Brief Comment on Health Care
Seriously, I love competition and market-driven solutions, but if you get shot you don’t have time to compare your choices and pick the most efficient hospital.
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You want competition? Let’s try to compete with some of the public systems that work, let’s compete toward making it more cost-effective to do business in America.
My response:
This is the typical rhetorical device used in these arguments. You justify the third-party payment system for normal health care by taking a catastrophic event and say that it needs to be covered by a third-party payer.
What we call “health insurance” in this country is really two things. First, it is guard against catastrophic medical events, and it doesn’t do a very good job at this because it’s not a true insurance product (see next point). Second, it is a stupid third-party payment system for normal, predictable, elective medical events. What is the value-add for me to pay $x/month to a third-party which then pays about 30% less than $12x/year to my health care provider for my annual physical? There is no value-add because there is no reduction of risk (which is the point of the premium on insurance).
If you want to solve the price inflation problem, you need to do two things. First, you need to separate catastrophic medical event insurance into its own insurance product, and you have to have individuals pay directly for predictable health care items, some of which will allow for lower premiums on their catastrophic insurance because they are correlated with lower chance of catastrophe (just like how your car insurance works). Second, you must remove the tax credit on health “insurance” premiums. This is always marketed as a benefit to the consumer, but it is not; it is a benefit to the insurance industry because their premiums are cheaper to the consumer without affecting the insurance industry’s profit margins. This effectively increases demand without them lowering their prices. It’s a brilliant way for them to rake in the cash.
You already know my response to this – what if my annual physical revealed I’m high-risk for heart disease? Would this decrease my “catastrophe” insurance because I’m a good citizen and went to get myself tested? Or would it increase my insurance because I’m genetically predisposed to heart disease?
Also, who would be responsible for defining what falls under the category of “catastrophic medical event” and “predictable health care items”. The free-market insurance providers? I dont think that’d be very wise, given that their incentive is to make a profit.
Krishna - July 18, 2009 at 7:31 pm |
Krishna, who defines those things in other areas of insurance? Why would this be any different?
To your other point, the medical information you receive from your doctor is yours. You bought it, after all. If you want to furnish it to your health insurer for a discount, you may, just as I may furnish my report card to my car insurer to receive a good-student discount.
mwarden - July 18, 2009 at 7:50 pm |
So I may furnish and be penalized, or not ‘fess up and be penalized when they find out about my condition?
While this is an interesting POV, it still has many holes in it. I dont claim to have the perfect answer, but from everything I’ve read/heard, I think that a single-payer with the option of supplemental insurance is probably the best.
Krishna - July 20, 2009 at 1:12 pm |
Krishna, I don’t follow what you mean when you say that you will be penalized when they find out about your condition. It would be important to clarify in the law that your medical information is yours, and it is your right and your right alone to share that with another party (insurance, employer, anyone). I assume no one would do this without some form of compensation, likely lower premiums.
I don’t know how supplemental insurance would be immune to this issue.
Other than this privacy concern, what are the other holes you see that are not present in a single-payer situation?
mwarden - July 20, 2009 at 6:55 pm |