HEALTH CARE, ONE LAST TIME

The recent Democratic political debates made clear only that there was utterly no clarity as to either the problem or any common-sense way of fixing that problem.  I have written too many times before what the problem with health care is and how best to go about fixing it.  I do it again this one last time.  If you think it makes sense, please pass it on to anyone who might be interested, including legislators and other people in office.

 

 

The problem with health care in America is that it costs way too much and that it doesn’t cover everyone.  Oddly enough, those who are covered are probably over-covered.  Consider.  You have health insurance.  It covers your medical bills, and your premium reflects the cost of that care.  You have homeowner’s insurance.  It covers some of those same bills, and your premium redundantly reflects the cost of that care.  You have auto insurance.  It covers some of those same bills, and your premium again reflects the cost of that care.  You may have worker’s compensation coverage, which may cover those same bills, general liability insurance, which may cover some of those same bills, and Medicare and Medicaid, which may cover some of those same bills.

Because you may have more than one insurer providing for your bills, the insurers who paid the bills try to see if they can get another insurer to reimburse them.  It is a process called subrogation, and it is a remarkably huge industry.  It is also very expensive.  It is also completely worthless.  Not very long ago, the administrative cost of insrance was 5% of the expense of insurance.  That cost is now a startling 35% of the cost of insurance.  That increase is due, in large part, to subrogation.

So, what do we want?  We want everybody to have health care, and we want to greatly reduce the cost of that care.  We do not, however, want to simply shut down the existing health insurance system.  That would be throwing away a huge trove of institutional knowledge.  So we want to do all this while still taking advantage of the men and women who have been running our health insurance for lo these many years.

We who are already insured also want the right to keep the insurance that we have.  Note, however, that that doesn’t mean we want the same insurance company, but rather that we want the same insurance coverage.  I really don’t care if my insurance is called Blue Cross or if it’s called Uncle Willy’s Midnight Insurance Company.  What I want is to know that I can keep the doctors I have and that their services will be paid as they always have.

So here is how you do all that.  Run health care like a utility.  Grid the country.  Auction off the grids to the highest bidder.  If nobody wants a particular section, let those people be covered by a public option.  Give the high bidder a monopoly in the area.  Put a Public Service Commission over it to protect the people against gouging.  Dictate to that bidder what coverage it has to provide.

And then, outlaw subrogation.

There is not enough space here to show why subrogation is a total waste of time.  Look, however, at what it does to your other insurance coverage.  Take medical expense out of worker’s compensation and you will automatically reduce the cost of worker’s compensation by over fifty percent.  Remove medical expense from personal injury claims, and you will slash the cost of auto liability insurance, homeowner’s insurance, products liability and medical negligence insurance.  And more.

What you get in return is the power of the entire nation to use its collective weight in negotiating reasonable prices from medical product providers and drug companies.  You also get a voice as to whether some guy running an insurance company deserved twenty or thirty million dollars a year for whatever it is he or she does.  The insurers and the drug companies will also likely slash their advertising, generating another huge saving.

There are problems here, not the least of which would be a loud lobbying pushback from those whose profits would be greatly reduced with such a plan.  In the end, though, this is about the people’s health, the interests of the people, and in the end that must ultimately be what we need to achieve.

So send this around.  I’m going to do the same.  The way I’ll know is right is if it receives a loud condemnation from those enjoying huge profits on how we do it — or misdo it — now.  Cheers.

 

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