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Healthcare and Capitalism: Why does our Healthcare System Work for (almost) No One?

19 Feb 2023 9:50 PM | WSMTA (Administrator)

By Dagmar Growe, LMT

Here in the US our economic system is unapologetically based on the tenets of capitalism: The maximization of profit and a free market to manage the distribution of resources. In many ways this works really well. Cousins of mine who lived under the planned economy of former Eastern Germany will assure you as much.

Massage therapy, the self pay kind, is a good example. Prices are based on a variety of things: The quality of massage and marketing skills of the therapist, and the economic makeup of the clientele. Are you working at an upscale spa in an affluent area, or in a small town with low wage jobs? Are you trying to fill your schedule, or trying to work less? Lower or raise your prices, and things will sort themselves out accordingly, at least in theory.

But there are some conditions under which this system is bound to fail. First, if a person's life depends on a product, like food, housing, or medical care, then they are forced to pay whatever the asking price is. This situation is more akin to blackmail than a free exchange of goods. We are seeing some of this with housing and pharmaceuticals.

Secondly, a functioning free market depends on multiple participants to allow for competition. Many areas have 1 or 2 insurance companies that dominate the local market. This lack of competition allows them to take an attitude of  "Take it or Leave it" with providers. And as we have repeatedly pointed out, in the name of  free market competition, individual providers are banned from uniting for the purpose of negotiating better pay. This puts big health care organizations at an advantage as they too have regional monopolies and can use those to negotiate individual contracts for their organizations. Unfortunately, non-allopathic care is not generally of interest to those organizations.

And finally, the insurance system puts multiple middle agents between the provider and the patient (aka the "consumer"). If I provide massages to self paying patients those  patients are my customers. They get to decide if my treatments are worth the price. Interestingly, if I provide a treatment under an insurance contract, that patient is no longer my customer, the insurance company is. And even more complex, the insurance company's customer is not my patient but the HR Department of my patient's employer. And in some way, the employee could be seen as the customer of their employer. This is where profit, or savings, maximization come in. The HR Department wants to buy a health plan for the lowest price they can get that still satisfies their employees needs to some extent. The insurance company calculates their prices to be competitive, while at the same time profiting as much as possible, meaning paying out as little as possible. Patient and provider actually have no relationship at all in an economic sense. The patient has to take whatever provider is contracted with the plan, and the provider has to accept whatever rates the insurance company offers or cancel their contract.. 

Where does that leave us? Any change needs to follow the convoluted path of market place relations. Once employees (who are allowed to organize) complain to their HR departments about the lack of an adequate network, then it could be hoped that HR departments would put pressure on insurance companies to improve their network. And if insurance companies cannot find sufficient providers at the rate they offer, then and only then would there be an incentive to raise reimbursement rates. Massage therapists keep asking the question: When will insurance companies increase their rates? And here is the answer: Why should they? They are for profit businesses, maximizing profits, which is exactly what their shareholders want them to do.

So what can we as providers do: First, we can refuse contracts that do not offer us a living wage. As long as a sufficient number (by whatever standards) of massage therapists are willing to accept current rates there is no need to change, from the perspective of the insurance companies. Being a contracted provider but limiting the number of patients one is willing to treat under a certain plan is both a contract violation under most contracts, and inflates the number of therapists available in a network. Secondly, we need to educate our patients why we are not accepting their insurance, both for financial and administrative hassle reasons. We need to encourage them to document their difficulty finding a provider, and complain to their HR departments and the Office of the Insurance Commissioner (OIC) if they cannot get the care their health plan offers. Third, LMTs need to increase their level of political involvement. Most healthcare provider associations spend tens or hundreds of thousands of dollars on lobbyists. They get that money from their members who recognize the importance of having their interests protected. If you have been around long enough you may remember Insurance Commissioner Deborah Senn who brought complementary care into the mainstream. She was elected with a lot of support from professional organizations. 

It is important to keep in mind  that everything will be a slow uphill battle every step of the way because the system is not meant to provide healthcare but to provide profit. But to do nothing means giving up on massage therapy as a healthcare modality being offered on par with other modalities. We have gained so much in the last 30 years - let’s make sure we don’t lose it.

And lastly, here is one piece of good news: As of the publication of this article - House Bill 1655 is being considered by the legislature. The bill recognizes that small groups and individual providers have no power within the system to negotiate reimbursement rates, and requires automatic cost-of-living increases. Please follow the bill’s progress and contact your legislator if the bill makes it to the voting stage. Watch your WSMTA mails for updates.

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