Health Care, What’s Broke? (Besides me I mean)

We are in the midst of what some call a health care crisis in this country.  The insurance companies say the medical costs are rising too fast.  The employers say the insurance costs are rising too fast.  We just see the cost of our health care rising, in many cases, out of reach.  We seem to pay more and more for less and less.

Is there anything in the system that we can fix?  Hmmm, well let’s take a stroll through the system and see if we can see what’s broke.

We take our child to the doctor, the doctor looks at him and prescribes some treatment.  If we are lucky, it works and our child gets better.  Seems like that part of the system works ok, even though sometimes with a serious illness a doctor is only about one step removed from shaking a rattle.  Still there is an honest effort to make the patient better.  A service is provided

Now in most every doctors office there is a person behind a desk whose whole function is to figure out how to get paid by the patient’s health insurance company.  They submit the bill and sometimes the insurance company pays it.  Or sometimes the insurance company pays some of it, or rejects it.  Then it’s this person’s job to bill you for the balance of the bill, SURPRISE!

In your mailbox you get a bill from the doctor that tells you how much the insurance company paid and how much you need to pay, only wait, this was a covered expense and you already paid the copay so what’s up with this.  So you pick up the phone and call the insurance company, maybe for an hour or more, at work!  Finally you think you have resolution, only to find out someone has dropped the ball and you get another bill, this one overdue.  So on the phone again, at work!

This has gotten so bad that there are companies whose whole function is to deal with your insurance company for you.  Yup, you or maybe if you’re lucky, your company (who is probably tired of all that time on the phone) pays someone to make the insurance company do what you pay them to do.  Kind of like hiring someone to watch the kid you hired to mow your lawn, hey kid you missed a spot.

So let’s see, we have a doctor who provides a service and you who, in a roundabout way, pay for it.  You pay for it with your premium, and with the portion you employer pays, which is really just another form of your wages.  So don’t let anyone say you don’t pay your own health care.  The only advantage you get by having it through your employer is he gets a better deal per person than you can ever get by insuring the whole company.

History Lesson, insurance was invented to spread risk.  If 100 ships go out to sea and in a year 10 are lost, all 100 owners will put a small amount into a fund and whoever happens to own the 10 lost ships splits the fund.  Next year you do it all over again.  If a trusted company holds these funds and invests them or loans them they can make a profit with the money, until they have to pay the owners of the lost ships.  It used to be that way for health insurance until some smart guy realized that if we only insure healthy people, or only insure cheap stuff, we get to keep all the money not just the return on the investment.

Today we have an insurance company who wants to maximize profits.  They collect all your premiums in the form of money deducted from your wages and the wages you never see in the form of EMPLOYER CONTRIBUTION.  Then their goal is to keep as much of this money as possible.

Wait, wait, the doctor performed the service, you got the service, why should the insurance company get to keep all that money, what did they do?  On top of that they are difficult enough to deal with that the doctor has to hire a specialist.  They are difficult enough to deal with that you have to hire a specialist, and for what?  In the end, doctors get paid by all of us.  Sometimes I pay for your child’s ear infection, sometimes you pay for my wife’s heart attack, but WE pay for EVERYTHING!  Insurance companies just skim off all they can and then pass through what they have to.  Insurance companies could evaporate tomorrow and if it was done right, we wouldn’t even know they were gone.

So why does it seem like we so intent on keeping this bloated parasite of an industry intact?  Well, of course there is the obvious answer that they have bought considerable interest in our government but that isn’t the only answer.  Take a look at your retirement fund, I bet it’s pretty heavily invested in health care industry.  HMO’s and insurance companies own a good portion of your retirement, and of grandma’s as well.  If we dismantle the insurance industry we hurt a lot of people in fixed income.

They are kind of like the parasitic worm that causes river blindness, if we leave it alone it destroys our eyes, but if you kill it, it can drive you mad.  So we leave it in place, root hairs wrapped tightly around some of the most economically vulnerable, and in the mean time the industry subverts our government with millions of dollars and pays the high level insiders even more millions in annual salary.

You know what?  I think I’d rather be mad than blind.

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Laissez-Faire

I just finished reading a commentary on CNN by a CEO named Carl Schramm. Carl, bless his heart, is lamenting the threat of a wave of government intervention in our economy. He wrings his hands and seems to say that since there is a danger of bad things happening the government should keep its hands off of the economy. Laissez Faire is the holy grail of economic prosperity.

Well Mr. Schramm, Laissez-Faire is what caused this melt down in the first place; following the buck isn’t always what’s best for society.

I wrote in an earlier post (Banks- or- I wish Adam Smith’s invisible hand would stop touching me there.) about the banking industry charging fees everywhere they can.

Health insurance companies are giving minimum services for whatever the market will bear and cutting off whoever they can who need their services.

We are bailing out the financial industry, all the while being berated for being too greedy, using too much credit, and not being careful about our investment. I must have been hit in the head because I don’t remember all that.

Politicians are telling us how we are going to have to sacrifice. Why? Because we have had so much benefit from this boom? What are the beneficiaries of this recent financial boom going to sacrifice?

I don’t know if anyone has noticed but wages have been stagnant since 2002. Our free market choices have degraded to a game of pick your rapist in banking, health insurance, and retirement. Our political system has long been a system of voting against the most odious candidate but now it has moved onto other parts of our life.

The most frustrating part is, there is no one to pressure for change. Faceless Corporate America is a tough target with no one responsible for its decisions. Not that I would expect a 40 or 60 million dollar a year CEO to take any responsibility.

I could push for change if only I could find a place to push. I feel like Archimedes, I could move the world if only I could fine a place for the lever. Well maybe it’s more like Sisyphus and his rock.