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Do We Need Health Insurance?
Do Americans need health insurance? The short answer is no — at least not in the form it currently exists in America.
It is true that in many wealthy countries private insurance companies are used in the financing of universal health care systems. But they are nothing like American companies. They are regulated public utilities and are told by their governments who to insure, what to cover and how much and when to pay. Most are prohibited from making a profit and are required to pay any willing provider. Not exactly the American model.
The purpose of health care financing systems should be — and is in all other wealthy countries — to facilitate the delivery of health care services, to protect individuals and families against huge medical care expenses and to avoid breaking the national bank while they do so. But in America, our private insurance system actually interferes with the delivery of health care and is rapidly becoming too expensive.
Last month I argued for adopting a universal health care system on moral, ethical and economic grounds. It is not only more humane but cheaper to cover everybody. We have moved in fits and starts toward that goal since the enactment of Medicare in 1965.
The recent federal health reform law took a few steps forward. But we are now taking a couple steps back, especially in Maine. Last week Gov. Paul LePage proposed disqualifying 65,000 beneficiaries of MaineCare. Earlier this year, the Legislature enacted PL90 that rolls back regulations intended to spread the financial risks of illness and improve access to health care for those most in need of it.
A little history may be informative. Private employment-based health insurance in America was not a planned system, but grew out of World War II wage and price controls. It was one of the few ways employers could attract and retain employees in a tight labor market. The spread of these benefits received a boost when the federal government exempted them from federal taxes.
Private health insurance was dominated by nonprofit Blue Cross and Blue Shield plans until about 1990. That changed when Blue Cross plans across the country began to convert to for-profit status, arguing that it would improve their efficiency. Maine Blue Cross made that transition in 2000 when it changed from a company whose mission was facilitating health care to one whose mission was maximizing shareholder wealth.
The business model of for-profit insurance companies is pretty simple. The creation of wealth for shareholders, including many of their executives, depends upon profitability. To maximize profitability they must charge premiums as high as the market will bear, offer skimpy policies that limit coverage, impose high deductibles and minimize what they must pay out for the services they do cover.
Maximizing premiums, imposing high deductibles and limiting the scope of coverage are pretty straightforward. Minimizing payouts for services they do cover is a little more complicated. Four techniques are used. First companies try to avoid insuring people likely to require health care, such as those with a history of illness or who are elderly or in dangerous occupations.
Second, they dispute the need for health care that is recommended or has already been provided to their customers by micromanaging the decisions of doctors and patients and denying as many claims as they can. This is a very expensive and contentious process that often damages the quality of care.
Third, they bargain down the prices health care providers charge as much as possible, shifting costs to other payers. This has created the curious and uniquely American situation where uninsured people pay the highest prices for health care products and services.
Fourth, many companies try to find a reason to retroactively dump sick customers who have filed claims by asserting that they have failed to accurately state their health care history, therefore defrauding the insurance company.
These people end up on public insurance or on the roles of the uninsured. This practice, called “rescission,” is particularly unfair but nevertheless appears to have become widespread. It has been banned by the new federal health care reform act.
What is the problem with this picture? It is not that for-profit insurance companies are failing in their mission. In fact, they are doing a very good job of exactly what their mission demands, maximizing the wealth of shareholders. The problem is that their mission fundamentally conflicts with the mission of a decent health care system.
What can we do to fix this problem? The obvious first step — but not the last — is to replace for-profit insurance companies. They are like a camel entered into the Kentucky Derby. No matter how much it is trained, how hard it tries, how hard it is whipped or who the jockey is, it never wins. It just wasn’t designed for the job.
Although insurance companies could play a role in a redesigned system by becoming public utilities, that is not the most efficient way to finance a system that includes everybody. For example, private insurance companies are currently fighting the new federal health care law’s requirement that they keep their overhead below 20 percent. Medicare, financed through publicly mandated premiums and taxes, spends less than 5 percent on overhead and interferes with health care decisions much less than private carriers.
Maybe it’s time to replace that camel with a racehorse. While we’re at it, why not go for a thoroughbred? An improved Medicare-like system for all could provide better coverage while spending less. What’s not to like about that?
