Saturday, May 06, 2017

Whom is health insurance for?

I was not planning to make another post this weekend, but my New York Times this morning includes an op-ed by a physician and medical school professor named Marc K. Siegel.  [Don't miss the post on Trump and Andrew Jackson, below.]  Dr. Siegel ran into an ambush when his thoughts reached my eyes, because he said something in simple, clear language, which had already occurred to me as the dirty secret of the Republican health care bill in general and the issue of "pre-existing conditions."  This is what he said.

"In addition to limiting the menu of essential benefits, the House bill would let states create high-risk pools for patients with pre-existing conditions who had let their insurance coverage lapse, and who could then be charged premiums more in keeping with their health care needs. This is the only way to make insurance affordable for most consumers; pre-existing conditions will continue to drive up premiums if everyone is compelled to pay the same price."

Now my idea of health insurance is that we all pay into it because we will all become sick from time to time, and we may become very seriously ill.  Many of us will never need extremely expensive treatments, but many will, and we can't tell who they will be. Thus our investment is very bit as reasonable as our investment in fire insurance.  But Dr. Siegel has a very different view.

What, in fewer syllabus, as a "patient with a pre-existing condition?"  Answer: a sick patient, one who needs treatment right now, and may need it for a long time. Alternatively, it may be someone whose medical history substantially increases the likelihood that they will get sick and need treatment in the future.   And I had realized as I read a news story about the House bill last week that this was the key to debate.  The insurance industry, bless their hearts, loves insuring healthy people but hates insuring sick people.  Like just about every other corporation in America they are focused on their bottom line, which healthy people improve and sick people make worse.  Somewhere in the course of his medical career Dr. Siegel seems to have forgotten the point of health insurance: to pay for treatment when people need it.  He doesn't think that healthy people's premiums ought to be high enough to pay for treatment for people who are actually sick. [Incidentally, Dr. Siegel, if this post comes to your attention and you want to reply to it here, you can have all the space you want.)

I have heard other stories over the years about the insurance industry's point of view.  A dear friend of mine who co-owned a thriving small business got cancer many years ago, and needed an expensive procedure.   The procedure was an unqualified success in the short and medium run, and he survived for 8 years of happy and productive life as a result.  But no sooner had he initially gotten well, than the insurance company that provided a group plan for his business (of a couple of dozen employees) hit the company with a tremendous increase in its premium.  Now that he had turned out actually to need the insurance, they wanted him and the company, in effect, to pay the claim.  Fortunately he was able to get insurance through his spouse instead, which solved the company's problem.  

Now, of course, if people waited, as many do, to seek  insurance until they are already sick, that's a problem about which insurers have the right to complain.  One solution is a mandate requiring them to buy it, which Obamacare includes but the new Republican bill does not.  A second solution which the Obama administration did not try to adopt is the Medicare solution in which payroll taxes (or conceivably other taxes) fund the health care system.  But the idea of "high risk pools," even if they work--which they generally have failed to do--is in my opinion a travesty that ignores the whole point of health insurance, by separating those who really need it from the rest of us.

It is quite possible that the Obamacare premium increases over the last couple of years reflected the need to include sick people, as well as the end of some payments to make such coverage more affordable that apparently ended after 2014.  And it is certain that health insurance is too expensive because of problems inherent in American medicine that Dr. Siegel also mentions, such as the cost of new devices.  (He does not mention overdiagnosis and overtreatment, or the enormous amounts spent on end-of-life care.)  Attacking those problems should have come next on our list.  But the fantasy that we can solve the health insurance problem by taking sick people out of the normal health care system needs to be abandoned.  It is unworthy of a civilized society.

9 comments:

Bozon said...

Professor
Another great commentary.

I have some thoughts too:

"...And it is certain that health insurance is too expensive because of problems inherent in American medicine that Dr. Siegel also mentions, such as the cost of new devices. (He does not mention overdiagnosis and overtreatment, or the enormous amounts spent on end-of-life care.)...." DK

Just to follow up on why health insurance is too expensive.....
The term 'American medicine' includes, as you mentioned other costs, including the extraordinary monopolistic costs of medicines themselves under our system. (Yet how drugs themselves get developed here is often the result of taxpayer investment in research through government funding. Another whole story.)

The whole market capitalist layer, now a constellation of quasi monopolies themselves, of costly and counterproductive insurance (insurance is really a branch of a larger banking finance and investment industry now) industry oversight and restriction of individual insureds' providers (HMO in out network, hospital, specialist, etc), covered/uncovered procedures and decisions, Rx decisions and variables (name brand versus generic) costs choices, and legal collection processes and costs, makes the system totally outlandishly expensive.

Another layer I need to mention, I always try to do this, which only compounds the costs, all costs, is the fact that the federal legislation provides for state by state, COUNT THEM THERE ARE FIFTY, legislative ways to handle the distinctions among insureds, under federal legislation which has to interact with each state and with all of them as well. Imagine how much costly and duplicative state legislative, administrative, and legal, costs are involved in such an enterprise?

