My last blog post recounted how difficult it was to secure individual insurance through Blue Cross Blue Shield, despite the fact that the company had insured my medical practice for decades as part of a group plan.
I concluded by pointing out that if this is the best these commercial enterprises can do, then market force proponents need to rethink their position that free markets are the answer to our health care woes.
Let me look at the commercial insurance world from some other perspectives.
The patient is not really the consumer
It is clear that the “market” has not worked to make healthcare insurance easily available to the final “consumer” – the patient. This is because, among other things, there is no free market in healthcare and the patient is not really the consumer.
The vast majority of insured people get their insurance through work where there is no actual market but a triangulated asymmetry between the employer, the insurance company and the largely ignored patient. Yes, the patient ultimately consumes the health care dollar when illness strikes, but the purchaser of the product (the consumer) is usually the business negotiating with the insurance company.
Insurance companies are selling policies, not healthcare
In my opinion, insurance companies are not in the business to pay for health care, they are in the business of selling policies. To sell more policies they have to create new products. Simplification is not in their profit making interests.
As David Goldhill explains in his book, Catastrophic Care, commercial insurance companies have a schizophrenic perspective on controlling health care costs. In any given year an insurer wants the reimbursements to be less than the premiums collected.
But this is not a formula for profit growth because long-term cost control will ultimately lead to lower premiums. Therefore the long-term goal for profit growth and shareholder satisfaction is to have a consistently expanding healthcare market with more products to choose from, more diagnoses to cover, more care to be delivered and more policies to sell.
Medicare is more efficient than commercial insurers
Phil Caper is a physician on the Coast of Maine, an oped contributor to the Bangor Daily News, and a founding board member of Maine AllCare, a nonprofit group dedicated to universal coverage in Maine. He recently wrote that despite the ACA’s bungled rollout, government health insurance works comparatively well and has satisfied most customers for 50 years. He notes that Medicare holds down prices and overhead costs much more efficiently than commercial insurers. He notes that the problem with the Affordable Care Act (ACA) is not that the government is involved but that it was written to accommodate the private insurance industry and their lobbyists.
What we need is simplification
How can liberal or conservative reformers justify an exchange-based market when simplification is what we need? Multiple insurers working against the best interests of the nation as a whole cannot solve a health care problem. They are the problem.
Let’s consider working toward Medicare for all and let the insurance companies truly sell directly to those individuals interested in direct negotiations. Better yet, support the development of Accountable Care Organizations (ACOs) – i.e. multi-specialty group practices led by doctors. More on ACOs later.