We have all heard the story about the blind man and the elephant. The blind man can only describe the part of the elephant he can feel, making it very difficult to know for sure either the part or the animal. The health care world is like the elephant story. Most of us have little real knowledge of what goes on in the health care industry, leaving us to blindly describe only the small part we can feel.
After being away from the health insurance industry for ten years, the last year of engagement has been an education, particularly amidst all the target hostility brought about in the health care debate. True, the number of complex benefit designs that include pre-existing condition clauses, life-time benefit caps, high deductibles, co-insurance arrangements, co-pays, etc., is staggering. The insurance industry array of products exploded during a time my life was devoted to exploring better ways to deliver care to uninsured and under-insured folks who were largely unemployed. I had no idea. Furthermore, many employers have migrated away from state regulated fully-insured insurance platforms in order to design even more creative solutions on their own, avoiding some of the disagreeable benefit mandates imposed by various state legislatures. The health benefit options in the market place are extremely varied. Today if you have seen one plan, you have seen only one plan among many. The insurance industry readily acknowledges the need for changes and has supported many recommended changes.
Almost all of this variation of benefit design has a single root cause…employers have been struggling to find ways to manage the increasing cost of health care. This large expense has not only been increasing at rates greatly exceeding other business costs, the unpredictable nature of the cost makes bottom line forecasting much more difficult. And the insurance industry has been working closely with employers to design plans aimed at reducing the growth trends and to make costs more predictable by distributing the financial risk. This part of the story seems very logical and reflects normal market forces at work.
Something else has been at work over the last decade that is also playing a major factor. Both providers and insurers have been in a race with one another to gain market power. Few physicians have been going into solo and small group practice partly because their success is better assured by becoming a part of larger organizations with corporate influence over market share and market price. And hospitals have been merging with one another making up large regional systems that attempt to set price. Likewise, insurance companies have been gobbling up smaller companies in order to gain market share. Once dominant, they can demand market concessions from the provider community which are excessive. Given most medical care and service is a local phenomenon, it is educational to see the impact of this predatory and egregious behavior from both providers and insurers. To this blogger the government has been negligent for not stepping into markets and regulating providers with price caps in some cases, or regulating insurers who impose take-it or leave-it contracts on providers that can leave providers in an untenable position for delivering a responsible service.
Calling insurance companies Cartel’s and attempting to legislate an opportunity for expanding government insured health care misses the point, in my opinion. Government has a responsibility and power to oversee and assure our essential capital markets remain healthy. When employers are going into foreclosure due to excessive health care costs, when insurance companies are imposing reimbursement rates well below the cost to deliver, or when providers are pricing themselves at 200+ percent of Medicare because they can, this is where the public expects action from our elected government officials. Current problems in health care related to poor access and service distribution, high cost, and poor quality have some pragmatic solutions. And the solutions are available to government today. What we need are courageous leaders who use the tools they have rather than pandering to the voters for more money to buy new tools. The current problem cannot be simplified as an insurance company problem and voters know this, even if they may not know the best solutions.
Thoughts?
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5 comments:
I can't find any viable reason that the solution to this would need to involve more regulations from the government. Anytime the government gets inolved there is always entitlements, special concessions and extra red tape created. A great exaple of this is the US Post Office - the government has so many regulations on them that they're sinking in a quagmire of statutes.
I don't need the government or my health insurance to regulate my health. I am quite capable of ruining it all by myself. Which is one of the reasons costs have gone up, the sick need the insurance andthe healthy don't buy want they don't use. A disporportionate amount of unhealthy people create an underwritting nightmare.
So the government is weighing either to make everyone get health insurance (increasing the number of healthy people into the pool) or they'll be fined/jailed, or get rid of pre-existing. The first option leads to mission creep, once you get people to pay for something they didn't have to before then the government will find another thing we're not paying for and make us pay for that. The later version will lead to phone calls that start like this "so I'm at my oncologist's office and he says I should look into some health insurance as I'm going to have some pretty exspensive bills coming up." and everyone pays more because only the insurance risks actually take advantage of the no pre-existing laws.
Given what we've all seen amidst the financial market collapse, do you really believe there is no place for government for oversight of market efficiency?
The pooling of resources to fund preventive services as a social obligation rather than a personal obligation seems less controversial than pooling resources to fund saving the life of an individual. Are their certain services more important for social pooling than others? Thanks for your input!
To me, government oversight of market efficiency is more along the lines of legislative control over avarice. Ensuring that no one losses too much money and that no one makes too much money eliminates risks, which in turn eliminates innovation. If there's no incentive to make money then there won't be any incentive to improve processes.
If you can't lose and you can't win then what's the point? Why go to school to learn to trade commodities if anyone can do it without fear of consequences?
What if all sports contests were regulated to end in a tie so no one's feelings were hurt? Would you keep watching them? I fully agree this is an exreme view of what might be, but I submit toll roads as en example of the government's inability to get out of the way once the initial mission statement is completed. I believe letting the government control the ups and downs of the market will only allow them to create mission creep into other financial sectors.
"Are you sure it is about health care?"
Given that health care is the Holy Grail of the American progressive movement, first articulated by Teddy Roosevelt as early as 1912 in the original agenda of the first of three iterations of the American Progressive Party in the 20th century, it seems logical to compare the language of the original debate to the present.
In 1912 the language was couched in fairness to workers and exploitation by business. There were no insurance companies to be demonized, just the oppressive tactics of American business upon the people. Health care was just one of the quality of life issues on the Progressive's agenda,
The needy of the 1912 debate were vividly depicted in articles and books written by a group of progressive authors, the "muckrakers". Prominent among this group was Upton Sinclair who had portrayed the evils and oppression of capitalism in his seminal work, "The Jungle". In comparing the underlying anti-capitalist theme in "The Jungle" and other works by the muckrakers with what we hear in the debate today we see that nothing has changed in the past 100 years. It wasn't really about health care then, and it isn't about health care today. It is about capitalism and the Progressives' antipathy to it. Health care is still the slight-of-hand vehicle to move the Progressive agenda forward.
The story of the blind man and the elephant is valuable if one believes this is truly about health care; but, if it isn't, as I argue, a more apt analogy may be the use of health care reform as a diversion by the Progressives while they promote their overall agenda just as a parent attempts to distract antsy children on a long journey by a game to keep them occupied while the real purpose of the trip and the time passes unnoticed by the children.
I believe the real question is "how shall we live": as free men with free markets through which resolution of problems may be freely pursued; or as subservient men with whatever health care, resources and answers the oligarchs choose to provide?
I agree with what President Obama said yesterday; "the time to discuss health care reform is passed". we differ on what follows; while he seeks avenues to subservience for us, I seek avenues to freedom and the assurance we are able to live as we desire to and to guarantee the same for our children.
Unrestricted demand for a shared finite resource ultimately dooms the resource through rational over-exploitation. This is the classic "Tragedy of the Commons". Is this where we're headed with health care? The oligarchs decide?
When "freedom" is interpreted narrowly as simply the freedom to do as one pleases, the community will eventually suffer. Do elected officials play any role regulating the availability of scarce resources for the broadest "good"?
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