Israel, Romney, and health insurance ? Badtux the Snarky Penguin

So the question is, ?can HMO?s (and health insurance in general) work??

Well, the answer is, define ?work?. If you mean can an HMO provide routine health care for cheaper than most health care providers, the answer is ?yes?. If you are asking, ?will I get better care from an HMO if I come down with a major illness??, well? that?s the question that?s not being asked by any of the so-called ?stakeholders? in the health insurance wars.

First, let?s look at some history. The first HMO was Kaiser-Permanente, which started out as the in-house health clinic of the Kaiser industrial conglomerate. Henry J. Kaiser paid Dr. Permanente to handle the health care of his workers because his in-house doctors helped reduce worker?s compensation claims by simply covering up the extent of workers? injuries and not telling them about worker?s comp. Furthermore he could hire cheap doctors, not good doctors, and pay less for health care claims. So, were Kaiser?s workers any healthier than workers in other industrial conglomerates? Err? no. Industry was an ugly nasty dirty business where people died young regardless, and if someone got a major illness they died swiftly anyhow because prior to the 1960?s most major illnesses were death sentences because of no effective treatments, so nobody really had any benefit over anybody else health-wise. HMO?s were cheaper, that?s all that Kaiser cared for, and when K-P was spun off as a ?not-for-profit? so that other employers would use it (thus helping share the costs), K-P continued a corporate culture of ?low rates to our business stakeholders before all.? Where ?all? includes the health of the workers.

To a certain extent that was offset by corporate culture back then. It was expected that you would work for the same company for most of your life, so companies had some stake in keeping you healthy enough to keep working for them. Furthermore it really wasn?t possible to cheap out on health care back then, because aspirin, penicillin, sewing needles (to sew up stubs of amputated limbs) and bandages were pretty much ?it?. But today? workers are disposable. And furthermore, we now have cures for most of the 750 pages of ?send patient home with palliative care to die? illnesses in the 1955 Merck Manual (the diagnostician?s Bible), but those cures are *way* more expensive than aspirin, penicillin, bandages, and sewing needles. If you tried cheaping out on bandages you might save a few cents. If you cheap out on leukemia treatment, you save $1,000,000, yes, a cool MILLION DOLLARS, if you can manage to delay treatment until the patient is dead.

Now I hear you say, ?but surely people wouldn?t buy health insurance that doesn?t pay for major illnesses!? Well, first of all: How would they know? Only a few thousand people nationwide come down with leukemia in any given year. I?ve never worked for a company where any of our employees became ill with leukemia. So how would I know first-hand whether my company?s health insurer would pay for effective leukemia treatment? Secondly, note that it?s my company?s health insurance. Not that it matters. If I?m looking at two health insurers and one is $1,000/month while the other is $500/month, and the policies say they cover the same identical illnesses, which one and I going to go for? But how did that $500/month get to be so cheap? Chances are it?s because they deny claims for expensive illnesses until the patient is dead, thus saving the money that would be spent treating expensive illnesses, but hey, Americans are cheap bastards with illusions of invulnerability so they?ll say ?well that?ll never happen to me? and there ya are.

The reality is that with today?s very expensive health care system for once-deadly illnesses, the insurance model simply fails. Back when health care was cheap and cured little and employers had an incentive to keep employees healthy it sort of worked. But in today?s disposable labor mentality corporate environment where health care is a major payroll cost? Get real!

Now we?re back to Israel, Romney, and health insurance. As I?m sure you are aware by now, Romney recently visited Israel and praised Israel?s health care system, and, specifically, its health insurance system, which looks a lot like, err, Romneycare, complete with mandates. But Israel goes further and regulates both the rates of insurers, and the payment policies of insurers. So insurers can?t just deny valid claims spuriously, because then the patient complains to the State and some very nasty looking people with guns and government badges show up to order the executives to pay the claim and if it doesn?t happen, they come back and start taking executives to jail for contempt until remaining executives pay the claim. So basically Israel treats health insurers as a private arm of the State. They are private in name only, and have no ability to manipulate claims payment policies to kill expensive patients who would cost more money than could ever be recouped in lifetime rates.

So that?s what Romney praised. Funny, though? while he seems to think it?s fine for Israel, it?s not fine for the USA? No wonder that when Romney went to Poland, Polish people started telling American jokes. Alrighty, then!

? Badtux the Snarky Healthcare Economics Penguin

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Source: http://snarkypenguin.wordpress.com/2012/08/01/israel-romney-and-health-insurance/

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