Sunday, August 20, 2006

Health Care Not Insurance

Can we talk for a bit about the health insurance crisis in this country? It's been bugging me for a while.

For starters, it's not a Health Insurance crisis, it's a Health Care crisis. Complaining about all the people who are uninsured implicitly agrees that the best way to provide health care to people is through an insurance plan.

Have you ever thought what it would be like if Auto Insurance were the same as Health Insurance? Whenever you took your car to the mechanic, you'd pay a $10 copay. There'd be in-network mechanics and out-of-network mechanics. Maybe you'd have to pay 10% of the cost of any repair, to try and give you an incentive to shop around, but really it's just to reduce the cost to the insurance company and incent you to try and get by without the repair. Mechanics would have elevated prices that would be their official rate for things, but they'd discount them heavily for the insurance companies, so anyone without Auto Insurance would be getting doubly-reamed.

It all sounds pretty silly, doesn't it?

Insurance was created to distribute risk, to allow people to gamble on the luck of the world. As a side-effect, it enabled people to take more risks than they otherwise would have, which enabled us to move the society forward faster than we could have done if individuals had been forced to carry the whole risk of a venture.

People's health has nothing to do with this.

People get sick through all sorts of mechanisms, and most of them come down to chance. Sure there are illnesses that are due to lifestyle choices (smoking / drinking / obesity -- though that last one is starting to show signs of being partly due to viral infection or differences in intestinal flora), but guys who, in their twenties, get staph infections in their blood that build up on their heart valve and break off and travel up into their brain...that's not a lifestyle choice, that's just bad luck. And it can happen to anyone at any time.

So why should handling all this be subject to the profit motive? Why the insane salaries for insurance executives, and the excessive marketing dollars, and the motivation to only insure the healthy? There are those who point out the difference in administrative costs between private and public health care (read: medicare) is 10x, while others, such as The Council for Affordable Health Insurance like to play around with the numbers to reduce the difference (ignoring the reality that one of the reasons the "hidden" administrative costs of medicare are hidden is because they are inherently part of running the government). Even playing with the numbers doesn't bring the levels in line with each other -- they are left only with trying to justify the higher costs saying they help keep costs low by reducing fraud. But there already are many people who work for medicare looking to reduce fraud; my stepmother used to do this work for the state of wisconsin.

If the private sector and the market are so great at keeping medical costs down, why have they utterly failed to do so? Why are we as a country paying so much more for health care and getting so much less?

People say that the private sector performs more efficiently because the profit motive incents them to keep costs under control. What prevents those same controls from working in the public sector, without the added burden of having to show a profit? If it's only a matter of incenting the administrators appropriately, those mechanisms are just as available to the public sector as to the private. With the added benefit of making defrauding the health care system a criminal offense, not a civil one.

The goal of anyone looking at health care should not be to ensure that everyone has health insurance, it should be to ensure that everyone has health care. Only then can we really put in place the mechanisms to take care of all our citizens.

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