Is the term “Payor” healthcare’s oxymoron?

  1. You think “payors incent their employees to pay out as little as possible?” and you think that “payors penalize or retrain people who pay out too much?” And you think that “payors design the claims and dispute process so as to make it so cumbersome on patients and doctors that parties give up prior to settling?”

    In my 16+ years of designing and developing payer software and working in a wide variety of settings, I have never seen anything of the sort.

    Evidently you have a strong bias and some sort of very negative personal experience that colors your view. But your bias and personal experience does not make your comments any more valid or credible than me saying that physicians are pompous, money-hungry bastards that have a God-like superiority over their hapless patients.

    I gotta say that some of you ‘provider-side’ guys have little credibility.

    I believe they do.


  2. I asked the question and stated a belief. I wanted to hear what others thought. Apparently, many hold similar beliefs. Here’s a few links on Google along a similar vein, they don’t mean I’m correct, but they certainly mean there are those whose journalistic pedigree is higher than mine whose homework says I am not alone or biased.

    “Health Net, an insurer in California, was recently fined $1 million because employees there were offered bonuses if they found a reason to cancel policies” “In CA… and the attorney general is investigating reports that insurers are denying claims at rates close to 40%.”

    “I became aware that the health insurance industry was contributing more and more to the problem of the uninsured and to a growing and fairly new problem of the underinsured. And as I also climbed the corporate ladder, I was more aware of the kinds of health care plans that the insurance companies were trying to move us all into. They all featured high deductibles. And it was clear to me that middle Americans, people who are average wage-earners, sooner or later will not be able to afford to access care even if they have insurance because of the high deductibles they are expected to meet. (My comment here–It’s all about the math, if you set up claims that require high deductibles, there are tables which tell insurance executives what percentage of people will pay their monthly premiums who will never be able to pay the deductible. The insurance company has the person’s income information. Hence, in some cases they are selling policies they know they will never have to make good on.)

    Karen Ignagni, was at that summit and she was on television assuring the President that the insurance companies would be working cooperatively with him and with the Congress on reform this year and I knew that was disingenuous. I had been a part of efforts to plan PR campaigns and lobbying campaigns to shape reform to benefit health insurance companies and I knew that’s what their motives really were. And they weren’t interested in the best health care reform for Americans, but [were out] for themselves.

    I saw another executive of that same organization, America’s Health Insurance Plans [AHIP] being introduced by Chris Matthews on Hard Ball on MSNBC and he was saying essentially the same thing. That this time, as he put it, the insurance companies are coming to the table with solutions. And I knew that was also disingenuous. The solutions they had in mind were solutions that would work for the insurance industry more than they’d work for anybody else.”

    “The Washington Post reports that health and life insurance companies use a type of consumer health “credit report” that is derived from databases containing the prescription medication records on over 200 million Americans. In fact, some insurers are already testing information systems that contain information about the laboratory test results on patients. Previously, in order to determine insurability, insurance companies had to rely on records obtained directly from physician’s offices. Insurers these days, however, rely on records that are obtained electronically at a very low cost (currently about 15 bucks), and these records are often used to deny people health insurance.”

    “A number of people who worked at UnumProvident, the giant of the disability insurance business, whose clients include CBS, told us that the company’s management puts tremendous pressure on claims handlers to deny new claims and shut down existing ones”


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s