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Why Do We Allow People To Make Money Off Sick Americans? |
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Everyone should see SiCKO. Michael Moore has certainly been a polarizing figure in the past, but his new documentary is not only the least partisan but the most powerful effort he’s ever put out. He stays away from party lines, and he lets his interviewees speak for themselves. He only has to ask a few open ended questions to get the kind of responses that he wants. No leading, no conspiracy theories; it really will affect you in a deep way. And you don’t even need to pay for it! I watched it online today, and you can too, and Michael Moore even supports it. It’s only two hours long, and it is worth every minute. Watch it right now!
The policy implications of this movie are vast, but I’d like to focus on one question that came to my mind. Why do we, as Americans, allow anyone to make a profit off of health insurance?
Now, let’s define this debate. When people talk about the system of healthcare in America they are really talking about three separate entities. You have the people, the patients who are sick or who need some form of care. Then you have the providers, the hospitals and doctors who provide that care. In between them, you have the insurers and HMOs who make a profit as middle men by charging customers premiums and paying out money to healthcare providers. Let’s be clear: There is no question that doctors should be well paid. There should be money for research and development and for new and better medical technology. I’m not even going to get into the problems that arise from the high cost of the actual care (though this is a subject that is worth talking about). I am going to concentrate on the role of insurance in the healthcare process.
Insurance companies and HMOs make money off of our sickness. They are for-profit corporations, and as such, they do everything they can to maximize their returns. This means that they try and insure as many people who will and can pay their premiums and deductibles, and they try and pay as little of the money they collect from premiums back out to the actual healthcare providers when their customers fall ill. My question is why do these middle-men even exist? How can we allow health insurance to be a profit making enterprise? It seems to me that the economics incentivize capitalistic behavior that most Americans would find morally abhorrent.
The theory behind HMOs and health insurance, at least from the consumer’s perspective, is that these services work something like a bank. You pay relatively small monthly payments into your health plan so when you get sick and need to have expensive procedures paid for, you can withdraw a large amount of money from your plan instantly. Instead of having to keep thousands of dollars on hand to cover health costs, people with insurance only have to worry about small monthly payments, and they rest easy knowing they are covered for catastrophe. Health insurance is supposed to theoretically spread out the risk, so some people might pay a bit more into the system than they get out (because they don’t get sick too often), and some people may pay in less than they get out (because they had an accident, for example), but in aggregate, the money coming in and flowing out should be about even.
This isn’t really how the system works, however. Insurance companies aren’t really like banks in two important ways. First, when you deposit money at a bank you deposit is insured by the government. If the bank ever doesn’t have enough money to pay you what it owes, the government will step in and make sure you get what’s coming to you. With banks, you can deposit with confidence. With health insurance, as SiCKO dramatically points out, you can’t. Second, banks make the bulk of their money off of investment income. They take the money you deposit with them and invest it how they see fit. They hope to make money on that investment, and they even pay you interest for the privilege of letting the bank use your money. HMOs don’t make money this way. They primarily make money by charging customers monthly premiums, and they hold onto that money by paying out as little as possible to providers. The economics are stacked against the customer. Because everyone needs healthcare (falling sick isn’t really an if, it is more of a when), then companies aren’t really competing so much on service as they are on price. And because of the way American law works, they can pretty much do anything with those plans that they want to. They can not accept people with preexisting health conditions, they can deny all sorts of treatment, and they can drop you if your care gets too expensive. If HMOs can choose what to approve or deny, they hold the power, and they have a powerful incentive to pay out as little as possible.
Why do we allow this to happen? Why do we stack the deck against the customer? Why do we allow HMOs to collect money from us all of our lives, and then deny us whatever care our doctors deem necessary when we fall ill? Doesn’t this practice seem wrong to you? It seems like health insurance is a scam, plain and simple, and if actual health procedures weren’t so expensive, I doubt too many people would fall for it. In America, we rightly limit the profit making capability of businesses we find abhorrent. You can’t screw people over with predatory lending and sky-high interest rates. Helping the poor and homeless for-profit is frowned upon. Essentials like gas, water, and electricity are severely regulated. I don’t see how healthcare should be any different.
Now, I’m not really going to get into the pros and cons of single-payer healthcare or socialized medicine. There is clearly a lot we can learn from other countries like Canada and France, but that’s a discussion for another time. I’m mainly arguing against the way the healthcare economy works with respect to HMOs. Can someone explain why it is ok for these companies to operate like this? Can someone explain why Americans, as people who believe in right and wrong, allow companies to exploit sickness in this way? It seems clear to me that at the very least:
- we need much stronger laws to give HMOs much less of a say when it comes to approving or denying treatment. The only person who should have a say over your treatment should be you and your doctor.
