Health Care for All

By Samuel Metz, MD. Samuel is a private practice anesthesiologist, HCAO representative from the Portland chapter of Physicians for a National Health Program, and founding member of Mad As Hell Doctors.

Profit is not what is destroying our health; it’s the private insurance business model.

Oregon is unusual in that our largest insurance companies are non-profit. Nonetheless, the cost of insurance in Oregon differs little from other states; our percentage of uninsured is in the middle; and we suffer the same proportion of medical bankruptcies as other states. Clearly profit-making among insurance companies cannot be held responsible for the sad state of health care in the US, or Oregon for that matter.

Many Europeans use private health insurance companies, a few of them for-profit, and Europeans enjoy better care for more people at lower cost than we do. But the European business model differs radically from ours. In fact, American insurance companies find the European model not just alien, but intolerable. Imagine an American insurance company playing by these European rules:

• You can set any price on your policy, but you must sell it at the same price to everyone, regardless of health.

• You must sell a policy to anyone who applies. No exceptions.

• No policy can be cancelled for any reason, not even failure to pay (the government will step in). Patients, however, can change companies without notice.

• Every policy must cover all treatable diseases. No matter what policy they purchase, patients will never risk destitution (or death) if they suffer a treatable condition.

• Your company must pay every claim within 30 days. You can protest the payment, but only after paying the bill.

• Every provider receives the same payment for the same service, regardless of patient or their insurance.

• Your records are an open book. Every dollar (or Euro) passing through your hands is open to public scrutiny.

• If you still manage to cherry pick healthier patients, the government will impose a premium to subsidize other companies with sicker patients.

With this model, European companies compete with lower prices, extra benefits, and better customer service. Not a lot of that on this side of the Atlantic, is there?

Without these rules, how do American insurance companies compete?

• They avoid sick patients. Highly paid underwriters detect potentially expensive patients before policies are offered. And the best way to avoid sick patients is with high policy prices.

• They slash benefits. Reduced benefits both discourage sick patients from buying a policy and reduce provider payments if they do.

• They pass costs to patients with increased deductibles and co-pays. Healthy patients (the ones companies want to keep) won’t notice because they don’t need health care. At least until they get sick.

• They delay or deny provider payments. If the collection process is frustrating enough, many providers simply give up trying to collect. That’s money they keep.

Does profit make a difference? No. It doesn’t matter if your company is beholden to stockholders or a non-profit board of directors – you must follow the same rules. If you don’t, your company is toast.

The unfortunate consequence of these rules is the conflict between insurance companies’ financial interests and policyholder’s medical interests. Whether your company needs to show a profit or not, you cannot avoid bankruptcy if you sell comprehensive policies at affordable prices to sick people. Do not have false hopes: Removing profits, enhancing competition, and removing regulations will not correct these misaligned interests.

Our American insurance business model is the source, not the solution, of our health care problems. We must run – not walk – away from placing our health care in the hands of the private insurance industry.