Restating the Obvious

There’s more commentary today on health insurance rescissions. Many are angry, but I’m not seeing anyone else state the obvious — the CEO’s insistence that they can’t stop recissions and make a profit; the implicit acknowledgment that they can’t insure people with preexisting conditions and make a profit; amounts to a confession that the private health insurance industry cannot solve the health care crisis. The “free market” is inadequate to the task of paying for modern health care.

And see Digby — the CEOs of the 23 top health insurance companies received $14.9 billion in compensation over a five year-period. You can provide a lot of health care for $14.9 billion.

What are the righties saying? So far the only reaction I’ve seen is from Erick Erickson of RedState. Taking his comments in reverse —

More damning, the White House cannot think of a single example of a single-payer system in the world that works.

Apparently White House spokesman Robert Gibbs was caught inexcusably flat-footed on a question about which single-payer system in the world “works.” I can answer that, but first let’s turn the question around — name a single nation in which 21st-century health care is being delivered by a “free market” system, at all.

{Cricket Chirps}

The United States is the only industrialized democracy that pretends to have a “free market” system, although in fact a large part of our health care costs are being paid by government, anyway. And the World Health Organization says ranks the U.S. at #37, behind Costa Rica, in terms of quality and fairness of our system.

In other words, there are 36 nations with some form of government-paid national health care system, several of which are single-payer, that are doing a better job than we’re doing in delivering health care.

Erickson also says,

Jay Rockefeller, Ted Kennedy, Barack Obama, and a host of liberal writers admit that the government will determine whether or not to treat you based on whether the government thinks the cost/benefit analysis makes sense.

Does anyone have any idea where Erickson got that idea? I’ve seen no such admission, and of course Erickson doesn’t provide a link.

14 thoughts on “Restating the Obvious

  1. …in answer to your last question, I would be cheerfully willing to go way out on a limb and suggest that he made it up. His observation falls into that category of political musings called “Making Stuff Up”, which we all recognize as the preeminent style of winger discourse. An underlying basis of a government-supported health-care plan (Veterans’ Administration nonwithstanding) is to eliminate the cost/benefit analysis; that practice is more commonly found in our ‘free market’ system, where the insurers perform that cost/benefit analysis and, if the cost to benefit ratio is much over 1:1, they move immediately into rescission mode…

  2. OK, let’s get personal here. I am part of a “group” plan for health insurance. As a U.S. gov’t retiree (civilian) I took my health insurance with me when I retired. Blue Cross/Blue Shield is obviously making a profit with this large group of federal retirees.

    I am also covered by Medicare and Medicare is the primary insurer so they set the amount of reimbursement for any procedure. But even before Mrs. Chief & I became eligible for Medicare, BC/BS is so big they negotiated the fees for each procedure with the providers.

    Right now, I am paying $116 / month to BC/BS for coverage for the two of us, which is 30% of the cost and the gov’t is paying the other 70%.

    Why can’t the government do the same for every citizen of the country ??

  3. I think Digby’s (again) on top of it – there’s a new Republican bill that would prevent Medicare or Medicaid from using ‘comparative effectiveness research to deny treatment’.

    Erickson and others are buying into the frame that this means the government denying you health care. This goes beyond spin into willful delusion, I think.

    A few years back, Bill Moyers talked about Oregon’s experience in examining drug results. Oregon used this to create a list of recommended drugs for the state heath insurance program – doctors could still prescribe drugs not on this list, they just had to write a note way. What Oregon found is that the most advertised drugs are typically either the least effective or very similar to a generic drug. This makes sense; if the drug was actually the right tool for the job, they wouldn’t have to advertise it.

  4. Erick got this idea from the same place most conservatives and Republicans get theirs. And here I thought they were individualists who hated sharing – yet they all pull this stuff out of the same @$$.
    Enquiring minds want to know whose @$$…

  5. I think Digby’s (again) on top of it – there’s a new Republican bill that would prevent Medicare or Medicaid from using ‘comparative effectiveness research to deny treatment’.

