Wednesday, August 05, 2009

Defending The "Villains"

A Charles Hugh Smith reader:

Walter Cook’s essay is brilliant (More on The "Impossible" Healthcare Solution) until it reaches its recommendation. Just as car insurance doesn’t pay for maintenance and small stuff, and homeowners insurance similarly isn’t expected to cover maintaining the home (repairs, painting, cleaining, gardening), all health care should not be covered by insurance.

As I have written to you in the past, these plans used to be called “hospital” plans…but that was trillions of dollars ago, half a century ago, and we didn’t have a trillion dollar drug industry whom Congress decided in the 90’s could advertise to the public drugs which the public did not understand, rather than being restricted to advertising to physicians who presumably were trained in medicine, and we didn’t have multi-million dollar pieces of medical equipment whose benefits seem mainly to be that they required the physician to think less and rely on “test results” more, and that was before our citizens developed an entitlement mentality to deserve the highest most expensive procedures, equipment and facilities for their bodies after they abused them with fatty foods, lethargy, and drugs overly used and prescribed.

The doctrine of “adverse selection” is a basic tenet throughout history in insurance. This means you can’t call your agent and buy a homeowners policy after you house has caught fire, and you can’t buy car insurance after you have wrecked your car or had it stolen from you (or after you have killed someone while behind the wheel).

As long as we have healthy people who won’t buy health insurance because they are not sick, then we reserve the right to not accept someone for health insurance who has been healthy all of his life and just now got diagnosed with a malignant tumor. If everybody is required to buy insurance, even the healthy, then we can accept everybody. A market-based solution is indeed the answer and Cook’s point is a good one, as is yours, BUT then alas, he blows it all to hell as so many have by bizarrely advocating SOCIALIZED medicine for everything but the big stuff.

The Medicare analogy doesn’t work; Medicare is going off an immense cliff, and in my area, more and more physicians are NOT accepting Medicare patients, so this is a dead end argument. Pray tell how will the federal govt. ensure adequate competition for medical services? No, sorry, only when the people are actually forced to start demanding to know the price of all services BEFORE they use them will market competition in medicine return to the U.S.

blaming the insurance companies for trying to hold the line on infinite consumer “wants” in medical care is really once again shooting the messenger. It is precisely the insurance companies who are the ONLY ones saying “NO” to those continually trying to raise prices and get more and more coverage without paying for it that are the only ones holding the line. The people have INFINITE wants when it comes to medical care, and the government cannot ever say no either, because they want to get re-elected. Insurance companies are the ONLY ones to engage in fierce contract negotiations with doctor groups, outpatient clinics, hospitals, and drug companies at every contract renewal date to keep costs down, something that NEITHER the consumers nor the govt. have the inclination to do.

For this they get criticized for their greed and heartlessness. As insurance companies have higher and higher deductibles, the consumers will HAVE TO demand more pricing info for their lower-level healthcare utilization prior to making their decision. The medical profession and industry is going to have to finally start advertising prices and actually competing, something they somehow think is beneath them, unlike ANY other profession or industry.

Human nature is such that until they are required to actually PAY for some of their care, people will continue to blame someone else, and demand that someone else pay for their bills. Sorry, I am put once again in the very difficult position of defending the insurance industry.

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