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Friday, January 14, 2011

Health Insurance News

California seems determined to lead the country in health insurance reform.  This week, they announced emergency measures that would require that health insurance companies spend at least 80% of their premium dollars on direct patient care.  While this same provision is part of the recent health reform bill, somehow these headline stories really struck a note with me and crystalized some key thoughts about our current health crisis.
First, we no longer pay for health insurance-we pay for a health care policy.  Insurance is something you pay a smallish amount of money to pay for something that you hope will never happen.  Health insurance used to e something like that-we paid to cover the big things that might arise while we paid "cash" for everyday health care needs.
Second, as a result of number one, individuals are no longer connected to health care costs and thus have no role in stabilizing costs.  Sure, rises in premiums are hard felt but they are no longer directly connected to how individuals use their policies.  Once they have paid, they have little or no incentive to limit their use of services.
Third, having free market health policies (not real insurance) puts us all in a horrible conundrum-if it is free market, then why should their be any constraints on how much profit these companies make, how much their CEO's earn, or what services they choose to cover? But no one really feels like it should be the free market like cars or restaurants or supermarkets...because it is our and our loved ones health and we need to know there is some control, somewhere...
So in the end I find it somewhat like a Rubik's Cube puzzle-once you know how to solve it, then it is easy but until then, it seems unfathomable.

  • Why should even 20% of our premium dollars go to administering the delivery of health care-I can't speak for others but what I do pay in premiums, I want invested right back in taking care of patients-not administrators who work to find every way they can to not pay doctors or hospitals or negotiate with the same in good faith.  
  • Why should non-physicians get significant say in what services, surgeries, x-rays get approved?
  • Why should consumers be able to demand tests, care, interventions that have no indication just because they have paid for a commercial product?
  • When will partisan bickering be put aside to allow for real discussions about what ails our failing health care system?


  1. You are right on that Insurance is no longer "just" insurance. It's a way of amortizing the costs of a lifetime's worth of health care. There is still some level of insurance in the risk pooling; you never know who the lucky ones will be in advance. Some will get cancer and need hundredds of thousands of dollars worth of treatment, others will be lucky and use little of their premium dollars.

    As for the medical loss ratio requirement, I'd be remiss if I did not point out that the reason liberals so wanted the "public option" in the healthcare reform bill is its medical loss ratio would have been a lot better than 80% and had the potential to outcompete the private insurers or force them to become more efficient. We lost that fight, alas.



  2. SF-Thanks for your comment. You give a good perspective. The public option certainly would have pressured insurers in many ways, perhaps most in the medical loss ratio...but Americans do not seem ready to accept other fall-outs from that option. As physician, I am fascinated by my patient's perspectives on their health care and on "reform"-I come away thinking that as with all things, political decisions are all about who shouts the loudest, not what really matters for the most people (cynical? perhaps but I do stay engaged in the process)