I’ve been critical of President Obama and his approach to health care reform, but when asked “well, what would you do?”, I’m stopped in my tracks. The more I learn about the whole situation, the more befuddled I’ve become about it. I have voiced my dissatisfactions on this blog with the current American health care system; about how terrible it is to deal with insurance companies, about how the government (especially Medicare) is too inflexible, and about how doctors are being forced to give you too much care in some places (e.g. tests and referrals to specialists) and too little in other areas (e.g., getting to know who you are and how you really live; and with that knowledge, finding ways for you to improve your health and avoid disease). And of course the rising costs of health care continue to diminish our nation’s economic recovery prospects, and is taking a lot of families down in the process (with uninsured and insured but uncovered health care bills). But as to coming up with a solution — I’ve been at a loss. TILT.
However, I had a revelation about it today, a road-to-Damascus experience. I figured that I’d share it with the world, for whatever it’s worth (probably not much). It struck me that we really don’t have any competition in the health insurance market – even though that’s the one place in the system where a competitive market could do the most good. As with most people who have health insurance (other than Medicare or Medicaid), my insurance is provided by my employer. I don’t pick out my plan; I take what the company decides to provide me with. (Yes, we can choose between 2 different providers; but we can only change in limited circumstances, and the plans are pretty similar anyway). My company decides which insurance company will provide my insurance, and what the features of that plan will be. I hope that the company is thinking about the importance of keeping me and my fellow workers healthy so that we can continue to work; but for the most part, my employer is concerned with controlling costs when it selects an insurer and a plan. It doesn’t really think about my particular needs.
Imagine if we all got our autos that way. Your employer decided on a type of car for you and what its features would be. If they were nice, they’d give you a choice of two cars; but again, both have pre-defined features, not much difference. They pick out that car based mostly on price, and selected some features that the average employee would like (or wouldn’t totally hate). They wouldn’t be too concerned with how it performs or how reliable it is once you get it; they just need to provide their employees with some kind of car, because present employees and future prospective employees have come to expect it. Too bad if you need four wheel drive or want to pay more for extra safety features (as with Volvo), or you craved fancy styling or you wanted the model that broke down the least (e.g. Toyota). You would be stuck with the average car, like it or not.
If that’s the way that everyone got their cars, then the car manufacturers wouldn’t offer much variety; they’d make something that was pretty average, and nothing else. They wouldn’t put effort into sales features like air conditioned seats (i.e., stupid stuff that people still like) or improved safety and reliability features (the important stuff). And that’s what we see in the health insurance industry. They don’t produce products meant to serve the individual; they make one-size-fits-all products for employers. Thus, it’s not surprising that health insurance gives lousy service to the end-user. The insurance companies deny claims arbitrarily, they make you wait on the phone for hours, they make things confusing, and they nail you for big money if you go to the wrong doctor or wrong clinic for a test, because you didn’t read their fine print properly.
Thus, it makes sense to me to end the present tradition of having employers provide health insurance, and make everyone buy it for themselves. A Congressman from Oregon (Ron Wyden) has a proposal to do something like that. Congressman Wyden’s ‘Healthy Americans Act’ would require employers who provide health insurance to offer employees a yearly voucher worth most of the policy’s cost, as to allow the employee to buy his or her own insurance instead. Most everyone would also get a big tax break for the cost of insurance (although this break would phase out in the highest income brackets). I’d go farther than Wyden, as to phase out all employer-provided insurance in return for higher pay. But of course, even Wyden’s proposal isn’t going anywhere.
Admittedly, it would be a pain-in-the-butt doing the research and paperwork and payments on your own health insurance (although most of us somehow manage with our car insurance, home insurance, life insurance, etc.). But we’d finally have a situation where the insurance companies would be competing for our business based on each individual’s needs. Who knows, the insurers might actually try some niceness to their customers in times of need; get a bad rep for refusing to pay in time of sickness, and you lose business under a competitive system. And since a big sales factor would be the price of the plan relative to the value it provided to the individual customer, the insurers would finally have some real incentive to work closely with doctors and hospitals to find ways to save money, without cutting the quality of care.
