September 25, 2009
WSJ: "Doubling Down on a Flawed Insurance Model"
"Comprehensive, low-deductible, low-copayment insurance has brought us to where we are today. The administration's plan to expand and lock-in this flawed paradigm will ultimately defeat the goal of making health services more affordable for everyone."
That's by three esteemed professors writing in today's WSJ Op-Ed. Time's a wastin'. Read the whole piece, which makes several other excellent points, and share it with your friends.
Posted by Carter Mackley at September 25, 2009
10:00 AM | Email This
1. If you make $45,000 a year, how big should your deductible be? $10,000? 22% of your income? The average male made $45,113 in 2007.
Catastrophic coverage is simply not the model to move forward with. Many more esteemed professors are comfortable with the comprehensive model. And you know what? So are most countries in the world, and they have significantly more cost containment than us.
2. The WSJ piece notes that people with health insurance tend to use more medical services than people without. You can't argue with brilliance like that -- and it helps explain the plan put forward by some to lower health care costs by doing away with comprehensive health insurance altogether. I just wish more Republicans would campaign on that platform.
3. The argument is that people with insurance use more services than they would if they didn't have insurance. The corollary is that people would get more value, based on their own preferences, by spending less money on insurance premiums and more on other goods and services. I haven't seen a politician in either party that seems to understand the fundamental problem. If you notice one, please send me link or reference.
4. Carter, lots of people understand that problem. However, they consider it far less serious than the problem of people getting too few medical services because they can't afford them. Even with insurance, I think most people tend to get less care than is medically wise (because it's a hassle, they're afraid, etc.) rather than more. There are lots of cases of unnecessary care, but the causes are many -- a fee-for-service model, greed, malpractice fears, etc. I think the problem of patients seeking too much care is a relatively small concern -- worth addressing, but not worth building a system around.
5. It's not as much about patients seeking too much care as it is that they rely on the recommendations of doctors and other caregivers as to what care to use. And those doctors have a financial incentive to recommend more care. In later posts I will be talking about this, and why I think doctors and other caregivers will act more altruistically if they know that the the person receiving the care will pay for it.
As to how we build our system, right now the Democrats on the Senate Finance Committee are poised to impose a system that combines the worst features of our current system and a single payer system.
6. Carter,
Michael Connelly has an excellent article at http://michaelconnelly.viviti.com/ that supports your post. What is being passed is a total nighmare and in violation of the Constitution!
7. Who is getting too few medical services because they can't "afford" them? My impression is that many people think it is unfair that "poor" people use the emergency room (thus causing hospitals to charge other customers & insurance companies higher rates). But "poor" people are getting the medical services! It seems to me that anyone who wants medical services does get them, whether they can afford them or not.
8. Carter, wouldn't eliminating fee-for-service remove an economic incentive for providers to even allow an over-use of services?
9. John,
Do you know a doctor who orders tests from a lab in which he has a financial stake? If so, report him to the AMA - he'll probably lose his professional license.
Medical laws and ethics require a doctor to NOT have a financial interest in any lab or referred clinic. That's a pretty strong reason to not order tests to simply make-a-buck.
Now, often extra and meaningless tests are added to avoid potential lawsuits in the future! Defensive testing/services to protect themselves in case a lawsuit arises later.
That could be addressed by tort reform, but that's also opposed by the current "leadership" in Congress, as well as the President... Never mind that tort reform is heavily supported by the American public.