Two doctors have written a really fascinating analysis of the history and economics of health insurance that will make our current U.S. system seem even more ridonculous than it already did.

69 Responses to “Why health insurance makes no sense”

  1. mtdna says:

    Ridonculous? That word is totally amazeballs!

  2. Brainspore says:

    Referring to the state of health care in the U.S. as a “system” is being a bit generous.

  3. Cowicide says:

     Physicians for a National Health Program have been explaining this for a long time:

    http://www.pnhp.org/facts/single-payer-faq

    The only thing that makes sense is a single payer system for health care.

    • Gilbert Wham says:

      Nationalise it. At gunpoint if necessary. Shit, at gunpoint for the lulz

      • Cowicide says:

        Er, wut?

        • Gilbert Wham says:

           Well, obviously there’s a degree of hyperbole there, but I know I find the idea of booting the boardroom doors open with a cheery, ‘Morning, fuckers! You work for us now!’ somewhat attractive…

      • incipientmadness says:

        I can assure you that once I get my Gyges’ Ring  single payer healthcare at gunpoint is on the agenda. My lulz are benevolent, though those who get in the way may disagree.

    • Boundegar says:

      No no no, the only thing that makes sense is to do what the lobbyists instruct us to do. My Representative told me. Surprisingly, the answer is to do whatever increases the profitability of the insurance companies. Counter-intuitive, I know, but there it is.

      • Humbabella says:

        You see, it is an obviously fact that needs no explanation that prioritizing X over Y is better for Y than prioritizing Y over X.

        (Substitute “profit” for X and anything you like for “Y” and somehow you’ll find people repeating this sentiment without thinking anything of it) 

  4. Gulliver says:

    That article makes some good points toward the end. But, in its summery near the beginning, it overlooks one of the key benefits of insurance: collective buying power.

    The workers’ input to the design of healthplans and their component fees is after the fact; their preferences are constrained by the options offered.

    Not always true. During my tenure as a small business owner, I and my business partners gathered information on a variety of providers and plans, held a meeting to go over the candidates after giving our employees time to look over the info we’d gathered, and put it to a company-wide vote. Then our employees, and ourselves, got to choose from plan options. I have many criticisms of the health insurance industry, which is massively mismanaged, but offering buyers options is not one of them. There are good things in Obamacare (I call it that because, for better or worse, it was his baby and he should own it, good and bad), band-aid though it is, and the Exchanges are one of them. The meme that people are too dumb or immature to make intelligent choices about risk management strikes me as elitist crap.

    • Cowicide says:

      The meme that people are too dumb or immature to make intelligent choices about risk management strikes me as elitist crap.

      Really?  You’re saying this about citizens of a country that voted G.W. Bush in with a mostly rubber stamp Congress…  twice?  Then the best they can muster afterwards is voting in Obama with a fillibuster-laden opposition party in place?

      Maybe it’s less “elitist” and more “realist” than you’re comfortable with?

      What we really need to is undue the insidious tie of health care coverage with employers entirely and finally (finally!!!!!!) move to a TRUE single payer system for health care. Too many so-called “free” American are slaves to their employers for fear of losing health coverage while daring to venture to another job. Screw that. It need to end NOW.

      • Gulliver says:

        And I voted for Obama. The problem is the lack of viable choices.

        I don’t have time to get into a debate about health insurance, but there are more possibilities than single-payer and good luck, chuck. Our healthcare system is a disaster. That doesn’t mean countries with single-payer are healthcare paradises. We, and the human race in general, can do a lot better than any of the models so far implemented.

        • Cowicide says:

          We, and the human race in general, can do a lot better than any of the models so far implemented.

          Ok….

          ಠ_ಠ

          That doesn’t mean countries with single-payer are healthcare paradises

          Gee, really?

          http://www.don-lindsay-archive.org/skeptic/arguments.html#straw

          there are more possibilities than single-payer

          But you can’t be bothered to name them or lift a finger to defend them against single payer. Glad to see you have that kind of courage behind your conviction.

