Health Insurance is Rigged to Kill.

[Einhander Sn0m4n]

SCHIP and the Rigged Health Insurance Game

Created by eric_at_rockridge (Rockridge Institute staff member) on Friday, October 26, 2007 08:07 AM

The House on Thursday passed a modified version of the SCHIP bill, with a vote that was seven votes shy of a veto-proof majority. There were 142 members of Congress who voted against extending health care to more poor children. Behind their rhetoric, their intentions are clear: they want to protect the health insurance market and the huge profits that go with it.

But the huge profits are killing health care. We all know that now. Profit-maximizing insurance companies are bad economics. They make money by denying care, which is a terrible way to try to keep us healthy. (The Rockridge Institute's white paper on health care security has details.)

And, profit-maximizing health insurance does more harm than that. It is also killing our sense of community. It pits us one against another to get affordable and available insurance policies, strangling the trust and cooperation we need to thrive. If we can't come together when we need each other most—when we're sick, injured or dying—without our vulnerability being used as an opportunity to maximize profits, then the U.S. is a hollow shell. The community that makes our nation a family is dead.

Huge health insurance profits are killing community because they are killing Americans. This is obvious. We know that over 100 million Americans are under- or un-insured. They can't get the insurance necessary to receive adequate medical care. So, millions of Americans remain sick unnecessarily and die prematurely.

But there is a second, more subtle impact of the profit imperative of health insurance that is destroying our communities.

In our current health insurance system, companies can't maximize their profits unless they turn people away. According to Princeton economist Paul Krugman, in any given year about 80% of us need very little medical care. Some aspirin and cough syrup, more or less. But 20% of us have an accident or illness that requires major medical treatment. That's expensive.

If everyone in the U.S. were covered by the same insurance company or were part of a nationally organized universal health care plan, then this would all balance out. In any given year, the large number of healthy people would pay for the small number of really sick people. And, the years when you are part of the 20% with large medical expenses, the others will pay for you. Spread out the risk, share the costs, and we all get good health care. We thrive. This is what every other industrialized country in the world does. Except the United States.

Currently, we don't spread the risk and costs evenly. Instead, we have lots of insurance companies all competing against each other to maximize their profits. Which they have—to the tune of billions of dollars a year. But they make their billions by not getting "stuck" with the people needing expensive medical treatment—sort of like avoiding the Old Maid in the children's card game. The more sick people an insurance company ends up with, the lower their profits. "Stuck" with too many people needing medical care at any one time and an insurance company loses some of their profits. So, insurance companies avoid people needing medical care—the Old Maids—at all costs. And we know the result: over 100 million Americans who are un- or under-insured, pushed into the health care cracks between insurance companies by the companies themselves.

And those of us with insurance have been dragged into this sick game. Those of us who have health insurance get it in a system that works by excluding some of our neighbors. With the present profit imperative of our competitive health insurance system, we have created a national Sophie's Choice: millions of people must be denied care so that the rest of us—healthier, wealthier, or fortunate enough to have employer-based insurance—can get it.

Health insurance companies are playing us in a lose-lose game, where we are the exploited and the exploiter together. They exploit our family responsibilities. I know that I couldn't live with myself, if I didn't provide my wife and daughter the insurance they need to get health care. But, having aided them (and me), I participate in the national Sophie's Choice. How do I face my uninsured neighbors now? Damned if I do, damned if I don't.

Insurance companies have dragged us into this rigged game and millions are losing. We can look the other way and pretend our neighbors and neighborhoods aren't needlessly suffering and dying. We can hope that our luck holds and that we will continue to have insurance. It might be self-denial, but if we're lucky we just might beat the house and survive. But we know some of our neighbors will lose. Whatever happens to us individually, our community is lost.

Health care doesn't have to be this way. It could actually empower community. But first we must stopping playing the insurance company game. As long as health insurance companies control health care, these problems will continue.

We already know that we can have better health care for everyone for less money, if we remove the competition and distrust that insurance company profits have injected into the process. SCHIP is a prime example of just this approach. It demonstrates what we can accomplish when we put lives before profit. Those who voted against expanding SCHIP, know that. That's their fear. And, that SCHIP might become a powerful rallying point toward rebuilding a thriving American community through health care for all.

[Glocksman]

The profit motive can and has been useful in promoting advancement, but as applied to healthcare, leads to the shit described in your article.
Which is why this otherwise rock-ribbed small 'c' conservative supports national healthcare.

