Tuesday, April 03, 2018

Thinking About the Health Care System, Part 3

This is the third in a series of posts about the state of health care in the United States.  You can read the first two posts of the series here and here; the series will culminate with my plan for rebuilding and improving the country's health care system, which will appear in a few days.

The premise of my series and my eventual recommendation is that there are several underlying causes for the dysfunction and outrageous cost of our health care system. The first was

We are conditioned by our history to stress individual responsibility and self-reliance. A real American takes care of himself and does not expect others to carry his weight.

The second was

Americans believe that the free market will always deliver a better, cheaper product or service than any government-run alternative.

Today, I present what I believe is the third fundamental cause -

The fragmented design of our insurance-based health care system imposes enormous administrative costs on providers, which are passed on to the patient.

When payment for health care is dependent upon the provisions of policies issued by insurance companies (which, by the way, are profit-motivated), a doctor or other provider must maintain a business staff whose sole purpose is to interact with dozens of policies issued by myriad insurance companies to figure out what the policies will pay for, which, in turn, drives the doctor's decisions on how to treat the patient.

If you are one of those people who howled about the horror of the "death panels" which supposedly would make treatment decisions under Obamacare, you may want to consider that the actual equivalent of death panels are the insurance agency actuaries who decide on what their specific policies will cover, cover in part, or not cover. And because every insurance company designs its own policies and writes them based on its own assessment of the risks posed by each patient, it's impossible for a doctor to know what he or she can do - and be paid for - to treat each patient. This means that

1. The insurance company actuaries are the people actually driving decisions about the patient's health care.

2. Because each company's policies are constructed differently, and are different for each patient, each doctor or medical group must maintain a staff dedicated to communicating with all the different insurance sources represented by their patients. This represents a sizeable cost that is passed on to the patients, and does not contribute materially to their care.

3. A tangential issue is that the average medical insurance policy doesn't cover all the health problems you might have - most policies do not cover vision care or dental care, both of which can be extremely expensive and require their own insurance policies ... which suffer from the same issues we've discussed already.

So, Dear Readers, part 3 of our look at the health care mess deals with the fragmented nature of the health insurance system.

We'll wrap up this discussion in a few days, when I discuss my proposal for revising the current system. Until then, stay healthy ... you probably can't afford to get very sick.

Have a good day. More thoughts coming.



Duckbutt said...

I'm not unhappy with my health insurance at present. I hope it continues.

For what it's worth - Americans are particularly distrustful of their federal government. In part, this is due to our two-party system. Regardless of one's political orientation, there's distrust of the doings of the other party if they happen to get in power.

This goes in spades with health care. Or immigration policies.

Mike said...

Here's a cartoon for you to draw since you're good with pen and pencil. A office full of insurance agency actuaries sitting at desks with their black robes and sickles hanging next to them.

allenwoodhaven said...


I look forward to your proposal for revising the system.