          • Gulliver says:

            I never said single-payer doesn’t have some benefits over other systems. All I said was that we can do better. That’s not a strawman.

            And yes, I don’t have the time right now for a protracted discussion of how to re-engineer the health insurance industry. I don’t expect you to be convinced merely by my saying alternatives exist, nor do I expect you to be dissuaded from your support for single-payer health insurance without argument. I’m sorry I can’t engage in that tonight. I have conviction. I also have a class to teach. If that, to you, means I lack courage, then perhaps my good opinion of you is flawed.

            And, while it’s not especially pertinent to people’s general intelligence or maturity in a system where choices are mostly false, I’m not convinced Dubya did really win the vote in 2000. But I also don’t have time to go into Florida 2000 general election vote-counting irregularities. Sorry.

          • Cowicide says:

            All I said was that we can do better. That’s not a strawman.

            Except that’s not what you said. You offered a classic strawman argument of ” … That doesn’t mean countries with single-payer are healthcare paradises … ”

            And, that’s what I responded to in that regard.

            If that, to you, means I lack courage

            That wasn’t what I meant and I apologize because I didn’t choose my words wisely and butchered a cliché while I was at it.

            I’m not convinced Dubya did really win the vote in 2000

            Agreed.

          • wysinwyg says:

             Actually it wouldn’t have taken you any longer to name the alternatives you mention than it did to respond with this comment here.  You could also concede that countries with single-payer have lower costs and better outcomes than our for-profit scheme.  It’s pretty annoying when folks do this “I’m going to make a bunch of unsupported assertions but I am waaaaaay too actually argue for them” schtick.  Better to either not make the assertions or to make more careful assertions with at least a hint of argumentative support (which wouldn’t have taken you any longer than what you actually wrote).

          • Humbabella says:

            Right now the American government spends more on healthcare than any of it’s healthcare-providing European or Canadian counterparts while not actually providing healthcare.

            Step 1) Stop spending outrageous sums of money to *not* provide healthcare.  Then maybe think about Step 2) Look for any even better alternative.

            Maybe there is a better system than a single-payer system, but it seems like that would be a nice discussion for the countries on a single-payer system to be having.

          • Gulliver says:

            @wysinwyg

            Actually it wouldn’t have taken you any longer to name the alternatives you mention than it did to respond with this comment here.

            Actually, it would have. Our faux-insurance industry is so thoroughly broken that it would have to either be totally rebuilt or entirely replaced. Either way, describing all the elements of a new system would take at least a mid-length essay.

            You could also concede that countries with single-payer have lower costs and better outcomes than our for-profit scheme.

            In many ways. But not all single-payer systems are equally beneficent. Some are demonstrably better than others. And my point, to reiterate a third time, was not that they are inferior to our present debacle, but that they could use work, in some cases badly.

            Better to either not make the assertions or to make more careful assertions with at least a hint of argumentative support (which wouldn’t have taken you any longer than what you actually wrote).

            You’re under no obligation to agree with me.
             

          • AnthonyC says:

            The Swiss model is one example (essentially exchanges but done right) http://en.wikipedia.org/wiki/Healthcare_in_Switzerland

          • Cowicide says:

            The Swiss model is one example

            Switzerland has one of the highest administrative costs of all health care systems besides the U.S.

            The Swiss system has the highest out-of-pocket costs in the world as well as relatively high overall costs, and studies show a sharp income gradient in access to care, with the poor facing grave difficulties.

            Swiss reform was opposed by progressives in that nation who viewed it as a significant backward step from its previous system. It is being invaded by for-profit hospitals and is struggling with costs and administrative complexity.

            Edited via:

            http://www.pnhp.org/facts/single-payer-faq#aca-exchanges

          • AnthonyC says:

            @Cowicide:disqus Thanks for the new info! I’ll stop using that one.