41 Comments so far
Show AllIn Vermont, if the millions of dollars spent on 'experts' to design a system had been used for health/dental care for the people, the problem would be solved. The experts are getting rich while people die. Last report says the 'experts' are keeping insurance companies in the system. We wonder whose side they are on - certainly not the side of the people.
US medical insurance is simply extortion that is licensed by the US Government. Obamacare assures that the insurance companies' license to steal has no expiration date.
The author points out that private insurers' overhead rates exceed 20% (most of them exceed 30%) while Medicare's overhead rate is less than 5%. Yesterday it was announced, however, that Congressional Democrats and Republicans are adding private insurers to create "options" within Medicare.
Boy, 2008 really was a worldwide financial coup d'état of all governments across the board, wasn't it? http://www.youtube.com/watch?v=Dl1jPqqTdNo
Of course, it's the only sensible and decent thing to do. And that is why big money will be fighting it all the way. And has been since 1911, when it was first proposed for the country. It was proposed again after WWII, when Truman saw how well it was working in the places WE set it up, like Germany and Japan. he tried to do it here, and was shot down by THE REPUBLICANS (some things never change).
This is going to be the beginning of the end of the "privatization" game, or at least I certainly hope so. When it's shown just how much less draining a non profit system is on YOUR pocketbook, we MIGHT be able to get rid of the rest of the stupidity we are putting ourselves through. Next should be the prisons.
For the life of me, I will NEVER understand how people could be so foolish as to think that adding on 30% to the top of your costs could EVER make something more efficient. There is NO way to be THAT much more efficient, no matter what. And it's been shown every time that adding a profit motive just makes these services WORSE and less suitable to the needs of the people.
Prisons in Colorado is a perfect example. From 1980, when the state took care of prisons until today, when it's mostly a for profit run system, we have INCREASED the amount we spend by 11 TIMES. In 1980, we spent $70 million per year, now, it's $770 million. We just cut $334 million from K-12 ed, but we don't drop a penny from the FOR PROFIT prison system. Some savings, and it's going to haunt us for DECADES.
Time to do the RIGHT thing, not the expensive, wasteful thing.
A co-worker who owns insurance stock recently told me that "single payer would only save 20 to 30% in the cost of insurance and wouldn't do anything to control health care costs". A 20 to 30% reduction in health care costs sounds like not only a fantastic first step, but a major long term victory in controlling health care costs.
ray...It all depends on how Single Payer is set up. There MUST be price controls on pharmaceuticals - salary caps on hospital administrators, etc. And most important - insurance companies have to eliminated.
We lost our last shot at sane national health care when Obama revealed himself to be a right-wing corporatist tool and sold us out.
And now, instead of being a stalwart supporter of Medicare and Social Security, the Democratic leadership is racing ahead to eviscerate those already-inadequate programs.
We are heading to a future in which bankrupt Seniors are living hand-to-mouth in the threadbare rentals of their underemployed and unemployed children.
We won't see any reform to the American health insurance system for decades, I'm afraid, if ever.
Yes, Obama made his position perfectly clear on September 9, 2009 (when he was promoting Obamacare) telling the world "we must preserve insurance industry profits".
Having maintained his approval ratings between 40 and 50% since then proves how brain dead most of the US electorate is.
Thanks, doc. great prescription. And make no mistake, well worth moving towards. You _must_ be a primary care doc.
The doc needs to convince college students to make health care the primary focus of their protests since it is having a much more adverse effect on their futures compared to their chosen protest issues: tuition and student loans. Every older worker who delays or cancels retirement eliminates another job opportunity for young Americans who have the highest unemployment rate of any age group.
All the tuition and loan reform in the world isn't going to help students and young Americans as long as millions of older workers continue to delay or cancel retirement, staying on the job solely to hang on to their relatively affordable employer-sponsored medical insurance.
"Second, they dispute the need for health care that is recommended or has already been provided to their customers by micromanaging the decisions of doctors and patients and denying as many claims as they can. This is a very expensive and contentious process that often damages the quality of care."
