Tuesday, June 30, 2009

Health Insurance: The Great Inequalizer

Of all the issues currently on President Obama's plate, few have as direct an impact on more people in the art world in the US than health care reform. Because of the small-business nature of the art industry and the staggering costs of buying health insurance in this country for small businesses, I know more uninsured middle-aged adults (artists, dealers, independent curators, freelance writers, etc.) in the art world than I do in any other realm across the country (and I count some rather un-wealthy folks amongst my friends and family).

Having lived in Europe for three years (and having encountered public health there as many times [once being hospitalized for four days]), I saw both the best (a truly wonderful hospital in Southampton England where they fed me ice cream in a private room and didn't even ask for my signature on any paperwork) and the worst (an emergency room in Northern London where the staff were clearly overworked and clearly short on patience...but then again, that describes the emergency rooms in any major city I've seen), but all in all, I was convinced that Americans' fears of public health are moronically overdeveloped. It can work.

Metaphorically, public health options are like the subway or Central Park. They are great equalizers that help keep a Democracy well oiled. Sure it would be nice if everyone could be driven to work in their own chauffeur-driven limo, but even if we had the money for that, we certainly don't have the road. To keep the country moving, there are times when a nation's people must accept that it's not all about them individually. Indeed, if you need to wait your turn to see the doctor, like every other citizen, despite your 6-figure day job, you begin to have it sink in a bit more that you're all in this together and adjust other parts of your life accordingly.

Now the strongest argument against public plans for US health care reform is the fear (and it's a legitimate one, but not an insurmountable one) that should the government offer public health care as an alternative to private insurance (thereby eating into the uber-powerful insurance monopoly's profits), the insurance companies will respond by dumping even more high-risk clients off their rosters thereby increasing their own profits and overwhelming the public systems. Over at the American Prospect, Paul Starr has been arguing just this point:
The public plan will likely end up as a dumping ground for high-cost, mostly low-income people if the exchanges are open only to the individual and small-group market and have inadequate power to risk-adjust premiums or to regulate private insurers' marketing and benefit design.

In other words, we could get a public plan that instead of "disciplining" private insurers, as the president said last week, actually buttresses their dominance of the system. Watch what you wish for.
The only thing is (and again, if Americans would simply travel more or at least pay more attention to the rest of the world), other countries have already sorted out how to deal with this practice (called "to cream" ...as in taking the cream off the top of the potential client base and letting the government handle the rest), as Josh Marshall shares in a quote from one of his readers:
The current health care reforms drafts, at least in the Senate, would create regional risk pools that drive out the incentive to "cream." In short, if Insurance Company A insured only the lowest-risk half of a given pool, it would have to pay a subsidy that goes to the company (or public plan) insuring the highest-risk members of the pool. In other words, we would drive out the incentive to cream, while also making it illegal to deny coverage on the basis of a pre-existing condition. CMS would manage that risk-balancing process, and has apparently become quite good at it. The Netherlands does something similar, so successfully that insurers actually seek out diabetics to insure.
Now over the weekend, President Obama's senior adviser David Axelrod said something rather alarming to a lot of people who believe a public option is a good and necessary step in providing health care to all Americans:
White House senior adviser David Axelrod says President Barack Obama would like to have a public option – or government-run insurance plan – as part of a health reform package, but will not insist on it.
Personally, I see this as typical Obama, focused on a goal rather than an ideological means, (and Axelrod noted in the same interview that "the president believes strongly in a public choice, and he has made that very, very clear."), but I also understand why folks are alarmed. Obama is essentially asking for a whole lot more faith on this than many of us are willing to believe a situation with the insurance companies motivated to keep things more or less the same as strongly as they are warrants. We saw what they did to Hillary. Then again, perhaps this compromise will pay off. Perhaps the insurance companies will see their way toward real reform, rather than digging in their heels for a battle over the public option.

I don't believe that's the case, though, as Marshall also notes:
[T]the opposition to a so-called 'public option' comes almost entirely from insurance companies who have developed monopolies or near monopolies in particular geographic areas. And they don't want competition.

Note, I'm not saying more competition. I'm saying any competition at all. As Zack Roth explains in this new piece 94% of the health care insurance market is now under monopoly or near-monopoly conditions -- the official term of art is 'highly concentrated'. In other words, there's no mystery why insurance costs keep going up even as the suck quotient rises precipitously. Because in most areas there's little or no actual competition.

That's some freakishly strong motivation to keep things as they are.

What I do believe is that the public option will succeed or fail under its own effectiveness, but as long as it's merely another option for Americans and provides true competition for the insurance monolopy, then it's worth a try. Something has got to bring prices down and help make insurance less of an albatross around so many people's necks.

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18 Comments:

Blogger Tom Hering said...

The debates about cost and choice miss the point. (Other countries have already proven there are ways to manage these difficulties.) The real problem is that our nation is faced with an epidemic of illnesses - more and more cases of cancer, diabetes, heart disease, super bugs, etc., etc., etc. The private insurers can't and won't handle a crisis that effects the whole nation. We need a public, national response.

6/30/2009 09:38:00 AM  
Blogger George said...