[PainRack]

I think that article slants things too much though.........
There isn't a reason why companies can't profit from the healthcare industry. The problem lies in providing for those who will need to consume large amounts of it, just as the article states.............

[Glocksman]

I think that article slants things too much though.........
There isn't a reason why companies can't profit from the healthcare industry. The problem lies in providing for those who will need to consume large amounts of it, just as the article states.............

...and then we go back to who will service those people.
Should we just let them die, as the purely profit motivated healthcare system would let happen?

And I'm not arguing with you, as you've precisely stated the dilemma that results from a purely profit oriented healthcare system WRT insuring all persons.

[SirNitram]

I suppose one can make the case for profit-driven insurance providing cosmetic coverage and the like, but the idea that this 'slants it too far' seems to reek of golden meaning. People die because they lack sufficient healthcare. Last I checked, that's a little more important than ensuring corporations feelings don't get hurt.

[Fingolfin_Noldor]

I think that article slants things too much though.........
There isn't a reason why companies can't profit from the healthcare industry. The problem lies in providing for those who will need to consume large amounts of it, just as the article states.............

Profit and Health care are oxymoronic. Either you make a profit, or turn away patients who can't pay up. In the US, many hospitals do deny care in the event you can't pay up. Insurance companies deny you any benefits if there is some small clause that says you didn't fulfill so and so requirements, which can pop out of nowhere.

[Darth Wong]

I think that article slants things too much though.........
There isn't a reason why companies can't profit from the healthcare industry. The problem lies in providing for those who will need to consume large amounts of it, just as the article states.............

So ... you state that the article "slants" things, ie- you are accusing them of dishonesty. But in order to back up this claim, you offer nothing more than your personal conviction that they're wrong? What the fuck do you think this is, Bill O'Reilly's House of Opinions I Pulled From My Ass?

[Einhander Sn0m4n]

I think that article slants things too much though.........
There isn't a reason why companies can't profit from the healthcare industry. The problem lies in providing for those who will need to consume large amounts of it, just as the article states.............

So ... you state that the article "slants" things, ie- you are accusing them of dishonesty. But in order to back up this claim, you offer nothing more than your personal conviction that they're wrong? What the fuck do you think this is, Bill O'Reilly's House of Opinions I Pulled From My Ass?

Ah, wonderful. I was hoping to spark some conversation with this. The reason why Golden Mean fallacies are such is that the truth can be as radical to one side or another as it damn well pleases with nary a care in the world for our pissant politics or, shock! horror! our feelings on the matter!

[PainRack]

So ... you state that the article "slants" things, ie- you are accusing them of dishonesty. But in order to back up this claim, you offer nothing more than your personal conviction that they're wrong? What the fuck do you think this is, Bill O'Reilly's House of Opinions I Pulled From My Ass?

Right, I accused them of dishonesty?

I felt that the statements

Profit-maximizing insurance companies are bad economics. They make money by denying care, which is a terrible way to try to keep us healthy

suggest that profits have no place in the healthcare industry..

That angle is too extreme, cause there is no reason why companies which seek to make profits can't provide decent healthcare, the problem is providing adequate healthcare to people who NEED it, whereas the pure profit motive will simply write these people off.

Its nothing more than the old argument for a mixed economy, where the government retains strong regulatory powers and even intervention in the economy, while allowing free enterprise. I'm contesting the statement that individuals and corporations can't profit from the healthcare industry.
Why not? One can simply structure it like the Australians where the government is the payer of the bills. You can make profits off the bills if you can provide the required services cheaper and better anyone else.

Profit and Health care are oxymoronic. Either you make a profit, or turn away patients who can't pay up. In the US, many hospitals do deny care in the event you can't pay up. Insurance companies deny you any benefits if there is some small clause that says you didn't fulfill so and so requirements, which can pop out of nowhere.

Not in a UHC system. Just switch it to the government paying the bills instead, and you get an extremely powerful consumer lobby that has the ability to make free choices. Something that individuals don't really have in the current system.

[The Yosemite Bear]

a recent goodie, is that my health insurance company while providing medical coverage now has a new trick. you have to get you testing and pharmacy from a provider "in their network" which is uasually not one that is anywhere near you...

yes, I just paid $386 dollars this year for HemoA1C tests (kinda needed to track Diabetes) because the lab that my doctor uses is not in the network.

[Glocksman]

In the US, many hospitals do deny care in the event you can't pay up.