There's a disconnect and dishonesty here. Doctors are incentivi$ed to write Big Pharma scripts each and every time they see a patient (1 patient every 15 minutes for 8 hours/day = 32 patients/day with Pharma scripts written.) Heck, doctors will diagnose you with something, anything, just to get a script into your pocket, and a hefty bonu$ in the process.
So, while insurance corps are "...micromanaging the decisions of doctors and patients and denying as many claims as they can," somehow doctors daily shove wheelbarrows of Pharmas out their doors. In other words, the Big Insurance MUST be cooperating with Big Pharma in these obvious "pad Big Pharmas bottom lines" handshakes.
And when they aren't fulfilling Big Pharmas bottom lines, ie when someone is actually really sick and needs actual real honest long-term medical care, that's when the contract is broken, and buh-bye sickie off Big Insurance medical rolls, hence the 49,000,000 people without medical insurance, and the (at minimum) 45,000 people who die for lack of medical care in this country every year.
You're right. The doctors are complicit in this sick system of "health care."
SkDoTo, you're all too right.
Here's a nice example, the story of a family doctor fired for giving patients accurate information about psychotropic drugs: http://www.madinamerica.com/madinamerica.com/Foster.html
Not surprisingly, neither the article here on CD nor the one in the above link mentions the bonuses doctors get for prescribing on-patent meds, but people who work in hospitals know all about it. That it is seldom reported as part of the problem. Doctors are all too often painted as the good guys.
A culture gets the institutions it deserves. You only need look at our medical system to see how really spiritually rotten this country is. Big Doctors, Big Pharma, Big Insurance: an unholy trilogy.
Doctors are brainwashed into the "for-profit-motive" scheme from an early onset in their trainings, lest they do not make it to licensing otherwise. Corrupted education systems, like medical schools, produce corrupted people, across the board. And these are the ones, who after years all is said and done, are asked to recite a little ditty, namely:
"I swear to fulfill, to the best of my ability and judgment, this covenant:
I will respect the hard-won scientific gains of those physicians in whose steps I walk, and gladly share such knowledge as is mine with those who are to follow.
I will apply, for the benefit of the sick, all measures [that] are required, avoiding those twin traps of overtreatment and therapeutic nihilism.
I will remember that there is art to medicine as well as science, and that warmth, sympathy, and understanding may outweigh the surgeon's knife or the chemist's drug.
I will not be ashamed to say "I know not", nor will I fail to call in my colleagues when the skills of another are needed for a patient's recovery.
I will respect the privacy of my patients, for their problems are not disclosed to me that the world may know. Most especially must I tread with care in matters of life and death. If it is given to me to save a life, all thanks. But it may also be within my power to take a life; this awesome responsibility must be faced with great humbleness and awareness of my own frailty. Above all, I must not play at God.
I will remember that I do not treat a fever chart, a cancerous growth, but a sick human being, whose illness may affect the person's family and economic stability. My responsibility includes these related problems, if I am to care adequately for the sick.
I will prevent disease whenever I can, for prevention is preferable to cure.
I will remember that I remain a member of society with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.
If I do not violate this oath, may I enjoy life and art, respected while I live and remembered with affection thereafter. May I always act so as to preserve the finest traditions of my calling and may I long experience the joy of healing those who seek my help."
In my very vast experience with decades of medicine in the most highly technologically advanced society the earth has ever known, this is all BULLSH*T to make the onslaught of newly released doctors misinterpret what it is exactly they do for a living, as it is we patients under the hand of these brainwashed sociopaths/psychopaths who truly understand and know a much different mindset than the one described by the Hippocratic Oath...
When I was a PhD student, I taught business writing to pre-meds, mostly seniors. What a bunch of money-mongering wolves! They take the Hippocratic Oath as seriously as Obama does the Constitution.
One fellow student/teacher (an elitist neoliberal to be sure) pointed out that the students at our university, Case Western Reserve (a training ground for pre-meds), were very good at deductive thinking but pretty hopeless in inductive thinking. They think their thinking is “scientific,” but don’t seem to get that the scientific method is based on induction. Then I was treated to an English professor—actually the head of the department!— who at one point said he could never remember the difference between inductive and deductive thinking—this from an “expert” on Samuel Johnson, no less.