H-P = D+B

healthcare - profit = death + bankruptcy

6/30/2009 09:44:00 AM  
Anonymous Anonymous said...

The public option is vital, without it we are still at the mercy of insurance company monopolies.

----ondine nyc

6/30/2009 09:46:00 AM  
Blogger C. L. DeMedeiros said...

Edward,
I'm getting itching with the whole Obama:
talk, talk, talk not going anywhere.
For me is like deja vu. He sound more and more like south American politicians. Nothing about Iran election Fiasco, but I big roar about Honduras turmoil. What's the difference?
Don't Ask Don't tell? don't even start with that...
And your post on Health Insurance.I think it is absurd to pay more for something that should be for granted: Universal Health Insurance.
I swear I thought he had big balls

I have no doubt he's aware of the risks of being the first of his kind, a mean good dancer, to accept that job but please, grow a pair of cojones and do something

Carlos

6/30/2009 09:47:00 AM  
Blogger Edward_ said...

healthcare - profit = death + bankruptcy

That's a remarkable equation, seemingly only applying to certain geographical regions of the world or political temperaments.

6/30/2009 09:55:00 AM  
Blogger George said...

Ed, well yes. It was meant to be like something Krugman would use, via my current macabre sense of humor.

I don't have a solution to the healthcare problem it's to complex for a glib answer. It seems easy to suggest that we just make a radical change one way or the other. The problem is that we already have a huge healthcare bureaucracy, both public and private, and any change will have to be implemented incrementally. It's going to be a matter of prioritizing.

6/30/2009 10:21:00 AM  
Blogger Joanne Mattera said...

Ed,
I applaud health-care reform. As a "sole proprietor" under an umbrella plan that covers small businesses, I pay $708 a month out of my own pocket, plus $25 co-pays and prescriptions. So I have a real interest in seeing change.

But Tom Hering brings up an interesting related point: the amount of illness in this country. Fast food, chemicalized crops, hormonized animals, and cigarette smoking are creating obesity, diabetes and all kinds of cancers. It's an irony that we should try to tackle the health-insurance industry without tackling the underlying cause of the epidemic.

6/30/2009 10:31:00 AM  
Blogger Edward_ said...

I actually think it's a bit hard to see the cause and effect here, though Joanne and Tom. Do we, for example, have out-of-control health care costs because we have so much illness or do we have have so much illness because we have out-of-control health care costs?

In England, for examples, doctors in the public system are rewarded more the healthier their patients are. In the US, doctors are rewarded more the sicker their patients are (i.e., the more treatments they can charge them for).

I'm not suggesting doctors are intentionally making their patients sick, but the motivation seems backwards.

Further many of the conditions that are so chronic in the US get that way because Americans without insurance are unable to get regular check-ups or seek prophylactic treatments as easily as are people in countries with public health options. They weigh paying out of pocket for a doctor's visit versus other expenses and simply live in denial about those symptoms that people in other countries would simply go get checked.

You can't cure a nation of sick people without providing them affordable treatments, so to my mind you must dig deep, find the resources to insure all Americans and then systematically begin rewarding health care providers for making their patients healthier.

6/30/2009 10:39:00 AM  
Anonymous Gam said...

A health care and a sick care system would allow one to address the different issues in each area while benefiting both

6/30/2009 11:39:00 AM  
Blogger George said...

Several months ago, I took my friend who died last week from cancer, to the hospital. It was for an outpatient procedure, to install a drug delivery device for his medication.

So, he goes to this hospital, generates a lot of paperwork, employs at least one nurse and one doctor, gets a hardware device and a subcutaneous implant to hook it up -- all this to get a timed delivery dosage of a drug. The particular drug he received was off-patent. The drug the doctor originally prescribed for him was on-patent and more expensive than the entire process above - therefore nixed by the insurance company.

In the end it didn't matter, and at the time the absurdity of it all was the source of a good laugh.

But, philosophically there is something very wrong. It is a philosophy which favors profit over care, under the pretence that the competition of the free market would improve healthcare.

The theory is that two or more companies will compete to provide the best "health care" solution (drug, device, plant, records) and therefor make a large profit. This works for iPods, and computers, even cars, so why shouldn't it work for medicine?

The problem is that health care, while intimately bound to the consumer, you and me, isn't like a computer, or iPod, or toaster, where we can compare and buy the one we like, fostering competition which favors better products.

Aside from aspirin, with health care, the real consumer is the medical industry, the doctors, hospitals and insurance companies. The individual, is only indirectly a participant and making decisions under the duress of fear and finances.

Maybe the medical industry should be viewed something like the electrical power grid, it's a public service. This means that the rewards of free market competition should be based not only on results, the cure rate, but also on cost effectiveness, which in reality is about availability. (think Job's new liver)

I suppose that in practice this is what insurance companies do, they act as doctors by prescribing (selecting) medical treatments based upon cost -- but we now have two people making decisions about a patients treatment where there was once one.

When I was a very young boy, my whole family caught the flu. My father called the doctor who arrived at our home carrying a little black bag. He sent us all to the hospital for three days because my parents were too sick to care for us. We all got better. We've come a long ways since then.

