Monday, November 22, 2010

Why Government and Insurance Companies are Bad for our Health…

Health Insurers need to make profits and the Government has been proven to be inefficient, unqualified, and subject to corruption through the political process. It is that simple.

Health Insurance companies that are either for profit or non profit at the end of the day have to ration care based on how much revenue they collect through premiums. The system of health insurance breaks down when the outlays for medical payments exceeds the amount of premiums brought in. So in order to survive, the insurance company must limit the amount they pay out. The only way to do that is to ration what services they will pay with the insurance premiums collected by their customers.

What health insurance premiums cover is a major part of the problem and fixing this is one of the keys to the solution of making healthcare more affordable and accessible. Insurance is for things that are unexpected and can’t be planned for like a house fire, hurricane, car accident, heart attack or appendix bursting. Insurance is not for paying to change the oil in your car, water your lawn, paint the family room or get a check up for your kids to join the High School swim team. Those expenses can be planned for, shopped around, and do not warrant a need for insurance.

The “market” for healthcare is so regulated it actually doesn’t exist in any real sense of the definition of market. Insurance companies and government welfare plans determine where, when, what, and how much they will pay for medical care. Shoppers and competitive principles need not apply. If consumers were paying for basic medical services, quality would rise, prices would fall, demand would stabilize, and the real market value would become apparent for the American consumer. It would also increase the ability for insurance companies to issue policies to cover catastrophic or highly cost intensive procedures (what they are best at doing). If all people carried a reasonable catastrophic policy, the true reason for insurance could be realized without impacting basic care. Large pools of people paying and less payouts based on the actuarial tables for the most costly and specialized procedures. (Two other side notes; tort reform, and clinics designed to handle basic and repeatable services removing the need for a doctor. These basic, common and repeatable services would be handled by certified healthcare professionals.)

The federal government has no authority to be in the healthcare business. That being said, the current Medicare and Medicaid systems are littered with fraud, inefficiency, and political and corporate corruption. To believe the government is a better administrator of any program is delusional. Those that believe corporations and insurance companies are corrupt often place their confidence in government bureaucracies they believe “protect” the people. I will not go deep here but the corruption of bureaucrats is so far greater than corporate corruption and the facts don’t support their misplaced trust. Government healthcare is already proven to be all of the things above, inefficient and corrupt. It will get worse as private insurance options are reduced due to the new regulations in the Obama healthcare bill and even more reliance falls to the government. Medicare and Medicaid are bankrupt and Medicaid is a disgrace. To invest more trust in these bankrupt systems is again delusional.

The answer is to get both insurance companies and the government out of basic decisions on healthcare and put them back into the hands of doctors and patients. After all, who cares about your health, you and your doctor or some bureaucrat or insurance adjuster? I think the answer is obvious.

Governments only role here is to provide for the truly needy, not the needy they create through dependence. But we have seen what the outcome is of placing welfare in the hands of government; more welfare and dependency. This dependency has come at a cost of tens of trillions of dollars and dashed dreams of generations of Americans. It is also destroying the market of healthcare. The waste and inefficiency of government is undermining the ability of a real health market to exist. The result of government care will be less access, poorer quality, shortages of doctors and nurses, and a revival of two types of healthcare; one for the people that can pay and one where people are dying while they wait in lines to see a doctor.

The way we currently pay for healthcare is the real problem. As consumers we shop for a car, a house, clothes, etc…, and based on quality, price, and our income we buy the things we can afford. I buy a Camry, my neighbor buys a Mercedes and we both buy based on our wants, needs, and abilities. We weigh the costs and benefits and buy what we can afford. When is the last time you asked a doctor how much it will cost you for a physical? When is the last time you “shopped” directly for any medical service? Exactly, you don’t. People are paying in excess of $300 a month for cell phone and cable but we can’t pay for a doctor visit? People are buying the NFL cable package but they can’t pay for a checkup? People are paying to go out to dinner three nights a week but they can’t pay for blood work? You get the idea. If you want the best healthcare system in the world you need to apply the best market practices in the world; competition.

There was a time not long ago when people had a direct customer to doctor relationship. That changed when wage freezes were introduced and companies that wanted to get better employees (competition) offered health plans to supplement the wage caps that were forced down by government to adhere to (law of unintended consequences). That and the government’s move into Medicare, Medicaid, and Social welfare expansions that have undermined the doctor patient relationship ever since. Some good was done for the poor in the beginning but as always government programs with good intentions have expanded and now is poised to destroy the best healthcare in the world.

There are many people out there that think the answer to everything is tax the rich. Well they may feel good about saying that but the reality is they have no moral ground to ask someone who works hard to pay for them just because they believe they are entitled to be healthy.

For some strange reason many Americans have come to believe they have a “right” to healthcare. It is impossible to have a right to healthcare unless you force doctors, nurses, and healthcare professionals to provide services to patients. Rights are derived from natural circumstances. For example, freedom is a right, free speech is a right, and the right to assemble; all have one thing in common; they don’t require anyone else to give up their rights. At some point these healthcare professionals will leave the profession and if we continue in the direction we are going that will come sooner rather than later.

There are people that are currently receiving the best medical care because the “rich” have put up with the current system, but that is coming to an end. These people are spending other people’s money and it is running out and running away. The wealthy always have the means to move. Just think of the Beatles and every other British rock star that fled Britain because their income was taxed at 95%. They moved to America and remained until those tax laws were changed. Now rich people are fleeing America’s tax system and setting up residence in tax friendly havens. So the people left holding the bag will not be the “rich” or those “greedy” corporations that employ people; it will be the people that feel entitled to the wealth of others that will be stuck paying the bills. And then we will get what we truly deserve.

The answer is not insurance companies or government bureaucracies. The answer is a renewed relationship between the patient and doctor; a reformed tort system that doesn’t force healthcare professionals to pay $100,000 a year out of their pocket for mal-practice insurance; a reorganization of basic healthcare services that don’t require the attention of a doctor and can be handled by certified practitioners. We need insurance policies that focus on risk as opposed to paying for basic services. The government’s role should be limited to providing for the truly needy, not the people that don’t want to pay for healthcare because it may cut into their life style. And finally a method to provide for pre-existing conditions that evenly spreads the risk amongst all insurance providers.

We need to stop looking at this in the way we currently are; government VS insurance companies. The main players should be the patient and the doctor. If we leave this debate to the insurance providers and government; we all lose…

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