The article I posted a link to above (http://www.madinamerica.com/madinamerica.com/Foster.html) is from a family doctor who read Robert Whitaker’s Anatomy of an Epidemic, which looks at the dismal effects of long-term drugging of psychiatric patients. “For me, it provoked a revolution in my head and in my practice, one that has had some significant repercussions in my life,” author Mark Foster writes of Whitaker’s Anatomy of an Epidemic. “When I finished it, I was so stunned, so moved to change my practice . . . and yet I didn’t know a single soul, not one provider or consumer, who shared those views. It’s amazing to me now, but in eleven years of undergraduate and medical training, even from an ostensibly alternative-minded medical school, I had never once heard anyone question the basic validity of the DSM [the aptly called “bible” of psychiatry] or the absolute necessity for psychotropic drugs to treat mental illness. I had been indoctrinated so fully into the biopsychiatric paradigm that I never even had the thought of questioning it.”
That’s a pretty disturbing admission. My first psychiatrist (no, I no longer deal with those bastards, who charged me big-time for exacerbating my pain to a degree I won’t go into) was supposedly the regional expert in treating depression through meds. He seemed to have everything to live for. He seemed happily married to another physician, had two adolescent children, a sterling reputation, all the wealth one could want, etc. One day he rented a motel room and blew his brains out. Unfortunately, he seemed plagued by ethics.
People need healthcare. Insurance is a bankster's game.
The corrupt congress has a real need for private health insurance monopolies in order to enrich themselves and this vicious, anti-humane and extremely costly and inefficient system is part of the real 'American Exceptionalism' as opposed to the phony one that has been drummed into the small brains of the American public over many years.
The only way to destroy the insatiable monster is to stop feeding it.
You go, Phil. In a transformed world the dinosaurs of old get to be tamed or caged. Thanks for recognizing the box.
Won't happen UNTIL the present system collapses of its own greedy weight.
Well, we went thru all this a couple years ago, when Obama ignored the millions of pleas that he embrace a single-payer Medicare for All system. He sided firmly and self-righteously with Big Pharma and Big Insurance. Everything this article says was said back then several thousand times, to the deaf ears of Congress and the executive. So now we have Obamacare, which will help a few people here and there but overall it doesn't do squat to address the problem. It isn't meant to. And if a Repug is elected in 2012, the first thing they'll do is overturn Obamacare, so all the sound and fury expended over it will have signified . . . nothing.
The US health care system is about 18% of our $15 trillion dollar GNP. This means that our total health care costs exceed the entire gross national product of Germany!
Our health care costs also well exceed the total tax revenues collected by the US federal government. So we are talking about an industry that goes through trillions of dollars a year. Remember what happened to the Clinton Plan of 1993? Remember the flood of television ads, radio ads, magazines ads against the Clinton Plan? The US health care industry can spend "BILLIONS" of dollars if needed to defeat any plan to restrict its income. It can buy so much advertising that there would be nothing but ads against "the government plan" shown during the commercials. In effect the health care industry is more powerful than the federal government. It could very easily have every given Representative, every Senator, three or four million dollars to vote against any plan to restrict its powers to charge whatever fees it wants to charge. It is the most powerful organized industry on Earth. It "owns" the Republican Party, and a good portion of the Democratic Party. Obama got all that could be gotten...
This is a great article. I learned something.
The American "health care" system is a pathological corporate monster at least as sick as our corporate war crimes machine.
I plan to die at home.
The healthcare debate in 2009 should have lasted one day.
The Democrats could have developed a two-year goal to be met by the private medical insurance industry.
That goal could have been the results obtained in, say, France (or any other developed country): cost per person, life expectancy and 100% coverage of the population - surely our private enterprise can best those "socialists." Then if this goal is not met in 24 months, the entire population is enrolled in Medicare for All.
Good-bye private health insurance, you had 60 years to demonstrate your superiority and you failed
But that isn't what happened is it?
