Monday, May 25, 2009

Obstacles to health care reform

A Wisconsin Political Fix
not just another blog
May 25, 2009

By Bill Kraus

As the protectors of the status quo gather their forces to keep the “it works for me” current system intact and prove again NY Times colmunist Bill Safire's prediction from 30 years ago that we were headed for a political condition best described as hardening of the arteries, one incongruity is evident.

A dramatically changed health care system worries the organized doctors and probably the other organized medical people like nurses, and technicians of all kinds as well.

Hospitals, clinics, and other organizations with physical facilities made their investments assuming that the status quo would pretty much stay intact too.

The pharmaceutical business seems to be thriving--if its advertising expenditures are any indication of how well its doing.

All of these people and companies deliver the health care product.

The insurance companies that are expected to line up with them do not. What they deliver is a payment process for the deliverers and a cost-control function for the organizations and people who pay them to pay the deliverers.

They are in the middle of the process clipping the money as it goes by to its own corporate advantage it appears.

It was not always so. When I got a bleacher seat in an entry-level job in the insurance business several decades ago Harry Truman was president and the British had invented what is now described as socialized medicine. The Brits were having some problems with the demands put on their plan by the worried well, but the idea still had enough bounce to convince President Truman that it would work here and should be enacted.

My recollection is that the opposition to this proposal was led by the doctors’ American Medical Association and the country’s dominant business organization, the U.S. Chamber of Commerce.

They convinced the insurance industry that to save the country from socialism or worse, companies would have to offer an alternative medical care payment plan based on employer funded health insurance.

I can only speak for the insurance company that I worked for, but I recall that we answered the call reluctantly. We didn’t know anything about this kind of insurance. We even wondered if we were dealing with insurable risks in the traditional sense. Worse yet, we were sure that we would lose money on the deal. Insurance companies at that time kept something like 30 percent of the premiums they collected to do all the things insurance companies do. The way this new health insurance business was being structured, they would get about a third of that. Not enough.

What insurers obviously have figured out in the ensuing 60 years is either a way to get a bigger piece of the pie or to make money at whatever level they are able to charge.

What they have also become, which gives them a seat at the table of the organizations likely to resist major changes in the health care system, is the naysayers. They set reimbursement policy. They decide what to pay and which medical procedures to pay for.

This is something far short of the free market that operates in other sectors of the economy, but since insurers are not government agencies this is not regarded as “socialized medicine,” even though that is what it looks like.

Whatever it is, I do wonder why those who are working on modifications still give the money-shuffling insurance industry a seat at the table and a full say in the deliberations.

Follow Bill Kraus on:
twitter / wmkraus

No comments: