Wednesday, September 7, 2016

Economics . . . and my healthcare plan

Today on Facebook, I saw something that said, "I think a man with a helmet defending our country should make more money than a man with a helmet defending a football."

Well yes, of course.


"Should" is a tricky sort of word.  There is the way things should be, and then there is the way things simply are.

Obviously we ought to have more respect and honor for a man who puts his life at risk to defend our country than for a man who plays a game.  But "should make more money" is a pipedream.

Football players make more money than soldiers for a reason: because people like to watch sports and are willing to pay money to do so.  Additionally, when sports are televised, advertisers are willing to pay lots of money for commercial slots to sell their products to the large audience tuning in for the game.  Football raises a great deal of revenue; therefore, football players make a lot of money.  National defense does not raise a lot of revenue; therefore, there is not a pile of money accumulating for the soldiers to split.  Whether or not this is "as it should be," is rather immaterial.  What are you going to do?  Force people to watch the news about military skirmishes around the world, and prevent them from watching football, in order to generate higher prices for ad space during the news, and then somehow send the extra revenue to the soldiers' families?  Even if that would work (and it would not), it would violate all kinds of freedoms and rights of the public.

There are no money trees.  The government does not generate money.  The government only takes money--through taxes--wastes a bunch of it, and then redistributes what is left.  All the money that exists is only around because someone worked to earn it somehow, originally through providing some sort of real goods.  Money can then be traded for services, or even stolen--or taken by the government in the form of taxes--but at the beginning, it has to be derived from some real resource.

This is why I think health insurance is unethical and should be phased out.

Health insurance is a business.  It exists to earn a profit.  In other words, the people who run health insurance companies run them so that they can make a profit off them.

Insurance is like a gamble, a lottery; except to win, you must get very unlucky.  In other kinds of insurance, we understand this.  We pay for car insurance hoping that we never have an accident.  Many, many people drive and have no accidents or only very minor ones.  They pay far more into their car insurance than what they ever get back out of it, but they have it so that in the event that they are very unfortunate and have a catastrophic accident, there is financial coverage for the damages.  Because there are relatively few catastrophic accidents, car insurance companies can sell their product at a profit and still keep enough in the coffers to pay out in a bad year of accidents.

The same holds true for homeowners' insurance.  Most of our homes do not burn down, but we pay into the system just in case.  For those whose homes do burn down, there is enough there to cover their damages, and the insurance companies still operate at a profit because of all the payees who did not have a tragedy.

Health insurance should, similarly, exist to cover catastrophies when an illness or injury would otherwise wipe out a family's finances.  It used to be more like this, and it used to be called, "Hospitalization."  But somehow, health insurance broke somewhere along the line.  Somehow, health insurance started paying for people's basic health care rather than traumatic health catastrophies.  And then, when that proved not to be viable, the rates skyrocketed out of the stratosphere. Think about it: how could health insurance possibly work?  Car insurance and homeowners' insurance work because not everybody suffers calamities in these areas; in fact, a relatively low percentage of people do.  That's why the insurance model works--lots of people pay in, so that there is coverage for the unlucky few.  But almost everybody gets sick at some point.  How can you possibly insure against that?

Health insurance companies, because they are companies, operate at a profit.  So, if they are taking money from you and paying out for your healthcare, in order to produce that profit, they are going to charge you more than what the healthcare costs in the first place.  It's not a good deal for the consumer.  That's how they make a profit.  They take in more than they pay out.  It's very simple. This is also simple and obvious: we would be better off without them, because we would rather not be forced to pay for our healthcare plus a surcharge so the health insurance company can make a profit, rather than paying for the healthcare alone.  This shows up in crystal-clear obviousness if you have ever been without dental benefits and have considered the financial efficacy of purchasing a dental insurance plan on your own, as opposed to paying out of pocket.  It is much less expensive to pay out of pocket.

