Turfed in the American Health Care Market.

Aug 13th, 2009 | By | Category: Medicine

The only good insurance customer is the healthy and irresponsible consumer–the prototypical healthy 30 year old who refuses to get a flu shot or annual checkup. Everyone else gets turfed.

Ah, turfed. Allow me to introduce you to one of the cherished terms of medical care in the United States. You turf difficult, or undesirable, patients to someone else. The insurance industry has succeeded, more than anything else, at transmitting this hatred and fear of sick people down to the lowliest depths of the health care system–from the mightiest administrator to the lowliest medical student.

People with easily treated maladies–high blood pressure, high cholesterol, high blood sugar and so on–go untreated (despite the huge potential long-term benefits from cheap therapy) because the entire health care system hates the ill with a deep and embittered passion.

Let’s think for a moment what the product of health insurance entails. For a fee, a company will pay your medical costs for a fixed period of time. These contracts are never lifetime–often they are annual. The multitude of insurance companies offering these contracts operate in a genuine market. Being efficient–successful–in such a market means figuring out any way to avoid providing healthcare costs, avoiding providing care. If you know you’ll only be writing a short-term contract, caring about long-term cost savings is a totally losing move.

The market has worked well: Insurance companies (for profit or non-profit) have proliferated a multitude of caps, fees, co-pays, deductibles and ‘preferred provider’ lists all oriented on reducing short term costs, regardless of consequence. The very concept of a “pre-existing condition” was generated to prevent sick people from becoming customers, and whole mechanisms have developed to kick people out of their contracts if they become ill. The better the market for health insurance works, the more these mechanisms become inevitable.

A big part of the proposed reforms floating around congress are attempts to subvert these market forces without fundamentally changing the nature of the market. Laws preventing exclusion based on pre-existing conditions or dropping people from plans due to illness seem like obvious ways to improve the situation. But the dynamic will remain, and the clever people at insurance companies will come up with new ways to turf those who need care that tip-toe right up to the new lines being drawn.

The great turf in the sky, right now, is Medicare. All of us, when we hit that magical age, become eligible. A public option, as proposed and under fire as a part of this reform, would probably end up serving a similar role: a government-chartered floor beneath which no American could fall. Stuck with these patients for the rest of their lives, suddenly the dynamic would change. Any clever administrator of a public option health plan would be tremendously motivated to provide preventative care; success of such a plan would be contingent on reducing long-term, not short-term, costs.

A model for such a plan already exists–the Veterans Affairs system. Patients in that socialized American health care system are demonstrably and objectively healthier than their privately insured compatriots in every measurable way.

Barring requiring private insurers to cover people for the rest of their lifetimes, there is no other way to achieve a similar focus on long-term health and cost-reduction than a public plan.