America’s HealthCare Crisis Part II: How much is that policy in the window?

Warren Buffet likes insurance companies.  Take a look at his portfolio and you will find several insurance companies in it, including re-insurance companies (companies that insure other insurance companies).  That is because insurance companies have a great business model (despite the licking they have taken over the past year and half).  They can, and do, select their customers carefully, picking out those most likely to make them money.  They raise their prices as and when they want to.  And they are notoriously bad at paying out claims.  So though they may be great for Buffet’s portfolio, they can have a profound impact on businesses they deal with.

Take their influence on the medical profession.  A doctor has no choice – the legal community has made sure that a non-insured doctor is an extinct species.  And as the doctor goes shopping for medical malpractice insurance, s/he is at the mercy of insurance companies who jack up the fees to make sure that the doctor pays for hypothetical lawsuits that may or may not occur.  An obstetrician can pay as much as half her/his income on getting medical malpractice insurance.  No wonder some specialties are dying, and in some states there is an acute shortage of obstetricians. 

The insurance companies have an equally important influence on patients.  In combination with health management organizations, they dictate medical care.  The length of a visit is pre-determined – based on the estimate of some bean counter who determines profitability, not medical complexity or appropriateness.  It is no wonder that patients do not feel that doctors do not them give adequate attention.  Insurance companies also determine what procedures get done, again based on profitability concerns.  If a patient gets frustrated with his/her insurance, they can always switch.  At least in theory.  There is a bewildering array of false choices, with all kinds of restrictions on doctors (in network or not, primary care or specialist, etc), medications (co-pay, generic or trade name), pre-existing conditions, etc.

It is therefore not surprising that the “health care reform” efforts in the Congress and by the Obama administration targets insurance companies.  Understanding the concerns of a government run insurance company various alternatives have been mooted, such as a ‘non-profit exchange’.  Naturally, the insurance companies are against it.  After all, how could they compete against a government-run non-profit?  The insurance companies cite patient satisfaction data that show that a majority of patients are satisfied with their insurance.  What is left out in the survey is the fact that most such patients have company sponsored insurance plans, an anachronism of the 1940s and 50s.  Ask the same question to those who pay for their own plans, and we may very well see a different response.

It is clear that any health care reform will have to address the issue of insurance companies.  But what form of  should it take highly debatable.  Should there be a single payer system, doing away with insurance companies all together?  Should business paid medical insurance be taxed?  What about Medicare and Medicaid, the two big elephants in the room that will probably be bankrupt soon?  Should they even exist if there is to be an insurance ‘exchange’?  There are several alternatives, among them

1. I agree with some in the Congress, and also with Senator McCain, who suggest that business provided insurance should be taxed.  In fact, businesses should get out of providing any health coverage.  That is the responsibility of the patient, not the company.  While a company can provide incentives for healthy behavior, such as not smoking or belonging to a gym, providing health care insurance promotes over-use by those receiving it.  It also ties employees down to jobs that they dislike, but stick to due to health insurance.  Thus, I obviously oppose the Obama administrations proposal or mandate that businesses should be required to provide health care.
2. Do we need yet another government run organization?  In fact, maybe it is time to get rid of Medicare and Medicaid.  The latter is about to go bankrupt, and fewer and fewer doctors accept it.  The former is not too far behind and if they are not discontinued voluntarily, they will either bankrupt the US or will go down in flames on their own.  Which leads me to point 3.
3. If the government is truly concerned about the un-insured or those who cannot afford it, bite the bullet and make the US and two tiered health care system.  Have government run clinics and hospitals where every one can get some degree of free care.  Let the private sector be unregulated, so those can afford to and want private healthcare can do so without any government restrictions.  The obvious criticism of this proposal is that the government run system will provide second rate care.  I agree that it will, but attest that that second rate care is better, and cheaper, than being uninsured in the present system and having common ailments taken care of in the emergency room.
4. For medical malpractice insurance, I think it is time to reform tort laws, which is the subject of the following, third article.