
What Happens When a Healthcare Startup Leaves You With the Bill - osiris679
http://omnifeed.com/article/valleywag.gawker.com/what-happens-when-a-healthcare-startup-leaves-you-with-1598186714
======
jackgavigan
There is, sometimes, a tendency on the part of young, ambitious entrepreneurs,
to be overly optimistic and assume that they can gatecrash an industry they
know nothing about, set up a slick website and disrupt the big, bloated,
uncool incumbents.

Sometimes that works out but I believe that a new entrants chances of success
are a lot higher if they have somebody on board who is actually familiar with
the industry sector they're trying to disrupt.

None of Oscar's founders have worked in health insurance previously. They come
from tech entrepreneur/VC, consulting and technology backgrounds.

Edit: Here's a good example of where some industry expertise might have been
useful: _"..it was a design decision to limit the information presented to
hospital's on what is covered in detail (like in­house labs)."_

There's currently a big trend in design towards making things simple. But
there's a difference between making stuff simple and dumbing it down.
Sometimes, stuff looks complicated _because it 's complicated_.

~~~
lsc
I have Kaiser. It's vastly simplified because the people paying for my care
are the same people who are providing my care. They also seem to have a real
"get you up and running so you can get back to work" kind of attitude, which
meshes well with my own values.

I mean, consider for a moment how much of a pain in the ass it is to get an
insurance claim on your house or your car or whatever filled. Multiply that by
the complexity of medicine, and... yeah. You can see how it would get complex
fast.

Maybe this is an area where horizontal integration is the order of the day?

~~~
debacle
> how much of a pain in the ass it is to get an insurance claim on your house
> or your car or whatever filled.

I have had nothing but excellent experiences with both my car insurance
company and my homeowners insurance company.

The trick to having a good relationship with your insurance company is to have
a good insurance company.

~~~
jjoonathan
Have you ever filed a claim that would would send the expected value of your
account negative? Since that's a tricky calculation, here's an alternative:
have you ever made a claim that (even momentarily) sent the value of your
account negative?

Insurance companies are always polite, efficient, and tolerant when they're
taking your money (including making small payouts). Why wouldn't they be? But
that's not where they add value to the equation. If it was, everyone would
just self-insure. They add value when they have to pay out a lot of money for
an unlikely adverse event. By definition, only a small fraction of customers
ever get to judge this part of their insurance company, even though doing so
is really the only way to judge the quality of the product they were paying
for.

~~~
001sky
They should force sales and claims to be the same person. Problem solved.
Right now, its good cop/ bad cop. Insurance only works in this framework if
you have a lawyer to advocate for you...otherwises its endless dark-pattern
fighting. Its truly atrocious.

------
kjjw
"So I went to my new Oscar-­approved doctor, who recommended routine blood
work. The hospital called up Oscar and Oscar's operations department assured
both the in-­hospital labs and administrators that this blood work would be
covered by my plan so we went ahead with it."

Urgh American health care is just so _weird_. It makes my skin crawl.

~~~
jjoonathan
It's evil, inconvenient, and (amazingly) it's even less efficient that its
government-run counterparts both inside and outside the US:
[http://healthcarereform.procon.org/view.resource.php?resourc...](http://healthcarereform.procon.org/view.resource.php?resourceID=004083)

What will it take to convince people of this? Our society already accepts that
markets aren't a suitable medium for every human endeavor, how long must we
continue to experiment with private (basic) health insurance before we add it
to the list of exceptions?

If our health sector ran as efficiently as everyone else's (as a fraction of
GDP/capita), the money we currently pay for medicare and medicaid would
suffice to provide universal coverage for every single person in the US.

[http://healthcarereform.procon.org/view.resource.php?resourc...](http://healthcarereform.procon.org/view.resource.php?resourceID=005522#III)

~~~
chimeracoder
> If our health sector ran as efficiently as everyone else's (as a fraction of
> GDP/capita), the money we currently pay for medicare and medicaid would
> suffice to provide universal coverage for every single person in the US.

This isn't an apples-to-apples comparison for several reasons (some which
overstate the amount of money, some which understate).

One, there are a number of things which fall under Medicare's budget which you
and I wouldn't think of as the "main" purpose of Medicare in this context (ie,
providing medical insurance to the elderly).

