November 18, 2003

private health insurance fails us

Calpundit discusses the impending Medicare reforms:

But here's the problem: in theory, private companies can deliver services more efficiently than the bad old federal government bureaucracy and can therefore deliver those services at a lower cost. But if that's the case, why does the bill have to pay them a bribe of $12 billion to get them to participate?

The answer, of course, is that the idea of competition in the Medicare market is a mirage. Private healthcare companies plainly don't believe that they can, in fact, provide services any more efficiently than the feds, and since the goal of a private company is to make money, that means that the only way for them to maximize profits is to reduce benefits and do their best to insure only the healthiest people.

This is, of course, completely correct and very well-stated. I would add that even if we acknowledge the efficiency gains that private insurers would generate (and this is certainly debatable), we still cannot justify getting rid of the government's role entirely.

Unless, of course, we change our minds about the people who are sick, poor, and uninsured by the private insurance industry. Despite our laissez-faire rhetoric, we are not willing to simply let these people die. Instead, we allow them to suffer from lack of timely preventive care until they are on the verge of death, and then we admit them to the ICU through the ER.

This always costs big money. Hospitals can't eat this cost, so they either pass it along to the government (us) or to their other patients (again, us). Either way, we pay for our unreasonable ideological commitment to the private healthcare insurance market. It would make far more sense to insure these patients early and get them the preventive and continuing care they need, rather than wait to spend gobs of largely futile money on them at the end of their lives.

This doesn't mean there is no role for private healthcare insurers; far from it. Rather, it simply means that we should not allow any segment of our population to depend entirely on the private market. Medicare, Medicaid, and the various state children's health insurance programs (SCHIPs) run under Medicaid are all acknowledgements that the private market has failed the old, the poor, and the children of the poor. The evidence is that it is also failing young working adults, who constitute the majority of the uininsured in our country.

We don't even have to think that healthcare is a "right." Even if our main concern is efficiency and cost-control, a universal, government-run system of basic health insurance is the best solution.

Posted by Carey at November 18, 2003 04:04 PM
Comments

There's also the public health issue to consider. If you have a large, poverty-stricken group of people without decent health care, then you have a large, wealthy breeding ground for evil disease. Which is never a good thing. Well, maybe it's a good thing in CDC labs, but not in New York. Which is one reason the tenements were cleaned up there, years and years ago -- if the poor people got sick, they might make the rich people sick, too!

Posted by: John at November 19, 2003 08:08 AM

You can't appeal to a free market economy's efficiency if the market isn't free. Medical care is highly regulated.

Posted by: mobiusnu at November 22, 2003 04:41 PM