A Health Care Question: Is the System Intentionally Set Up for Errors?

There are many things to complain about with our health care system, but there's one aspect that doesn't get as much discussion that I've been thinking about recently. Based on purely anecdotal evidence, it seems to me that an unexpectedly large number of claims are wrongly rejected because of problems with the paperwork, whether its a wrong code, the wrong person listed as the policy holder, a data entry error or any number of other missteps somewhere between the doctors office and the insurance company.

The rejections are often the result of a human error somewhere along the way and if one is diligent in working through the intimidating looking form full of seemingly meaningless numerical codes, the mistake can be found. Then, if you have the time, patience, and sheer force of will to negotiate the phone tree and call back a couple of times until you get someone at the insurance company who will work with you and not merely dismiss you, you can get it sorted out. TheWife has become an expert in negotiating these shark infested waters.

But, she is educated and detail oriented, has the ability to carve out a block of time to take care of it, is not insecure about asking questions and making the person on the other end explain exactly what is happening at each step in the process, and willing to call back to get another person if the one she is talking to seems to not fully understand what he or she is talking about or appears to be unhelpful for any reason. I find it incredible to think that we are that much of an anomaly in terms of number of errors and since the vast majority of people do not possess all of the necessary characteristics for successfully working through these matters, my guess is that there are a significant number of legitimate claims not paid by insurance companies because people who pay large premiums wrongly believe that their health care costs were rightly rejected. And, interestingly, he mistakes strangely always appear to benefit the insurer.

Things have only gotten worse now that a number of our health care providers have begun farming out their billing adding an extra middleman to the whole process. As one learns from the accountant's version of Ockham's razor, the more hands a bill goes through, the more likely it is to get kicked back.

So the question is whether this is intentional and if so, whether it is intentionally intentional. The complexity of our current system of private insurance has created a situation in which error is likely to occur which means there are four possibilities:

(1) The insurance companies are simply unaware that this system works to their undeserved advantage and being unaware do nothing about it.

(2) The insurance companies are aware of it, but are unable to do anything about it because it is necessarily complex for reasons particular to insurance and it just happens to be a lucky coincidence for them that it works out that way and, oh well, that's just how the S-CHIPs fell.

(3) The system arose out of a process of ad hoc modifications that have built up over the years and unintentionally turned the process into a Frankenstein, insurance companies are aware of the problem and could restructure the system if they really wanted, but that would cost them money and since the system as is adds to their bottom line, it is left in place out of benign (malicious) neglect because there is no incentive for them to change it.

(4) The system was intentionally designed so that there would be a number of wrongly rejected claims in order to slant the playing field to benefit the insurers. If the consumer takes "caveat emptor" seriously and catches the mistake then has the skill and patience to work through the labyrinth, the error will be corrected, but the barriers at each step guarantee that a certain additional percentage will get screened off. This process was designed by the insurance companies to benefit the insurance companies.

So, which is it?