On the other hand, look at the profit margins of any hospital broken down by
insurance status. Virtually any hospital hemorrhages money on uninsured
patients, Medicare patients, and Medicaid patients. They make this up by
charging patients on private insurance, and in the end eke out low single-
digit profit margins if they're lucky (most aren't). If you're on private
insurance, you're essentially subsidizing the medical care of the
aforementioned groups (whether you pay it in the form of your deductible, or
in the form of your premiums[0]).

As the largest payer, Medicare has the leverage in order to decide what it
will and will not pay for, and providers have very little choice but to accept
that, whether or not it's economically feasible for them. (This is the exact
inverse of the situation most of us are in with our ISP/cable providers (we
have an essential monopoly on broadband access in most parts of the US). When
there is a single purchaser, this is known not as a monopoly but as a
monopsony[1])

It's easy to say that "costs are too high" \- that's fine, but _where_ are
they too high?

The easy response to this is that hospitals and doctors are making too much
money. But in reality, most hospitals are struggling just to say solvent,
which is why we've seen massive consolidation in hospitals in the last several
years as hospitals go out of business. The same is true of doctors, who are
selling to these larger hospitals because their private practices are now
financially unsustainable[2]. Of course, this really just pushes the problem
up the food chain, because those same hospitals are already struggling to keep
the lights on.

I don't really have an answer to this, by the way... I just want to relay an
appreciation of why the situation hasn't been fixed yet - it's very complex,
and nearly every option involved has significant, serious tradeoffs that
nobody really wants to address (whether for political reasons, ethical
reasons, or otherwise).

[0] Remember that the size of your premiums are (loosely) linked to the
expected value of providing medical care for you. Mathematically this is
trivial to show - in reality, the market isn't so efficient, but it's simple
enough to say that if your insurers' costs go up, in the long run, your
premiums will as well.

[1]
[https://en.wikipedia.org/wiki/Monopsony](https://en.wikipedia.org/wiki/Monopsony)

[2] This 116-page report gives a very extensive analysis of the economic state
of physicians. Don't be fooled by the title - this trend began long before the
ACA, even though the scope of this study was the impact of the ACA
specifically (which has contributed to the trend which previously existed):
[http://www.physiciansfoundation.org/uploads/default/Health_R...](http://www.physiciansfoundation.org/uploads/default/Health_Reform_and_the_Decline_of_Physician_Private_Practice.pdf)

~~~
pessimizer
>This isn't an apples-to-apples comparison.

It really is, and has nothing to do with the current state of Medicare and
what it covers. Our per-capita government health care expenditures are far
higher than systems that both have better outcomes and that also don't charge
at the point of delivery.

Our doctors make twice as much as everyone else's doctors, and that is only
sustained because they are both protected from competition from foreign
doctors, and also restrict supply domestically. Our drugs are 10x the prices
paid in other countries. Our broken patent system contributes to massively
bloated prices in medical devices.

We wouldn't have a government budget deficit if our system was as efficient as
any other system in the developed world. The saddest thing is that in _after_
our government spends more than everyone else, we as individuals then go out
of pocket even more, and the majority of our bankruptcies and foreclosures are
a result of medical difficulties. I would go on, but all of this is as boring
and obvious as it is ultimately unsustainable.

[http://www.cepr.net/calculators/hc/hc-
calculator.html](http://www.cepr.net/calculators/hc/hc-calculator.html)

edit: [http://www.cepr.net/index.php/blogs/cepr-blog/fixing-our-
fis...](http://www.cepr.net/index.php/blogs/cepr-blog/fixing-our-fiscal-
health-budget-deficits-and-health-care-costs)

~~~
grandinj
Your drugs are expensive because the rest of the world freeloads by
artificially restricting the selling price of drugs, leaving the US to bear
the brunt of the R&D costs.

Your FDA and legal system pushes up the price of medical devices.

