My reality - which is reality as I see it - is as follows:
Health Care in the United States today seems to be state of the art, period.
Access to Health Care is a really, really big problem.
Health Care Cost is another really, really big problem.
Not understanding Insurance Theory is another really, really big problem.
Managed Health Care was never a good idea for anyone except corporations who invested in it.
Access to Health Care:
Universal access to health care will require universal buffering of health costs. Insurance companies are not constitutionally (small c) equipped to provide this service. An insurance company must be 25% to 40% more expensive than publicly funded health access simply because they must provide a return on investment for their stake holders. Medicare has a one percent overhead cost!
The government is capable of providing health access to the uninsured. The problem is that everyone wants it for free. Today, if we pay $4,000,000,000,000 a year for health care and 80% of people have insurance, then does this mean that between $800,000,000 and $1,280,000,000,000 goes to insurance company overhead?
Regardless, if the money is being spent then it is a cost not a risk. Insurance companies insure risk, not cost.
What should the government do? To begin with, the government must use it's power to fix the first problem. The first problem is the citizens who can't pay. The government must recruit an army of health care professionals. As an army, they would be put into service under the command of a cabinet level Surgeon General. They would be recruited be offering to pay back medical school costs in return for services. One year as a government doctor or heath care professional providing free health care to the uninsured and the government will pay back one eighth of the medical or other school debt. It is also time for the government to begin dealing with the pharmaceutical companies as if they were dealing with public money given in public trust. If health care costs $4,000,000,000,000 per year then that is how much the health care plan must budget. Otherwise it is smoke and mirrors.
Health care used to be centered around a doctor in a storefront office or an office in a residential building. People would go to the doctor, or the doctor would go to the sick person. Only "sick" people saw the doctor. The really sick people had to go to hospital. The doctor usually knew the people he was treating and charged for his services according to the probability of getting paid. Obviously, some doctors had richer clients and more lucrative practices, but they still made house calls to provide such services as taking one's temperature or delivering headache powders.
Today, if you do not have a third party payer, you will not get past the receptionist. Unless, of course, the doctor you are seeing has opted out of third party payer health plans and only accepts checks and credit cards.
In short, access to all but some emergency rooms the few free clinics that get funded is limited by the power of somebody to pay.
This is why I feel that the health problem in this country is health cost and not health care.
Health Care Cost:
When I entered the workforce in the 1960's, it was common for people to have Blue Cross or a similar form of coverage as part of the benefit package. I got a wallet sized card that entitled me to up to $20.00 a day for a semi-private hospital room. Sometimes I had to pay as much as a dollar a week as a premium copay. I still paid for doctor's visits and other services at the hospital. When I was discharged, I might expect to get a bill for several hundred dollars for a "routine" hospital stay after a bout of pneumonia or delivering a baby or having a broken leg or getting an appendectomy. Catastrophic health events usually resulted in major disruptions in life, up to and including losing one's home and moving "away".
Then the insurance industry began to offer more complete health cost coverage. Companies were competing with each other for market share. The insurance companies began to offer new products. People began to compare their coverage based on things like out of pocket expense. "Hey Billy! How much did it cost you to bring the baby home?"
"Twenty Five Dollars! The insurance picked up the rest."
"Wow! It cost me a hundred. What company do you have?"
As competition increased, the insurance companies needed to pay more and more. The medical industry began to realize that they could charge more and that the insurance company would pay. This is also a time when technology is exploding onto the scene. As Monty Python posited in The Meaning of Life, it was the time of "The Machine that goes BING!"
In the 1970's, if Michael Moore is accurate in the movie SICKO, the corporate philosophy of "Managed" Health Care was accepted and promoted by Richard Nixon and his administration.
The purpose of "Managed" health care was, and remains, to rein in inflationary health costs by requiring dispassionate, disconnected and unapproachable fourth party people to disapprove payment for procedures that seem frivolous solely on the basis of cost/profit ratios.
