Tuesday, October 02, 2007

What If Insurance Isn't Really Insurance?

Astute reader Paul T. has raised some very interesting questions about the entire concept of "insurance" and whether what passes for "healthcare insurance" is indeed insurance at all:

Just a quick note on health "insurance". It ain't insurance and its time folks 'fessed up to that. Not everybody's house burns down, so that is a risk that can be distributed (insured). Everybody is going to need dental and conventional medical care (setting aside catastrophic care, which is another issue, and is insurable).

So how do you "insure" my food costs. Do I send you the bill? Let's say I like Denny's, Mimi's and other "up-scale" junk joints, and you like buying staples at the local co-op. Well, that's the kind of food insurance program I'd like.

Setting aside catastrophic care (how many people want to leave injured pedestrians lying in the street), if one's dental care costs $500 a year, how are you going to pay less than that ("insure it" in today's Orwellian speech craft) unless somebody else pays for it. You are going to subsidize my Snickers habit (which I'm told is good for me as a between meal mini-meal. Can't wait for the organic version).

The solution appears to me is back to the future of un-corporatized medical care with individual practitioners like we had in the 50's. Ron Paul points out that technology typically brings costs down. However, in the current system, which is directed by corporate HMO and Big Pharma interests, they go up. Get rid of the MD monopoly, bring on competition from alternative and complementary medical care sources. Forget 'big" programs and think small.

Let's quit talking about something that doesn't exist - medical Insurance. Yes, we can socialize the cost (hell, we do so for hedge funds), but why call it "insurance". I think this just muddles up the issue of costs. Society has to confront this as a simple expenditure issue - such as new military programs, which come to think of it, are also being marketed as "insurance" - against terrorism. Jeeesh! Routine medical and dental care has nothing to do with spreading risk (again setting aside catastrophic care). So let's all begin by talkin' straight.

Allow me to carry on this discussion a little further, particularly about the costs associated by individual choice and the costs associated by the system one finds oneself enmeshed in.

Ten old friends get together for a reunion dinner. It is agreed that the bill will be split evenly 10 ways instead of someone playing accountant. After a fine dinner and conversation all the way around, the waiter arrives with the dessert menu. Featured item "Death by Chocolate". Unbelievably inviting... until you see the price, $19.95. Three bucks, for sure; 5 bucks, maybe; 20 bucks... forgitaboutit.

As the waiter comes back, the first guest pipes up "I'll go for it!". More choruses of "me too" pipe in until the waiter reaches you. You now realize that you are on the hook for 1/10 of $180, so the dessert choice is only costly you $2.00. So you go for it too!

The actual cost was $20 to you, obviously, but your choice only cost you $2. This is one reason why health costs within the system are rising.

When I state "There is no collective, societal benefit in doing so", it brings up the obvious question of why is it even being considered then? The answer lies in the ancient question of cui bono ("good for whom"). Well, might I suggest for purveyors of industrial food, large HMO corporate interests who are able to push off the costs to "the guvmint" (meaning the people, this is the old "privatize profits while socialize costs" game that is being played out in the hedge fund bailout arena), and of course, our good old, friendly mountebanks pushing their pills for manmade to illusionary diseases - type 2 diabetes to farter-starters.

This isn't rational you say - helping two opposing sides. Well, its happened before. Witness the decades long subsidy of tobacco farmers, while paying for a anti-smoking campaign. As long as our "One Dollar, One Vote" system exists, and our prosliticians are willing to take money (are you kidding?) from all comers, one would be foolish to expect a rational national policy. "

Excellent analysis, Paul--thank you. Clearly, there is a key conceptual difference between a system which pays for every doctor's visit and every drug and every test, and one which actually insures a large number of people from catastrophic accidents and diseases which are statistically unlikely to strike us all (brain tumors, lightning strikes, being hit by a bus, etc.)

Understanding this conceptual difference could offer a way out of the thicket surrounding our already-unaffordable "healthcare." Frequent contributor Michael Goodfellow wrote a cogent essay, What to do about Health Care? back in May (it's in the Readers Journal sidebar on the right) which I recommend, precisely because he does differentiate between types of afflictions.

I believe the best system--true catastrophic bad-luck medical insurance, and everything else, including self-caused conditions, paid in cash--is also the only one which is remotely affordable as the Baby Boomers suck Medicare and Social Security dry and the U.S. economy tumbles into the black hole of recession.

Thank you, Daniel C., ($20) for your much-appreciated donation to this humble site. I am greatly honored by your contribution and readership. All contributors are listed below in acknowledgement of my gratitude.

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