Case in point:  we bought one of the original Obamacare Marketplace Health Plans.  It cost us $1000 per month in premiums, and there was a $12,000 family deductible that had to be paid out of pocket before any coverage even began.  This means that between your monthly premiums and your deductible, you are guaranteed to spend a minimum of $24,000 in a year before you receive any benefits.  If you don't spend out your entire deductible, you might spend less than $24,000, but the insurance company will not pay out any benefits at all in that case.  Except, a free yearly physical was supposed to be included in that, but the physical would be qualified as "not covered" if you actually discussed any new or pre-existing health issues with your provider.  Basically, you could have a free blood pressure check and cholesterol screening, along with a professional weighing and height measurement and perhaps a bit of nutrition and exercise counseling.  Period.  Seriously.  This is not a good deal.  It is not a cost effective way to structure health care.  Even if I paid out of pocket for my yearly physical along with the rest of my medical expenses, is it doubtful that even I--with the expenses incurred by lupus--would exceed $24,000 in doctor bills in a given year (in doctor bills alone, if I didn't have insurance premiums to pay).  This is what I am saying: insurance companies take in more than they pay out, so they can be profitable.

If someone were to contract cancer, that would be no longer be the case, and by getting unlucky in life, he would get lucky in the health insurance lottery, but nobody really wants that.  The crazy thing is (I noticed this when shopping the exchange for health insurance plans): Plans don't always cover cancer or major injuries anymore.  You often have to add special riders to get that type of coverage.  I do not know how many consumers are reading the fine print to realize this.

Recently, my insurance company denied a standard blood lab run with a general physical.  Over the course of trying to figure out what was going on, I was told many different stories:  It is covered, but coded incorrectly.  It is coded as preventative but needs to be coded as diagnostic.  It is coded as diagnostic, but needs to be coded as preventative.  I should be covered.  Oh, nevermind.  It's not covered.

I submitted a formal written appeal and received back a letter with the word DENIED, all in caps, just like that. Somebody enjoyed writing DENIED, I am quite certain.  In the fine print, the letter stated that under the Affordable Care Act, "the frequency and eligibility of services is subject to change."  Well now.  As you might imagine, this statement did not increase my feelings of happiness, security, affection for President Obama or respect for insurance companies.

At the end of the day, this is what we need:

1.  We need to phase out insurance and go back to a fair fee-for-service medical system.

2.  We need billing reform.  Doctors are currently forced to inflate their bills to protect themselves from insurance companies adjusting allowable charges down to where the doctors could not remain solvent.  This should be easy to fix if we phase out the insurance altogether, but doctors and labs will need to reduce their rates.

3.  We need tort reform.  People should not be able to sue doctors the way they do.  Incompetent doctors should be barred from practicing, but good doctors should be protected from frivolous lawsuits.  Life is messy and people get sick and die.  Doctors cannot prevent this from happening in every situation.  Indeed, every person who has ever been born either already has or will at some point die.  Doctors can't stop this.  Doctors are not God (and even God has His sights on the next life, not this one).  Doctors usually do the best they can; doctors usually honestly want to help people.  If they wanted to be rich, they would be insurance company executives, not doctors.  If we stop suing doctors for every uncontrollable negative outcome, they will be able to stop purchasing expensive insurance against lawsuits, and that will also allow them to reduce their rates.

4.  If we are concerned about access to healthcare for people in poverty, we should develop community clinics, free and open to the public, that would provide a basic level of healthcare to all citizens.  This would include physicals for children, services for injuries such as stitches and bone-setting, education on nutrition and hygiene, maternity care and delivery services, and medications for common illnesses and infections.  These clinics would be funded by the government and staffed by government employees, similarly to the way public schools function.  The buildings could even be annexed to public schools.  Each clinic would have one or two doctors for oversight, but they would be predominantly staffed by NPs, PAs and nurses.  They should be open 24/7 and take the burden of the uninsured off hospital emergency rooms.