But yes, you have the most unnecessarily complex and convoluted health care
administrative structure known to man.

~~~
lilsunnybee
Often times there are very good reasons for those restrictions, especially
when pricing for a drug deviates dramatically from actual R&D / operations
costs. Take the case of orphan drugs:

[http://www.forbes.com/sites/johnlamattina/2013/10/05/are-300...](http://www.forbes.com/sites/johnlamattina/2013/10/05/are-300k-drugs-
disruptive-to-the-healthcare-system/)

Besides runaway pricing, many drugs for which companies are given patents and
sole-distribution rights, have already been on the market for decades, just
never with proper FDA approval. There are other tax incentives and grants
provided as well for reintroducing "new" drugs that were already on the
market.

[http://apps.seattletimes.com/reports/pharma-
windfall/2013/no...](http://apps.seattletimes.com/reports/pharma-
windfall/2013/nov/9/mining-rare-diseases/)

Makena scandal:

[http://en.wikipedia.org/wiki/KV_Pharmaceutical#Makena_pricin...](http://en.wikipedia.org/wiki/KV_Pharmaceutical#Makena_pricing_controversy)

Many many other drugs with runaway pricing as well:

Armodafinil and Sodium Oxybate for instance

Europeans decide to enforce price controls? Can't say i blame them.

------
eggbrain
I had a conversation with a friend recently who was a doctor. He was telling
me that he had 3 patients in a fairly short period of time that had come in
with mysterious symptoms (they were all in their 70's) and that had died soon
after being admitted. While he knew that he had technically done everything by
the book to treat them, he worried that he had made a mistake along the way
that possibly could have been the cause of their death.

It made me appreciate that the code that I produce as a web developer most of
the time would never have me facing those same ethical dilemmas -- there are
very few times a bug in a web app would cause people to die or to be
financially ruined.

In this case, however, you can see what happens when an ambitious startup ends
up trying to apply things web developers had done for years (A/B testing,
"design" decisions) to avenues of life where people's livelihood or health is
at stake -- people can end up getting hurt. "Failing hard and fast", the motto
many people have regarding startups, cannot be taken with the same arrogance.
If you want to change the world in ways that impact people on a personal
level, be ready to be very careful with the trust your customers put in you.

~~~
famousactress
Absolutely.

I've been in healthcare for a bunch of years (I dunno, sheesh, I guess like
14?). For a big stint of that I built systems that aim to prevent medication
errors in hospitals by telling clinicians when doses were due, etc.

I know of at least two incidents where code that I wrote failed in a way that
(due to some edge-case concurrency in one case, and daylight savings time in
another case) didn't make it clear to a nurse that another nurse had given a
medication to a patient and the patient received a double-dosage of a pretty
severe drug.

Imagine getting that call. It's every bit as fucking terrible and humbling as
you'd think.

Far more numerous (thankfully) were the calls that we got reporting that we
stopped double dosages or even order-of-magnitude label misreadings on drugs.
I know of more than a handful of instances that code I wrote may have
literally saved a life.

I've been lucky to have found myself at companies that take this stuff really,
really seriously. It's a really hard balance to strike when failure is as
devastating as it can be in healthcare, but the status quo is pretty
terrifying also. In general every health IT shop's culture finds some balance
between making decisions based on fear, and trying to achieve a velocity that
allows problems to be fixed quickly and the greatest positive impact possible
against the problem they're solving.

I talk to a lot of people who want to work on "big/real problems" and list
"healthcare" as one of them but when it comes down to it are often pretty
freaked out about the stakes. It's weird to be used to the gravity of it, I
certainly am now. I can't even wrap my head around what it would mean to work
on something that doesn't hurt people when it fails.

~~~
commandar
Also in the industry, but on the HL7 interface side.

I think you've hit the nail on the head. I've seen studies that suggest, for
example, a 75-90% reduction in med error rates in hospitals that have gone to
computerized barcode systems. So there's a tremendous amount of good to be
done in the field.

But, as you point out, the potential damage that can be done by mistakes makes
for a fair bit of anxiety at times. Fortunately, it's been my experience that
people in the field tend to take testing _very_ seriously as a result.

Another interesting thing on that aspect - I'm one of the only people in my
department that doesn't have a prior clinical background. I almost wonder if
the fact that they're less trusting of the technology at times is a _good_
thing to some extent.

~~~
famousactress
_> I'm one of the only people in my department that doesn't have a prior
clinical background. I almost wonder if the fact that they're less trusting of
the technology at times is a good thing to some extent._

I totally agree. Over time I've come to really value working with teams made
up of a variety of backgrounds. I think it's incredibly valuable to not end up
in group-think on either end of the spectrum when it comes to how to approach
problems, assessing risk, and healthy cynicism about technology.

------
joshfraser
The problem with insurance companies is that they are fundamentally
conflicted. As for-profit businesses they have a fiduciary responsibility to
maximize profits. Unfortunately the only way to maximize profits is to decline
coverage.

