As I followed the news, I wondered, "What other item can't be purchased by someone without insurance?" It occurred to me that if the subject weren't healthcare, we might see how insane the path we are on really is. One issue that separates healthcare from every other purchase is that everyone feels entitled to the very best, top of the line, leading edge resources and expertise. When we buy a car or groceries, we don't feel like everyone deserves a BMW or fillet mignon with caviar. Some people can afford the luxuries and the rest buy what we can afford, but with healthcare, with our well-being or lives on the line, there is no room for compromise (despite the fact that this has never been the case through all of recorded history). Given that difference, let’s do a little thought experiment to help clarify the issues.
Noticing that your gas tank is getting low, you drive to the gas station to find that things have changed. Before entering, an attendant
asks to see your insurance card. She
looks at it and tells you that they used to accept that insurance but no longer do. If you
really need gas, they will fill you up, but you will have to pay them at a
higher rate or your insurance will charge you more for
“out of network" service. You wonder why
you weren’t notified of this, and you don’t want to pay the higher rate. After all, you and your employer pay good money for the premiums (which cover fuel, and minor or major repairs).
So you drive out and head to another station. Your insurance is accepted and you drive in and get gas. At the same time your car is tested for various problems. You notice a few things: the price of the gas is not posted anywhere, all
the readings for the pump are inside, and the tests they do differ from the ones your old station did. You wonder whether all these tests are
necessary, but are assured that the attendants are professionals and know what
they are doing. When you drive out, you
don’t pay. They will send the
information to your insurance company who will process it and in about a month
or two, send you information telling how much they will pay and how much you
owe. This information is very vague
about the tests done with some "reason codes" referring you to general
explanations of what isn't covered and why. (Some of these services you may not even recall getting.) A few
weeks later you will get a bill from the gas station and you hope the numbers
match. If they don't you have a 3-way argument with them and your insurance company - good luck! Sometimes this process becomes so complex that your employer provides the services of an insurance advocate to help sort out discrepancies, an activity that may last several months.
Not everyone has insurance. They can’t be left stranded on the road, so the stations send tow trucks to help. The uninsured pay what they can, but the difference is
passed along to regular customers.
Another factor that adds to the cost is that everyone demands the very
best in fuel, fuel delivery systems, repair diagnostics, and so forth, forcing
all the stations to invest heavily in top of the line products and equipment, even those rarely needed. This only-the-best
mindset leads to further costs as attendants and mechanics are held to stricter
standards of performance and must pay extraordinary amounts for liability
insurance, passing those costs along to their customers. You drive carefully and take care of your car, but others drive recklessly and neglect their cars; the cost is averaged over everyone. Finally, there is a small
minority of stations that game the system by filing bogus insurance
claims, likewise adding to the overall cost.
One thing few people notice is that in areas where insurance is
more generous, stations tend to more readily recommend additional
repairs and maintenance. If you live in
one of these areas and don’t pay strict attention, you may drive away with windshield wipers or even new tires whereas another station
might have let you drive a few more miles with the ones you have. Two months later you find that your less
generous insurance doesn’t cover these and you are stuck with
the bill – too late to do anything about it. Those with the better coverage don't object to the extra services because it's not costing them anything, so the practice continues.
Now if someone came along and said, “We’ll fix it by
making it easier for people to buy insurance and by forcing more regulations on the
companies or by setting up a government insurance pool", do you think that would
improve the system or provide the incentives needed to bring the long-term cost
down? I don’t think so. I think anyone who considered the problem critically, seriously and objectively would conclude that the entire system is messed up. Easing entry into a messed up system doesn’t
un-mess the system. It just exposes more
people to the complexity and the mess. Think about it.
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