'Pre existing condition', while an important point to make against the proposed legislation, and to explain, is also in a way a lure away from this tribe of other 800 pound gorillas which have always been sitting in the room.

All the best

Kathy Collins said...

I am an ordinary retired citizen, not a politician, economist, CEO, or medical professional. Over the past ten years or so, I have watched with disgust the growing frenzy over healthcare insurance. I am on Medicare, which I hope will last as long as I do, and a Medicare supplement, which bestows upon me premium increases TWICE a year. I also buy Part D coverage and in five years I have had four different carriers because every year they change their formularies and jack up the price (by as much as four times), forcing me to look for new coverage every time. I don't suppose I need to point out that this is hard on a person with a fixed income, but I will anyway.

Right now the issue is more focused on those under 65 and I can understand that. Elders don't seem to matter much anymore. Pre-existing conditions are now, and have long been, a huge issue in healthcare. I've not seen any statistics, but I would bet a substantial portion of people over 50 have pre-existing conditions, and in people over 60, the figure has to be much higher. Yes, providing healthcare for those with pre-existing conditions is much more expensive than for younger, healthier people. But from my perspective, there is something very wrong with limiting healthcare coverage for such people, either directly (by rejecting applications for coverage) or indirectly (in the form of premium increases no average citizen can afford).

And this brings me to my point. Healthcare -- literally taking care of people's health -- is not a political, economic, or business issue. It is a MORAL issue. I have nothing against capitalism in general, but obscene profit-taking has become much more important than the health and wellness of human beings, our citizens, our families, our selves. It is beyond disgusting -- it is loathsome.

Who is making all these laws and deals? The politicians, who don't ever have to worry about their own healthcare coverage or premiums. The economists and financial gurus, who only look at bottom line numbers, not at the human impact. Business leaders, who care for profits, not people.

The big question, which I have rarely heard asked and never heard answered, is: why is the emphasis and pursuit of solutions always on finding insurance coverage? Why is it never on dealing with the actual, and incomprehensible, rising cost of healthcare itself? Could it be that the real, the fundamental, issue is making sure that insurance, medical, and pharmaceutical companies continue to profit, regardless of impact on recipients of their goods and services?? As long as profit is the penultimate objective, the health of our people, of any age, will continue to be of secondary, or perhaps even insignificant, importance. Will we ever, then, take the high road and do the right and moral thing by truly caring for our people? Or will we all be sacrificed to the God of Extreme Profit?

We have a moral obligation to take care of one another. If that isn't our primary goal, then we no longer have a moral compass. We have only a bottom line mentality.

Kathy Collins said...

I am an ordinary retired citizen, not a politician, economist, CEO, or medical professional. Over the past ten years or so, I have watched with disgust the growing frenzy over healthcare insurance. I am on Medicare, which I hope will last as long as I do, and a Medicare supplement, which bestows upon me premium increases TWICE a year. I also buy Part D coverage and in five years I have had four different carriers because every year they change their formularies and jack up the price (by as much as four times), forcing me to look for new coverage every time. I don't suppose I need to point out that this is hard on a person with a fixed income, but I will anyway.

Right now the issue is more focused on those under 65 and I can understand that. Elders don't seem to matter much anymore. Pre-existing conditions are now, and have long been, a huge issue in healthcare. I've not seen any statistics, but I would bet a substantial portion of people over 50 have pre-existing conditions, and in people over 60, the figure has to be much higher. Yes, providing healthcare for those with pre-existing conditions is much more expensive than for younger, healthier people. But from my perspective, there is something very wrong with limiting healthcare coverage for such people, either directly (by rejecting applications for coverage) or indirectly (in the form of premium increases no average citizen can afford).

And this brings me to my point. Healthcare -- literally taking care of people's health -- is not a political, economic, or business issue. It is a MORAL issue. I have nothing against capitalism in general, but obscene profit-taking has become much more important than the health and wellness of human beings, our citizens, our families, our selves. It is beyond disgusting -- it is loathsome.

Who is making all these laws and deals? The politicians, who don't ever have to worry about their own healthcare coverage or premiums. The economists and financial gurus, who only look at bottom line numbers, not at the human impact. Business leaders, who care for profits, not people.

The big question, which I have rarely heard asked and never heard answered, is: why is the emphasis and pursuit of solutions always on finding insurance coverage? Why is it never on dealing with the actual, and incomprehensible, rising cost of healthcare itself? Could it be that the real, the fundamental, issue is making sure that insurance, medical, and pharmaceutical companies continue to profit, regardless of impact on recipients of their goods and services?? As long as profit is the penultimate objective, the health of our people, of any age, will continue to be of secondary, or perhaps even insignificant, importance. Will we ever, then, take the high road and do the right and moral thing by truly caring for our people? Or will we all be sacrificed to the God of Extreme Profit?

We have a moral obligation to take care of one another. If that isn't our primary goal, then we no longer have a moral compass. We have only a bottom line mentality.

DAngler said...

I heard that prior to the ACA there were health insurance companies who issued their insured a new policy each and every year. So long as you were healthy, they'd issue the new policy. But if you had a major health event that looked like it might extend on for some time, at the end of that year they'd drop you, and you couldn't get re-insured with them because you had a pre-existing condition. To me that was criminal behavior under the guise of smart business.

