I complain a lot about how medical ‘insurance’ is used in this country, and about how its (mis)use betrays a fundamental misunderstanding of the nature of risk. But I don’t offer any solutions!, you chide.
Well, this post is not going to change that. But I did have some additional thoughts that may be more constructive.
Of course my basic complaint is that the role of insurance – hedging against large, surprising costs due to risky events – has gotten all mixed up and intertwined with the concept of a payment plan – regular payments designed to smooth out costs and perhaps benefit from package discounts. Seems to me the fact that ‘insurance’ has turned out this way must, on a fundamental level, mean that people just really want to buy all their medical care with payment plans.
Indeed, one of the most common complaints and fears people seem to have is paying for medical stuff ‘out of pocket’. Imagine someone needs a pill daily that costs $10 per dose. Listening to the average person on the subject of health care, it’s easy to come away with the impression that people would much much rather have a ‘plan’ that ‘covers’ that pill for $300/month than to have to buy that pill daily for $10/day. Even though the cost to them is the same either way (ok, pretend all months have 30 days for the purpose of this discussion). Doesn’t the $300 exit your pocket monthly either way? Actually, I suspect that the average person would actually be happier having a ‘plan’ that cost $350/month to ‘cover’ those pills than to have to (gasp) buy them ‘out of pocket’. People seem to value ‘plans’ so much, and fear this ‘out of pocket’ thing so greatly, that one gets the impression they’ll pay a premium for a ‘plan’.
People want to pay for their medical care via payment plans. They don’t want to have to see numbers when they’re actually at the doctor or pharmacist. They don’t want to be confronted with cash registers at the doctor. Rightly or wrongly, it’s pretty clear that’s what most people want.
The result is the system we have, and the constant politicizing of the so-called ‘insurance’ industry, pressure to ‘cover’ more and more things, to pay ‘out of pocket’ for less and less, and to get the government all involved and mixed up with what is ‘covered’ and who decides. In other words, the result is the intermingling of true insurance with buying routine medical care via payment plans. And this is what people like me don’t like. I wish I could buy an insurance policy that was just insurance for catastrophes/large costs, and then deal with other medical care – routine checkups, needed drugs, health maintenance, etc. – some other way. Whatever way I felt like, or thought was most economical, or most convenient. You know, like how I buy virtually all other stuff.
But let me try to meet everyone halfway. Because actually there’s nothing wrong with a payment plan per se. I do understand the appeal of it. And there are many, many other things we do buy on payment plans – an important subset of which we call utilities.
Take your cell phone, your land line, water, garbage, electricity and gas. Essentially we buy all these things on payment plans: we get billed once a month, and we use the things (or not) throughout the month. Although our bills can vary with the amount of usage (typically the bills are of the form base fees/taxes + a cost that scales with usage), we certainly don’t get ‘billed’ with every single usage – we don’t have to break out the credit card and pay ‘out of pocket’ for each flick of the light switch, each fill of the bathtub, each call to the friend down the block. And what a pain in the a** it would be if we did! There’s a fundamental logic in how these things are paid for – even I can understand that.
And so maybe people just fundamentally want their health care to be the same way – something you use, because it’s an ongoing human need, but you don’t have to break out the credit card for each time you use it. In other words: fundamentally, basic health care (if not emergency health care) is a utility. So let’s treat it like one.
Note that this approach is neither left-wing nor right-wing. It doesn’t necessarily mean government takeover of health care, but it doesn’t necessarily not mean a government takeover. The question is just what works better. Some utilities are essentially government monopolies, but others have been privatized to at least some extent, and some utilities have shifted back and forth between the public and the private. Electricity is typically quite public; in the case of cell phone companies, you are basically dealing with private companies.
Some benefits of this approach: it would leave room for shopping around (like people do with their cell phone plans). It might also make people stop and think, a little bit, about their seeming obsession with paying for things via ‘plans’. Notice that most people aren’t really all that happy about how cell phone plans work – signing lengthy contracts, paying high monthly fees whether or not they use it, etc. I submit that the way we pay for health care has a lot of the same problems (and more – after all, at least the government doesn’t incentivize our employers to garnish our paychecks to pay for our cell phone plans) – but people just don’t notice it because they don’t think about health care the same way that they think about their cell phone plans.
They should. And if Basic Health Care was essentially a utility, a monthly service, like cell phone plans, then maybe they would – and maybe they’d stop and see that what they’re asking for when they clamor for government to ‘reform’ ‘healthcare’ is the health-care equivalent of asking the government to take over Sprint and then force everyone to sign up for 50-year cell phone contracts in which the government has the power to limit the number of minutes.
Maybe people would stop asking for stupid, self-defeating things, in other words. Hey, I can dream.