They may do so, but it's illegal if the care is necessary to keep you alive.
Legalities aside, it's a national shame that the US didn't implement a national health care scheme decades ago, much less debating it in the first decade of the 21st century.

[Darth Wong]

So ... you state that the article "slants" things, ie- you are accusing them of dishonesty. But in order to back up this claim, you offer nothing more than your personal conviction that they're wrong? What the fuck do you think this is, Bill O'Reilly's House of Opinions I Pulled From My Ass?

Right, I accused them of dishonesty?

Yes. What the fuck do you think "slanted" means, moron?

I felt that the statements

Profit-maximizing insurance companies are bad economics. They make money by denying care, which is a terrible way to try to keep us healthy

suggest that profits have no place in the healthcare industry..

So you dislike the conclusion, therefore it is "slanted?" What the fuck do you not understand about this?

That angle is too extreme, cause there is no reason why companies which seek to make profits can't provide decent healthcare, the problem is providing adequate healthcare to people who NEED it, whereas the pure profit motive will simply write these people off.

And how does this mean their article is "slanted"?

Its nothing more than the old argument for a mixed economy, where the government retains strong regulatory powers and even intervention in the economy, while allowing free enterprise. I'm contesting the statement that individuals and corporations can't profit from the healthcare industry.

And how does this mean their article is "slanted"?

Why not? One can simply structure it like the Australians where the government is the payer of the bills. You can make profits off the bills if you can provide the required services cheaper and better anyone else.

And how does this mean their article is "slanted"?

Not in a UHC system. Just switch it to the government paying the bills instead, and you get an extremely powerful consumer lobby that has the ability to make free choices. Something that individuals don't really have in the current system.

And how does this mean their article is "slanted"?

[Korvan]

The thing that really gets me about the US health care system is that you can have enough money to afford insurance but be denied because you're too unprofitable to treat.

There's no way that you can afford treatment yourself without going bankrupt in a hurry, but you can't get any assistance because you can afford insurance (which you can't get). Once you've been financially ruined, the state will step in to help, but I imagine the added stress can't be good for for what every is wrong with you.

[Fingolfin_Noldor]

Not in a UHC system. Just switch it to the government paying the bills instead, and you get an extremely powerful consumer lobby that has the ability to make free choices. Something that individuals don't really have in the current system.

UHC systems are funded by Governments who pick up a huge bit of the tab, as it is in many socialist leaning countries in Europe. These systems, as your local propaganda newspaper has consistently whacked into our heads, are inefficient and require substantial bits of Government funds. Nevertheless, the right to health care should be and by all means a basic right for even the poor and needy. And though inefficient, a UHS is a necessity.

They may do so, but it's illegal if the care is necessary to keep you alive.

That's good. But I guess the burden of debt falls to the immediate members?

[loomer]

The profit motive can and has been useful in promoting advancement, but as applied to healthcare, leads to the shit described in your article.
Which is why this otherwise rock-ribbed small 'c' conservative supports national healthcare.

Commie.

[Alan Bolte]

Commie.

No, no, you're doing it wrong, that's damn near a "+1". I direct you to IP's recent post in SLAM.

...no, I don't have anything else to say, but let's face it, it's been said. Write your congressman...or something. I dunno.

[Glocksman]

The profit motive can and has been useful in promoting advancement, but as applied to healthcare, leads to the shit described in your article.
Which is why this otherwise rock-ribbed small 'c' conservative supports national healthcare.

Commie.

Me? a dirty Commie?
I'm afraid that the board's resident Communist (Stas Bush) would think I'm far too right wing to be a genuine Communist despite my proletarian status and union activism.

[The Yosemite Bear]

actuallly I do write my congressman and my senator...

of course since were back in the era of robber barrons...

[PainRack]

Yes. What the fuck do you think "slanted" means, moron?

Because while the current model is broken, there is no reason to take the other ideological extreme, which is profit-taking should not exist in the healthcare industry?

So you dislike the conclusion, therefore it is "slanted?" What the fuck do you not understand about this?

Because I felt that there is no practical or ideological reason why the healthcare industry should not include companies out there making money?

And how does this mean their article is "slanted"?

Because my intention was not to say that insurance doesn't deny care, it was to attack the position that profits shouldn't exist in the healthcare industry.

That's my meaning of the word "slanted". Its adopting a stance that's too radical, too far to the left.