Again, when the insurer sells to your employer and not to you, and when that sale involves hundreds or even thousands of workers – well, there’s not much incentive for the insurance company to find the best medical routines; the incentive is more to deny as much care as possible, since the employer usually doesn’t care about that. They mostly want a low cost policy to help balance their books; they’re not going to bat for you if you get cancer and need an expensive new drug that the insurance company doesn’t like.
Yea, it just makes so much sense, now that I think of it. Sure, there would still be plenty of problems; there would be fly-by-night companies (or even some of the bigger companies) would would not be there when you need them. And as with the mortgage industry over the past 5 years, people might be tempted to sign insurance policies that seem great up-front, but will blow up later on (e.g., require big co-pays for serious illness). And the working poor would be tempted to buy the thinnest policies that hardly help when a big problem strikes.
That is where the government must be involved. There would need be a powerful federal government watch-dog over a direct-purchase health insurance market. There would need be someone to go to when an insurer unfairly denies a claim based on its own interpretation of fine print; or doesn’t give you reasonable choices as to what doctors you can go to; or goes bust and can’t pay (the government would have to step in and take over the insolvent insurer’s policies). There would have to be someone to help you understand what you are buying, to prevent the “pre-existing condition” limitations, to set minimum standards for coverage. There would have to be someone to set minimum coverage standards. There would have to be a scheme to allow poor families to obtain enough coverage (through increased tax credits and direct subsidies).
So, the federal government would still play a big role. But it would set the stage for a competitive market that doesn’t exist right now. Competition is still an amazing force, when it’s negative side-effects are contained. In my opinion, it would have the best chance of “bending the cost curve” (the latest fashionable bit of wonk-talk among the pundits).
Darn. It makes sense (to me, anyway), a
nd it doesn’t seem all that complex. So why aren’t the President and Congress proposing this basic reform? Why are their proposals so complicated and convoluted?
Oh, right. POLITICS.
Jim,
I have some comments on your ideas and some tho’ts of my own that I’d like to address in this comment.
First, your concept of competition is certainly a tho’t that should certainly be taken into consideration in regard to health care. However, some parts of the concept really bother me:
–I wonder just how many people will carefully sit down and compare and contrast various health care policies, given the complexity of so many of the plans. How many people will be inclined to and/or be capable of plowing thru all the details of the various plans and make a wise choice of plans? Seems to me that this particular aspect of competitive health care insurance is in the same category as telling people that they should never, under any circumstances, sign any legal papers without signing them. How many people actually READ legal papers when they sign them? My guess would be that the number is in the very, very low percentages. When one thinks of the fact that (from what I’ve heard) the general reading level of newspapers is that of the 3rd grade level because that is the reading level of most people (and my observation of the writing level of many blogs and/or comments on articles—sometimes even books—is that the writing level of many people is at the same 3rd grade level) , my careful consideration is that few people would be able—or perhaps even willing to, care to—read the details of the various health care options one might have in a competitive system.
–What seems to me the answer to my question is addressed by you in your comments that the gov’t would have to be “someone to help you understand what you are buying.” Perhaps I misunderstand your point there, but you also mention that “There would need to be a powerful federal gov’t watch-dog over a direct-purchase health insurance market.” Would this person then be an “insurance czar”? If I understand you correctly from previous blogs, “czars” are not on your favorite things list. And then again, how would this “czar” (I admit that is my word, not yours) help the many, many individuals who would need guidance? I can see the bureaucracy multiplying.
