Monday, August 10, 2009

Health Care Debate

From today's "In 2008, U.S. health care spending is estimated to have been $2.4 trillion. It is projected to nearly double to $4.4 trillion in 2018."

So we'll be spending more than the 1.5 trillion that opponents are complaining that the proposed health care overhaul will cost over the next 10 years whether or not the health care plan President Obama wants is passed. The difference will be in how it is spent and what we get for the money.

Currently (according to some sources) 30% of all health care dollars go to insurance company overhead and profit . The CEO of United Healthcare (the largest of the health insurers) not only has a salary in the millions but has accumulated stock options of almost ¾ of a billion. Allegedly one of every 700 dollars spent on health care in the US goes into his pocket.

Many years ago I read an article in which the author said the way to get rich was to put yourself in a "gatekeeper" position, find something people need and position yourself between them and the thing they need so that you can collect a fee for letting them have it. That is what health insurance does. It adds nothing to the health care system, it simply acts as a gateway through which you must go to get health care. The health care you get is what the insurance company decides it is willing to pay for and that decision is based on preserving its profits.

Ideally an insurance system is one of shared risk, meaning that all members contribute and the money helps those who most need it. You may pay in more than you get back for many years, like the driver who has no accidents, but at the point where you do need it there are more resources available to you than you would have on your own if you were not a member of the insurance plan. That is the irony of the complaint by opponents who object to a public option on the grounds that it is socialism. The concept of shared risk though insurance is essentially socialist, a group of people looking out for each other. The only thing that makes private insurance different is that it allows the insurance company to add profit to the cost of the system and puts the decision making over who gets what benefit into the hands of those who own the company instead of people who are accountable to the insurance holders.

Personally I think it is sad that a single payer system is not one of the options on the table. According to several polls that is what most people would prefer. It would be the most economical. I often wonder if the 30% that is currently eaten up by overhead and profit would not be sufficient to cover all those who are not now covered. True, there would be overhead with a public option. Currently Medicare (a public insurance plan that covers everyone in the country that is over 65 and those who are permanently disabled) has an overhead of 3%. Putting everyone on Medicare would still save 27% ($756 billion in 2008) and that would go a long way toward covering everyone.

Addendum: A friend in Texas sent this link to a YouTube video of some Canadians commenting about the health insurance reform debate going on here in the US. As readers of this blog know I have relatives in Canada and while they have problems of distribution too, theirs are based on how to spread the services where they are needed rather than who can afford care and who can't. You may have to wait for some non-urgent services but if you need care it is there whether or not you can pay.

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