At the same time, employers were being required to pay higher and higher premiums. In order to remain economically viable, employers needed to begin defunding insurance in the benefit package. The insurance companies got together with the government. They helped us by introducing pre-tax allotments or stipends and catastrophic health care accounts that are non-refundable. We were told that we could now tailor our health care spending to our needs. We could choose our deductible and pocket the money we don't use! All we had to do was call this 24 hour 800 number before passing out and being out in the ambulance.
Meanwhile, the health care industry got real comfortable with being paid what ever they wanted to charge. They found that they could look a patient in the eye and tell that patient "your insurance won't cover this procedure, but if you want to live..."
The medical community also learned something else. They learned to be more efficient. And they learned that being more efficient meant being more profitable. A traditional $6000 operation may take a full surgical team six hours in an operating room and require a week in the hospital to recover. Today that operation costs, in equivalent dollars, $10,000. But it takes one hour, it involves a smaller laproscopic team, it is done in a medical office building and the patient is driven home with a bottle of percocet.
And everybody is expecting someone else to pay whatever is charged.
Not understanding Insurance Theory:
IF AN INSURANCE COMPANY IS NOT ALLOWED TO MAKE A PROFIT, THAT COMPANY HAS NO REASON FOR EXISTING!
THEREFORE - INSURANCE COMPANIES MUST TAKE FROM BETWEEN 25% to 40% of ALL MONEY THAT COMES IN THE FRONT DOOR AND GIVE IT TO THEIR OWNERS AND EMPLOYEES.
The insurance industry, as we know it is only a few hundred years old. Anyone who has worked in sales in the insurance industry has had training that explains the origins. The basic theory is: Nobody expects to have a loss. Every investment will pay off.
That is why I dare to invest in anything. But what are my chances that the ship with all my trade goods will sink? What are the chances that my building will burn down?
So people in Philadelphia began to realize something. If my building is worth $5,000 and has a small chance of burning down, it doesn't make sense to put $5,000 aside to protect me from that risk. Hey! Wait a minute! Every building owner in the city has exactly the same risk. What if 500 building owners each invest $10 in a common fund or bank account and if any one building burns down they get the money.
This was a great idea!
But it only protected one building. The reality of the time was that if one building caught fire, it would probably destroy it's neighbors. The volunteer fire department was invented for two reasons.
- To put out fires and protect buildings.
- To protect that pot of money that was being invested and earning it's own profits for it's member subscribers.
Would you rather sell a fire insurance policy to a foundry that deals with molten metal or a water bottling plant? (hint: Foundry people know how to handle fire and would be willing to pay a much higher premium). That is why so many homes in flood prone areas are insured. It is also why, with an increase in floods and hurricane damage, more of those policies are being cancelled.
But back to health insurance. The rule is: Insure Healthy People!
Today, every person running for president is talking about universal health insurance. This concept is untenable. Insurance only makes sense when a reasonable risk is distributed among a lot of people who, individually, have a small chance of filing a claim.
The minute an insurance company is told that they are required to accept, insure and pay the medical bills of a person with a pre-existing condition, the entire concept of insurance goes right out the window.
One final point
INSURANCE COMPANIES MUST BE 25% TO 40% MORE EXPENSIVE WHEN EXPECTED TO PROVIDE UNIVERSAL HEALTH CARE ACCESS.
Managed Health Care:
One of my favorite jokes goes like this:
Three nurses die and are standing before the pearly gates.
Saint Peter asks the first nurse what she did in life. She replies that she was an emergency room nurse. She worked hard and although she had a very stressful job, she felt that she saved more patients than she lost.
Saint Peter hugs her and welcomes her to Heaven.
He then turns to the second nurse.
She states she worked at a hospice. She spent her life helping the terminally ill die with comfort and dignity.
Saint Peter brushes away a tear and, taking her hands, welcomes her to Heaven.
The third nurse then states that she worked for a managed health care company.
Saint Peter excuses himself and pulls a telephone out of his desk. After about 45 minutes of phone calls, Saint Peter states:
Well you can come in, but you can only stay for three days.
'nuff said.
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