From: Tim May <tcmay@got.net>
Date: Fri, 31 Oct 1997 01:43:57 +0800
To: cypherpunks@cyberpass.net
Subject: Re: Protocols for Insurance to Maintain Privacy
In-Reply-To: <7433f6e11aa46cf7b903a8251c3e35b5@squirrel>
Message-ID: <v03102809b07e63edadc1@[207.167.93.63]>
MIME-Version: 1.0
Content-Type: text/plain



At 8:50 AM -0700 10/30/97, Secret Squirrel wrote:

>The really good way to protect your medical privacy is to self insure.
>Most people are happy with policies that tap out at $1 million.  If
>you would be happy with such a policy, then all you need is $1 million
>to protect your privacy.  It is likely that this $1 million will not
>ever be consumed by health care costs.  (Probably much less likely
>than that a policy holder will hit that limit.  People tend to spend
>their own money more responsibly than somebody else's.)

I used to think this was so, too. But there's a certain kind of market
failure at work. (Actually, it's not a market failure at all....it's a
manifestation of the market. Read on.)

It turns out that if I have to go to the local hospital, the daily rate for
a hotel room will be something like $2000 a day. Exclusive of whatever
treatments I'm receiving, of course.

Turns out that Blue Cross and Blue Shield have negotiated, through enormous
buying power, daily rates of about $700 a day. (These numbers come from my
memory of a "60 Minutes" report a few years ago. Details and current
figures may vary.)

Listed prices are the "sucker rates," kind of like the posted prices for
out-of-towners, with locals getting a discount. And these pricing
differences apply to the whole range of procedures. For example, an
insurance company might have negotiated--over many years of intense
negotiations--a fee of $100,000 for a liver transplant, but a "cash-paying
customer" (a victim, a mark, a sucker) would pay the list price, e.g.,
$300,000.

Could I negotiate a lower room rate, and lower fees for a spectrum of
possibly needed treatments? Probably. I haven't had to try, fortunately.
(Nor am I knowledgeable about procedures. Nor am I patient negotiator, no
pun intended.)

I'm not calling for market intervention, price regulation, government
intervention, etc.

Just noting that cash is not always king. Especially to any medium-sized or
larger hospital, where filling out the forms correctly is more important
than getting paid in cash. (My dentist's receptionist is befuddled by my
paying in cash. She clearly prefers to just enter the number of an
insurance company.)

Walking in off the street, or arriving in an ambulance, without an
insurance policy number is becoming a guarantee that one will pay the
absolute maximum rate, the "sucker rate." If one is admitted at all, as
many hospitals turn away anyone without a means of proving they can
pay....and promises are not enough.  And if one proves to the hospital that
one has large resources, I fear for the consequences ("wallet extractions"
being one  risk).

I have so far elected to self-insure, i.e., to just pay any medical bills I
might have out of pocket. However, given this "sucker rate" and the
increasing unwillingness of hospitals to take patients not in health care
or insurance programs, I may have little choice but to sign up.

--Tim May

The Feds have shown their hand: they want a ban on domestic cryptography
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
ComSec 3DES:   408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^2,976,221   | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."