NYCEVE's diary entry today describes an issue that concerns all of us, the cost of health care. NYCEVE, an entreprenuer, lost coverage when their policy was cancelled, along with all other holders of the same type of policy, by this provider. The answer, according to NYCEVE and others who wrote in support, is national health care.
Insurance, of all types, is about smoothing spikes in cost against times of low cost. There is really no savings, per se, just sharing of expenses to smooth the incidental costs. In fact, Insurance companies plan for a profit margin when designing policies, so the total cost is actually increased. If insurance companies can invest excess revenue at a profitable return, and they share that return with policy-holders, operations costs can sometimes be partially covered.
But the total cost of care will be covered by the policy-holders.
Several questions came to me while reading the diary entry.
Does NYCEVE really get a deal because the medical costs exceed the policy fees? If so, others are paying for more than they receive. How much profit should the insurance company be allowed to make? How does that answer compare to the profitability of NYCEVE's enterprise? How much profit would you, as a stakeholder in the insurance company, demand?
Where do the actual medical costs come from? My admittedly naive perspective is that the costs are from three roughly equal areas; costs of operating the medical establishment, costs of malpractice insurance, and costs of government mandated administration. The health care practitioner derives profits from only the first area. The other two provide no benefit to me as the patient. Why do we choose to support a system that does not benefit the consumer? Why can't I choose to waive my right to sue, and why can't the administrative requirements be waived since they provide no value? In doing so I could cut my expense by two thirds, and the insurance would be more affordable.
How would national health care resolve these issues? Other than being a statistically larger universe over which to share costs, would the malpractice related costs shrink? Would the administrative costs shrink? The only component would be the insurance companies profits. I don't get the sense that they are cleaning up, what with hurricanes, increased syndromes such as ADHD, obesity, blood pressure, diabetes, and the like. NYCEVE's real costs are NYCEVE's, not some clerk's in Chicago, or factory worker in Michigan.
The real issue is how do we continue to improve the quality and availability of medical care while reducing costs? I thought Ted Kennedy's HMO plan would strengthen our national focus on getting and staying healthier, but nothing could be further from the truth. In a national health plan scenario, what responsibility does the individual have to create and maintain a healthy lifestyle? How do we encourage the best and brightest to develop new drugs and equipment if we remove the profit incentive? How do we get more and better trained doctors and practioners if we continue to sue them for outcomes, and pay them like gov't clerks?
While costs for insurance covered medical procedures have tripled in recent years, costs for procedures not covered by insurance, such as LASIK, have declined due to competition. Why haven't competitive pressures kept "regular" insured medical costs in line.
Gov't programs today are slow to pay and pay substantially less than retail, so much so that doctor's in order to maintain an office in the black must restrict access to gov't provided clients. What happens if all clients have gov't insurance provisions?