Healthcare

The first topic to consider here is healthcare.  I want to start the conversation with a couple of questions that I think are key to any discussion on healthcare.

1         1)      Is healthcare a right or a privilege?

2         2)      What is the primary purpose of health insurance companies – provide insurance or make a profit?

I’ll start with the first question.  It seems that in America we are attempting to straddle the fence.  We treat it like a right by telling hospitals that they can’t ask for proof of insurance or ability to pay before treating patients.  We treat it like a privilege by telling those same people they have to pay for the treatment, even if those payments cause financial stress, even bankruptcy.  We treat it like a privilege because even people with insurance face financial ruin because insurance companies don’t cover all the costs and leave patients facing tens of thousands of dollars in medical bills.  Sure, there are non-profit health systems that have to write-off so much treatment or lose their non-profit status.  Sadly, a recent Washington Post report shows that 7 of the top 10 most profitable systems in the U.S. are non-profit, including the top 4.  Not a good sign when some of the most profitable systems are those that are supposed to be serving the communities where they operate.

               If we want to solve the healthcare crisis in American, we have to get off the fence.  This is where the 2^nd question comes in to play.  The answer is pretty straight forward – health insurance companies exist to make a profit.  At a basic level, profit is the primary goal of any company.  Without it, the company goes under.  I don’t begrudge insurance companies making a profit; they have to pay their employees, buy supplies, pay bills, etc.  But maybe profiting off of sick people isn’t who we want to be as Americans.  At least, it’s not who I want us to be.  Making a profit is simple – take in more money in premiums than the insurance company doles out paying claims.  As the baby boomers get older, their health care costs are going to rise.  Unless more people, younger people, healthier people, enter the market, premiums are naturally going to rise.  More people in the market means more people to spread the costs around.

               How do we go about compelling people to enter the health insurance market?  Make health insurance compulsory.  We do it with auto insurance, why not health insurance?  I know some will argue that driving is optional.  If you don’t want to pay for auto insurance, don’t drive.  Okay, I get that.  We still have people driving without insurance and we all get to pay for it with higher premiums.  That’s also why we have penalties for people who get caught driving without insurance.  Health care isn’t optional.  Sure, I’m pretty healthy today, but that can change at any minute.  All it takes is one nasty car accident or an auto-immune illness like MS that strikes without warning for a normal healthy young person to suddenly become a drain on the health care system.  Just like an uninsured driver, it doesn’t do any good to get insurance after the fact.  Yes, putting in protections for pre-existing conditions helps.  But no insurance company is going to pick up the tab for an event that occurred before coverage was in place.  The ER visit, major surgery, and ICU stay for the uninsured 20-something victim of a car isn’t going to be paid by the insurance company he signs up with a year later.  They might start paying for the ongoing therapy, but the $100k+ bills coming from the original accident, sorry, the patient is on his own.

               It would seem that the reasonable course is for everyone to carry health insurance to make sure a sudden catastrophic incident doesn’t bankrupt them.  Unfortunately the high premiums and higher deductibles make it so that many people feel they can’t afford insurance.  It’s a fairly well understood principle of capitalist economies that increased competition leads to lower costs and better quality.  It’s why we passed the Sherman Antitrust Act back in 1890.  Too few people controlled too much of certain industries (the Rockefellers controlling oil, Carnegie controlling steel).  And yet, 4 of the 5 largest insurers are trying to merge.  Aetna is trying to buy Humana and Anthem is trying to buy Cigna.  They all claim it’s because they just can’t make profits.  This article from Modern Healthcare would seem to suggest otherwise.  Sure there are other articles that point to declining profits for Humana, but nobody is reporting that Humana is actually losing money, just that they aren’t making as much.  Call me a bleeding heart liberal, but I’m not losing sleep over an insurance company making a few BILLION in profits.  If we want to bring more people into the health insurance marketplace, we have to increase competition.  We have to oppose the proposed mergers.  But that’s not enough.  We have to increase competition beyond the current companies. 

During the debate over the ACA there was a lot of talk about creating a public option, basically a government run insurance company to force more competition.  As with most things, a public option has it pros and cons.  Read here for a more in depth explanation of the pros and cons.  I do want to address one of the major concerns of conservatives and that is the ability of a public option to wield massive cost negotiating power.  It’s not an unfair concern.  Medicare pays significantly less than private insurance.  That’s why so many providers won’t take Medicare patients.  Here’s an attempt at a solution.  Create an independent arbitration panel that sets the reimbursement rates for the public option.  The panel would need to be completely independent of the health care system AND the administrators of the public option.  One of the challenges of a public option would be balancing the differences in costs across the country.  The fact is a bypass surgery in California does not cost the same as the same surgery in Wisconsin.  If citizens from both states are paying into the plan, are providers in both states getting the same amount?  I don’t think that will work.  Either providers in one state are getting underpaid or providers in the other state are getting overpaid.  So the board would need to set reimbursement rates on a state-by-state basis.  Do we have to adjust premiums the same way, basing the premium in part on the state the citizen lives in?  I think so.  In order to really make this work, the individual mandate has to remain in force.  The mandate is a key part of the plan Republican Mitt Romney introduced in Massachusetts and it’s an integral part of the ACA.  We need to stop viewing the mandate as a tax penalty and start viewing it like we do Social Security.  Young, healthy people buy in now so that insurance is still affordable when we they are old and sick.  I’m certainly no expert here, but take this as a starting point to try and find a solution to something we all know is a problem.

  Tell me what you think in the comments or even contact me with your own post on healthcare.