The problem with Obamacare is that it does nothing to fix this problem. Who
wants to be the guy responsible for that many lost jobs?? So, instead they
propped up the insurance companies and made everything more complicated for
everyone.

The only solutions I see are to have non-profit insurance companies or a
single payer system.

~~~
r0m4n0
[https://www.blueshieldca.com/bsca/about-blue-
shield/health-r...](https://www.blueshieldca.com/bsca/about-blue-
shield/health-reform/our-involvement/healthcare-quality-value/our-pledge.sp)

One of california's largest health insurance companies is a not for profit and
doesn't stockpile money. why is healthcare still expensive?

~~~
joshfraser
Doctors would say health care is expensive because of the threat of lawsuits
which forces them to carry expensive insurance. It's easier for hospitals to
price gouge when they're billing a faceless corporation instead of an
individual.

~~~
ceejayoz
> Including legal fees, insurance costs, and payouts, the cost of all US
> malpractice suits comes to less than one-half of 1 percent of health-care
> spending.

[http://www.slate.com/articles/health_and_science/medical_exa...](http://www.slate.com/articles/health_and_science/medical_examiner/2006/07/the_medical_malpractice_myth.html)

------
minimaxir
This is actually a Valleywag article, which is a banned domain on HN so the
original link is using a workaround to show the article.
([http://valleywag.gawker.com/what-happens-when-a-
healthcare-s...](http://valleywag.gawker.com/what-happens-when-a-healthcare-
startup-leaves-you-with-1598186714))

In this case, the article is actually pretty good.

~~~
michaelochurch
Valleywag shouldn't be banned. It can be a bit gleeful about the Valley's
moral meltdown, but it's the only outfit in "the tech press" that tells the
truth. Everything else is payola.

~~~
minimaxir
I agree that Valleywag shouldn't be banned on the basis that they often
contribute unique articles not discussed by other tech outlets. (e.g.
[http://valleywag.gawker.com/the-laundry-quarters-startup-
is-...](http://valleywag.gawker.com/the-laundry-quarters-startup-is-
dead-1596481798))

Although to be fair, there are a few "rich people in tech suck because they're
rich" articles which are more hostile.

~~~
michaelochurch
_Although to be fair, there are a few "rich people in tech suck because
they're rich" articles which are more hostile._

Not because they're rich, but because they've departed so far from the
founding values of technology.

Picking on the average "Google bus" rider is mean-spirited and pointless, but
the "leaders" of private-sector technology really are rapacious assholes. This
sector of the economy really is run by horrible human beings and pointing out
is not mindless hostility, but confronting one of _the_ most important issues
that our generation faces.

~~~
jrochkind1
I'm curious what you think "the founding values of technology" are, and when
they were established (the founding of "technology"? Like the wheel? Or just
transistor-based technology?), and by whom/what.

~~~
michaelochurch
_I 'm curious what you think "the founding values of technology" are_

I'm talking about the pay-it-forward culture of the 1950-70s Valley when it
was cheap to live there and people did everything they could to help each
other out. This was the era when Hewlett-Packard refused to do a layoff:
instead, it cut costs with a 10% pay cut and a day off work every other week.
There was a time when software had an R&D culture, and Northern California was
full of people trying to do something new and interesting.

Now, startups are a safety career for failed McKinseys and Goldmanites, whose
VC friends put them into executive positions and let them boss nerds around,
but it wasn't always that way. You didn't go in thinking you'd be a
billionaire, but you could get what would now be an upper-middle-class
lifestyle and work in the sort of R&D environment that doesn't exist anymore,
because the slimeballs killed it.

------
GotAnyMegadeth
Sorry for over repeating what people always say, but I am genuinely so
grateful for the UK's NHS.

~~~
arethuza
I get private healthcare in the UK through my job - the only time we have used
it was when my teenage son got his tonsils out.

What was amusing was that at one point the anaesthetist came up and said there
had been a mistake in the billing and I'd have to pay part of the bill
directly. Having heard all the horror stories from the US I was thinking it
was going to be a huge amount of money - he very apologetically gave me a bill
for £12.00 (yes, twelve pounds) :-)

[NB Worth noting that although we do have private health care, anything
serious that has happened to us over the last few years was fixed by the NHS].