- we need laws that eliminate preexisting condition requirements for receiving coverage
- we need to take the profit motive out of healthcare by mandating that HMOs can’t generate profits by denying claims, only by investing their money, or we need to mandate non-profit status for HMOs entirely
I don’t see how these points aren’t things most people would agree with. Spiralling healthcare costs are a problem. Millions of uninsured are a problem. But the biggest problem to me is the fact that health insurance providers are making millions of dollars by abusing people like me and you. Making money off of sickness is wrong. Let’s put an end to the shameful practice. (And watch SiCKO too, when you get a chance. It is well worth it.)
Your thoughts?
So you’re just going to let the medical providers off on this issue? Don’t they make money off sickness, too? They absolutely do. Insurance carriers and HMOs are a market mechanism that bring the providers and the consumers together. Sure, we can replace that market mechanism with a governmental solution, and I’ll even concede that we might cut a few percentage points out of the nation’s total healthcare spend by doing this (at the risk of producing a customer service debacle). But the cost of care is by far the largest portion of overall healthcare cost. This can’t be ignored, or wished away, or saved for another day. We need to talk about a comprehensive solution that includes all players–providers, insurers, government, and even consumers (who need to understand that they can’t smoke, drink, eat to excess, and engage in all sorts of dangerous behavior only to be granted every medical procedure known to man at little or no cost). I’m not asking anyone to defend the insurance industry, but let’s at least eliminate the silly notion that this is our only problem. It’s on the list, but not in the top five.
Why do we listen to sick poeple who make movies? They try to influence others with psychology and rhetoric rather than the scientific method of reproducibility and testing of theory. The theory of saving money on health care by letting the government do the paying has been disproven by any/every/all tax schemes ever promoted. They take a huge cut out of the money collected, spend all of it as in Social security trust funds and say what a good boy am I. The Social Security Trust fund should own title to a lot of real value and property just by the passage of time since 1935. Instead they have a stack of two or three trillion dollars worth of paper promises. They should own the National Petroleum reserve, the gold in Fort Knox and all of the energy generating dams in the U.S. Now shouldn’t they?
@CincyJoe
You are absolutely right. The insurance companies are just one part of the problem. Healthcare costs are spiraling and we don’t focus on preventative medicine. I was focusing on the insurance insustry for this article only because that is what struck me while watching SiCKO. Certainly, as a solution, we are going to have to tackle all angles.
@AVJ
You betray your bias with your second line:
This isn’t about saving money (though I do believe a single-payer system would do that). This is about ensuring all Americans have equal access to quality healthcare. Money, as I think I’ve shown, is the cause of the problem here, not the solution or a goal.
Wow! How simplistic an answer. You must be a Moore follower. Last time I checked the hospital emergency rooms were full of people that did NOT have insurance, but still received the best care provided regarless of their ability to pay.
Secondly, when was the last time you inquired as to what a medical procedure cost before you had it done? Medical services are the only comodity I know of where the cost of providing it is not discussed or known until after the fact!
Get a grip, and next time you editorialize try to look deeper than Mr. Moore’s slanted journalism in order to “profit” ( now there’s a dirty word) through sensationalism. Maybe the Government should subsidize or create a single-payer movie theater system so those without MONEY can go see SICKO!
Two points, Slasher:
1. Slanted journalism doesn’t necessarily mean it is false. Moore is slanted, but he’s also right.
2. Moore said he doesn’t care if people watch this movie online. See the link above. I agree with you there. Don’t pay for this movie. Watch it online.
Being Canadian and health I would like to offer a different perpective on health care. My wife and son are American citizens and in the process of getting landed immigrant status. They do not have health care at this time. My son broke his wrist and required a cast. Hospital, doctor, and treatment cost $550.00 My wife had strep throat, she went to a walk in clinic for treatment. Doctor visit, paid directly to the clinic. $40.00 Antibiotics $25.00 No middle man.
For me, those costs are paid for through my taxes. I gladly cover them in my taxes. What percentage of my taxes go to healhcare? I do not know but I do know they are within my tolerance level. When the taxes are all added up. Federal/state(province)/muncipal/education/sales you will find that Canadians are pretty much on par on tax levels as Americans. Ecxcept that we dont have to purchase health care. Note that we do purchase drug plans, dental plans, special cosmetic surgeries, work loss insurance for self employed people.
So, for me looking south, I cannot understand why the VA system is not available for all Americans. You can afford it. If people abuse the system, deal with that.
If nothing, sicko does promote dialogue.
cheers dan
The simple argument against this push for national healthcare reform - why do it at the federal level? Are states not big enough entities to make laws?
