Tag: insurance

Health volley

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I’m putting together a much longer post to present a tortuous metaphor for the state of American health care, but I keep seeing the same theme in the current “debate” on health that is driving me nuts enough to say something about it here.

Here is an example, this one from Mark Steyn:

I think Sarah Palin’s “death panel” coinage clarified the stakes and resonated in a way that “rationing” and other lingo never quite did.…What matters is the concept of a government “panel.” Right now, if I want a hip replacement, it’s between me and my doctor; the government does not have a seat at the table.

Whatever you may think about Palin or the death panel or whatever, the statement above contains a huge glaring problem. Under the system we have now, while it may be true that the government does not have a seat at the table, if you want a hip replacement, it is most certainly not between you and your doctor. It may be between you and your insurance company, and it may be between that insurance company and your doctor, but if you and your doctor, by yourselves, want to decide on your hip replacement, you are totally fucked under the current state of health care in America.

If you don’t like the current health bills being debated right now, fine, but don’t compare them to an idealized system as if it actually exists when it really doesn’t.

Robert Tracinski makes the same mistake in this piece, when he says (with his own emphasis):

Do the Democrats even understand what insurance is? … Insurance is a form of financing. It is a contract under which a health-insurance company agrees to pay for medical bills that could run into the tens of thousands of dollars, if you are hit by a bus or are diagnosed with cancer, so that you don’t have to pay for those bills out of your savings. For younger people, this means being able to pay for catastrophic care even if you haven’t had time to build up tens of thousands of dollars in savings. For older people, this means not having your retirement savings or the equity in your home get wiped out by an unexpected illness.

It is? Really? Great!

The problem is that while this is what insurance should be, present-day American health insurance doesn’t actually work like this. At all.

You try telling a mother of two “sorry, your kids’ check ups are not covered by your insurance. Insurance is only for unexpected emergencies.” I dare you.

And, likewise, when an actual emergency causes “medical bills that could run into the tens of thousands of dollars”, see how likely the “insurance” is to pay it all.

There is a reason HR departments call it “health coverage” and not “health insurance”: because it is no longer insurance. The “coverage” is now used for pretty much any type of health related expense. The expectation involved is similar to imagining a world where everyone just assumed that their auto insurance would pay for their fuel, oil changes and routine maintenance, instead of just a serious car accident.

While the current state of health care in America isn’t exactly socialized medicine, it is functionally pretty close. Does it really matter that, instead of the bureaucracy of the state that meddles in your health decisions, it is the bureaucracy of a set of corporations that meddles in your health decisions? You (and your doctor) have roughly the same level of control over both of them: almost none.

The knife

Wordman 1 Comment

The death of an 18-year old girl from voluntary breast surgery explains the timing of this post, but is only tangentially related to its point. In the coming days, there will likely be a huge fuss about plastic surgery in the media, with people screaming on all sides in what passes for debate in that venue. Some, like this article, will make mention of an American Society of Plastic Surgeons report (pdf) claiming that the number of breast augmentations in 2007 increased 64% over the number in 2000. Some will claim this as a sign of the decline of Western Civilization. They may be right, but not in the way that they think.

In the past five years, health insurance providers have gained more and more control over the business of health in the United States. This has made them very profitable, as this comparison of four large, publicly held health insurers—Humana (HUM), CIGNA Corporation (CI), United Health Group Inc. (UNH) and Aetna Inc. (AET)—with the S&P 500 index from 2003 to 2007 shows (for the color blind, the S&P line is the one on the bottom):

Stock comparison
Image and data from Google Finance

In the process, they have essentially gained control of the pricing of nearly every procedure that they cover. They, not the doctor, set how much the doctor charges. I will have more to say about this later but, briefly, the result of this has been to cause a toxic environment with at least two major consequences: 1) in most cases, neither the person consuming health care nor the person providing it have any input or influence on what the care costs (this basically turns the invisible hand into a middle finger) and 2) doctors are now, essentially, indentured servants to insurance companies.

As a direct result of the latter development, doctors in private practice are now forced to make one of three choices: either close their practice down now, continue practicing until forced to close by bankruptcy, or find some way of making money that doesn’t involve dealing with insurance companies. A great many doctors have been choosing the third path by exploiting a loophole of sorts: insurance companies usually don’t cover voluntary surgery. Voluntary surgery, like breast augmentation.

It should, therefore, come as no surprise that plastic surgery is on the rise. There are now huge numbers of doctors motivated to get people to pay for it, so that the doctors themselves can, you know, house themselves and eat. This makes it cheaper, easier to get, and gives plastic surgery the perception that it is now routine (which, sadly, it is becoming). Ever heard of labial plastic surgery, where women have their genital “lips” reduced? You will, as millions of OB/GYNs discover they can’t actually survive by doing things like delivering children into the world.

As I said, I will have more to say on this later. For now, keep in mind when watching all these idiots on television that the rise in plastic surgery has real economic causes.