~~~
lilsunnybee
You smug bastard. Joking, but i'm in the US and have had so many issues in my
life with huge medical bills and debt collectors, denial of care, insurance
refusing to pay because a doctor messed up the paperwork, insurance not
covering certain medications, or saying the dosage needed to be changed, that
i'm almost not. :-p

~~~
arethuza
Well, as anyone will tell you who lives in the UK, the NHS isn't perfect, but
I personally happen to think that the model we have of a pretty good health
care system for _everyone_ and private health care for the tiny minority who
want it seems to work fairly well.

Mind you the NHS is socialism... but perhaps telling that the founder of the
NHS, Aneurin Bevan, called his book on the subject _In Place of Fear_ \- which
sums it up really.

[http://en.wikipedia.org/wiki/Aneurin_Bevan](http://en.wikipedia.org/wiki/Aneurin_Bevan)

NB I find illnesses and injuries in a family stressful enough to deal with as
it is - adding bureaucracy and financial stresses would be a nightmare.

------
will_brown
I have posted it before, but any time a healthcare thread pops up I like to
mention a project I co-founded (before Obamacare/Affordable Healthcare Act).

Primary care coverage for $20/month $10 copay for ARNP/PA visits and $25 copay
for Doctor visit. Even if someone is covered on the exchange this type of
primary care plan can be far more cost effective than paying the copays under
many of the plans. See:
[http://pfccmember.com/Membership_Plans.html](http://pfccmember.com/Membership_Plans.html)

>So I went to my new Oscar-­approved doctor, who recommended routine blood
work...On April 28th 2014, I received a first bill from the hospital detailing
how Oscar covered none of the in­-hospital labs and I would need to pay $1640.
A second round of labs before April 28th pushed the total bill to over $2000.

Even our little start-up was able to negotiate $99 for blood work labs, which
is out of pocket to the patient. If the same patient uses insurance that rate
skyrockets, usually requiring patients to pay out of pocket anyway because of
giant deductibles.

~~~
alyandon
It is absolutely ridiculous how pricing schemes like that are even legal. Have
insurance that covers a non-typical lab test? They bill $1000 to your carrier
(regardless of what th e contracted rate will be) and you are usually
responsible for a fraction of that because of deductibles. Don't have
insurance and are a cash-only customer? They bill you $150. Have insurance and
insurance declines to pay? You get billed $1000.

A real example of this, my son had a routine vaccination performed at a Baylor
clinic and my insurance company drug their feet on remitting payment to them.
So, Baylor turned around and invoiced me for $1250 and was ready to send that
to collections. Turns out that the agreed rate with my insurance carrier for
that vaccination was well under $100.

~~~
maxsilver
It gets even worse than that. Some people are stuck with an HSA.

A HSA is _not_ insurance (it covers nothing), but it _looks_ like insurance
(so hospitals still charge you the 'ten times more' price).

A $100 doctor visit, becomes $900 "charged" to your HSA (because you 'have
insurance' so they can eat the artificially-inflated cost). But since HSA
never covers anything, the insurance always just passes that $900 bill on to
you. They stamp "THIS IS NOT A BILL" on the top, but that's a lie, it _always_
requires you to pay money.

You call up the hospital and explain "I don't have insurance, I need the sane
price." They say "we can't give you that price, you have insurance." No one in
healthcare understands that HSA's aren't insurance, and cover nothing, so no
one will let you pay a manageable sum of money.

~~~
dragonwriter
HSAs are, by legal requirement, only available if you are enrolled in a High-
Deductible Health Plan [1], which is insurance and does pay for _something_ ,
though (as the name suggests) it has a very high annual deductible (for which
the HSA is used).

So if you have an HSA, you do, in fact, have insurance.

[1]
[http://en.wikipedia.org/wiki/Health_savings_account](http://en.wikipedia.org/wiki/Health_savings_account)

~~~
lotharbot
or you might have an HSA left over from when you used to have insurance. (FSAs
expire at the end of the year, but HSAs are permanent.)

------
bbarn
I find the phrase "Don't A/B test with people's lives" to be in search of
something catchy, or a zinger. The reality of big insurance has always been to
be paid more than they pay out. Simple. You've always been a number to an
insurance company.

~~~
xienze
> The reality of big insurance has always been to be paid more than they pay
> out.

Well yes, that's how a company stays solvent...

The problem with health insurance is that it's been perverted into a discount
club rather than being insurance for catastrophic occurrences. It divorces
consumers from the true cost of services and hence service providers are free
to play with the costs all they want. Hell, you can't even really get an
upfront estimate for a procedure...

