I confess: I was not an early supporter of a public option for health insurance. This is because I believed that our existing system could be reshaped to work for the good with some reforms, some regulations, and some transparency.
In my defense, I have worked in employee benefits for nearly 30 years, and have some working knowledge of the types of reforms that could actually work. But they won’t. The reason is simple enough: the culture of the insurance industry works against the good of the insured and toward the good of the company’s shareholders.
From today’s WSJ Health Blog:
Aetna shares were down more than 8% in after-hours trading this morning, after the company said higher health costs are likely to take a bite out of its profits this year.
This single sentence highlights the need to completely tear down the current culture of insurance and rebuild it properly.
My health is not for sale. Nor is yours. Nor should anyone’s be. As long as insurers are slaves to the bottom line in this country, no reform is possible. And as long as we hear the shrill cries from the right about how public option is the essence of socialism (as if socialism is some kind of dirty, ugly, slimy concept risen from the depth of the 50s, where it will nuke us or worse yet, take over the planet), we can’t have a meaningful dialogue about this.
Health insurance cannot be a for-profit enterprise. Period. It must be a not-for-profit enterprise, and that means all facets: pharmacy, hospital, diagnostic, imaging, etc. As soon as profits are the primary motivator, patients become the problem. When patients become the problem, attention is only paid to ways to make them less of a problem, either by cutting back what is insured, how much is insured, or by raising their rates to unaffordable extremes. Right now, all three of these options are in play.
This is truly critical. A recent study indicates that 19 percent of companies want to stop offering insurance over the next 3-5 years. If they do, we will be at the precipice of a complete collapse of our economy as health care costs continue to take a larger bite out of our income.
Yet, Aetna has no concern for this. They serve only one master, the bottom line. This is at the heart of why markets are ineffective and inefficient ways to keep health care costs down. There is a fundamental conflict between the need to serve a profit on every quarterly statement and the requirement to provide benefits to the policyholders who pay the premiums that pay the claims and the profit.
Insurance companies claim they can serve two masters. If the government will simply deregulate them, or give them more authority, they can insure more people and continue to serve their shareholders. They cannot.
Not only that, but health care costs are at the root of many of our economic woes. Consider this case, of a Wisconsin school district facing ballooning liabilities for retirees:
The school district takes its fiscal responsibilities seriously. It has set up a trust fund to pay benefits, primarily health insurance, for retired school employees. When these benefits (called “Other Post-Employment Benefits” or OPEB) were originally negotiated, the expense was modest. But then health care costs exploded. What’s more, accounting rules now require that school districts amortize these costs and post them on their books as a liability each year. Whitefish Bay, like many other school districts, became worried about how to meet these liabilities.
I recommend you read the entire article, but here’s a summary: The school district began to explore investments that would bring a greater rate of return on the trust fund. Wall Street bankers targeted small districts like this for investment in complicated pooled credit swap/default schemes. Of course, those schemes have now collapsed on themselves, leaving towns and municipalities with the original obligation and no trust funds left to cover it.
This is a crisis that won’t be eased by tweaking a badly-broken and dysfunctional system. The entire system that must be reshaped into a single payer system and coverage for all. It is a system that must put health at the front of all considerations rather than profits.
The statements above were a difficult conclusion to embrace. I wanted to believe we could fix the one we have, but with each passing day, it becomes more and more apparent to me that it is not possible. So I have reformed, and will be using all resources available to me to call for a public health coverage option, and for the exit of all for-profit health insurers from the dialogue.