I’ve been thinking about medical care. As we all know, it is expensive, and either you pay directly, or else if you had the money and the foresight, and were fortunate enough not to have any pre-existing conditions that the insurance company has decided render you uninsurable, you paid in advance in the form of insurance. Or else you pay as you go, or you go into debt, or you just plain suffer or die. Unless… your job pays your insurance.
And it was while contemplating this idea, the “job” paying for your insurance, that my thoughts came to a screeching halt. Now, it only takes a little insight to follow this line of thinking. So work with me here.
First of all, let us imagine for a moment that Fred works for the utility company. You know, gas, electricity, water. Just so we can point a finger. Now, let us further imagine that the utility company provides Fred with medical insurance; in the end, this is the same as providing him with medical care, I think we can agree. Now, to the extent that he’s not paying or co-paying for that insurance, that’s what I mean by the “job provides.” Otherwise, he would be providing, and that’s not what I’m concerned with here.
Now, the money that the utility company is paying for that insurance policy with is coming from where? From the utility company customers. Just your average person. Let’s say that is Joe. Average Joe. Now, Joe has to pay for his utilities. Otherwise he freezes or swelters, can’t run his refrigerator, flush his toilet, etc. I think most people would agree with me when I assert that paying his utility bill isn’t really an “option.”
And of course, the cost of Fred’s insurance, that is, the insurance that the utility company provides to utility worker Fred, is built into Joe’s utility bill. Because that’s where all the utility’s income is derived from — just your average Joe.
So it is clear that in fact, Joe must pay for Fred’s insurance. The policy of having Fred’s insurance built into Joe’s bill isn’t something he can control. It’s there, if he doesn’t pay it, he doesn’t get utilities. So it’s a done deal in every sense of the phrase.
Unfortunately, this means that the opportunity for Joe to get medical insurance is reduced by his having to pay for Fred’s insurance first. There’s no way for him to opt out of paying for Fred’s insurance and just pay the costs of Fred’s labor.
Now, some might say, “but there are many utility company customers and only a few employees by comparison, so it’s really not that much.” This is true. However, Joe is also paying for the insurance of the gasoline vendor’s employees, the phone company’s, his Internet service provider’s, the city’s employees, the county’s employees, the state’s employees, the federal employees… you get the idea. Any job that has insurance provided “by the company” or “the city” or “the feds” is really a job that Joe pays his share of the insurance for. For any cost he cannot avoid, such as utilities, or fuel required to get to work, he must pay other people’s insurance. It is only after paying all these things that he can even begin to consider paying for things in his own life that are optional — like insurance.
I guess it is no wonder that Joe… your average Joe… can’t afford medical insurance. He has to buy everyone else’s, first. Being on the bottom of the economic totem pole means you pay for others before you pay for yourself. Isn’t that… poorly thought out?
This is one of the reasons I’m for pooling our medical costs and paying for everyone out of the pool. I despise the idea that someone could be ill and not get the care they need, or be damaged financially as a consequence of illness. I don’t like the idea that the poor have to suffer more, either; doesn’t sit well with me. It seems to me that like education, the health of the citizens in general are a foundation element of maintaining a strong society, and we should just buckle down and get it done. I know this is an unusual tack for someone who leans as libertarian as I do, but I’ve thought about it a lot, and this is where I always end up.
Insurance companies are, I think, a uniformly bad idea. They’re the very embodiment of the term “conflict of interest.” On the one hand, they want to offer consumers protection from something, in this case, medical problems. In order to do that, they figure the odds and charge everyone in the pool enough to cover what the odds predict will happen to the pool, plus enough to have a cushion and pay the company employees.
But on the other hand, these are for-profit companies, and they have an obligation to maximize profitability… and in every case, they do that by “cleaning” the pool, that is, removing those people who are most at risk. Because the fewer high-risk individuals in the pool, the better the odds get, and the more money they make. Unfortunately, the people removed are the ones most likely to need care; which is why one tries to have insurance in the first place.
I know a woman who has had breast cancer and is a diabetic. She’s uninsurable. I’m not saying she can’t afford premiums — I’m saying the insurance companies refuse to cover her. She’s obviously someone who is very likely to need care. So they don’t want her in the pool.
This is precisely what I mean by conflict of interest. Insurance companies don’t work very well, especially for people who really need coverage. So I say let’s get rid of them, everyone pool our funds based on the current year’s medical costs for everyone, and in this way, everyone will have care.
Yes, there will be people who use unusually large amounts of resources; but there will also be people who are healthy all of their lives. That’s the whole point of pooling. We don’t know what will happen to us, so let’s arrange things so that no matter what does, or who it happens to, we know we’ll do our best for them. In the end, we’ll be better off.