          • Gulliver says:

            Apology accepted, and thank you for clarifying.

            I also could have chosen some of my words more carefully. It was not my intent to suggest that a system needs to be perfect. My intent was to point out that, as Bruce Martin put it, just cloning an existing system is far from the best we can do. The health insurance industry is slowly going down in flames and taking patients, healthcare providers and the medical industry with it. As awful as that is, we have a historic opportunity to not only learn from our mistakes and our fellow countries’ successes, but also their mistakes which they too will have to address in the coming decades.

            Indeed, that goes not only for the health insurance industry, but the economy in general. One reason I’m sometimes reluctant to delve into discussions of strongly economically-intersectional topics is because it’s hard to talk meaningfully about one with talking about all of them, or at least about their commonalities. Also, I tend to look at them with a engineer’s eye, and am sometimes at a loss to discuss the political minefield of what, to me, shouldn’t, at least at face value, be so completely, vehemently political issues. I take it as a given that most people, not everyone, across the political map, want opportunities for good health and prosperity available to all. Beliefs about how to accomplish that vary widely, but most are, IMHO, just that, very strongly held beliefs that verge on dogmatic. In examining each camp’s arguments, there are typically perceptive nuggets of insight embedded in a matrix of that camp’s uncritical version of so-called common sense.

            I must concede that I find this frustrating because what is truly needed, again IMHO, is a dialogue between the various camps that mainly seem interested in yelling at each other, assuming the worst possible motives, character or stereotypes of each other, and rejecting out-of-hand the possibility that their opponents make some valid points, while parasitic politicians and pundits whip up outrage by pandering to baser motives and promulgating outright lies. I don’t believe that dialogue would bring everyone to the same page to sing Kumbaya, but I do think it would strengthen the overall understanding of how to actually begin solving big socioeconomic problems, and result in grassroots pressure that is at least as driven by results-oriented efficacy as by ideology.

            #SpockForFinanceMinister

          • Cowicide says:

            just cloning an existing system is far from the best we can do.

            That makes me strongly suspect you haven’t throughly read what the Physicians for a National Health Program have proposed. I gave multiple links previously to their FAQ, but I’ll give it to you again here in case it was missed:

            http://www.pnhp.org/facts/single-payer-faq

            The intention is not to clone anyone. It’s to create a single payer system that meets the specific needs of United States citizens.

          • Gulliver says:

            That makes me strongly suspect you haven’t throughly read what the Physicians for a National Health Program have proposed.

            I only had time to glance it over cursorily. I’ll give it a more through inspection at first opportunity (probably this weekend, to be honest), but I’ve got it bookmarked.

        • Navin_Johnson says:

           That doesn’t mean countries with single-payer are healthcare paradises.

          Compared to our profit driven system they are.

      • SomeDude says:

        (Props, Cowicide, I’m a fan.)

        You’re saying this about citizens of a country that voted G.W. Bush in with a mostly rubber stamp Congress…  twice?

        Just for the record, there are those of us not at all sure that citizen’s votes have been fairly counted in the last several elections.

        • Cowicide says:

          I see your point, but I think it should have been an undeniable landslide against Bush (especially the second term). I think the only way they pulled off stealing the election(s) was because it was such a sickeningly close race each time.

    • Al Billings says:

       You weren’t legally required to do this though. I’ve never had input in my health plans. In fact, more than a few times I have received the “well, we’re changing providers this year. If you’re doctor isn’t on the new provider’s list, we’re so sorry!” email.

      • Gulliver says:

        Agreed, we did things a bit differently from the norm. And I wasn’t defending the current system, only offering a counterpoint to one argument made in the article. Indeed, I think it’s a disaster of which we made the best situation we could. And while, as a company of less than 200 even at our largest, the level of feedback we solicited from the people the plans would effect was higher than a large corporation could realistically solicit even if it wanted to (and most don’t), it gave me an appreciation for the fact that the problem was less one of intelligence than of quality information and meaningful input.