UHC systems are funded by Governments who pick up a huge bit of the tab, as it is in many socialist leaning countries in Europe. These systems, as your local propaganda newspaper has consistently whacked into our heads, are inefficient and require substantial bits of Government funds. Nevertheless, the right to health care should be and by all means a basic right for even the poor and needy. And though inefficient, a UHS is a necessity.

So, how does any of this prevents individuals and corporations from making money? A single payer system such as that found in Australia amply allows people to make money servicing the healthcare industry.

[Starglider]

A single payer system such as that found in Australia amply allows people to make money servicing the healthcare industry.

So PainRack, you're ok with private hospitals but not private health insurance? That seems sensible to me. There are still things that can go wrong with that system, but it's competitive with a full-blown national health service (which has other issues) and a hell of a lot better than the current US mess.

I think everyone agrees that private profit-making drug companies and equipment manufacturers are a good idea; totally communist health care may work ok initially but will stagnate very quickly. But they just need to be carefully regulated.

[Fingolfin_Noldor]

So, how does any of this prevents individuals and corporations from making money? A single payer system such as that found in Australia amply allows people to make money servicing the healthcare industry.

If you are going to allow for a two tier system where you have private and public sector system, likely the private sector will make money, but not the public sector. Of course, the private healthcare is only for the rich and not the poor.

[Aaron]

The only place where a two-tier health care system has been tried in Canada, Alberta resulted in the private clinics running to the government within a year asking for handouts because they were broke.

[Edi]

The only place where a two-tier health care system has been tried in Canada, Alberta resulted in the private clinics running to the government within a year asking for handouts because they were broke.

Then they were obviously doing something wrong. Finland has well functioning two-tier system where the public health care system is for everyone, but it can take a long time to get treated for non-urgent (i.e. non-threatening or simply quality-of-life issues) because urgent cases are given priority. So non-urgent stuff is important for the private sector as an income source. Another are where private practice is making money is providing health care services for companies that provide certain coverage for their employees. Job health care exists here too, since it is advantageous for companies to concentrate their stuff in one place and if you need to call in sick, you also need it signed by a doctor or a nurse and employers generally require you to get those reports signed by the party providing the services to the company. With the way the current system is set up in the US, our model could not possibly work there, but here it works rather well.

[Aaron]

Then they were obviously doing something wrong. Finland has well functioning two-tier system where the public health care system is for everyone, but it can take a long time to get treated for non-urgent (i.e. non-threatening or simply quality-of-life issues) because urgent cases are given priority. So non-urgent stuff is important for the private sector as an income source. Another are where private practice is making money is providing health care services for companies that provide certain coverage for their employees. Job health care exists here too, since it is advantageous for companies to concentrate their stuff in one place and if you need to call in sick, you also need it signed by a doctor or a nurse and employers generally require you to get those reports signed by the party providing the services to the company. With the way the current system is set up in the US, our model could not possibly work there, but here it works rather well.

I've been told that one possible reason for the failure is that while the province of Alberta is very rich, the people that control that money aren't in Alberta. So the money for the private clinics isn't there. Another possible reason is that people are simply satisfied with the existing system. But I have little info on what services they provide or how their setup.

[K. A. Pital]

Because while the current model is broken, there is no reason to take the other ideological extreme, which is profit-taking should not exist in the healthcare industry?

"Ideological extreme"? Pfft. Just removing profiteers from where they fail. That's not "ideological" and not "extreme", it's just a constatation of the failure of the profit model and it's removal and replacement with a better system. The fact that what you called "ideological extreme" works better than the currently existing system seems to avoid you. That's not replacing two equivalents, that's replacing the worse with the better.

Now, another ABC - there's rationalism, which does not care whether an idea is "ideologically extreme" or not, it cares for practical implementation and looks at the one idea which produces better results, then exchanges them.

A single payer system such as that found in Australia amply allows people to make money servicing the healthcare industry.

If you think total insurance is the way to go, fine, that well may be a reasonable position. Show the evidence that it's the best of healthcare models, or produces the best results with the resources given compared to the "ideological extreme" of a non-profit universal healthcare system when advocating such a system. It's a non-trivial matter - we have a choice between system A and B, so both systems need to have a rigorous assessment. A universal insurance system, now, is it very widespread? What are it's key superiorities over a non-profit system? Lower p/c costs? Seems profit healthcare does not have lower costs, so by including profiteers into the system, you raise the cost, not lower it. The ability of corporate profit? Why should that be of any importance to a healthcare system, which has the task of healing the people regardless of expense, universally?