#1 by NFYeamans on July 20, 2008 - 4:03 am
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There are some problems with this.
Due to advances in medical technologies, there is a treatment for just about everything. Some of them save your life, and some just extend it. Most of them are very expensive. If everyone had all the treatment they needed, then there is not going to be enough money to go around. You can choose to let a very small number of people live forever, or you can average out the money to make the most people live as long as possible.
This is why the Social Security system in the US is having trouble. Nobody even wants to tell someone when they’ve overused their share of the system.
Then you have the problem of who hands out the money. The government? If you have seen them in action, you’d know this is a bad idea. The people running it would act as though it were a welfare system and try to deny coverage anytime they are able.
Even times you should certainly be covered, they deny your claim, and you have to resend it and negotiate over and over again. You also have to beg them for every little thing. Then, if you still can’t get it and want to pay for it yourself, don’t do it! Because then they will say you don’t need their coverage anymore and take it away.
Private companies? It looks like you have already figured out the HMO angle, so I won’t go into it. Execpt to say they make the doctors lie to you to save money. I remeber sitting in the dialysis center listening to a guy tell his story. He said his doctor kept insisting he had some bowel obstruction or something. I would think the guy had other symptoms which pointed to kidney failure. Maybe the doctor just made a mistake, but it sounds like an HMO thing to me.
Could nonprofits do it? Possibly, but it is hard to find good ones who don’t use most of the donations for “administrative” costs.
From what I’ve seen, too much work is done by hand. Much more automation is needed. Some of it is this way because the screwed up patent system and greedy companies. There are many examples, but one company patented a way to test for breast cancer, now they claim they own the idea of all breast cancer testing.
Then there is the dialysis center where all the techs have to reenter all the machine’s data to get it on their computer system because the manufacturer charges obscene amounts of money for the board to interface it. I used to work in electronics. I know such a board wouldn’t cost more than $10 each. But since they don’t release specs either, no one else can make it.
I could also go on a long rant about a certain unreliable monopoly operating system which causes plenty of its own problems (like losing data). These are typical issues and they add to the amount of medical work which needs to be done per patient. It all adds up to excessive amounts.
I could probably go on, but my post is too long already.
#2 by fyngyrz on July 20, 2008 - 8:39 am
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That might be true if everyone were sick; however, most people are not sick and so costs aren’t quite the overwhelming load you imagine. Modern medicine also ensures that fewer and fewer people are sick as time goes by; this has important and positive implications for the overall costs of medicine to our society.
We are clearly in a transitional period; with considerably more to learn about how the animal body functions, more and better cure and prevention regimes will be developed,. This will continue until we reach a point where most high-effort medicine will be applied to the consequences of accidents, rather than disease. That doesn’t mean we should ignore the victims now. Relieving their suffering and making them as productive and capable as possible is as important as anything else we do.
That’s entirely incorrect. The social security system has two problems.
First, that congress has stolen from the fund repeatedly; they were supposed to guard it, and instead, they dipped into it to “borrow” money from it. They (the government) will have to pay back what they borrowed, and the question is, where will they get that money? They should not have borrowed from it, period. Then, just as an aside, they used our account numbers in ways they promised not to. They violated our trust in so doing. Even so, Social Security isn’t out of money, nor will it be in the next few decades or so, because it rakes in a lot of money from a lot of people.
The second problem is that the number of people who qualify is enlarging because they are living longer. Social security does not pay for medical care, as you seem to imagine. It is only a steady payment, based upon your contribution to the system, which in turn is based upon your income. The longer drain upon the system doesn’t match up well with the amounts collected during a person’s working life.
The problem of sufficient available funds decades from now is being compensated for in two ways; first, by moving the date at which one qualifies for a check later in life, and second, by increasing the amount collected. The use of both, if correctly managed, can ensure that social security continues to work. This requires correct action on the part of the legislature, which is certainly not a given; it also requires that we let people work longer, which we must address at a social level.
I will certainly grant you that the money has to be handled responsibly. However, both private enterprise and the government have problems here. These problems must be addressed. In the case of private enterprise, the moneys are skimmed for profits, and the system allows this. That needs to be eliminated because, as I describe in the main post, insurance for profit creates counter forces that cannot exist in a reasonable fashion.
However, by eliminating profit, you eliminate motive, and so the job will fall to the government. Legislation must therefore establish a minimal infrastructure to deal with payments. This is not a problem in principle; but we will have to exert pressure to see that it happens just that way.
If we fail at this, it will cause a lot of needless suffering. Is the job hard? Assuredly, it is. Nonetheless, we should meet the challenge.