      • Cowicide says:

        Agreed, the overwhelming majority of American workers have zero input on health plans.  Companies simply dictate what you get and change it at will.  Back in the day before unions were decimated there was at least some negotiations on behalf of labor.  Nowadays it’s the tiny minority in the private sector and even public unions are on a gradual decline since the 80′s.

    • Ryan_T_H says:

       

      he meme that people are too dumb or immature to make intelligent choices about risk management strikes me as elitist crap

      It’s not even a question of being dumb or immature. First, human beings are really lousy at risk prediction. Awful. There’s all sorts of studies about just how terrible we naturally are at making cost/benefit decisions. Given enough statistics and time to study a problem we can make better calls, but that assumes time and ability and accurate information.

      But more importantly modern healthcare is really complex and difficult. Crazy hard. Basically anyone who does not actually work in healthcare does not have the ability to make rational decisions. It’s not a question of intelligence, its a question of training, experience and access to information.

      And talking about individual responsibility when it comes to these decisions is really just saying the everyone should be expected to have medical knowledge equivalent to a doctor. It’s silly. That’s why we have specialized professionals, so that someone actually knows what they are doing.

    • Humbabella says:

      The meme that people are too dumb or immature to make intelligent choices about risk management strikes me as elitist crap.

      It is only elitist crap if you are under the mistaken impression that you are an exception.

      • Gulliver says:

         @Humbabella

        Step 1) Stop spending outrageous sums of money to *not* provide healthcare.  Then maybe think about Step 2) Look for any even better alternative.

        Respectfully, that’s a false dichotomy. Measure twice, cut once, as they say in the surgery biz.

        It is only elitist crap if you are under the mistaken impression that you are an exception.

        Someone must be the exception, unless we’re going to rely on wisdom of crowds to decide.

        • Humbabella says:

          Respectfully, that’s a false dichotomy. Measure twice, cut once, as they say in the surgery biz.

          I’m not suggesting any dichotomy.  I’m suggesting that when the symptom is really bad you treat the symptom before you treat the underlying problem.  Things would be a lot better if governments tried to do things well enough instead of striving for perfect (and then using the lack of available perfection as an excuse to not make things better).

          Someone must be the exception, unless we’re going to rely on wisdom of crowds to decide.

          I don’t know what to say to this.  What do you mean be “decide” at the end of that sentence, decide what?  If you are saying we can’t make decisions unless we know that the person deciding isn’t subject to cognitive biases then I think that is just factually wrong.  If you are saying that without being able to find a person who is actually great at evaluating risks to their own health then we can’t make good decisions about a healthcare system, I don’t know what you would think that.  It seems like you are trying to make a philosophical question out of an empirical one.

          Suppose we actually could get data (I’m sure the insurers wouldn’t give it to us) on: the decisions people made about their own healthcare premiums and deductibles and whatnot; and the health problems they ended up facing and how much those cost them.  Then we could figure out how well people fared at making those decisions against random decisions.

          Given the article that this is a discussion of we saw that what decisions people made were based more on their income and culture than on their health risk factors, so I would expect that in fact people would be closer to random than to optimal.  That is being bad at making that decision.

          Obviously we can’t do the study and I can’t say I’m right, but my point is that I really don’t know what you are getting at when you suggest someone must be the exception under this model of thinking.  It could easily, empirically, be the case that there are no exceptions, only outliers who happen to have gotten it right more than average.

    • chgoliz says:

      There was a study done regarding individual choice on national pension plans in Scandinavia somewhere (Norway or Sweden).  Turns out, a large percentage of the population chose a private alternative to the baseline government-run option, despite the fact that the government option provided the highest and most steady return.

      Making long term decisions on medical insurance isn’t a slam-dunk….no need to assume total incompetency with regard to the average citizen to recognize that individuals are not always going to be able to factor in the multitude of components that go into making a truly informed choice.

