Thursday, September 03, 2009

No one should die...

If you are a Facebook user, you would have to be blind to miss the current movement in which users are changing their status to read as follows:

No one should die because they cannot afford health care and no one should go broke because they get sick. If you agree, please post this as your status for the rest of the day.

I think this is a great sentiment. Unfortunately, I also think it's unrealistic.

I fear that the Obama administration and many of its supporters have really and truly bitten off more than they can chew when it comes to health-care reform.

Because, you see, it's not at all about health-care reform, it's about health INSURANCE reform. And the goal of Obama and many of his supporters is to remove the risk from the concept of insurance, which is simply not realistic.

By definition, insurance requires a calculation of risk. That's why homeowners living in areas known for wildfires or floods have trouble getting home insurance. If they can get it, it is often more expensive than someone living high up on a hill in an area that gets plenty of rain. Less chance of fire or flood for that homeowner, so lower insurance costs.

Every insurance company is making a bet and that bet is that the party paying for insurance will never need it. I have paid thousands of dollars in homeowner's insurance over the years and have only had one small claim. I've paid thousands of dollars for health insurance, also, and have had thousands of dollars in claims over the years, from knee surgery to back surgery, to broken bones and twisted ankles. Have I paid in more than I have taken out? I bet not. And most people would consider me a fairly healthy person. I do not drink much, I do not smoke, I take no regular medications, and my cholesterol is in a healthy range. I do need to lose twenty to thirty pounds, but that's a recent development brought on by the life changes such as moving from walker- and cyclist-centric New York City to car-centric San Diego, not to mention having a toddler son cuts into your ability to get to the gym.

You cannot force insurance companies to insure people who are unhealthy and who present bad risks. It's bad business. You CAN incentivize them. Offer tax breaks to insurance companies for each "high-risk" customer they take on. But is that really any more cost-effective than simply letting those folks sign up for Medicare? I think not. In fact, letting the uninsurable sign up for Medicare is likely more cost-effective, since Medicare is an established system and no new infrastructure would really need to be set up.

But we CAN make the health insurance companies foot the bill. Why not take a lesson from the banking crisis? Millions of depositors have seen their funds protected by the FDIC when their banks went under. The FDIC is funded by banks themselves, who must pay into the fund. Money from the fund is then used to protect depositors.

What amazes me is that no one has apparently considered applying this model to health insurance. I have read that there are about 1300 health insurance companies in the US. They are responsible for billions of dollars in business. Why can't the federal government simply create the Federal Health Insurance Fund (FHIF) and require health insurance companies to contribute some percentage of their billed premiums every year? Then those unable to get health insurance through their employer are allowed to sign up for Medicare and the funds from the FHIF are used toward financing their care. They would still have co-pays and minimums, etc., just like the rest of us, but at least they would have insurance.

There are flaws, no doubt. What's to stop small businesses or even large businesses from ceasing to offer health insurance when there is a government option? Well, lest we forget, businesses are not REQUIRED to offer health insurance, free lunch, or 401(k) plans. These are not mandatory entitlements; they are BENEFITS. Companies offer benefits to entice good workers to come to work for them. Companies that stop offering benefits will find that the best talent leaves to go to companies that do offer benefits. It's a fundamental part of the market economy and it works quite well.

Of course, one major issue many have with health care in this country is that it actually IS a market economy, but hasn't it always been one? Doctors move to cities with growing populations and few doctors to ensure enough patients to make a living. Towns without doctors may recruit and offer to pay off medical school loans for doctors if they will come practice locally. Good doctors may even refuse to accept health insurance—even good health insurance, not just Medicare—to ensure that they will get paid in full and are not locked into the rates established by Medicare or considered "reasonable and customary" by health insurers. But if they find that patients are few and far between, I'm sure they will rethink their decision not to participate in any insurance plans. But try to force doctors to ONLY accept what Medicare will pay and you will truly only get the most altruistic of students going to medical school. Why would anyone go to medical school if the only hope of earning a living as a doctor is to earn what Medicare allows?

The United States has laws against price-fixing, yet Medicare and insurance companies essentially engage in price-fixing every day. Well, technically, they engage in the REVERSE of price-fixing, as they drive prices down, rather than up. Medicare has a fee structure and doctors who accept Medicare have to accept that structure. Insurance companies will only reimburse what's "reasonable and customary" according to their own system, which is somewhat like the blackjack dealer telling you that you have lost but refusing to show you his cards. Perhaps someone should examine the restraint-of-trade and antitrust issues in health-care reform?

I don't believe that it's at all possible to "reform" health care and health insurance in our country with one bill, not matter how big the bill. And I think that it's unreasonable to even try. They may have passed one desegregation law, but it still took dozens (hundreds?) of confrontations in different states to get us to where we are today...still working on it.

We should strive to fix only the question of the uninsured for now. Portable health insurance is a great idea, but if you lose your insurance at least there will be an option for the uninsured. And when it comes to pre-existing conditions, go ahead and say that the new option for the uninsured allows for pre-existing conditions. Yes, it may result in an insurance pool that covers only those who can't get insurance, who have pre-existing conditions, and are the worst off, but aren't those the ones who need the most help now?

Z


1 comment:

Elizabeth, Cedar Springs, MI said...

WOW, common sense. Thanks for your bravery and logic, but aren't you afraid of being lynched?!

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