Saturday, February 27, 2010

Why I'm For Total Health Care Reform

I usually try to stay away from commenting on political concerns.  But the current case for healthcare reform is so much bigger than that.  I'm completely for revitalizing health care.  As a matter of fact, I don't think it goes far enough.

I've had the privilege of working stints on the business end for the number one ranked hospital in the US, setting the healthcare market strategy for the software division of a Fortune 500 company, and trotting on foot through all kinds of neighborhoods to hospitals and health centers on behalf of a smaller healthcare agency.  I've seen and learned a few things since.

1. Publicly-Traded Health Care Companies Will Only Increase Costs
There are a few large insurance companies that dominate the US health care insurance market.  Because they are publicly traded entities, they are expected to deliver on quarterly results by increasing their profits as often as possible.  You increase profits one of two ways.  By driving down costs or increasing revenues.  With 30-40 million Americans who can't afford insurance, the US healthcare market has pretty much matured.  It's a little tougher for these healthcare companies to offer the service overseas because 1) many of the emerging markets that can't afford the premiums pose too much of a risk for these companies to cover and 2) the "modernized" societies that can often have a public option that limits US health insurance companies ability to bring in profits from these countries.

So, these insurance companies are limited in their abilities to draw additional revenue.  The only way for them to earn additional revenue from their current "customers" is to raise insurance premiums.  The only way to keep increasing profits is to cut down costs.  Since insurance companies don't manufacture an actual physical product that can be produced more efficiently, the way insurance companies cut down costs is to limit services and payouts to the people who need them.

That means that even if you can afford insurance now, you'll be guaranteed to pay more and more for it in the future.  It's the job of the people who run the massive health insurance operations to keep that money coming in. It's also the reason I think it should be illegal for health insurance companies to be traded on public stock exchanges.  It wouldn't solve everything, but it would necessitate locally-based insurance market that would increase competition and curtail the acceleration of costs.

2. Free Market Dynamics Mean Big Companies Can't Help The Issue
Free market dynamics are a great thing for growth and attaining a certain standard of living.  But when it comes to universal needs, they certainly have their limitations.  First off, as discussed in my last point, these large health care insurance companies that control much of the market grow to the detriment of the people who require the insurance to live healthy lives.  Free market dynamics support the continued growth of these companies, which will only make it tougher and tougher for people to afford healthcare insurance.

Also, companies of all kinds see healthcare coverage as a cost.  Already, there is a trend of hiring more temp and contract workers or cutting down on benefits to cut costs.  If you left it up to free market principles, the logical thing to do would be for companies to reduce their contributions to benefits and health insurance up to the point that employees will still stay with the company.  Because, in reality, the only way a lot of people can afford the coverage they need is through full-time employment.

3. Aside From Costs, Big Companies Don't Want To Give That Freedom
Since companies, particularly publicly-traded ones, are encouraged to continue to increase profits, the last thing management wants is something that would make attaining their financial goals harder than it already is (we are in a recession).  Most companies attain their efficiencies through guidelines, rules, processes, incentives, discipline, and the like.  And since most people need their jobs for health insurance (a huge cost for many), they follow many of these rules to a T, regardless of what rights they believe they should have or what other aspirations they have for themselves.

If public option became a reality, most people would not need these companies for their health insurance.  So they might do just fine working part-time at a local coffee shop rather than being tied to their desks or under the thumb of any particular employer.  Which would mean companies have less control over people's lives.  But people would have more control over their own.

4. Fears Of Government Inefficiencies Are Reality For Those Who Can't Afford Insurance
People who have money, have insurance, or have no other choice go to hospitals.  In this free-market economy, common folk and those without solid insurance are too often treated as a second concern.  VIPs and the wealthy actually do get quicker care and have entire sections of hospitals solely dedicated to them.  That's not some fabrication.  That's the reality of a health institution and market place where money is first concern.  I know because I've worked in one of them.  Those who don't have the money, at least in New York City, can visit community health centers where you wait hours on end for care given with fewer resources.  Which is not to say that it is always substandard care.  But it's for sure of a far lesser quality than given to those with deep pockets.

5. The Wealthy Take a Proportionality Bigger Chunk Out Of Medicare
The wealthy have financial advisers and friends who understand how money works.  And although they may have millions, if they need care they are told to "maximize" or "max out" their Medicare or any other public assistance programs; that is use up as much of it as they can before they have to spend their own money.  Your average person does not have the legal support or financial expertise and connections to use these loopholes, so they often up paying through the nose even if they have much less to spend.

There's so much talk about "competition" when it relates to free markets and healthcare.  Bringing in the public option actually forces these companies to be competitive and "compete" for their customers rather than milking the most they can out of people that can't afford it.  That means health insurance companies are forced to stop cutting back on (indirectly) providing the service that they charge your person through the nose for to stay competitive.  It means big employers have less ability to chain people to their desks and run their lives.  It means that the rich and the poor are given something closer to equal access to care, and those who want other options can pay directly for it. Worst comes to worst, these behemoths of insurance companies would be forced to split or spin off into smaller companies to make it work, because efficiencies (and therefore growth) would be limited.  And people would be free to choose.