By Carmen Yarrusso
August 18, 2009
Health care services are in a special category of “services”. Unlike almost all other services in our “free market” economy, most health care services (just like police and fire services) are necessary for all residents—often a matter of life and death.
Incredibly, we treat most health care services as if they were optional for some residents. The extreme costs, the multiple inefficiencies, and the shameful injustice of our current health care system are the guaranteed results of treating heath care services as optional for some residents.
As a civilized nation, we would never tolerate a system where police or fire services were treated as optional for some residents. To understand how utterly absurd our private health care system is, imagine life in America if we treated police and fire services the way we now treat most health care services.
If police and fire services were optional for some
Instead of groups pooling their resources and providing everyone with police and fire services, where each dollar spent provides a dollar’s worth of services (minus the cost to administer payments), imagine introducing a middleman—police and fire insurance companies.
Like our current health care system, about 30% of every dollar we spend wouldn’t provide any police or fire services whatsoever, but instead would go to other insurance company expenses.
Aside from administrative costs to pay for services, insurance companies would pay billions to shareholders as profits, plus spend billions more for advertising, lobbying Congress, huge executive salaries, and paying a large staff whose main job would be to find ways to shift costs to purchasers and providers and to maximize profits by minimizing services.
Like our current health care system, maximizing profits would mean charging the highest possible premiums (money in) while spending as little as possible on actual police and fire services (money out). This is simply smart business.
Insurance companies would compete to enroll residents likely to require the least police or fire services, while trying to avoid residents likely to require the most police or fire services. Like our current health care system, this would guarantee that residents who need these services the most would be the least likely to get them (this is simply smart business).
Those residents unfortunate enough to need services “too often” would be denied, dropped, or charged unaffordable premiums. Those who live in “dangerous” (low profit) areas would simply be denied police or fire services due to “pre-existing conditions” (this is simply smart business).
Insurance companies would have great profit incentives to find myriad ways to deny services or to shift costs because any money spent providing actual services comes right out of their profits. Like our current health care system, this would guarantee millions of residents would have no police or fire services at all (this is simply smart business).
In a civilized society, most health care services are no more optional than police and fire services. It’s patently absurd to put a middleman (whose profit incentives are plainly against the interests of the American people) between us and our health care providers.
A middleman makes no sense for health services
It’s clearly counterproductive to put a middleman between providers of necessary services and those who need these services. This guarantees disastrous results.
Providing real estate services using a middleman (agent) makes sense. A real estate middleman has profit incentives to provide purchasers with reasonably priced products because if prices are too high, purchasers won’t buy and the middleman gets nothing. There’s no profit incentives to deny purchasers what’s being provided. Thus middleman profit incentives benefit both purchasers and providers.
But providing health care services using a middleman is an unambiguous con game. A health care middleman clearly has profit incentives to charge excessive prices precisely because these services are necessary (pay or die). But even worse, a health care middleman has great profit incentives to deny us necessary services because every health care service denied is pure profit (this is simply smart business).
In addition to diverting billions of our health care dollars to profits and other non-health-care expenses, encouraging excessive premiums, and making it very profitable to deny us necessary services, using a middleman also adds hundreds of billions to our health care costs by forcing hospitals and doctors to maintain vast armies of administrators who must battle hundreds of insurance companies (with thousands of different medical plans) all with great profit incentives to deny us as many health care services as they can get away with (this is simply smart business).
It’s beyond foolish to expect insurance companies to act against their profit incentives. A single-payer system is the only reform that can end this devastating rip-off of the American people.
A “public option” would only make things worse
A public option (or a co-op) would simply add another player to our inefficient, fragmented, dysfunctional, multi-payer system. The hundreds of billions we now waste on multi-payer administrative costs would continue unabated.
But worse, a public option would soon be overwhelmed with the sickest (most costly) residents. Why? Because insurance companies compete by discarding the sickest residents (while marketing to the healthiest), a public option would quickly shift even more of the costs of our sickest residents to taxpayers, while freeing insurance companies to compete for healthier (more profitable) residents.
We eventually pay for everyone’s health care anyway
The government already funds more than 60% of all health care spending. We taxpayers already pay a lot for “other people’s” health care. Tax subsidies for private insurance alone cost taxpayers nearly $200 billion a year. We taxpayers give insurance companies about $100 billion a year to provide health care for public employees (such as teachers and police officers).
We all pay when uninsured residents must use expensive emergency rooms. In most cases, had they been given regular preventative care, they would have required much less total health care and thus cost us much less.
An Institute of Medicine study says 18,000 of us pay with our lives each year because we lack health insurance—a shining example of how private health care “saves taxpayers money” (this is simply smart business).
An American Journal of Medicine study says 62% of all bankruptcies (about two million a year) are linked to medical bills (80% had health insurance). When we count the excessive burden our absurd private health care system adds to all businesses, and other such hidden costs, single-payer would be much less expensive and provide much better care (exactly what other countries with single-payer systems have experienced).
Multiple studies show there’s more than enough money in our health care system to serve everyone if it were spent wisely (e.g. 1991 GAO report, 1993 CBO report).
Preserving profits with lies, damn lies, and propaganda
Insurance companies know very well they’re running an extremely profitable con game. They won’t give up their massive profits without a ruthless political fight.
They tell us “government insurance” would mean rationing, bureaucrats getting between us and our doctors, and excessive costs to taxpayers. In fact, these things are much worse now in our private system. Insurance companies don’t really want us to carefully compare their products with single-payer Medicare, which is rated very highly by its 45 million users.
In a national Commonwealth Fund survey, Medicare users were significantly more satisfied with their health care than people using employer-sponsored plans (even though the elderly require by far the most intensive health care services among us). For example, 70% of those with single-payer Medicare said they “always” get access to needed care (specialists, tests, treatment) compared to only 51% of those with private insurance.
Doctors consistently report having few problems with single-payer Medicare, and frequent problems with private insurance companies. A “government bureaucrat” has no incentive to deny us necessary services because he’s spending “other people’s money”. If he denies us a service, the money “saved” just goes toward another’s care. But an insurance company bureaucrat has great incentive to deny us necessary services because the money “saved” goes right into his pocket.
Unlike honest “service” providers, who seek people needing their services, health insurance companies seek those who don’t need their services (while doing all they can to avoid those who do). Insurance companies pretend they’re in the business of providing health care, when their true business is denying health care.
Each year two million of us are bankrupted by medical expenses. Each day, 14,000 of us lose our health insurance. Most of us are just a pink slip away from this horror. Compare this to the peace of mind we’d have with a single-payer system that would always be there for us (all of us).
Why does this blatant con game continue?
Because our government is for sale to the highest bidder. Our government “representatives” thrive on special interest money. They would be severely punished politically (and lose millions) if they were to put the interests of the American people ahead of influential insurance and drug companies.
The health care industry is spending $1.4 million dollars per day to lobby against reform ($126 million in just the first quarter). This is precisely why our “representatives” (Democrats and Republicans) aren’t seriously considering the only sensible way to provide high-quality health care in America—a tried and tested single-payer system.
Our “representatives” are diligently keeping single-payer “off the table” for one reason only: single-payer would easily win in any honest, open debate. Once again our “representatives” are selling us out to special interests.
A long habit of not thinking a thing wrong, gives it a superficial appearance of being right—Thomas Paine
Private insurance for necessary health care is just plain wrong and it’s been just plain wrong for a very long time.
We the people must unite and take back our government—it surely won’t be given back voluntarily.
