We all know that an optimized, single payer system is the most efficient health care system, both from a theoretical and a practical standpoint. The problem is that, like gun control, single payer can be too easily turned into a political football.
It is worth looking, even if distastefully, at what it would take to reform the private-insurance system we have now.
As shouldn't be surprising, the reforms necessary are simple, small, elegant, and most likely, politically impossible.
Five simple rules would be enough (6 if you count the implied nomic rule that you have to follow the rules; in this case that rules must be enforced.)
- All benefit sets have the same premiums (ie, a given company may not charge one individual more than another for the same benefits)
- Establish a minimum set of required benefits all plans must have.
- No individual may be turned down or away from any plan or set of benefits.
- Insurance companies are required to report total premium intake, medical expenses and total services offered for each quarter.
- Allow waiting periods before benefits change when swapping plans.
Is that really all it would take? Ironically enough, yes.
Here's why it can never happen:
#1's 1 and 3 eliminate the individual profit element for health insurance. Specifically, insurance suddenly becomes a function not of individual bilkability, but becomes based on the statistics of large groups. This will cause premiums to drift to the 'true' cost of health care for each covered group.
#'s 2 and 5 are parameters that balance individual risk and benefit. The option to go 'uninsured' is necessary in a free market to avoid having the 'low end' insurance drift up in price. At the same time, a waiting period for upgrades to insurance status is a valid method of forcing individuals to manage their own risk, while the 'minimum coverage' requirements ensure that coverage means coverage.
What does minimum coverage refer to? Probably not much. We can't help the sob story of the 9 year old girl with some rare disease that costs a million a year in treatment. What we can do is control the price of basics, and have an honest conversation about what will and won't be covered. Rational rationing.
What is the upshot of all this?
Part of the problem with health care is that certain conditions (terminal conditions and those requiring lots of ICU time) cost disproportionately more than other kinds of care. How different risk pools and benefit sets interact for different groups can be weighed honestly in a 'maximum efficiency' environment.
Health insurance companies will be forced to compete (in true free market principle) for clients based on customer service, low numbers of claims denied (as reported in #4), efficiency in the form of a high payout to revenue ratio, and a high services-to-cost ratio.
To compete, health insurance companies would be forced, on their own, to find cost-control innovations, negotiate with drug companies, and carefully manage health care costs.
This won't happen because it lies in the middle of the road, and will get run over by the health-lobby bus. Progressives won't like it because it won't go far enough. Conservatives won't like it because it will raise premiums for certain people (or more accurately, because there is a risk of premiums rising for some, conservatives will be scared.) Finally, having to compete in a true free market instead of an oligopoly, the health lobby will cry foul.
Personally, I don't like seeing cute little animals hit by a bus.