–You mention that “it doesn’t seem all that complex” (to you). I have to say that, having already done the “choosing-my-insurance-plan” as it currently is and has been working, choosing an insurance plan is really not the easiest thing to do even for people who may have a partial grasp of what needs to be done. My tho’t is that it would be only too easy for companies to do with health care insurance plans as they do with foods we buy in the grocery store; often one size of a particular product is listed in ounces when another size is listed in grams; one product is listed in liters when another size of the same product is listed in quarts. How does one make an easy, on-the-spot comparison? (One has to have a quick, easy grasp of conversion of these various measurements; I for one do not have that quick, easy grasp to compare metric measurements and our American measurements.) Now back to the health care insurance: I found it difficult to decide whether I’d take a plan that covered certain medical aspects that may be useful to have OR to choose a plan without those particular benefits BUT having prescription drug coverage. A difficult choice. Will I need these certain medical coverages in the future OR will I need prescription drug coverage more? Most difficult for the individual sitting at home to figure out. However, I’d bet that the insurance companies have the answer to which would be the better coverage because they have the stats that cover huge numbers of people—but any such info the insurance companies may have is certainly not passed down to the consumer.
My comments continue below.
MCS
Comment by MCS — July 24, 2009 @ 7:11 pm
Jim,
I have some comments on your ideas and some tho’ts of my own that I’d like to address in this comment.
First, your concept of competition is certainly a tho’t that should certainly be taken into consideration in regard to health care. However, some parts of the concept really bother me:
–I wonder just how many people will carefully sit down and compare and contrast various health care policies, given the complexity of so many of the plans. How many people will be inclined to and/or be capable of plowing thru all the details of the various plans and make a wise choice of plans? Seems to me that this particular aspect of competitive health care insurance is in the same category as telling people that they should never, under any circumstances, sign any legal papers without signing them. How many people actually READ legal papers when they sign them? My guess would be that the number is in the very, very low percentages. When one thinks of the fact that (from what I’ve heard) the general reading level of newspapers is that of the 3rd grade level because that is the reading level of most people (and my observation of the writing level of many blogs and/or comments on articles—sometimes even books—is that the writing level of many people is at the same 3rd grade level) , my careful consideration is that few people would be able—or perhaps even willing to, care to—read the details of the various health care options one might have in a competitive system.
–What seems to me the answer to my question is addressed by you in your comments that the gov’t would have to be “someone to help you understand what you are buying.” Perhaps I misunderstand your point there, but you also mention that “There would need to be a powerful federal gov’t watch-dog over a direct-purchase health insurance market.” Would this person then be an “insurance czar”? If I understand you correctly from previous blogs, “czars” are not on your favorite things list. And then again, how would this “czar” (I admit that is my word, not yours) help the many, many individuals who would need guidance? I can see the bureaucracy multiplying.
–You mention that “it doesn’t seem all that complex” (to you). I have to say that, having already done the “choosing-my-insurance-plan” as it currently is and has been working, choosing an insurance plan is really not the easiest thing to do even for people who may have a partial grasp of what needs to be done. My tho’t is that it would be only too easy for companies to do with health care insurance plans as they do with foods we buy in the grocery store; often one size of a particular product is listed in ounces when another size is listed in grams; one product is listed in liters when another size of the same product is listed in quarts. How does one make an easy, on-the-spot comparison? (One has to have a quick, easy grasp of conversion of these various measurements; I for one do not have that quick, easy grasp to compare metric measurements and our American measurements.) Now back to the health care insurance: I found it difficult to decide whether I’d take a plan that covered certain medical aspects that may be useful to have OR to choose a plan without those particular benefits BUT having prescription drug coverage. A difficult choice. Will I need these certain medical coverages in the future OR will I need prescription drug coverage more? Most difficult for the individual sitting at home to figure out. However, I’d bet that the insurance companies have the answer to which would be the better coverage because they have the stats that cover huge numbers of people—but any such info the insurance companies may have is certainly not passed down to the consumer.
My comments continue below.
MCS
Comment by MCS — July 24, 2009 @ 7:11 pm
Continued from above by MCS:
I have some comments to make about Obama’s speech on his health care program.
First, I was interested to hear that he did mention some details of the plan. He also explained and mentioned briefly some of the more specific details the various committees are working on, the various senators are studying and suggesting. It is clear that Obama has an excellent grasp of the various aspects of the program. (And I find myself being very glad we have a prez who can carefully consider and weigh thoughtfully the various aspects of very complex issues such as this health care plan.)