The private health insurance industry can never match prices in the rest of the developed world even if they were to forgo all the profit they now make. US doctors are paid far higher than doctors in the rest of the developed world. Often in the rest of the developed world the doctor's education is "free" or close to it. Here in the US a medical education can run as much as a quarter of a million dollars all told for some specialties. Imgine the size of the monthly payments for a student loan that size! So the US doctor has to earn much higher fees than does the doctor working anywhere else. American hospitals use more expensive high tech equipment on a per capita basis than hospitals anywhere else. This is because well to do patients who have a choice can pick and choose between hospitals. Rest of the world limits these expenses and people have to wait to use what high tech equipment there is. However a lot of this high tech equipment is over used in the US because of our mal practice laws which make doctors order more and usually unnecessary tests for fear of being sued. Rest of the developed world it's much more difficult to file a lawsuit for this sort of thing. US has more lawyers per capita than any other nation which is why we are so "lawsuit happy" here. Also we have the world's most expensive drugs developed by the world's most profitable drug companies. Many of these drugs are simply "reverse engineered" copies of another company's drug with just enough modification to qualify for a patent. Also, the US Food and Drug Administration is very slow in OK'ing drugs, slower than Europe or elsewhere. This means it takes longer to develop a drug and start making a profit off of it. So the consumer pays a higher price here in the USA for the same drug that is cheaper everywhere else. One reason for this is the rest of the developed world each nation uses competitive bidding to lower the price of drugs. This isn't done here in the USA. Everything relating to health care is thus more expensive here in the USA than anywhere else! So even if we had "single payer", it is likely our costs would still be higher if not as high as they are now.
None of this will happen because the elite know that illness and suffering is the best thing ever to get people to liquidate their lives into their pockets. American is run by sociopaths. The government is completely captured by the elite. People continue to think that wolf in the bed is grandma. Not even close. Wake up America. We are lunch to these people running our government. The real government is gone.
Nye Bevan ( A Welshman) said this
The collective principle asserts that... no society can legitimately call itself civilised if a sick person is denied medical aid because of lack of means.
—Aneurin Bevan, In Place of Fear, p100
He managed to get a national health system in britain by "stuffing their (the medical profession) mouths with gold'
Yet for all its faults I never had to worry about not affording any treatment, never worried about losing my house or savings, never had to worry about losing a job or staying in a job I hated and was bad for my health.
Never had to wait days to see a doctor.
Can't say the same for the best health care system in the world.
Some of the respondents on this thread have tarred physicians with a very broad brush. Please be advised that about 30,000 of them, including me, are members of Physicians for a National Health Program (PNHP.org).
The dynamics driving the system are as follows.The under- and uninsured obtain much of their health care in emergency rooms. That is very expensive for both minor as well as severe illnesses. The emergency rooms, being overwhelmed by the large amounts of uncompensated care that they give, shift the costs to the insurance carriers that in turn increase premiums, co-pays and deductibles. As these rise, more and more individuals and companies become priced out of the system, sending more to the emergency rooms to shift more costs.
Thus, the under- and uninsured are the major--altho not the only-- force driving the cost of health insurance upwards. All of these have been accentuated by the current economic downturn. This will continue until the system collapses. Indeed, a few years ago The Institute Medicine issued a report saying that our system of medical care is unsustainable in the 21st century. We are seeing this come to pass before our eyes.
People in this country who call for Medicare for all, etc. need to know that our system is such that we are not going to have national publicly funded medical care until we have it in a state or two. That's why Supreme Court Justice Louis Brandeis once said that the states are the laboratories of democracy.
We in Ohio are have the Single Payer Action Network of Ohio (SPANOhio.org). We have been at it for about 8 years. Currently, S.B. 112 and H.B (House Bill) 287 (called The Ohio Health Security Act) are before the legislature. It includes taxes that have been deemed adequate to pay for it.
Wish us well and send us a buck, because you all have a stake in this. You may have insurance today, but don't bet on tomorw or don't bet that your insurance will cover you, should you need it.
Finally, I doubt that it is true that physicians receive bonuses for prescribing on-patent drugs. From whom?
.
Yes, a very broad brush indeed.
