Tuesday, June 30, 2009

Health Care Should NOT Be For Profit

As my blog description of me says, I am libertarian leaning. That means I have my doubts about centrally planned economies - I don't think they work. I value competition, where there truly is some. But some things simply can't be for profit - they can't really work that way. One of those things is health care and health insurance.

Health care simply can't be for profit. Health insurance, in particular, simply cannot be for profit. Because the way you make a profit, ultimatley, is by turning down health care for someone. Not just someone, but lots of people. And to me, that is immoral. No one deserves to have their health sacrificed simply because they don't have enough money.

If you have a burning building with a bunch of people inside, you don't just rescue the people from the building who have money. You rescue EVERYONE. That is the moral thing to do. What, you might say, of those people who stupidly went into the building when they knew it was on fire? Ask a fireman about that - they get rescued too. Because again, it is the moral thing to do.

It is not like people are going to want to deliberately sabotage their health just so they can get medical procedures. Generally speaking, many people, if not most, would rather not go see a doctor if they can avoid it. I sure as hell don't like to go to the doctor. I only go when I'm really sick and I don't think I'll get better on my own. Sure, there are hypocondriacs, but then, such people are probably cheap, because it doesn't cost much to have a doctor look at you and tell you nothing is wrong.

The benefit of insurance, and the reason it works, is that it is about sharing risk across a large population, such that individuals who suffer great losses don't go under, while at the same time, premiums are, on average, affordable. This stops working if insurance companies are allowed to cull from their coverage anyone who really would take a loss, leaving only people in the pool who never need benefits. The only reason to do this is to make a profit. If you don't have a profit incentive, then you might as well just get as many people on coverage as possible, because almost all of the money goes to the people insured instead of into some CEO's pocket.

The bigger the pool of people, the better. The best pool is one that has the entire population in it. Then everyone contributes and everyone benefits and is covered. Yes, this means even young, healthy people have to pay a premium (through their taxes), but then, that is something they will benefit from when they themselves are old and utilizing the premiums paid by the succeeding generations of young people.

Another reason health simply can't be for profit is because when it comes to actually choosing health care, people generally don't have a choice. If you find out you have cancer, you have no choice but to get expensive treatments. You also may not have any time to "shop around" - nor do you really have the expertise to do so. If you need a kidney removed, you only get one shot at having that done. Either they do it right or they won't, and you won't know in advance if you are getting your money's worth. You simply cannot make dispassionate market choices when your health is in immediate peril. And even if you could, it would be very hard to discern if you are truly getting the best treatment. It is not like you are ordering a steak.

So to sum up, there are three basic reasons health care simply can't be for profit.

1. Shared risk really only works where everyone is in the same risk pool and everyone benefits.

2. There are perverse incentives to play with the money in the risk pool when the goal is profit instead of simply making sure everyone is covered.

3. People really can't shop around for health care, even if they wanted to. They simply don't have the expertise and may be under great duress when the time comes to pick services.

Finally, most of the reasons cited to avoid a single-payer, public plan are bogus.

1. The notion that you won't have any choice is crap. As it is, for every private plan I've been on, I've not had much, if any, choice. So it is not like a private plan is any better. If everyone is on the public plan, there would be a vast improvement in choices as you would no longer be limited to whatever small circle of doctors is on your plan - because EVERY doctor would be on your plan.

2. The notion that you would have long wait times for service is also crap. You have to wait under private plans. Even for a simple office visit, you can wait hours past your regularly scheduled appointment time. And procedures can have you waiting weeks or months. My wife just had a suspicious result in one of her checkups. She is a bit of a hypcondriac, which makes that worse. But even though there was potentially a serious problem, she was forced to wait almost two weeks for the followup because no other appointments were available. And now she has to wait two more weeks for the results. So private health insurance sounds an awful lot like what is anecdotally complained about in nations with public health plans.

It does make sense for other types of insurance to be more on a profit model. Insurance that covers optional activities or is based upon your choices, that is ok. Like insurance that varies based on where you build your house. If you try to build in a flood plane, it makes sense that you would have to pay a lot of extra money for that. Or if you want to get a fast, dangerous car, then you pay a premium on the insurance for that care. Or if you want to get life insurance when you chose dangerous recreational activities, like sky-diving. There, the risks set the price, and you can avoid the price by avoiding the risk.

The time has come for us to have a single payer health care system that covers everyone and pools everyone together. I wouldn't outlaw private plans - if someone wants to get something over and above that, and someone else is willing to supply it, that's fine by me. I think the private insurers are all up in arms because they know that once the monopoly of crappy private plans is broken they lose their obscene profits (and in many, if not most places, it IS a monopoly - even where there is more than one plan, you are still stuck with whatever your employer provides) .

I still think many things should just be left to the free market (and I mean TRULY free market (free, but regulated), not the government-sponsored monopolies that make up much of our "capitalist" system). But health care is not one of those things.

1 comment:

Rantsville said...

I tend to not like Libertarian views at all. They are usually very self-centered and unsympathetic. But I am really pleased with your view of healthcare and wish that a lot more thought like you. Thanks!