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Posts Tagged ‘health insurance’

What’s right and what’s wrong with the U.S. health care system? Does it need a major overhaul or a few tweaks?

In a two part episode, I discuss the cost of the U.S. health care system with Dr. Robert Berenson, a health care policy expert who has served as a practicing physician, the manager of a large health plan and in senior government positions, including being in charge of Medicare payment policy and private health plan contracting in the Centers for Medicare and Medicaid Services.

Dr. Berenson describes how incentives need to change to get control of our medical costs.  You can hear both of these episodes and others on my online podcast radio program, Getting Better Health Care.

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According to a congressional report covered in the Wall Street Journal, large insurers denied policies to one in seven applicants due to preexisting conditions.  This highlights the same problem we saw with denial of coverage of sick children.  If we want a health insurance system that covers everyone — including sick people — we have to mandate insurance for everyone.

A system without a mandate that forces insurers to cover people who are already sick would be a system in which people wouldn’t buy insurance until they were ill.  The cost of that kind of insurance is the same as having no insurance.

Mandated insurance with cost controls implemented by the insurers (including government insurers) is one logical solution to our health care coverage woes.  The other approach would be one in which patients themselves are given more incentive to stay healthy and to conserve health care resources.  Like I’ve said before, there’s no free lunch.  We can’t get all the health care we want without paying for it somehow.

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It’s unconscionable that insurers would refuse to cover sick children — well it sounds unconscionable, but it does make logical sense.  The whole point of “insurance” is to insure against risks. If people could buy insurance for disasters after the disaster occurred, people wouldn’t buy insurance until they were sick.

It’s reminiscent of the fellow in Tennessee who didn’t pay for fire protection, and then watched his house burn down while firefighters watched.  If he could have paid the $75 fire protection fee while the house was burning, then it would have been logical for everyone not to pay the $75 fee until their homes were burning down, too.  Had the homeowner been permitted to pay the full cost of putting out the fire on the spot, he would have at least been in the same position as people who choose not to carry health insurance and have to pay the full bill when illness occurs.

Some people look at the Tennessee former-homeowner and say it is unconscionable that society let the home burn down.  We can say the same thing about health insurance for sick children.  The solution in the case of the homeowner is to require all homeowners to pay the fire protection fee; in other words, they pay a tax.  And if we want sick children  to be covered by insurance, then we’ll need to mandate that everyone be covered, too. In other words, pay a tax.

There’s just no free lunch.

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In a July 19 article, Washington Post columnist Robert Samuelson describes Massachusetts health care reform measures as a model for the national health care legislation that passed Congress this year. He doesn’t paint a hopeful picture. True, marginally more people gained access to care — defined by having insurance coverage. But costs continue to spiral out of control.

The measures to control costs have been limited and largely ineffective. Wholesale changes in how doctors and hospitals would be paid were suggested, but without any specific plans. In Samuelson’s words, “The system’s fundamental incentives won’t change.” He raises the possibility of unpopular measures such as “accountable care organizations” or spending restrictions that would limit consumer choice of doctors and hospitals or raise the specter of essential care denied.

Samuelson leaves out the other path, the one that has been so successful in so much of the rest of the U.S. economy, a market-based approach in which consumers get to choose what care they want, but they must also face the economic impact of those choices. For more details, visit http://www.drscore.com and check out my White Paper on Health Care Reform.

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On Getting Better Health Care, physician Cynthia Koelker, M.D., describes practical ways people can lower their health care costs right now.

Koelker is author of the book 101 Ways to Save Money on Health Care.

We don’t need government to legislate health care reform to lower costs if we take some personal responsibility. Click here to listen to the show.

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I tire of partisan bickering over health care reform. What will the health care reform legislation that passed Congress really do? I pursue this with two experts on Getting Better Health Care (http://webtalkradio.net/shows/getting-better-health-care/).  

The bottom line is that in the short run, the legislation improves people’s access to insurance. That does little to nothing to reduce health care costs. Someday the other shoe will fall, and something will be done to bring costs down. We’ll have to wait to know what that will be. 

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In a discussion of health care reform, the AARP magazine reported on a proposal to extend Medicare eligibility to people ages 50-64. The magazine reported that no denial of coverage for pre-existing health problems would mean greater access to affordable insurance. I’m not so sure. The idea of having insurance without denying coverage because of pre-existing conditions violates the whole idea of “insurance.”

Insurance is something someone pays to insure against a risk. A pre-existing condition is a known event, not a risk. In theory, if there were no denials for pre-existing condition, the logical thing for people to do would be to not purchase insurance until the person became ill and needed coverage. The cost of coverage would become dramatically higher.

With DrScore, we hope to enhance the quality of U.S. medical care by giving doctors feedback. There are plenty of other issues to deal with in our health system, the two greatest being giving more people access to our terrific medical care and finding a way to reduce the cost of the medical care system. Creating a system that discourages people from having insurance (by eliminating restrictions on coverage of pre-existing conditions) doesn’t seem like it will address the underlying problem.

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