Posting in Cancer
There are costs everyone must bear to stay well. Avoiding them, and evading their message, is what leads to chronic conditions like diabetes and heart disease. The rich also expect a different level of care from poor people, and in the American system they have a right to that.
(The picture of a bookie shop is from Wikipedia.)
When my writing does not meet the ideological approval of the audience, I'm called biased. This is inevitable no matter what I write because the issue is so contentious.
So here I want to briefly tell you where I stand. I stand for peeling the layers.
Health insurance currently covers all three layers of health costs -- what we know we need, what we'll probably need, and what we might need.
The bottom layer includes things even the youngest and healthiest adults need. Regular check-ups, wellness counseling, help with diet and exercise. We routinely pay these costs for little kids, but once you're 21 you're on your own. And you become accustomed to not seeing these costs as real or necessary.
Once you turn 40 or (gasp) 50 you start paying these costs as part of your routine. You get the pap smear, the colonoscopy, the prostate exam. You get your cholesterol checked and adjusted, you get serious about your blood sugar, you start going to the gym or at least walking each day.
If these things had become habits at 20 you might not be hustling to catch up. We can save a ton as a society, over time, if everyone is paying these costs and getting these benefits.
This is not "insurance." Insurers are bookies. They can set rates for the outside chances of cancer or a heart attack, they can estimate the odds you'll fall and or get in a car wreck. They are good at this. They are not good at paying out on sure things.
That's what bankers do. So health care should be run by bankers, not bookies.
If everyone has costs (and they do) everyone should pay them into a common pool. You then designate a health system to take that money -- you can change if you move or switch jobs -- and they use that money for your basic care.
They assign you a wellness coach, who uses data from your regular check-ups and anything else they can learn to keep you as healthy as they can. This should be a doctor, but we don't have enough primary care doctors so most people will get this through groups that have doctors at the top and a range of people aligned to them.
Health insurance, too, comes in two layers. There are the likely hazards -- cavities, eyeglasses, mental problems, maintenance prescriptions -- and there are the unlikely ones.
You can insure that second layer or handle those costs yourself through a Health Savings Account (HSA), whose sponsor might win you discounts through buying power. Insurers can and do set up such plans today. It's a conservative idea that can work.
Then there's real insurance, the "catastrophic care" plans some Republicans consider a total solution to the problem. This is where the insurance industry started, gradually expanding into wellness because there was money in it and savings were promised.
We should have insurance for catastrophes, just as we have car insurance, fire insurance, and business insurance. The market works well here, and for those who don't go to the market taxes can pay for care that's as good (or bad) as the public wants to make it.
That's a good place for a political debate.
So what do we have?
- A per-capita wellness tax everyone pays, which providers compete to get your piece of.
- A layer of costs we can either cover through forced savings or pay cash for.
- A layer of catastrophic coverage we handle through the market, with taxes paying for minimal standards of care on the uninsured.
The "Dana Plan" has something in it to make everyone angry:
- Conservatives are going to hate the wellness tax. They're going to hate the nagging it pays for even more.
- Liberals are going to hate the standard of care the uninsured get, when compared to those who buy insurance.
- There are going to be gaps in the middle as people treat necessities as extravagances.
This isn't a political plan. I am quite tired of politics when it comes to health care.
But this is the honest truth. There are costs everyone must bear to stay well. Avoiding them, and evading their message, is what leads to chronic conditions like diabetes and heart disease. The rich also expect a different level of care from poor people, and in the American system they have a right to that.
I wish I could have written this two years ago, when I first started covering health care for ZDNet. I wish I had this plan 30 years ago when I began covering business for a living.
Better late than never.
Oct 19, 2009
..."There are plenty of examples in Europe of systems that does work well. Germany, Great Britain and Denmark, for instance...", might I suggest reading what the people in those countries think about their health care. Since it's readily available in English, I'd suggest British papers such as: London Observer: http://observer.guardian.co.uk/ London Telegraph: http://www.telegraph.co.uk/ Just search by keyword "NHS" (for "national health service", and you'll find plenty of examples of what we will be in for when we adopt an "officially controlled" health care system. The American promoters of the "government option" are counting on it that you'll be too lazy to actually do that.
