The power patients have against health insurers

Insurance is boring and difficult to understand for a reason. After the insurers bore you, then they try to confuse you. That way, you are more likely to overlook the finer details.

By the end of this column, I hope to change your perspective on the insurance industry, particularly, the health insurance industry. I want you to understand that while they are supposed to working for you, in reality, they are not.

Let’s start with the basics. All insurance companies have the same goal: to collect money up front from you, in the form of a premium, and to pay as little of it out to you when tragedy strikes. The less an insurance company pays out, the more they can keep for their executives and shareholders. Most kinds of insurance cover losses for rare events, like your home burning down. Your coverage is intended to support the costs of rebuilding your home.

Health insurance is different. Because everyone needs healthcare services at some point during their lives. After you pay a monthly premium, your health insurer picks and chooses what portion of your medical bills were necessary and which they will pay. Any exclusions to your health coverage require you to pay money out-of-pocket. Often, you may not be aware of those extra costs until after you have incurred them.

Unfortunately, health insurance is difficult for doctors to understand, too, due in part to the fact that health insurers can be reluctant to pay for the care physicians provide.

For instance, when a health insurer pays out more than expected, they look to cut costs. Instead of asking their executives to take a pay cut, they ask various health care providers to do so. Insurers go after the small fish before the bigger ones. A small private practice is much easier to strong-arm than a large corporation or hospital who has more bargaining power. The insurer gambles that not enough patients will notice or care if their doctor is no longer “in-network.” But in communities like Kitsap, with fewer doctors to choose from and fewer clinic options, their gamble does not always pay off.

It didn’t pay off for Kitsap Physicians Service insurance, to share a personal example.

About 15 years ago, KPS attempted to reduce the payments for patients seen at the clinic my father and I ran together. We refused to agree to their payment reduction. In the attempt to negotiate with their executive team, we sat down in their board room, which used to be in downtown Bremerton on the corner of Fourth Street and Warren Avenue. Negotiations failed. KPS terminated their contract with our practice.

In reality, those executives did not value the services we provided to our patients. Thankfully, our patients disagreed. And they were loud about it. Loud enough that it made a difference. Six months later, KPS returned to the negotiation table and hammered out a compromise. KPS gambled that our patients would choose to go elsewhere. They were wrong.

Now, the health insurance company Regence is looking to end their contract with Olympic Internal