OK....
Here is a position that apparently does not occur to most in the medical profession: the health insurance industry serves a vital role in the delivery of modern healthcare. As pointed out above, health care today is vastly different than the pre-MC era where direct patient contracting was much more feasible. Inpatient care, outpatient procedures, chemotherapy, nuclear imaging, etc are all far too expensive to provide to offer cheaply, and are far too expensive to be affordable or attainable for the masses. Even if the genesis of the third party payer system had not arisen from misguided wage and price controls, the need for it would have arisen as treatments advanced in both efficacy and cost. Granted, the rate of cost escalation would likely have been remarkably different were it not for the large infusion of funds that is the result of the disconnect between consumer and payer...
I, like most practicing docs, very much have a love/hate relationship with private insurers. It is a constant battle to maintain fee schedules, battle denials, delays, etc -- yet I appreciate that they represent the most profitable segment of our business. They (begrudgingly) subsidize governmental payers.... as well as charity care, affording us the ability to see these less profitable payer classes.
Mohs, I've enjoyed your posts on this subject, and I suspect we are more philosophically aligned than not. I appreciate the fundamental value of insurance as pooled risk, and I'm actually a fairly staunch fan of profit, despite my rantings above. The other thing I'll credit insurance companies for is...
...wait for it...
...death panels! Yeah, I said it. One thing we are collectively guilty of in oncology is offering expensive treatments with little or no benefit during the last few months of life. If we table the potentially ugly spectre of profit motive for a moment, we do this because even if we in some way acknowledge the cost of the therapy, our primary missive is to provide care for the patient in front of us, and frankly few of us want to be the bad guy who says "Well, there
is something out there, but I'm afraid you can't afford it". Having a nameless, faceless conglomerate like the insurance company jump on the grenade and say "that's ridiculous, we're not paying for that" in a way absolves us of being the bad guy. Deep down, in places we don't like to talk about, we want them on that wall; we
need them on that wall!
The issue I have with insurance company profits (and maybe I should amend it to read something like
record profits) is the mechanism by which these these profits are frequently derived, namely doing nothing to defray the cost of care other than passing it on to individuals, employers and care providers. Think about my proposal above, asking a for-profit insurer to contribute to lowering the overall cost of care by reducing their margins, whether by lowering the overall profit or reducing overhead. Isn't this the exact same thing that they routinely ask of policyholders and care providers when they raise premiums or cut reimbursements? And while we can, in theory, tell the insurer to get lost and find a suitable competitor in the "free market", it is rarely a practical consideration.
As an example, if you run a small business, how happy will your staff be if you change your insurer four times in a year to take advantage of a more competitive cost scheme, only to have some (many?) of them lose their PCPs with whom they may have been perfectly happy. The insurers know that this creates a leveraged position (a similar concept would apply to providers and the potential loss of referral base) that ensures a greater likelihood of everyone maintaining the status quo and merely accepting any rate hikes as the cost of doing business.
FWIW, I think the current level of government involvement already fouls up the system, as you were probably alluding to by the "large infusion of funds". The fact that most insurers peg their reimbursements to the CMS schedule, which results in chronic underpayment for some things and chronic overpayment for others. Of course, from our side of things the temptation will be to push the more lucrative tests and procedures, which is admittedly sometimes done for pure profit motive, but occasionally because failure to do so will put a practice that is already skating on razor-thin margins completely out of business. And lest the populace rejoice that some evil money-grubbing doctor has received his comeuppance, consider that he/she was also running a small business, and now his/her salt-of-the-earth clerical and support staff is also out of a job.
Long story short: The system is broken (duh), but a government-based fix will probably create more problems than it solves. And I'm still not a huge fan of for-profit insurers. Except for the death panel part.
