October 25, 2003

Insurance industry disgorging ill-gotten profits

Health insurer Aetna has agreed to pay $120 million, among other things, to settle a class-action lawsuit on behalf of doctors who charge it with interfering with treatment decisions and shortchanging them on reimbursement. It looks like mega-insurer Cigna might also settle soon. Since virtually all the other large health insurers in this country are also named in the suit, we can expect a lot more money to be disgorged by the insurance industry in the near future.

So much for relying on HMOs and the private insurance market to bring down medical costs. Apparently the solution to the old fee-for-service system's tendency to overtest and overtreat was not to undertest and undertreat. The aggressive second-guessing of doctors by the HMOs has resulted in bad patient care without reducing costs. The money was simply diverted from doctors to insurance companies. And the patients are still getting fleeced.

So what next? Is it too much to hope that the HMO model's failure will prompt us to reconsider the idea of national health insurance? Or will our irrational fear of common, cooperative solutions lead us to shut our eyes to the obvious and repeated failures of the for-profit "free" market to provide a sustainable, effective, accessible and equitable health care system?

If so, the problems of unavailability and high costs will continue to plague us until we open our eyes and take our ideological blinders off.

Posted by Carey at October 25, 2003 10:49 AM