PART 1
What Insurance Companies Don’t
Want You to Know
Chapter 1
Insurance Companies’ Strategy:
How They Really Make Their Money
A lot of doctors I speak to think insurance companies have it out for chiropractors because they hate what we do. But I can tell you that it is not about our philosophical approach to health and wellness or musculoskeletal conditions. They really do not care about any of that. What they care about is whether they will pay or not pay. The insurance process is currently so automated that I can assure you that there is not a person sitting at a desk in the insurance company holding on to your money because they do not like chiropractors.
An insurance company is big business. Just like any other business, it is made up of three things:
- People
- Process
- Technology
They use those three things to make as much profit per unit as possible. In this case, the unit is an insurance claim. That being said, you will soon start to see that they actually love chiropractic, just not for the reasons we may hope for.
For years, I thought insurance companies made their money by collecting premiums and then not paying claims. That meant they would increase their profit per claim substantially. But if you think about it, if insurance companies simply denied claims, they would look really bad in the eyes of their customers, the patients.
What they really want to do is make it look like they are trying to pay claims but the doctor is simply not cooperating in some way, shape, or form. The name of the game is slowing down payment or taking the money back after they’ve already paid the claim and the customer is satisfied—that is, an audit.
Think about the audit from the customer’s (the patient’s) perspective. They are covered for a visit or visits, and then they get a letter from the insurance company stating that their doctor is being audited. Their visit is still paid, and the insurance company looks like the good guy. But the doctor looks like the bad guy. We’ll look at this more in a bit.
But there is more to the story.
How They Really Make Their Money—Paradigm Shift
To begin to understand insurance companies’ motives and, more importantly, what you can do about it, you just need to follow the money. Here is a little known fact: More than 50% of insurance companies’ profits come from interest. This is also known as float—or interest on money that should have been paid to you but was somehow delayed.