Another point is that when Obama asked for the ACA to be written, he publically stated that he was for single payer healthcare, but he knew the American public and business were not ready for it, so he asked Congress to give the American people what the Federal Employees and Congress have: a choice of healthcare plans provided by the insurance industry, but with three major conditions applied to their policies. They had to cover preexisting conditions, they couldn't drop an insured person for health issues, and they had to present their insurance prospectus in a uniform format so that potential buyers could easily compare amongst plans.

We have a mess in the ACA because the Republicans refused to let it be a Federally operated program, and we have 50 different states with 50 different plans, and the insurance companies can pull out of the states that have plans they don't like. We still have the refusal of the Congress to let the Fed compete the price of drugs

And now the Republicans are blaming the Democrats for the mess they created. It is enough to make a grown man weep.

But make no mistake, I have no love for the Democratic Party. They abandoned blue collar America, and we are all paying for it. I despise the current crop of Republicans. But I keep asking myself how it is that they are doing so much damage, and their true believers never figure it out? I have the answer, and it is something that our media is studiously ignoring: the American conservative propaganda machine is the main (but not the only) reason for the true believers, and the main, if not the only, reason they remain true believers.

Bob Hallahan said...

Professor your column made me realize that there is actually a bit of sense in the Republican plan. It is the idea of peoples' rates more closely reflecting their risk. Of course I do recognize your idea of shared responsibility for each other that underlies the very idea of insurance. And I also recognize that there are many uncontrollable risks in the medical field, for instance we generally have no idea how to prevent brain cancer.

However, most people generally want to get what they pay for, and conversely, pay only for what they get. Therefore nobody complains that medical insurance companies charge more for smokers, or that car insurance companies charge more for drivers who get frequent speeding tickets, as these lifestyle choices increase those peoples' risk.

I wonder if the Republicans wouldn't really rather be open about it and permit companies to charge more for people who are don't exercise or are obese, or charge more for those who drink sodas every day, as these lifestyle choices clearly increase risk. Of course going down this path is a can of worms but as a healthy person myself I see the temptation.

Perhaps even better would be your suggestion that we tear down all such barriers between each other and acknowledge shared responsibility. Maybe this course would encourage individuals to eat better and exercise more, but I'm not certain.

Jude Hammerle said...

Dear Dr. Kaiser,

I saw a clip over the weekend showing Tom Price making a point that gets to motive. Price reminded the public that the new provisions do not affect people who get their insurance through employers, only those who buy through the federal and state exchanges.

By focusing the potential pain upon self-, under- and unemployed people, the House measure may advance two big-business agendas. First, it may force into the wage labor pool people who might otherwise avoid it, and second, it may reduce overall costs in the health care industry as a means to stabilize or even reduce premiums for big businesses.

Thus the House measure can be viewed simply as another example of the sitting legislature and executive favoring big-business interests at the expense of the public interest.

Jude Hammerle

ed boyle said...

Another obvious sign of US decline. Somewhere between 3rd world corruption and first world rationalism. One introduces the idea of a safety net for the poor or health care for all but leaves it to robber barons to control at own discretion. The fox watches over the chickens. After he has eaten them all up he himself dies last. I think Marx predicted capitalism would end this way. Every ideology taken to its logical conclusion kills itself off. It happened with communism and now with monopoly 'corrupt and capture democracy'capitalism(aka neoliberalism, laissez faire). Since both major systems ended after ca. 80 years( our end soon) in innate cynicism and corruption we must assume human nature is the culprit and get back to generational theory. In the bible guilt was laid down till 4th generation. Debt jubilees were also standard. Capitalism and monopoly debt(on farmers) was in all ancint cultures. Health care insurace is a moern novum. I recall 19th concept of group undmployment and health insurance like oddfellows halls, etc. A doctor was employed to look after members. He was not god and was not rich. People did not expect to live forever on latest tech and drugs and moral blame for bad health behaviour was likely in a universally religious society. Life post 65 for more than a sliver of population, who were self responsible, genetically predispositioned, rich or likely all 3, was unknown. Our entire society and its expectations have become unwieldy and unrealistic. Most operations are on very old to maintain life into 80s, 90s, what for?, same with endless medicines daily. In 50s it was presumed that pyramid age structure would continue indefinitely but this was based on concept that children supported parents into old age so had lots of kids. Retirement and health benefits eliminated need for kids as form of insurance so now too few payees exist to support chronically sick old population. This is where the logical end of a welfare insurance state ends cynically. Even Jesus Christianity suufers under this. The man that took over franciscans after St. Francis was a corrupt cynic. Any good idea will be abused and turned to its opposite of intention, destroying itself.

Emman Esguerra said...

I believe that health insurance like that of Maxicare, is for everybody. Am I right? I hope so.

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I am an ordinary retired citizen, not a politician, economist, CEO, or medical professional. Over the past ten years or so, I have watched with disgust the growing frenzy over healthcare insurance.
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