Tuesday, January 24, 2017

Resist the Fiction of Health Insurance

It has come to pass. President Donald J. Trump. Are you scared? Are you planning to “resist” the policies you imagine President Trump will pursue by tweeting furiously with clever hashtags galore? Would you prefer to move my fastidious quotation marks from “resist” to “President”? This is after all, the first President in a very long time to take office without the blessings and financial support of established “world order” leaders. It must be rather disconcerting to proceed without clear guidance from our betters, especially seeing how well they served us over the last decades, and particularly when it comes to affordability of health care in America.

Are you binge-watching the Obamacare drama playing on America’s center stage these days? Are you tweeting and retweeting every shred of information that proves Obamacare is a huge success, and its repeal will mean certain death for millions? Or are you busy proclaiming your faith in free markets, the (undemocratic) government of Singapore, or the charitable nature of Americans in general and doctors in particular?  Is President Obama your tragic hero, or your shifty villain? Is President Trump your great liberator (although he promised not to do anything you really want), or the Grinch who will steal health care (although he promised to preserve everything you really like)? Are you not entertained? Pass the bread, please.

Health Insurance

In the latest plot twist of the greatest political show on earth, which according to all expert comedians managed to put Ringling Bros. and Barnum & Bailey Circus out of business, our newest  Republican President announced that “we’re going to have insurance for everybody”, even people who “can’t pay for it”. Sounds like some sort of universal health care to me, no? Ah, the sweet irony…  Amidst my deep joy with the ensuing gasps, grunts and groans, I have to assume that President Trump is really talking about health care for everybody, including those who can’t pay for said care, because “health insurance” is a fictional construct designed to extract profit from misfortune.

Would it surprise you if I said that most people in this country, or any country, don’t actually have “health insurance”? Medicare is not insurance. Medicaid is not insurance. TRICARE and CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs), as well as care provided by the Department of Veterans Affairs and the military, are certainly not health insurance. Even the health insurance you get from your employer is not insurance in the strict sense of the word. These are benefits, defined benefits. Obamacare extended these benefits to more people, and by essentially eliminating individual underwriting and monetary caps, it practically did away with the notion of health insurance. Good riddance.

Nevertheless, practically all our Obamacare conversations are about health insurance (or coverage), because those who sell products called “health insurance” want us to discuss health care on their terms. It’s more profitable that way. When we talk about insurance, we can talk about pools, actuarial risk, death spirals, corridors, and all sorts of obscure and complicated things that seemingly justify the need to pay health insurance companies for something. And what is that mysterious something we pay so much for? It’s certainly not “insurance”, seeing how at least half the revenues of for-profit insurers come from federal and state governments. It’s complexity. We pay insurance companies to paint a thick layer of complexity over the health care delivery system.

Price of Care

How much is a jar of pickles? Well, it depends on the brand, the size of the jar and yes, the grocery store where you shop, but one thing is certain: every person in your store pays the same amount of money for the same jar of pickles. Not so with your doctor visit. If you have traditional Medicare, your doctor gets $75 for a regular visit. If you have traditional Medicaid, he gets $40 for the same visit. If you have BCBS Super HMO, he gets $70.51. If you have BCBS Super HMO+, he gets $72.37. If you have BCBS Freedom PPO, he gets $82.86. If you have Cigna Gold Choice, he gets $90.03. If you have Cigna Liberty Sucks, he gets $65.99. If you have…. and on and on it goes, for the same exact 15 minutes, from the same exact doctor, in the same exact room. The doctor one floor up may have a completely different set of fees from the same exact complement of insurance plans. Add to that the avalanche of “value-based” payment “initiatives” triggered by the massive underbelly of Obamacare and the picture gets murkier than ever.

So what’s the real “value” of that doctor visit? Irrelevant, my dear Watson. Irrelevant. The true value is in not having a value at all. Why? Because then your doctor will need expensive software and an army of “expert billers”. The insurer will need different mega software to manage accounting across “product lines” and “initiatives”, and an army of analysts of its own. Of course contracted fees and quality initiatives change all the time, so the change process needs to be managed on both sides of the transaction. Extrapolate this to hospitalizations, diagnostic testing, procedures, a variety of specialists, and before you know it nobody has a clue what the price of anything is, except of course the number crunching data aggregators, usually owned and operated by, you guessed it, insurance companies.

Choices Galore

There is nothing America hates more than one-size-fits-all health insurance, you know, like Medicare. There are two health insurers and 23 individual “plans” on the Obamacare exchange in my county. Two are Gold, twelve are Silver and eight are Bronze. The same insurers offer additional “choices” off the exchange, and other choices for the employer market. There must be well over 50 “plans” from my health insurer alone floating out there. They vary by type and metal, and within each metal they vary by a few dollars here, a few dollars there and a few percentage points here and there. They all offer all the required Obamacare benefits. Why do I need two PPO Silver plans, from the same insurer, one with a $336.20 premium and one with a $336.91 premium, and similar earth shattering differences in deductibles, out of pocket maximum, copays and co-insurance?

I don’t, and neither does anybody else, other than the insurance company, of course. That layer of complexity must be nurtured and maintained. The more plan choices we have, the more we can agonize over each miserable and completely irrelevant detail. Furthermore, if the government pays for everything, including your deductible, the “actuarial value” of the plan means very little. If you’re not poor enough to qualify, and not wealthy enough to buy a top shelf plan, or pay your own way, you’re screwed no matter what you choose. The Ryan/Price “solution” to this quandary is to allow insurers to create many more plans that differ not only in price, but also in the benefits they cover, thus making insurance great again.

You can have plans that don’t cover pregnancy for example, or maybe they don’t cover physical therapy or expensive cancer drugs, because customers know best and government shouldn’t tell them what to buy. Well, that’s awfully nice, but what if your diaphragm malfunctions, or you shatter your tibia playing hoops, or God forbid those headaches were not due to stress, can you then switch to another plan just in time, or are you barred because preexisting conditions? This is a serious question, because if you can switch, every healthy person could maintain coverage for ten bucks a month, and if you can’t switch, then what’s the point having all those threadbare “plans” to “choose” from?

Let’s just get real

As gloriously delicious as the health insurance spectacle is promising to be, dwelling on it won’t solve anything. Whether you call it health insurance, health benefits, medical services or just plain health care, the darn thing is just too expensive. It’s too expensive for us to buy with our own money and it’s too expensive for us to buy with tax money. It was too expensive before Obamacare, it’s too expensive now, and the massive complexity introduced by the health insurance industry and its perpetually revolving door in and out of government, is making sure it will remain too expensive forever. Why? Because the more money we spend on health care, the better health insurance companies do, and they are doing swimmingly well lately.

And nothing, absolutely nothing, the GOP put forward up to this point is poised to change that. President Trump argued convincingly enough that we cannot solve major problems unless we are willing to correctly identify the problem by its proper name. I agree. If we are going to identify and refer to the main threat to our security as radical Islamist terror, then we should be brave enough to call the health care problem by its proper name. It’s not insurance. It’s funding. The question is not how we provide “access” to some fuzzy notion of health insurance to everybody. The question is how we fund the actual delivery of medical care to all Americans at a federal level or even state by great state.

This does not necessarily mean tax funding of free health care for all. It does not mean single-payer or Socialized medicine. It also does not necessarily imply free-market fantasies, supplemented by our legendary charity. It does not mean that employers are either off or on the hook, or that pooling money to pay for fluctuating medical needs is forbidden. It doesn’t mean that insurers should all go out of business either. It just means that the American people have no obligation to guarantee empires, executive salaries, profits, earnings, and return on equity for any industry, and certainly not at the expense of their own health.