How to Reduce Healthcare Costs

Health insurance companies contribute to the high cost of healthcare in the United States. The companies selling health insurance are neatly situated between the patient (consumer) and provider (physician/hospital/service provider). As such they produce nothing and can be considered a middleman in the high healthcare cost scenario existing in the US today. While I definitely do not feel socialized medicine is the answer to the high cost of healthcare, I do feel there is much the health insurance companies can do to reign in their healthcare costs while having a positive impact on the services they provide.

An example will demonstrate why I feel this way. I recently had to order a refill of a prescription through the online mail order pharmacy affiliated with my health insurance carrier. I went to the healthcare insurers web site and rather then stop and log in there I clicked on the banner for their mail order pharmacy. The window that opened had a log in prompt which I entered my correct ID and password. Upon clicking Submit a message came up on the screen saying that they determined I was insured under one of their health insurance plans and that I should go back to their main web page and log in there using the same ID and password. I did that and was taken back to the same online pharmacy web page where I went to initially. This time I was already logged in to the pharmacy site in addition to the insurance site. The time it took to navigate, wait for the pages to load and then enter the same information twice took about 4 minutes above what it would have if my first ID and password was allowed when I initially went to the pharmacy site.

This pharmacy is part of a nationwide healthcare insurance provider with many thousands of subscribers. If, say, 10,000 people across the nation accessed that insurer's pharmacy page and went through those steps daily that would amount to 40,000 minutes per day of non-productive time spent by customers. Multiply that times a 24/7 calendar of 365 days yields an annual wasted time of 243,333 hours. If one assumed an average hourly rate including fringes of $18.50 for a home internet user, the total wasted time would be valued at $4,501,666 per year just for the customers of that one healthcare insurance company. Perhaps you feel that is extreme and that fewer then 10,000 access the page daily. OK, fair enough, cut it down to 2500 people visiting the page. You can also reduce the hourly rate. The number of healthcare associated dollars lost due to that software problem would still be enormous. True it doesn't cost the insurance company that money directly but it is still lost productive time for the customer in the patient-middleman-provider chain. In this case it is the patient that effectively loses that money. For a really eye opening cost multiply this calculated result times the many insurance companies doing business in the US. Each one has the potential for multiple design shortcomings in their respective web page software. As customers we probably just consider it an inconvenience and move on but consider those that are accessing this software from their workplace where time is indeed money. In that case this rapidly becomes more of a healthcare related cost rather then an inconvenience.

If you still have doubts that this lost time is a real healthcare cost consider what per cent of those customers end up being befuddled by not being able to log into the pharmacy site directly and resort to calling Customer Support at the insurance company. In these cases the direct cost to the health insurance company plus the cost to the customer escalate rapidly. At this point these truly do become healthcare costs. This is considering the waiting time to be connected to a live person in addition to the salary of the Customer Service representatives who are fielding these calls from frustrated customers trying to figure out why they can't log in to their online pharmacy.

There are no magic bullets in reducing the escalating healthcare costs in the US. Reducing costs to customers, insurance companies and providers will come as a result of small gains achieved over a wide range of areas. It will be done by studying all the steps in the health care delivery chain with a critical eye. Identifying and correcting non-productive steps such as discussed here is one area to start.