Car insurance covers accidents, theft, etc. That's it. Can you imagine how
much e.g., an oil change would cost if it were commonplace to use car
insurance for such routine maintenance? That's what really went wrong with
health insurance in the US, and we're too far down that road to fix it.

~~~
bbarn
I've always viewed it as an arms race to see who can get away with what
between providers, insurers, and patients (and before ACA, employers to a
degree).

The true cost of service at this point includes having staff and systems (with
their own support staff) to negotiate and calculate the cost on both the
insurer and the provider side.

So, in a way, if you have one particularly tough to deal with insurer, that
cost gets distributed among all patients, and their insurers as well. In
addition, the basic cost of any visit now includes some of that administrative
overhead.

In the oil change analogy, if you had to walk into the shop, and there was a
base price of $50 to cover the administrative costs, you had to wait until you
saw a mechanic to decide if you really needed an oil change, and they charged
$50, and then you paid the $20 dollars for the oil change, you can bet by now
someone would have started marketing a per-visit copay style insurance for
cars too.

None of this is to say I disagree with you, just that it's even worse than I
think we all think it is.

------
shepardrtc
This seems similar to third-party warranty companies. They offer full coverage
for low amounts, but when the time comes for them to pay up, they're
impossible to deal with. Can't reach them on the phone, they need things to be
faxed(!) over, and then because of so-and-so reason, it won't be covered.

Healthcare shouldn't be handled by startups. Its too expensive and there's too
much riding on it for something that could go belly-up at any moment to
handle.

Of course, that brings up the question: How do you actually start an insurance
company? I'd imagine that in a perfect world, the government could guarantee
your coverage until you get enough in your coffers to handle things without a
backup.

~~~
flatline
I've talked to a couple health-care startups on the East Coast that have
started by tackling one small aspect of healthcare and built off of that.
Prescription drug tracking. OR procedures and checklists. There are tons of
companies in the medical startup space that are doing good work, there are
tons of areas that traditional big tech companies have failed to innovate in
that are ripe for being upset.

Playing fast and loose with insurance claims sounds more like outright fraud.

~~~
commandar
>I've talked to a couple health-care startups on the East Coast that have
started by tackling one small aspect of healthcare and built off of that.
Prescription drug tracking. OR procedures and checklists. There are tons of
companies in the medical startup space that are doing good work, there are
tons of areas that traditional big tech companies have failed to innovate in
that are ripe for being upset.

While this is true, one of the problems currently being faced by the industry
right now is that all of these niche vendors have their own ideas about how
data should be handled, and it's resulted in a fair amount of balkanization of
the healthcare IT industry.

It's getting better, and HITECH and the ACA are finally pushing toward real
standardization and data interchange, but from where I'm sitting (working in
healthcare integration), it's probably going to take us another decade to sort
out the mess things are in today.

------
DatBear
>In the emerging health and wellness markets, startups like Oscar intimately
disrupt and destroy their customer's lives through incorrect datasets where an
A/B testing mentality results in exorbitant fees, angry hospital
administrators and patients with no recourse except to bankrupt themselves
paying bills they didn't expect.

This doesn't make sense to me. How is an A/B testing mentality at fault for
this? It has nothing to do with the incorrect datasets... you don't A/B test
your data structure... I hope. A/B tests are blamed later in the article too,
not really sure why.

------
kenrikm
This story seams par for the course when dealing with insurance companies
regardless of if it's startup or not. I've had the same exact issue with
everyone from "United" to "Humana" and more recently "HealthNet" You will be
told something is in network and it's not, a lab location is listed on their
website as in network and then they claim it's not covered later. Sadly, this
seems to be an area where legislation needs to bring out the big stick and
force them to cover services that they had listed as "in-network" bad data is
no excuse.

~~~
lilsunnybee
Wish more people knew this. A lot of professionals on here might personally
have a stellar health insurance plan through their employer that covers almost
anything no questions asked, but those same big insurers will administer cut-
rate plans to the majority of plan-holders and deny payment at the drop of a
hat, or pick and choose what necessary care / medications they will / won't
pay, often after the fact, seemingly arbitrarily or if submitted paperwork
isn't flawless.

It's a pretty good racket really; provide quality, hassle-free coverage to the
high income, professional class, or anyone else that might have any say or
sway or influence in government, and then for the working class majority
refuse to ever pay out more per person than you are payed. That way you can
cost-save like crazy and make obscene profits, but no one that matters cares
and based on their experience it just looks like belly-aching and blowing
things out of proportion.