How can someone honestly think the same system that brought the elective Iraq quagmire, pathetic hurricane response, etc is somehow going to do a great job with healthcare? (Nevermind the fact this system left the goons in power for 4 more years longer than necessary)
50 approaches to see what works is better than one huge bureaucracy which will be even less responsive than health insurance companies.
Having said that - the system in MA is as stupid as it can be. It’s business as usual, but you face a tax penalty if you don’t have insurance. Also keep in mind that state-run health insurance provides actual justification of laws against drugs and other lifestyle choices.
I think we should also make it illegal to make money off from damage to houses and cars.
Auto mechanics? Plumbers? Roofers? All immoral, and should be illegal.
Your logic makes doctors (except for the ones who work for free free) immoral too, by the way.
This problem is really complicated, but as someone with a public health and health economics background, I both agree with a lot of what Michael Moore has to say, and disagree with some. I am overwhelmingly in favor of a government system for universal coverage and/or care, and I do have problems with for-profit insurance companies. However, do bear in mind that many insurance carriers, most notably the Blue Cross/Blue Shield companies, are not-for-profit, as are the vast majority of hospitals. Also consider that very few people are covered by HMOs anymore, since that model collapsed in the late 90s. And with regard to providers accepting blame, a lot of the cost increases we see are due to malpractice costs (and defensive medicine that results from that), absurdly expensive technology, and cost shifting as Medicaid/Medicare reduce reimbursements.
Our problems with health care are also cultural, and that is something that I think Michael Moore approached a bit with his film. Many Americans really don’t care about their fellow citizens. They say they do, but they aren’t willing to suffer any change or anything that might help someone else. They are too afraid that any reform might affect them, even in the slightest, and so it isn’t worth doing at all. The system won’t change until enough people are without coverage and without decent care that it no longer is about helping others, but about helping themselves. That is what Americans really care about. For better or worse, I think we’ve at least almost reached that point.
Also, that is wrong. America spends way more per capita on health care than any other country, including those with universal insurance or socialized medicine. We would stand to offer better care and save billions of dollars if we just got over ourselves and accepted that change was necessary.
My biggest worry would be the goverment involvement.
If Walter Reed is any indication of how they would handle it I would choose to have the system in place reformed.
I.ve had 2 of my doctors leave the state just because of liability costs stemming from frivilous law suits.
Insurance companys should make preventative care mandatory. Those that comply would get lower premiums and deductables.
If we’re required to have car insurance to drive, then if you’re alive, you should be required to have health insurance. If everyone was required to have health insurance from birth, there would be no pre-existing conditions. Laws that wouldn’t let them discriminate people with pre-existing conditions would then pretty much let people just sign up for insurance when they’re sick (and therefore not pay into the system at all).
I’d hate to see the government run insurance, they can’t run anything else, but clearly the free-market isn’t running health-insurance well either.
That I could agree with. I’m not convinced yet, but without too much research, I don’t see why the states can’t tackle this problem. As a resident of Illinois, I hope their new universal healthcare plan passes. It would be a great step forward.
I believe the core of the issue is taking care of ourselces first. The processed foods we eat , no physical education in elementary and middle schools etc.
If you make your scheduled regular visits and catch something before it mushrooms your cost will no doubt be less,in life and dollars. If you are a policy holder but dont come in untill its a million dollar job , I think you should have to suffer the consequences of your laziness.
As far as a State run program goes, the problem is that all states would have to conform to one standard.And by then it would be federal. If one state has its shit together and and onother one doesnt, the state with its shit together is gonna get mobbed.
Where I live they build signs that cost a million dollars just to let you know what neighborhood you’re in.
I wouldnt trust them to put a band aid on me. And since we are surrounded by water I would be screwed.
I think a majority of the system in place would work just fine if we tweeked it so all the B.S. and crap got trimmed off. And of course the Govt. will be involved to certain extent. But not to level of socialized medicine.
Holy crap.
I am a medical doctor. I went to 4 years of college, 2 years of graduate school, and 4 years of medical school. After that, I completed a residency that lasted 5 years. Even though I don’t know you, I’m going to assume that I am way, way smarter than you.
If you want people like me to become medical doctors, you must pay me, and pay me well. If you want doctors to work for less, work for free, or become employees of the federal government, you will end up with stupid doctors. Smart people will enter other professions.
If you think I’m joking, look at the quality of care delivered at VA hospitals. The doctors that work there are a joke. They arrive late, leave early, and have no incentive to work hard.
Keep that in mind while you destroy the medical profession.
-MD
First, people have to understand the difference between: universal healthcare and universal healthcare insurance. Single-payer systems relate to one and not necessarily the other. BUT understanding the difference between the two “universals” is paramount.
