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Sunday, March 12, 2017

Health Insurance Is Not a Product

An excerpt from a piece by Egberto Willies in Daily Kos:
One of the biggest problems with health insurance is that we allow Republicans to treat it as if it is a consumer product.

It is not.

Republicans love to talk about leaving health insurance to market forces. Their ideological blindness and callousness leads them to believe that what is good for a capitalist market is always right for the individuals it purports to serve. The reality is that we have made the capital markets our religion, as opposed to treating it as a tool that can make life better for us all.

A company does not sell a product that is not profitable. The fiduciary responsibility of a business in a capitalist market is to its shareholders, not the customer. The client is nothing more than a means to transfer wealth to the shareholder and the executives running the business.

A company cannot make a profit on an unaffordable product. Prices must rise or costs of manufacturing the product must go down, or the product will cease to exist. That’s what is happening to health insurance under Obamacare. Some insurance companies raised their prices, while some just abandoned the health insurance 'product.' Because proper regulations were finally in place, they could not make the product less expensive. In other words, Obamacare did not allow health insurance companies to sell their customers a crappy insurance policy.

Republicans argue that it is a lack of choice that allows these businesses to charge exorbitant premiums. They claim it is overregulation that causes health insurance companies to have to provide services people don't necessarily want. They say that disallowing interstate health insurance purchase reduces competition and competitive pricing.

There is some truth in those statements—but that’s only because as long as health insurance is seen as a product, that abridgment of market forces is detrimental to the company's bottom line, and also to insurance pricing for Americans. . . .

Here is the reality: We do not decide when we get sick. When we get sick, we cannot just shop around for the hospital and doctor that will provide the best price to treat a disease we do not yet know we have. Sickness does not know our socioeconomic condition, so having a ‘choice’ to purchase a plan we can afford means we get wealth-based health care.

Health insurance is not a product. Selling it that way is immoral, un-American, and downright evil.

What I Say: Your Head Trucker, who has endured a great deal of poverty in his life, and watched his loved ones suffer and die with precious little help from the free-market system, believes in a much-expanded and much-improved Medicare for All - by which I mean, a single-payer system, which could be funded and provided by various means, but which would automatically cover every resident of the United States from cradle to grave without limitations, exclusions, or premium payments. Ideally, it should be free at the point of access, though I could support a sliding scale for nominal co-payments, based on income.  Anything less is inexcusable and immoral in this, the richest nation on the face of the earth.

All medically necessary care and services, including preventive exams and treatments, physical therapy, mental health services, prescription drugs, and appliances, as well as hospital and residential care, would be provided under a nationally determined list of allowable benefits to patients. Doctors, clinics, and hospitals could be either government employees or private providers who agree to accept the standard compensation for services. Patients would not be involved in the billing process at all.

The whole program would be funded either out of general taxation, or with the help of a nominal withholding tax on wages. But everyone young and old would be fully covered at all times, regardless of whether they were employed or not.  Private insurers would be forbidden from competing with Medicare on any benefits covered by the national program.

The ultra-rich - like snooty rich-kid pig Jason Chaffetz (R-Utah) - who can't bear to sit in ordinary waiting rooms with the commonality could use their gold-plated private doctors and hospitals, who could charge whatever the fat-cat market would bear - but they could not also receive any payments from Medicare.

Or maybe there's a better way than all that to cover everyone - I am no financier, but I do believe in the three principles upon which Britain's National Health Service was founded:

  • That it meet the needs of everyone
  • That it be free at the point of delivery
  • That it be based on clinical need, not ability to pay

I see that the total expenditure from all sources on healthcare in the United States in 2015 was $3.2 trillion.  (For comparison, the total annual payroll in the United States, including government employees, was $5.9 trillion in 2014; and total federal spending in 2015 was $3.7 trillion.)  That's a lot of money, but I'll wager at least half of it is wasted on insurance middlemen and their bulging profits, not to mention mindless paperwork and the utterly needless drug advertisements that flood the airwaves and Internet night and day. All other developed countries spend much less per capita on healthcare than the U.S. does, and get better outcomes, too:

Click to enlarge.
And then there is the combined $2.1 trillion net profits of American corporations the year 2015, which benefit immensely from our skilled, educated workforce, high-class infrastructure, and natural resources - your Head Trucker thinks that instead of paying fantastic salaries and bonuses to the execs, the big companies should be doing some substantial good for the general public.

Chart from Statista.com; click to enlarge.

USA Today reported that just 28 big firms, or 6 percent of the total, made fifty percent of those profits in 2015.

I don't know for sure the best way to finance universal coverage, but what I do know is that there is plenty of money circulating around this old world, and the big-money boys in their gold-plated towers can always find a way to finance every whim and extravagance and obscene profit they want, and the public be damned - so they can sure can sure as hell figure out a way to finance Medicare for All if they are made to, and if they don't - may God reward them as He did Dives.

It's instructive to check out this comparison of various national healthcare systems from Wikipedia, with links to many other sources of information. Also enlightening is this comparison of U.S. and Canadian healthcare systems.

Physicians for a National Health Program has a proposal for a single-payer system that seems well thought out to your Head Trucker.


Frank said...

You've been on a roll and I must say I agree with your commentary fully (including previous posts). You've been doing research and finding info that is informative, useful and damning to those currently in power. Power. That seems to be the god enshrined in Washington and along with Money, makes for a regime that is self-absorbed, insulated, uncaring, elitist and .... fill in the blanks.
I have often said, long before this current fight over healthcare, (http://reluctantrebel.blogspot.com/search?q=health+insurance) that our recent problems in health care are in large part the fault of the health insurance companies themselves, ever since they were allowed to become publicly traded commodities on the stock market.
As your article points out, Health insurance is not, or should not be a "commodity" - it should be something everyone can depend on. And in the long run, wouldn't it save money, resources, and improve the lives of all, if everyone could have the means to take care of their health?
By making health insurance companies beholden to their stockholders, they are easily persuaded to to practice medicine without a license: to dictate to doctors what services and/or procedures are permitted, for whom, when and how often and at what cost to the insurance company.
All with an eye to the bottom line profits. - NOT to reduce health care costs (you pay the deductible, co-insurance, uncovered expenses, co-pays on prescriptions, etc.); NOT to provide the best or optimal health care to "consumers"; NOT to encourage preventive health care (though they often make a big show of "incentives" and other nonsense to promote personal health); NOT to work toward reducing the real cost of care and pharmaceuticals.
As I've said many times: Insurance is legal organized crime.

Russ Manley said...

Insurance is by and large a very profitable racket, that's for sure - it has its uses, but the profit motive has NO place in any rational healthcare scheme. Doctors and nurses should certainly be well compensated for their training and ability, and financial incentives that are reasonable and justifiable can be used to good effect in other ways as well.

But NOBODY should be getting filthy stinking rich off the sickness and suffering of their fellow men.

I am not a socialist per se; I despise all isms and doctrinaire philosophies. But this issue makes me want to run out and start waving the red flag.

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