5.  Health insurance--if it survived at all--would function more like other insurances: people who could afford it (or whose companies chose to offer it) would have health insurance in place to cover health emergencies and catastrophic illnesses.

6.  People with the money to do so would be able to purchase whatever health services they desired, outside of a health insurance system, and costs would be lower because health insurance would not be around giving doctors cause to increase fees.  In fact, doctors' fees would decrease, because in a more organic fee for service system, doctors would experience the need to compete for patients. Insurance companies would no longer dictate which doctor you could see!  Besides driving costs down, the competition would motivate doctors to provide the best services possible, weeding out incompetent doctors.

7.  We should encourage medical professionals themselves to design concierge service clinics, where patients could pay a monthly rate to receive whatever services they need over the course of a year.  In essence, instead of paying $1000-$1400/month to an insurance company for possibly no benefits, you would pay $1000-1400/month to a medical group that contracts to provide services for you as needed (no high deductible).  Let me tell you, you'd get a ton more for your money, and you wouldn't have to worry about pre-authorization or surprise claim denials.  Large companies could contract with these concierge clinics, or even design their own for their employees.  The clinics could contract with hospitals.  This is a fabulous healthcare option, but it is rendered impossible by President Obama's current healthcare laws, which were written by the very insurance industry that profits most from them (and from blocking creation of a system that would allow people to circumvent insurance).

8.  We should encourage and incentivise medical research to develop less expensive treatments for conditions like diabetes, so that they could be available to the poverty stricken.

9.  We should use a system of vouchers for healthcare, whereby everyone would receive vouchers to be used at government healthcare facilities.  Over the course of treatment, people would either receive more vouchers--as they complied with their treatment plan, or have vouchers revoked, if they refused to take responsibility for self-care.  People who lost all their vouchers due to non-compliance would then have a choice between giving up their free healthcare opportunities, or giving up their personal freedom and being institutionalized in a state-run infirmary where compliance would be enforced.  People who purchase private healthcare on their own would have freedom to chose and follow whatever treatment plans they wish.

10.  We should set up a special non-partisan task force of highly experienced doctors, medical researchers, medical ethics specialists, hospital administrators and economists to study what exactly could be reasonably covered by the government in public community health clinics.  We should shelter this group from lobbies and other outside influences. We should strive for compassion while being realistic about what medicine and the government can and cannot achieve.

The fact that we currently have laws that force citizens to purchase health insurance from companies run by the same people who wrote the laws, who are rich and getting richer, whose only purpose is to run a company that makes a big profit . . .

This is ludicrous.

This is unconstitutional.

This is not freedom.

This is an egregious abuse.

This must come to an end.

Economics are economics.  Money doesn't grow on trees.  The government can only do what it can do; it is not omnipotent.  People get sick and die sometimes, and this cannot always be slowed or prevented.  All babies are not born perfect.  We need to be both realistic and compassionate as we figure out how to live within the limits and constraints of life in a very imperfect world.

* * * * * * * * * * * * * * *

This would be a viable solution to the healthcare crisis we are experiencing.  The trickiest part is figuring out how to phase out the health insurance industry without throwing our economy into a crisis.  Nearly 500,000 people make their living working in the health insurance industry in the USA.


Priscilla said...

I agree with you. It's all a mess that seems pretty impossible to fix, mainly because of greed. Just look at the whole crisis regarding the monopoly on EpiPens. It's very sad...and frustrating.

Ruthie said...

Yes. Too much greed. There used to be laws to prevent monopolies, but recently it seems as though the laws favor them. Too much greed, and too many lobbies. We need to impose term limits on members of congress, and we need to reform the way money is passed around in Washington. The whole system revolves around lobbies and bribes. Lobbies are actually legalized bribes, but it's all unethical, legal or not. A disillusioned young man I know recently told me that he'd figured it out: "Everything is about money," he said. "Everything." May God have mercy on us all.