Second, I must say I have to disagree with the point Obama made that individuals MUST PURCHASE a plan under his proposal. I immediately see a problem with this point. It would seem to me that the people who need health care insurance the most are precisely those who are not able to purchase it because they are out of a job or perhaps are unable to work because of various personality issues and/or mental problems. Compounding what I see as this problem is the fact that Obama mentioned that individuals who do not purchase insurance would be FINED! What sense does it make to fine people who cannot purchase health care insurance because they are out of work and/or have some mental/physical disability that prevents them from working? If the point of the program is to help people, where is the help in this aspect of the program? It seems to me that this aspect of the program would only make the situation worse for people who are most in need of health care insurance. I do have to say that Obama did mention that consideration would have to be made for “hardship cases.” But then the issue becomes what constitutes “hardship”? And, perhaps even more significantly, WHO would be making the decisions on what constitutes “hardship”? Something’s wrong with this aspect of the program. More careful tho’t needs to be given to this aspect of the program.
Then too, as much as I want to see Obama “get his way” in this health care program, I am glad that Congress did not give him his wish about having it finished before August. I found that “hurry up and give me this” aspect of the program waaaaaay too similar to the GWB administration pushing the bail out thru with little or no careful tho’t or consideration. As important as it is that this program be implemented, the more careful tho’t that goes into a complex program the better. How many times in my own life have I tho’t something would get done “immediately” only to find it postponed—and then to discover some aspect/tho’t/consideration of the issue to surface during the postponement that was important and would have been a loss if it had not been considered if the issue had been settled sooner rather than later. So, postponing the health care issue may not be a bad thing.
(Continued a yet another time below)
MCS
Comment by MCS — July 24, 2009 @ 8:08 pm
Continued from above by MCS:
I have some comments to make about Obama’s speech on his health care program.
First, I was interested to hear that he did mention some details of the plan. He also explained and mentioned briefly some of the more specific details the various committees are working on, the various senators are studying and suggesting. It is clear that Obama has an excellent grasp of the various aspects of the program. (And I find myself being very glad we have a prez who can carefully consider and weigh thoughtfully the various aspects of very complex issues such as this health care plan.)
Second, I must say I have to disagree with the point Obama made that individuals MUST PURCHASE a plan under his proposal. I immediately see a problem with this point. It would seem to me that the people who need health care insurance the most are precisely those who are not able to purchase it because they are out of a job or perhaps are unable to work because of various personality issues and/or mental problems. Compounding what I see as this problem is the fact that Obama mentioned that individuals who do not purchase insurance would be FINED! What sense does it make to fine people who cannot purchase health care insurance because they are out of work and/or have some mental/physical disability that prevents them from working? If the point of the program is to help people, where is the help in this aspect of the program? It seems to me that this aspect of the program would only make the situation worse for people who are most in need of health care insurance. I do have to say that Obama did mention that consideration would have to be made for “hardship cases.” But then the issue becomes what constitutes “hardship”? And, perhaps even more significantly, WHO would be making the decisions on what constitutes “hardship”? Something’s wrong with this aspect of the program. More careful tho’t needs to be given to this aspect of the program.
Then too, as much as I want to see Obama “get his way” in this health care program, I am glad that Congress did not give him his wish about having it finished before August. I found that “hurry up and give me this” aspect of the program waaaaaay too similar to the GWB administration pushing the bail out thru with little or no careful tho’t or consideration. As important as it is that this program be implemented, the more careful tho’t that goes into a complex program the better. How many times in my own life have I tho’t something would get done “immediately” only to find it postponed—and then to discover some aspect/tho’t/consideration of the issue to surface during the postponement that was important and would have been a loss if it had not been considered if the issue had been settled sooner rather than later. So, postponing the health care issue may not be a bad thing.