      • Humbabella says:

        What we really need to do is arrange health care options as oatmeal solutions and then just do whatever the slime mold does.

        But really, the idea that people could make good choices with regards to healthcare options is very far-fetched.  A lot of insurance is pure scam with virtually no upside (like insurance on products you purchase provided to you by the purchaser, mortgage insurance that is supposed to cover your payments if you lose your job, credit card insurance where you pay 1% of everything you spend for minimal benefit).  Insurance companies get people to take these ridiculous products with sales tactics and it works.

        The financial industry makes a lot of money by assuming that no one can do math, which is fine for them because they were never going to make a lot of money off people who can do math anyway.

  5. Bruce Martin says:

    Or, the US could just clone the Canadian healthcare system (which is itself a clone of those in Britainap and other civilized countries).

    • Brainspore says:

      I’d take Uruguay or higher.

      • Shay Guy says:

        Well, you go Uruguay and I’ll go mine.

      • SomeDude says:

        Homer: “Don’t worry… America’s health care system is second only to Japan… Canada… Sweden… Great Britain… well, all of Europe… but you can thank your lucky stars we don’t live in Paraguay!”

        • AnthonyC says:

          It amazes me the extent to which “These people all spend less, take less medicine and get less surgery, and live longer, healthier lives” completely fails to move the opinions of a large fraction of my fellow citizens even one iota.

          • Antinous / Moderator says:

            Duh. Facts are gay.

          • Jardine says:

            Homo-gay. Possibly super-homo-gay.

          • chgoliz says:

            Giving them equal rights to their opposite (lies) in this country would be morally wrong?  Yeah, I guess you’re right.

          • Humbabella says:

            No, chgoliz, what would be wrong is allowing facts to be with facts and lies to be with lies.  We all know that facts and lies are meant to be together, presented equally to one another.

          • lafave says:

             Cognitive dissonance. The USA is number 1 in everything, right? Right? RIGHT????

          • phuzz says:

            Certainly no.1 in per-capita health care spending, well done America!

          • Humbabella says:

            As a resident of a country with healthcare, my friends who have moved to the US have reported incredulously on the reaction of the people they know there to healthcare debates.

            Seemingly reasonable people in all walks of life have the most insane ideas about healthcare.  They seemed unmoved by the fact that swaths of people die as a result of the US healthcare system’s ineptitude while their government spends more per capita than any country that actually provides healthcare.  It’s all, “Well, I have healthcare, so I don’t worry about it.”  Like the reality is too sickening to face.

          • Navin_Johnson says:

             Propaganda, think tanks, lobbyists and so on…..

  6. MonkeyBoy says:

    Years ago I read an article that said some/much of US health insurance arose during the Great Depression as a means to keep hospitals afloat – most people could not afford major hospital bills but lots of people could afford small monthly payments.

    My Google-fu however cannot turn up anything along these lines.

    • Lemoutan says:

      It intrigues me how many times the USA has solved problems like this by distributing the cost amongst the population. It’s almost as if it operates some kind of communism. But as there’s no actual vote, that can’t possibly be right.

    • Missy Pants says:

      I wonder if you’re mis-remembering the dude in Sicko talking about the birth of the NHS after WWII in Britain?

  7. Antinous / Moderator says:

    I worked at the hospital at UCSF during the period when the insurance industry staged a coup which put them in charge of the health care industry.  Even as recently as the early 1980s, your physician dictated how you would receive care.  By 1990, it was all done by utilization review boards, who based care on DRGs (diagnosis related groups) and capitation (what an insurer will pay annually per head of cattle patient.)

    It’s bleak, but it’s not entirely bleak.  When I started, you would have spent a week in the hospital for cataract surgery.  We had psoriasis patients who lived in the hospital for months just so that they could get smeared with tar and stand in a UV box twice per day.  For some conditions, cost-cutting improved quality of life by getting patients out of the hospital faster.  But for others, you just got sent home with inadequate supervision, inadequate help and inadequate pain control.