6/30/2009 11:46:00 AM  
Blogger tony said...

Being English, & now living In France, I feel like an intruder on this particular topic but I really would appreciate some help. From my completely prejudiced & narrow point of view I have never quite understood America's approach to healthcare. For me a fundamental notion of democracy dwells on the respect of the individual & his rights whilst also recognising that each individual exists within a society where the health, not only in physical terms, of that society can only be assured when the mutual interdependency which exists is taken into account. In a highly developed capitalist society maximum exploitation of manpower, resources & materials are to the fore and the more aggressive/'successful' this exploitation the greater the probability that a percentage of the population will be sidelined. How is it that American political leaders throughout the decades have not put the physical well-being of their citizens to the top of the agenda ? How is it that now Obama is, in a more or less modest way, seeking to adjust the inequal balance can there be any objection ? I understand that change costs money but how is it that insurance companies have the temerity to place their financial interests not merely above the well-being but also the very lives of many fellow Americans ? Having followed the last election I know that many in your country equate socialism with communism but it is totally beyond my understanding how such a basically compassionate country like America has been, and may even continue to be, content that many of its citizens can be treated so contemptuously in matters of health-care; a contempt, incidentally, more worthy of a banana republic than the USA. Forgive what ignorance I have betrayed in my words but to an outsider the debate seems to err on the side of the incomprehensible.

6/30/2009 12:50:00 PM  
Blogger Pretty Lady said...

I have been telling everyone who will listen to read Atul Gawande's study of healthcare costs in the New Yorker. He makes a compelling case for restructuring healthcare systems along the lines of the Mayo clinic--a collaborative, service-oriented set up, with flat salaries for doctors.

As long as healthcare is profit-driven, with financial incentives to compete rather than to collaborate, healthcare costs will continue to spiral and quality will decline, no matter who pays the bill.

Tony, as much as I agree with what you say, your lack of paragraph breaks betrays a contempt for the well-being of my vision. ;-)

6/30/2009 01:46:00 PM  
Anonymous Oriane Stender said...

Tony, I didn't read any ignorance there. You're right. It's close to incomprehensible.

I have a friend (I consider him a good friend, except that we don't discuss politics because then I wouldn't be able to be his friend) who works in the insurance industry. He told me that when he was actively working, he set up so many accounts that he didn't have to work at all for the next several years because every time one of those account customers renewed their policy, even though my friend was not involved after the initial sale, my friend got a commission, enough to make him quite a good income. That's great for my friend (and for artists in a trickle-down way because he is a collector), but THIS IS WRONG. The salesperson/middleman should not be absorbing the resources that should rightfully go to pay the claims of the consumer if and when they need to call on that "insurance" policy. The whole insurance industry, which is definitely a business in the capitalist, profit-driven mode, is antithetical to taking care of people's needs.

6/30/2009 01:48:00 PM  
Anonymous Anonymous said...

Well said Tony!

----ondine nyc

6/30/2009 01:54:00 PM  
Blogger marc said...

I suggest reading the article "We've Been Trapped Inside a Bad Health Care System So Long, We Don't Even Know How Much We're Missing"

By Sara Robinson, Campaign for America's Future.

6/30/2009 02:34:00 PM  
Blogger Tom Hering said...

Ed, whatever the cause of increasing illness in the US, 18,000 Americans die every year for lack of insurance. These are unnecessary deaths. The private system obviously fails prevent these deaths, so we need a public sector solution.

Illness is not a private matter. Every individual's illness has a serious effect on others. Illness is a social matter. That's the real change in thinking that has to take place.

6/30/2009 02:47:00 PM  
Blogger Joanne Mattera said...

Ed says: "Do we, for example, have out-of-control health care costs because we have so much illness or do we have have so much illness because we have out-of-control health care costs?"

Generally, Ed, the people who don't smoke, who drink moderately, who don't do hard drugs, who eat healthfully, who exercise, and who take a pro-active interest in their health DO have better health, and thus lower medical expenses, than those who do the opposite. Even when you're dealt a bad genetic hand, taking control of diet and exercise makes a huge difference.

But after a certain point, the out-of-control system kicks in. With diabetes, for instance, the system will pay for an amputation before it will pay for wellness care. (I read this in the Time's mind-blowing series on diabetes a few years ago.)

And I know this from personal experience. Insurance would have paid $25,000 for back surgery--with not guarantee of success--but not for the acupuncture, massage, exercise and chiropractic that healed it at about 10% of the cost. (I paid my health insurance premiums AND the out-of-pocklet expenses of the alternative treatments.)

6/30/2009 02:49:00 PM  
Anonymous Oriane Stender said...

There are so many stories like Joanne's back care coverage. Insurance companies don't like to pay for preventive care or any kind of holistic or alternative care; they tend to only go for expensive tests and surgeries.

And then there are the plans that cover Viagara for men but not birth control for women. That has got to be the ultimate in short-sightedness. Erections! We must have erections! (Consequences of erections? Oh, that's your problem. And haven't you irresponsible sluts ever heard of abstinence?) Oh, sorry, I got off on a tangent.

6/30/2009 03:32:00 PM  

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