The only thing health insurance companies are good at is scaring us about socialized medicine

In a new column in the LA Times, business columnist Michael Hiltzik makes the argument that the only thing health insurers have done with any effectiveness is scare us into thinking that the socialized medicine services that every other advanced country has will not work in America.

Insurers are not even good at being profitable: the waves of mergers and acquisitions that has resulted in mass-scale concentration in the health insurance sector resulted in billions in losses, the bill for which was passed on in the form of higher premiums.

Hiltzik cites the work of Wendell Potter (previously), the Cigna exec who defected to the public's side of the health-care debate and is an excellent source of inside dirt on how dysfunctional and profit-driven the health-care industry is.

It's Potter who identifies the industry's most valuable, reliable product as scare stories about socialized medicine, with actual health-care provision lagging far behind.

The health insurance industry’s most telling contribution to the debate over healthcare reform has been “to scare people about other healthcare systems,” Potter told me. As a consequence, discussions about whether or how to remove private companies from the healthcare system are chiefly political, not practical.

The Affordable Care Act allowed private insurers to continue playing a role in delivering coverage not because they were any good at it but because their wealth and size made them formidable adversaries to reform if they chose to fight it. They were sufficiently mollified to remain out of the fray, but some of the big insurers then did their best to undermine the individual insurance exchanges once they were launched in 2015.

Even as individual Americans fret over losing their private health insurance, big employers have begun to see the light. Boeing, among other big employers, is experimenting with bypassing health insurers as intermediaries with providers by contracting directly with major health systems in Southern California, Seattle and other regions where it has major plants. It would not be surprising to see the joint venture of Amazon, Berkshire Hathaway and JP Morgan Chase try a similar approach in its quest to bring down costs.

Column: Health insurance companies are useless. Get rid of them [Michael Hiltzik/LA Times]