Cost containment. Way too much focus on the fact that healthcare costs so much. So what if it’s 12-15% of GDP?? You don’t ever hear people talk about these reasons for healthcare’s cost within the U.S.:
- healthcare disparity (racially, ethnically, gender, disease, modality, geography, etc)
- over/under utilization of procedures, techniques, and facilities
- R&D is EXPENSIVE … all the low-hanging fruit is all but gone now. The blockbuster model was a failed idea from the start. HOWEVER, all the money spent to achieve the first 70% improvement in efficacy for cancer (e.g.) will require anywhere from 3-7 times the amount of money to reach the next 10-15% improvement on top of the current 70%
- U.S. population continues to grow steadily unlike Japan of the EU; which can be stagnant or non-existent
- Both political parties, but mainly Republicans, are the reason Medicare’s shortfalls
- As Americans live longer, the cost of healthcare will increase (almost) exponentially
- Razor thin margins hospitals & med centers operate upon make it virtually impossible to have an EMR system. Such large-scale IT expenditures require some kind of subsidy. Tax cuts will not help but make this situation much worst
I personally don’t like insurance people making medical decisions for my mother when they lack the pharmacological or even medical background to do so. Just because a generic is cheaper does not make it better. The fallacy of evidence-based medicine (EBM) is that it’s a contradiction of pharmacogenomics as it is used today. Generics are reverse engineered compounds, thus the substitute materials can and will reduce a drug’s efficacy for you the INDIVIDUAL. Thus, EBM should support NOT dictate what drug or procedure is best for a patient. That final decision lies with the doctor and then the patient.
Insurance companies (like most biz today) want high margins. To ensure high margins, they often deny-deny-deny services or payment to those in need. Like accounting, defer-defer-defer taxes and hope they one day die. Ditto for insurance companies. Besides, look at the difficulty individuals are having in New Orleans and the entire Gulf Coast in rebuilding. Insurance companies have put so many hurdles in the way for payment and/or what can/has to be done for one’s home that many people are giving up.
It is important to include all players in healthcare as many have stated. It is also important to understand who wields the most power and why. This is where insurance companies, HMOs, and MBAs (or biz folk) have the most influence. Some insurance companies are non-profits, so we can’t forget the details either.
At the end of the day, competition needs regulation. Otherwise, we would live in a Hobbesians-type world. Healthcare didn’t need to become consumerized, but we have to deal with that growing reality as well. Go see Sicko by whatever means you like. Even doctors admit there are far more truths than not in the movie. A novel idea would be to detail what’s accurate and what’s not in the movie for others to see. The human side can be lost by such an act, because the man having to decide between a $12K and $60k finger is still minus some body parts. 47 million Americans w/o insurance is a real shame for the richest nation on Earth. AND BE THANKFUL if you have not had to experience our healthcare system. It’s not pretty if you’re not connected or wealthy, or your illness is not that severe …
Maybe in the VA near you, but in the work I did that involved the VA Hospital in White River Junction, VT, the very opposite was true. The doctors were well paid, produced excellent outcomes, and did so much more efficiently than the nearby academic medical center. The VA system has had a bad reputation for a long time, but they have, in fact, improved immensely and are now offering some of the best care in the country.
Health Insurance companies don’t invest the money? Why not?
Car and home insurance companies do that all the time. They take in less money than they expect to pay out, and invest it, so in the meantime they make up the difference and some profit.
Even if our health insurance doesn’t become gov’t controlled, we should learn some lessons from other countries like make unnecessary procedures such as circumcision totally out of pocket, and try treating stuff with diet and lifestyle changes before jumping to the namebrand drugs.
Although I agree with both the MDs on most of there points, I dont think the quality of the doctor or his pay is an issue, as is the availabilty of healthcare. I see no reason why the quality of care should go down as a result of the system in place becoming more streamlined and efficient. Any person that trains at a profession for 15 years should be able to call his price.
And the market will determine his worth.
Its the insurance systems and liability costs that are the problem. Alot of MDs make good money only to see huge percentages go to settlements and their liability premiums. I had this discussion with two of my doctors that had to leave Hawaii because they just couldnt afford to pay the insurance.
This is an overhead that if dropped would make care available to any more people at reasonable prices.
First, as stated above, I believe doctors need to be paid. No question. However, if you are becoming a doctor because you want to make a lot of money, then I think you are in the wrong profession. The Hippocratic Oath says nothing about money, and I’d hope my doctor is treating me out of more noble reasons than greed. As SiCKO points out, doctors under national systems make good money. But, if you want a 2 or 3 million dollar house instead of a 1 million dollar one, and if you want 3 or 4 Audis instead of 1 or 2, I’m going to call it like it is. That’s greedy.
No question that doctors and nurses should be paid well. What I’m objecting to is health insurance companies making a profit. Indeed, under national healthcare systems, doctors get paid just as well for their hard work, as they should. It’s the insurers who should be put out of business.