    I could be wrong, but I dimly remember that many years ago a federal court ruled that Medicare and Medicaid could not use cost-benefit analysis to deny care, so they don’t.

  6. I know, I’m a numbers person but they are impressive. In 2006, we spent $2.1 trillion on health care. As of now, health care/insurance costs as determined and run by the insurance industry costs us $7,026/person/year – $28,000 for a family of four. One-third of every health care dollar goes to the private insurance bureaucracy and paper work ($350 billion/year.)

    At this rate the medical/health insurance crowd should be pricing themselves right our of the market, which may finally be what kills them (and gives us a bargaining chip.) Bad news – today’s applicable stocks (up) reveal that the Street is betting that anything resembling or even close to or even abutting a single-payer system is dead in the water.

  7. I’be been working as an actuary for 25 years, mostly in health or disability. It has long been clear that the most efficient (i.e. outcome per unit cost), and effective (outcome per unit exposed) system of care would provide universal coverage from a single payer. This is not theoretical ho-haw. Just look around the globe! The experiment has been run. That being said, the political ‘realities’ all snag on: implementing such a system would destroy the livelihoods of many employed by the current system, and would reduce the standing of the Republican party as a credible source for social welfare policy ideas.

  8. The logic of your first paragraph is unassailable. I added it to my bag. If only it could be elevated in other forums.

    While it is good debate jiu-jitsu I do suspect that what I’d always heard is still as true today as it was yesterday…that Banking and Insurance are the two most profitable industries in America.

    Doesn’t it say something about us that they are in the service sector rather than manufacturing? We used to be good at making things. Both share the taint of gambling.

  9. “Banking and Insurance are the two most profitable industries in America”

    I agree, that’s why most of the big buildings in every city carry the name of a large bank or insurance company.

    I believe I’d add big pharma, big oil, and the weapons industry to the list.

  10. …the political ‘realities’ all snag on: implementing such a system would destroy the livelihoods of many employed by the current system…

    Not necessarily. It will likely destroy the livelihoods of many executives in the current system, but the work still has to be done. I work for a government contractor. All of us beltway bandits bidding human process business win/lose contracts to each other all the time. What normally happens is the people are transferred from one company to the other and keep doing what they do under different management (and often streamlined procedures). Relatively few job losses where real work is done.

    What will likely happen is, as government work spools up, insurance company work will spool down and trained workers will move from one to the other. In fact, a large part of this work will be outsourced to the private sector; perhaps many of the existing insurance companies will win these contracts and keep on doing what they do under different rules. In fact, given that we should be covering more people, there will likely be an increase in health insurance employment.

    It all still has to be administered by somebody.

  11. I’ll second Dave S. As there have been upheavals due to outsourcing and the evaporation of our manufacturing base government has told us to retrain in other areas and sometimes offered incentives to do so.who made some really good points.

    If we take the high road as a nation and 40 million more get healthcare when the status quo has been unable to make that happen since forever then there are going to be some new jobs in the healthcare sector.

    However in the repeated cycles of claim denial leading to approval after much hounding and many threats I suspect that a lot of needless manpower is consumed and costs are jacked up disproporationately because of that. So maybe a few less people will be needed.

    Medicare administration costs run less than comparable private drug plans…

  12. Someone just pointed out on Digby’s blog that the bennies for insurance CEOs should read: 1.4 billion instead of 14 billion. I can’t swear to the accuracy of this because my brain fries on numbers larger than my shoe size. Might want to check it out, though.

  13. How would a public/private partnership work. Most people seem to agree that Medicare and the VA are well run for a govt. agency while our approach to say, running the Iraq war with Haliburton et. al. making billions for doing nothing is not. Would a govt. plan look more like Medicare or Haliburton? What I have seen is the govt. pays for a private company to perform a task they are way over bid, and quality control of those private agencies is none existent. Given the two, I would want it to look like Medicare.

  14. $#*% The companies are upping salaries to compensate for the lack of bonuses now. They just refuse to get it don’t they!

Comments are closed.