(Continued a yet another time below)
MCS
Comment by MCS — July 24, 2009 @ 8:08 pm
(Third continuation from above by MCS)
Then too, I must say I thoroughly approve of Obama’s idea (here I paraphrase) that the BEST health care be given but not necessarily every possible health care option be made available to individuals. I must say that, contrary to the baby boomers who seem obsessed with the desire to “live forever”, I am not one who subscribes to the live-forever concept. I have seen people suffer thru life-threatening illness that eventually caused their deaths. I have come to the conclusion that often the cure is worse than letting nature take its course. I, for one, opt for myself to let nature take its course. What sense does “life” make when that “life” has no quality to it? I’m willing to “put my money where my mouth is” on this one.
Lastly, I can also see an aspect to the health care program that may change what we may expect from the health care industry. I can see already that likely this gov’t program will turn out to be similar to the way veterans receive their care. For many years I had care of a family member who received his care from the VA. Yes, the Vets get generally very good care. Yes, if a person is ill, the Vet will receive the care he/she needs. YET, I also noticed a draw back to the VA’s health care for the “ordinary” Vet: Each appointment for health care was an all-day affair. One could not simply slip in and out of the doctor’s office at the specified appointment time and get back to work or life for the rest of the day. No, each appointment was an all-day affair that required many hours of waiting—waiting in one place to see one doctor, waiting in another place to get an X-ray (for instance), waiting again to see the doctor about the X-ray, waiting for prescriptions that may or may not be ready that day. In short, VA care for Vets is generally good and the person receives what Obama describes as the BEST care, not necessarily every possible treatment available—but the Vet does get good care. (I say this notwithstanding some of the more or less recent scandals of, to say the least, substandard care of Veterans in some places.) But prepare yourself if the gov’t plan is to be implemented—prepare for WAITING! And waiting may have to be the price one will have to pay to get subsidized health care and/or free health care. But, then again, every such (free? gov’t?) plan has a downside (of waiting) and the downside may be worth the benefit one gets in the end—health care when otherwise one would not have it.
MCS
Comment by MCS — July 24, 2009 @ 8:09 pm
(Third continuation from above by MCS)
Then too, I must say I thoroughly approve of Obama’s idea (here I paraphrase) that the BEST health care be given but not necessarily every possible health care option be made available to individuals. I must say that, contrary to the baby boomers who seem obsessed with the desire to “live forever”, I am not one who subscribes to the live-forever concept. I have seen people suffer thru life-threatening illness that eventually caused their deaths. I have come to the conclusion that often the cure is worse than letting nature take its course. I, for one, opt for myself to let nature take its course. What sense does “life” make when that “life” has no quality to it? I’m willing to “put my money where my mouth is” on this one.
Lastly, I can also see an aspect to the health care program that may change what we may expect from the health care industry. I can see already that likely this gov’t program will turn out to be similar to the way veterans receive their care. For many years I had care of a family member who received his care from the VA. Yes, the Vets get generally very good care. Yes, if a person is ill, the Vet will receive the care he/she needs. YET, I also noticed a draw back to the VA’s health care for the “ordinary” Vet: Each appointment for health care was an all-day affair. One could not simply slip in and out of the doctor’s office at the specified appointment time and get back to work or life for the rest of the day. No, each appointment was an all-day affair that required many hours of waiting—waiting in one place to see one doctor, waiting in another place to get an X-ray (for instance), waiting again to see the doctor about the X-ray, waiting for prescriptions that may or may not be ready that day. In short, VA care for Vets is generally good and the person receives what Obama describes as the BEST care, not necessarily every possible treatment available—but the Vet does get good care. (I say this notwithstanding some of the more or less recent scandals of, to say the least, substandard care of Veterans in some places.) But prepare yourself if the gov’t plan is to be implemented—prepare for WAITING! And waiting may have to be the price one will have to pay to get subsidized health care and/or free health care. But, then again, every such (free? gov’t?) plan has a downside (of waiting) and the downside may be worth the benefit one gets in the end—health care when otherwise one would not have it.
MCS
Comment by MCS — July 24, 2009 @ 8:09 pm