Why Profiting Insurance Companies Are Better Than Government

On Monday, I watched a woman at the town hall of a Republican representative pose a question that reflected something that Democrats are trying fiercely to squeeze. The woman first conceded that she wasn’t very pleased by the idea of government personnel intruding in discussions of her health care. However, she said, her insurance is expensive, and why should she be paying for the insurance company’s profit? Well, I’d love to take the opportunity to explain why.

First, be assured: I’m neither in the insurance business nor in any way in their employ. As a disabled man, I can claim the objectivity of a party with my only objective being the best interest of society. Obviously, the best option would be if your family was so wealthy that they could buy you whatever care your favored doctor advised. But, that isn’t the case for most of us. Conservatives have correctly argued that balancing cost should be more in the hands of the individual consumer, which means making the varying costs weigh in with respect to the consumer: perhaps with a variable rather than a fixed co-pay.

But, that would be to clarify your relationship with the insurance company: you are their customer. Even while an employer is the primary policy-bearer, a company can afford to develop a reputation neither as a too costly provider nor a poor service provider.

I think I can use my personal example. My insurer is a very large and well-known company whom I’ve been covered by for many years. As a multiple sclerosis sufferer, I see a lot of doctors for primary care, neurology, and various specialists for different symptoms. I have even once seen a surgeon.

Many years ago, a few of my doctors dropped my insurer and I had to find other doctors. And, it seemed that finding doctors in their plan was a little more difficult for a while. Either payments were too slow or price negotiations too difficult: probably both. All insurance companies are trying to control costs and hold money as much as possible, just like any other company. It seems that it may have affected my company’s competitiveness in the market, because most doctors now accept it and in fact, a few of the doctors I had to leave, now accept it again also.

That’s how markets work: there’s push and pull for profit and market-share. The company does what it must to compete. Again, we want to maximize the consumers control to maximize the fact that YOU are the insurance company’s customer. Companies don’t mistreat customers, willy nilly.

NOW, consider your relationship to the government: it doesn’t negotiate price. It dictates it. It doesn’t compete for money. It takes money. It doesn’t compete on service, either. It just undercuts the market and bills the taxpayer. There is no competitive motivation prompt and efficient service. To the government, you are not a customer. The government deals with numbers, and you are a bean. Stepping squarely into it, President Obama himself made the point quite clearly. Explaining that private companies could compete with a “public option,” Obama said Federal Express and UPS are doing fine. “It’s the (taxpayer subsidized, money-losing) Post Office that has the problems.” Yes. You pay for both: the Post Office forcibly and the private companies voluntarily. And, which gives you friendlier and more efficient service??? Which is closer to the ideal of a rich family?

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Comments


Hello,
I have heard from many sources that public health care system in France is among the best in the world in terms of quality. Could you please give some arguments why can't we creat the similar health care system in US. I mean available to all citizens and at the same time with high quality standards?
Thanks.
Al

Al:

My initial response to what you wrote is to question how successfully I communicated and/or how much you absobed or acknowledge the ESSENTIAL practical difference between private and public. I am not concocting arguments out of a reflexive animus toward Democrats or even government, except to the extent that I strongly believe government actions distort the natural function of human nature. My central point was to distill out the fact that a private provider OFFERS a service to the consumer and a public agency DELIVERS a compulsory service, whether money or resources. That very fact of itself fundamentally changes the nature of the transaction, and usually the efficiency of the system.

France really has a combination of a public and private system; sort of like Medicare, where many people purchase supplemental policies to fill a gap or what is called "the donut hole." In France the national system picks up 70% of cost, except in cases of chronic severe conditions and relative indigency, which there is more of as the economic system is constrained by government, but is how universal coverage is achieved.. But otherwise, the other 30% is picked up by the privately purchased (usually by employers) supplemental policies. And, the French pay into the public system proportionate to their income.Consider a few things:

First, the most glaring challenge for France is burgeoning cost, as for instance in Massachusetts where universal though privately administered coverage is mandated. Because of this, France is implementing measures to make individuals more responsible for bearing and controlling costs, like conservatives in America stress maximizing individual control over cost and service.

Secondly, France generally sports better figures in both longevity and infant mortality. I think both of these figures are largely attributable to irresponsible living on the part of Americans. We want what we want and we want it, now. Poor general health, most obviously exhibited in our "inflated" rate of obesity as well as other things, influene both personal and infant/childbirth mortality rates. The French lifestyle is less indulgent of excess as well as less stressful. In America, people diet and avoid all fats and setts...WHILE they are on the diet. The French have wine and chees and good cooking and pastries. The just don't usually have them by the TON! In America, we have fast-food burgers and fries and delivery pizzas and LOTS of light pilsener beer. Yes, generally I think we should smell the roses more, but NOT at the expense of liberty!

That brings up a 3rd point: America spends the most of its GDP of any industrialized nation by 2 to 6 percentage points. America also has the most developed and cutting edge technology in the history of the world. And, those two facts are NOT NOT NOT coincidental! Liberty produces innovation. And also, as in so many other areas, more controlled nations are to some extent parasitic on our progress. New discoveries of technologies and pharmaceuticals are available to all. It's not that Europeans and Asians aren't plenty capable. They are: we all also share in developing education. But, the profit motive pushes effort and resources in promising directions.

We need to ask ourselves a few questions: In a misbegotten effort to squeeze every abstract social ideal that comes along, are we willing to clamp down on liberty?" And. when we have sufficiently squeezed liberty out of the USA, what will then be the primary generator of technological progress?

I'm actually not totally pessimistic about the survival of liberty, as some are. At this point in history, I believe if we squeeze liberty out of America, it will like mercury squirt somewhere else. But, are we really anxious to anesthetize it in this unprecedented American historical experiment? We need to teach wise living and optimize individual control. But, we DON'T need to control the liberty that was the very foundation of this country and purpose of the US Constitution.

Larry

 

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