------
HarryHirsch
With bogus physician bills my SOP is to call the office and tell them that I
will let the bill run to collection and dispute it in court. This strategy
never failed, physicians are mortally afraid of having to admit that their
billing practice is questionable.

With refunds from the insurance company I have found that a nice letter
"please pay up 10 days from now or I will get a title in court" works wonders.
I never had to no, not once.

~~~
lilsunnybee
More likely, doctors are very averse to lawsuits, and would sooner provide
care to one patient at a loss than defend against a lawsuit, especially when
it doesn't seem like a bluff because you seem like someone who could afford it
(not typical btw).

------
tkinom
It happened to me ~10 years ago with another health care startup. The sign up
booklet looks good and we switch to it. I was with a big company ( - Nokia )at
that time. But when the time comes to pay hospital/doctor bill, it has all
kind of reasons not too.

I documented the phone calls with them, put the detail on a yahoo group and
make sure the group was opened to everyone who want to join and also invited
their company's PR/Marketing to join that group.

The issue was resolved immediately. I don't think that company is alive today.
Healthcare insurance start up is not easy. I don't trust them base on that
experience.

The main issue with insurance is always how much you can trust them when they
need to pay up. In the short term, they can always promise low rate to get
your attention. But that only get the young folks to switch. After one been
thru the experience I been thru, it is hard to trust that kind of company
again.

In today's internet age, it is impossible for any "startup insurance" company
to do that kind of "hack" to try keep their cash flow and not immediately to
have their reputation out to everyone in the world.

------
greenyoda
In the U.S., insurance is regulated by the states and each state has a
regulatory agency where one can go with complaints about insurance companies.
I find it surprising that the abused customer in this story didn't file a
complaint with the government. That would have probably made the insurance
company stand up and take notice much more than complaining about them on
Twitter.

~~~
lilsunnybee
I never knew this, and sincerely doubt most people do. But besides this rare
start-up, if you're an established player like Blue Cross, does one or dozens
or even hundreds of complaints even matter?

------
r0m4n0
With a healthcare startup, you will almost always pay more. Large insurance
companies are able to bargain the best rates through many means based upon
their size.

Even when the provider disagrees (with capitated services for example) and
bills the member, the larger insurance companies will reimburse the member and
then bill the provider.

------
dangerboysteve
Why not link directly to the article than that slow feed site?

[http://valleywag.gawker.com/what-happens-when-a-
healthcare-s...](http://valleywag.gawker.com/what-happens-when-a-healthcare-
startup-leaves-you-with-1598186714)

~~~
atestu
Because valleywag is a banned domain on HN for some reason

------
rlvesco7
I'm sorry but I've had all these problems and many more with traditional
health care companies. As a diabetic I'm intimately familiar with the health
care system. It's a hard space to work in and I'm happy to see startups trying
to tackle it. But it won't solved soon. Unlike Dropbox, where they "solved"
sync more or less there is no one thing in health care, but many.

------
jnardiello
From the Oscar front page: "Free doctor visits via phone". WTF is this? How
can a doctor visit by phone? All this story is just a smell on how deeply
broken the entire US health system is (together with all the healthcare-
systems of 3rd world countries).

~~~
k-mcgrady
I could see this being really useful. There are many times I have needed
questions answered by the doctor (e.g. I've been diagnosed with x - can I
still do y safely) and the only way is with an appointment which wastes both
our time. I wish my local GP would set aside 1 hour per day to answers
questions via email or phone. It would make things much more efficient.

~~~
fr0sty
The issue with that, is there's no good way for the doctor to get paid for
doing it. Prior to 2009 there was no billing code for phone calls or email and
currently the rules around what is a "billable" consultation are complex and
the coverage by insurers is far from uniform.

More info here: [http://patients.about.com/od/followthemoney/f/Why-Doctors-
Wo...](http://patients.about.com/od/followthemoney/f/Why-Doctors-Wont-
Telephone-or-Email-Patients.htm)

~~~
k-mcgrady
I was thinking more about my own healthcare system where the government pays
the doctor. So his salary would just stay the same. In the US or other systems
like it I can see how that would be an issue.

~~~
walshemj
well use something like the UK model where dr's can have both a NHS contract
plus private patients.