I believe in prevention as a way to deter or to identify earlier conditions. The only way to provide it to everybody is through some form of government way. There are plenty of examples in Europe of systems that does work well. Germany, Great Britain and Denmark, for instance... and they are officially controlled. Surely they cost money to everybody, and ultimately, it's up to the individual to chose between a super-sized junk food with a gallon of soda sweetened with corn-syrup. Some people will still die from self neglecting by ignoring wellness practices, but many more will be able to benefit from a regular visit to a prime care office. Some say we don't have enough doctors, even though they currently make some serious money (nothing wrong with that...), but if we decrease their exposure to being sued for frivolous reasons there would be more of them. We always can schedule wisely, and have some doctors working on Fridays again... If we don't do this, most of our medicine will be practiced at the Emergency rooms, and we all know how expensive that is. Think about the IT market, for example. Ten years ago, we were importing people from everywhere to code for Y2K. Surely, we off- shored lots of those jobs and nowadays we have surplus of such professionals... Maybe we could start importing doctors as well... Bottom line is, the saying that 4 of every 5 Americans have some sort of insurance is not working.
..."tort reform". If you want to see "questionable profits", how about those for John Edwards' former law firm?
"But there are serious questions to be raised about the size of health insurance profits." My casual reading of industrial comparisons puts the net profit margin for the health insurance industry somewhere between 4 and 11 percent; hardly levels I'd consider questionable or even worthwhile considering the levels of risk involved today. Now, if you want to talk about eliminating anti-trust and monopoly rents in the health care arena, I'd probably be your biggest fan. Again, these are distortions totally created by government intervention by: o Incentives and disincentives via the tax code o Favoring employer and state provided coverage over personally provided coverage o Not allowing insurance to be purchased across state lines o Regulation through mandates, which discourages competition o The biggest monopoly, Medicare o Practically zero transparency But none of this is on the current agenda, which almost completely driven with the goal of a single-payer system. And the biggest problem with the single payer system is that it's not-for-profit, meaning that nobody comes out ahead for doing it well.
I like profits. I don't object to profits. But there are serious questions to be raised about the size of health insurance profits. Anti-trust issues, for instance. To what extent are these profits monopoly rents, and how should government respond to make them the product of good business rather than legal tricks? While I take it that the profit motive is a great thing, it's also not the only motivation for all market participants. It is foolish to ridicule these other motivations. I have learned this in covering open source.
Finally, you let it slip. The evil "P" word. Personally, I would never do business with an insurance company that did not make a profit. Contracting with a unprofitable company would mean only 2 things; either rates would have to be raised significantly in the near future, or worse, they'd be unable to pay claims when the day came that I'd need them. (This is what is likely to happen with the non-profit "public option" when it happens, which is inevitable) And as industries go, the health insurance industry is no where near the top of the list in terms of profit margin. You need to do some research beyond DNC press releases before regurgitating lines like that. Your audience here is a bit more sophisticated than MSNBC's.
My ideas were generated from interviews with people in the wellness and insurance industries over the last two years, including people involved in predictive health. What businesses tell me is that the best way to lower health care costs is wellness. Do everything you can to keep people from getting sick and you can make a material impact on the cost curve. I suggested "tax" and everyone ran from the hills. But I'm no hypocrite. If everyone has to pay in and get something out I'm not going to call it a "user fee." If it's universal it's a tax. My suggestion is that this be a pass-through to wellness companies, who are able to choose whom to serve and offer a variety of plans based on folks' age and risk. If I know you need a colonoscopy and regular heart screeings this year, I'm not going to give you the bottom-level plan with the health club and the massage. That's the market at work. All this can be automated. The overhead costs of running automated plans are really very low. That's why insurers have such high profit margins.
...is this idea that somehow if everyone get free regular checkups as they should, that they will start living healthier lives and require less expensive care down the road. This is myth on several levels; the 1st being that most health care dollars are spent on the final months of life, regardless of how old someone is. The 2nd is that the effects of obesity and diabetes are more expensive to treat than the diseases that those who avoid obesity and diabetes will eventually get in their place in old age. (cancer, althzhiemers, etc, unless we actually will be using "death panels"...) And the 3rd myth is that somehow people will simply live healthier because they get to go to the dr for "free". But that seems to be your optimistic viewpoint, in that you also believe that if only we had more sidewalks, then people would start walking more and driving less. In fact, I fear the opposite; free health care will actually encourage people to be less healthy, just as the success of anti- virals have encouraged the return to unsafe sexual practices as AIDS is no longer seen as the death sentence it was 20 years ago. If people won't go on a diet, there will be free medication and surgeries to fix the problem.