  8. subtle says:

    I am a nurse case manager on the hospital side, and I always feel that if people understood how their care is dictated by clinically meaningless charts and flowsheets they would riot. They should also know that their doctor’s value to them as a patient is not how clinically competent, kind or compassionate they are, but rather how thorough and “compliant” their documentation is, since that is all that the almighty payer looks at. If a doctor words something slightly differently than the accepted diagnostic phrase, it can mean the difference between staying in the hospital or being bounced to the street early. 
    That said, there is real value to the healthcare system being lean and efficient, and “more” care doesn’t translate to “better” care. The problem is is that people are not informed, rational actors when it comes to healthcare. Indeed, many patients, by definition of their diagnosis (I am thinking of neuro or psych patients here) are as far from rational as they can possibly be, and often families and caregivers are just as ill-informed. Add into an already confusing, upsetting time the predatory actions of pharmaceutical and insurance companies (“ask your doctor about what Cialis can do for you!”) and you have a populace that is not only under-informed, but actively mis-informed, and things get that much worse.  
    Of course, with hospital profits and insurance profits are all at record highs, and with the AMA (which exists only as a front for hospitals, insurance  and pharmaceutical companies) being the largest political lobby, things are unlikely to change anytime soon. 

    • crenquis says:

      Of course, with hospital profits and insurance profits are all at record highs, and with the AMA (which exists only as a front for hospitals, insurance  and pharmaceutical companies) being the largest political lobby, things are unlikely to change anytime soon.

      Sigh.  I think that the first step in the process of changing this situation is to start with campaign finance reform…

  9. technogeekagain says:

    We need a health care system.
    We have a health insurance system.
    They are very different things.

  10. BradBell says:

    I liken insurance to community barn building. When your barn burns down, all the farmers work together to build a new one. It spreads the risk. And nobody pays anything until a barn burns down. This is a concrete and reciprocal social relationship that shares risk. I like this kind of insurance. 

    But something happens when you replace this system with the insurance business. First, you pay up front. Second, the relationship becomes asymmetrical and the risk of failure to repay is heightened as you are now in a non-reciprical relationship with one actor instead of a hand full. Plus there is a new level of complexity built around the fulfilment of rebuilding the barn, like deductibles and increasing premiums, often at a cost that makes making a claim pointless. Once this happens, you may realise that you don’t actually *have* insurance at all. What you have an abstract, asymmetrical and anti-social relationship that extracts rent to multiply and consolidate *your* risk. Could it be? Insurance companies amplify risk instead of attenuating it? Fortunately, the insurance business has a solution: insurance insurance.

    • IronEdithKidd says:

      I’ve long said that insurance by any other name is racketeering.  ”It’d be a shame if something happened to your nice barn.” ::lights Molotov::

  11. MissCellania says:

    The difficulties people have with their health insurance seem very strange to those who have none. 

    • Antinous / Moderator says:

      My monthly premium is $666. That should be a hint as to who’s running the industry.

    • MissCellania says:

       When I said “none,” I was referring to health insurance, not difficulties. 

      • Gilbert Wham says:

         Ah, I thought you were referring to places with socialised healthcare. Cos they look strange from here too…

    • Humbabella says:

      The difficulties people have with their health insurance and the difficulties people without insurance face are not the same, but they have the same root.  If there weren’t so many people without coverage it would be a lot harder to cow people into taking whatever coverage they are given.

  12. Listener43 says:

    Clearly you’re all to foolish|stupid|ignorant|self-absorbed|self-reliant|left-leaning|right-leaning|apathetic|downright pejorative [please choose one] to be allowed to decide for yourselves. I’ll handle things from now on.
    You’re welcome.

  13. Kaleberg says:

    I’ll stop supporting single payer health care when everyone else stops supporting single payer military protection.

  14. I was slghtly puzzled by the headline in an RSS feed until I saw the story was really “Why _the current US system of_ health insurance makes no sense”.

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