What Role Should Private Health Insurance Play?
Today's required reading is this AEI Outlook by Clark Havighurst, "Private Health Plans: Where Is the Value? What Is the Point?" He does not pick up on my one-man crusade for public discussion of risk adjustment mechanisms, but he does discuss how health care reform is not moving in a direction that would enable beneficial competition among health insurers to meet the variety of consumer needs in this market. An excerpt:
The Obama administration has yet to present a credible scenario to justify its claim that reforms creating new, regulation-backed entitlements will control costs, let alone control them sufficiently. Indeed, not only is cost control being largely finessed for now, but the regulatory regime Congress is likely to create will also put a new floor under costs, giving consumers even fewer opportunities to reduce their spending on marginally valuable health care and coverage. Yet now more than ever, the economy needs consumers to spend on things besides nonessential health care, and consumers themselves have other pressing needs, such as making mortgage payments, educating their children, buying new cars, and rebuilding their retirement accounts. What the nation and consumers need most is reasonable economizing options in the huge gap between today's costly conventional coverage and no coverage at all. So far, it does not appear that private health plans will be allowed, let alone encouraged, to offer such options.
Read the whole thing.
Private Health Plans
O.K. - I read (skimmed) the whole thing. My summary would be that a)effective, efficient and well designed private plans would provide better care at lower costs, b) the current industry does not, c)a key problem is employer-based insurance which disguises costs, d)various regulatory burdens and mandates and e) fee for service programs that create perverse incentives. All relatively true. So why hasn't the Industry been designing and pushing for such new thinking?
Any business or other large organization has three major public responsibilities: 1)do no harm, 2)collaborate on those harms it creates where no individual organization can afford to solve the problem and 3)work on correcting larger social problems because no organization can be healthy in an unhealthy society (puns intended).
The Industry has pursued the exact opposite tack of focusing on creating rents thru influencing the political process to support its profitabilities. When a private actor persists in behavior that damages society and creates large-scale problems and does not deliver sufficient counter-vailing value then society is left with no choice but to move to correct the problem, even when the alternative mechanisms available are 2nd Best at best.
Other than being too erudite and hard to read the essay doesn't address the really hard questions of: 1) designing new health care insurance, 2) creating the proper incentives for insurors, providers and consumers and 3) proposing a "new-thinking" regulatory framework based on market-like incentives.
There's a lot of work left to do and this essay is just a very short-step on the tip of the iceberg. It could be much more if it were done right though.
What are the chances for that?
Meanwhile let me point you at this model of the existing and proposed systems by way of proposing a framework strawman for thinking about the problem:
http://llinlithgow.com/PtW/2009/09/a_taughttauttaunt_moment_healt.html
Based on International
Based on International comparisons, we know where the "fat" is in US healthcare. We pay doctors and nurses more than other countries, and we utilize the newest drugs and techology more than other countries. Our other issue is that we have more invasive coronary procedures (due to obesity) but otherwise our use of medicine and number of doctors per capita is comparable to other OECD countries.
Judgig from Medicare, some doctors are willing to take less pay, and others opt to not take new Medicare patients.
Everything on Insurance Review
Not higher, in fact we pay doctors the highest in US. The President's policies are just getting over my head. At one side, this kind of policy would help in bringing small business into the stream again. On the other hand its blank with a question mark, where do we go if there is no such reasonable policy for private Medicare?