...as you frequently seem to do, you have to resort to extremes as answers to any debate. Your original post is far more reasoned than most I see regarding this debate. You are amongst the few who seem to actually understand that what most Americans think of as "health insurance" is actually a "payment plan". Insurance is a hedge against lesser-likely but catastrophic events. However, 60-years of corporate custom abetted by the tax code has seen to it that most people think of insurance as something an employer takes responsibility for with $20 co-pays and real costs that they never ever see, or realize even exist. My favorite example is: How expensive would your auto insurance have to be if it also covered oil changes, tune-ups, and replacement tires? And how much would consumers care about the actual cost of oil changes, tune-ups, and replacement tires if all they had to pay to get them whenever they wanted them was $20? But the unfortunately, your "wellness tax" is simply a blank check in a nation where few understand, and fewer can even define in finite terms what all "health care", is, or should be, especially when most of those clamoring for it expect that it will be paid for by someone other than themselves. Add to that the idea that somehow a hopelessly corrupt congress can develop a plan that was not riddled with special and self interest, and then stand behind and defend what they write before the people instead of relying on code and procedural gimmicks to get it passed into law. And this is all done in the shadow of the explicit goal of implementing a Soviet-style single-payer system the second their flawed system predictably fails. Any discussions of "freedom" will be long since mute at that point; we'll all be slaves to the state.
The market does not currently work for the catastrophic coverage, though perhaps it can be fixed. There is a huge economic incentive to find ways not to pay for catastrophic care, and smart insurers will of course pursue these self-interests on behalf of their shareholders If you invest in a healthcare insurer you should understand that the profits you've enjoyed came at the cost of people's lives. You made a couple bucks, someone died so that you could. Blood for money This is not the right area for a for-profit business. It's Dickensonian, like the days of Ebeneezer Scrooge. "But what did Scrooge care? It was the very thing he liked. To edge his way along the crowded paths of life, warning all human sympathy to keep its distance..."
Dana, not a bad article for a statist. Your comment doesn't fly, though: "If you refuse to pay those taxes in the name of FREEDOM, you're taking away their FREEDOM to live" Its unfortunate that our government schools don't teach us that freedom is a negative right, not an obligation. Its tough to have a debate unless we start from a common framework of understanding the nature of rights and the reason for their existence. Iron Monk is correct, the government has created the mess. The public option is all about increasing competition, right? So why does the administration avoid no-cost reform? http://www.youtube.com/watch?v=YD1JH3dF_X4 (3:04) Senior Presidential Adviser David Axelrod cites statistics on how insurance companies dominate state markets (1:25) and proposes a public option to introduce competition, but refuses to endorse de-regulation of state barriers (the very purpose of the Commerce Clause in the Constitution) on competition between insurance companies. Ideology and winning elections clearly drives politics. So is Axelrod like an evil CEO who commits fraud and can be prosecuted? No, far worse, he's an idealist politician who never grew up, who paves the road to hell with his good intentions, and is unassailable for pushing to break the law: "I got into politics because I believe in idealism. Just to be a part of this effort that seems to be rekindling the kind of idealism that I knew when I was a kid, it's a great thing to do." http://www.latimes.com/news/printedition/asection/la-na-axelrod15feb15,1,1237468.story Government failures drive market failures. Its a shame that the term hasn't entered the mainstream, since most of our problems are due to it. http://en.wikipedia.org/wiki/Government_failure Dana, I think you'll find this article on Somalia very interesting. http://www.cato-unbound.org/2007/08/06/peter-t-leeson/anarchy-unbound-or-why-self-governance-works-better-than-you-think/
O'bama can fix it w/o much fuss. All he has to do is sign an executive order changing the insurance companies to N.P.O.s. They'll quickly settle into MUCH lower cost operations to save their salaries. Include in the order that they must maintain their current level of service and it is settled.
Hi! Dana, The government screws-up everything they touch (Failed Fannie, Freddie, SS, medicare, education, legal system, ...). If we give them control of Well Care, then it will cost double & accomplish 1/2. Please re-think the tax part ... I'm Independent, not republican Thanks! My Best! Mark
Sorry, no matter how you spin it, it's still the "government run, 1500 page, no one has read, refuse to post on the internet so we can't read it, non-transparent (in contrast to the president's campaign promise" Obama Plan. No diffence. It's "robbing Peter to pay Paul", or in this case, robbing from hard-working taxpayers who chose to work and sacrifice in order to purchase health insurance. The government should concentrate on covering those who are certifiably unemployed as a result of the economy, the working poor and those who are locked out due to pre-existing conditions. Why change it for EVERYONE in order to cover those who choose not to work, chose to spend their money elsewhere or are here illegally?