Thomas Gilbert-
The limitation of the healthcare debate is that it only addresses allopathic medicine. Allopathic medicine is excellent for trauma care and management of acute conditions, and all people should have access to this without fear of financial ruin. However, pharmaceutical drugs do not improve the overall levels of health of a society...this can be done only with healthy diets, healthy livelihoods and natural nontoxic therapies. Supporting these aspects of healthcare is far more important than finding ways to subsidize more prescriptions and surgeries. Since this will not happen in the current political climate, it is therefore up to people to empower themselves by relearning as much of the old traditions of botanical folk medicine and self-care as possible.
Thank you for bringing this up. Most insurance companies refuse to cover almost anything truly natural and will side with Big Pharma almost any day. As it is, a lot of natural alternatives have been made either economically restrictive or legally prohibited altogether. No nation that offers universal health care is this bad at a market that gives lopsided "freedom" to Big Pharma and yet gags the naturals.
This is true. And, as a former health & physical education teacher, I must add that the schools are where we are missing the buck. When cuts are made to spending for education, the first programs to get cut are the arts...then phys.ed and health (not the lucrative sports programs for talented athletes).
Health education is very important and very much neglected. Sex education is rarely part of any school's curriculum and classes about proper nutrition, if they happen, are negated by the offerings in the school cafeterias. Gym classes are non-existent in many places, and physical exercise and play are not encouraged - especially past the lower grades.
We see the results of these deficiencies every day - the number of obese children has risen dramatically, along with the rise of associated diseases (e.g., diabetes) and other problems related to proper growth and development.
So, in addition to correcting the health 'insurance' / health care industry problems, we should also put some focus back on health education in our schools, as this would help to prevent the causes of a lot of the expensive care later.
As my uncle would say it best, "All insurance is scam", a lesson he learned when he lost his wife to both rogue "doctors" and "insurance" that turned out to be defective when it was needed the most. In fact, I had heard that even people making really good salaries have had reports of getting retroactively cheated whereby the insurance company would "make adjustments" and turn claim approvals into denials.
"Ottawa warns current health transfers unsustainable" (CBC)
Message to Canadians,
Keep a close watch on that majority government. Harper did say that you would not recognize Canada under a Conservative majority-------- He was right: Canadians will not recognize the Canada they are living in by time this clown is through. But...it will look all too familiar to their American cousins.
The radicals have indeed taken over.
Thomas Gilbert-
I would not call them "radicals" for hideously pushing to turn back the clock for the worse. Tom Larsen in the comments section described it best a few months ago.
http://www.commondreams.org/view/2011/07/12-1
I was referring to radical right wing ideology. Yes, I would call these clowns radicals.
Thomas Gilbert-
Pay up or you will be in big deep shit! The words of Al Capone, also the words of the insurance companies! There is a reason that insurance companies can give millions of dollars to their CEOs, it is from us sending huge prememium payments and them denying us coverage. Until insuance is out of our system we will continue to be robbed with no other choices. Thieves, gangsters, insurance and big pharma are murdering Americans daily. But like Huckabee, they do this in the name of Christianity. We need a single payer health care system, not For profit insurance.
According to Medicare.gov my estimated annual health and drug costs with Original (Government Run) Medicare is $6,650 plus $1,300 deducted from my Social Security for a total of $7,950.
But if I get my coverage from a Medicare Advantage Plan (from a for-profit Company) my estimated annual health and drug costs are $3,550 plus $1,300 deducted from my Social Security for a total of $4,850.
So tell me again, why should we go from private insurance companies to a Medicare for everybody?
How much extra do you have to pay for your Medicare Advantage Plan? And what does it cover? You might want to check your coverage relative to what Medicare itself covers. Sometimes a Medicare Advantage Plan will actually cover less than Medicare itself does, or will cover "more" in some cases and "less" in other cases. Realistically you have to study your coverage carefully, compared to what original Medicare covers. You might find that you are limited in choice of doctors, drugs, whatever. Or you have co-pays that original Medicare doesn't have. Remember there is "No Such Thing As Free Lunch"! You can't get as much coverage out of a private insurance plan as you do out of orginal Medicare itself.