Sheesh! First you've got to gather information, then analyze it, define the problem(s) to be solved. What's the problem? Many people want infinite health care at zero cost... and they really really want it... now. If you can't afford something, and you can't get or won't accept charity, you don't get it, no matter how much you want or "need" it. The bookie analogy is pretty good, though. Protection rack, er, uh, insurance companies do not take on risk. They're weasels, as we saw a while back when hurricanes came through and one particular firm declared that all damage to their insurees was "flood damage" (which they've already dumped off onto the feral federal government, and hence to tax- victims). They were even caught forging engineers' reports, and leaning on engineers to get them to change their reports. What's most amazing to me is that they're still in business, still protected BY federal and state governments, and the executives are still pulling down megabucks, for nothing. "medical insurance leads us to buy more health care than we would buy if insurance were not available and every bill had to be paid in cash." --- Lester C. Thurow 1980 _The Zero-Sum Society_ pg 89 "In 1940 [the 4th year of Socialist Insecurity imposition] people aged 65 & older in the US was only 6.8% of the total population, according to that year's census. Life expectancy at birth was calculated by the National Center for Health Statistics to be 63.6 years -- 61.4 years for men & 65.7 years for women... The hardy few who did make it to 65 could expect to live -- & draw benefits -- another dozen years (13.4 for women)." --- Marshall N. Carter & William G. Shipman 1996 _Promises to Keep_ pp 29 -30 "Today, the vast majority of people in the US are covered by Medicare or by some sort of private insurance plan. Because a 3rd party is paying most of the cost, consumers have little reason to shop for better prices, nor do doctors have an incentive to lower their charges to gain more business. If anything, the reverse is true." --- Derek Bok 1993 _The Cost of Talent_ pg 121 "[A] day's stay in the hospital cost 5 times as much in 1970 as it did in 1950. These incentive problems have existed since the advent of medical insurance, but the negative effects on overall health costs have only manifested themselves since WW2 because health insurance was rare before that time. In 1940 less than 10% of the US population had any health insurance, so while institutions responsible for reducing market forces in medicine were developed earlier in the century, they did not exert a major effect until insurance became more wide-spread." --- Randall G. Holcombe 1995 _Public Policy & the Quality of Life_ pg 129 (referencing Martin Feldstein 1971-12-?? "Hospital Cost Inflation: A Study of NonProfit Price Dynamics" _American Economic Review_ vol 61 pp 853-872 & Burton A. Weisbrod 1991-06-?? "The Health Care Quadrilemma: An Essay on Technological Change, Insurance, Quality of Care, & Cost Containment" _Journal of Economic Literature_ vol 29 pp 523-552)
What about those costs we all must incur, costs which if we don't incur them we die, now or later? I guess you'd say it's FREEDOM to forego these costs. FREEDOM to not tax us to pay for those costs. Trouble is, a lot of people would like those costs paid in some way. A lot of people might prefer not to die of diabetes or heart disease in their 40s. They might like the option not to. If you refuse to pay those taxes in the name of FREEDOM, you're taking away their FREEDOM to live. Oh, and the opposite of FREEDOM isn't government. It's anarchy. No government, no FREEDOM. Unless you consider Somalia FREE.
Insurers take on risk, everything is a risk when it comes to insurance... health insurance should be like car insurance, in regards we use it to pay for accidents, we pay for our maintenance out of pocket, this is where HSA's and a high deductible plan can save us lots of money. If people want to live a unhealthy lifestyle, they have that right of freedom, but they will have to pay when it comes to getting health insurance. The government has created the mess, we need less government intervention in healthcare to fix it, not more. NO MORE TAXES. To give few have nots of "health insurance" they will have to take away freedom from the majority of people... which is UNJUST Side bar... as the bureaucrats would have you believe that people are dying because of no health insurance, which is a total lie. People who need medical care cannot be turned away from a hospital emergency room for lack of ability to pay. People have a responsibility to take care of themselves, if they live unhealthy lifestyles, too bad. It's called FREEDOM. We should have FREEDOM to SUCCEED and TO FAIL.