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Health Insurance Experiment has Failed, or, What Could YOU Do With $1 Trillion a Year?

Original post made by old-fashioned conservative, Another Palo Alto neighborhood, on Sep 21, 2008

Estimates of what private medical insurance costs our system range from around three quarters of a trillion dollars (around $750 billion) to just over $1 trillion annually. Excessive administration and profit due to private insurance companies are the lion's share.

Not calculated in that cost are the economic losses to patients and their families for healthcare they need but don't receive, for deaths resulting from healthcare they need but don't receive, for hundreds of hours a year in insurance paperwork patients do when they are very sick, for the experience doctors lose because they spend so much time on paperwork (statistics in many kinds of care show that doctors need to see a certain number of patients or get enough "practice" to do well, it only makes sense), or innovations lost to medicine and our society because insurance paper pushers make medical decisions instead of doctors. Innovation and problem solving are also serious casualties here. Also not calculated are the costs to our economy from a debilitated labor pool that is less healthy and less secure than it should be, and of course, the huge cost to businesses of this excessively expensive insurance.

What are we getting for that money? Insurance is a shared risk pool. Yet in our system, the most common reason for personal bankruptcy is medical bills, even though the majority of those people have insurance at the start of the care that bankrupts them. Insurance companies say they are needed to control costs, yet all they are doing is denying care - but they aren't controlling costs, they delay and deny care through expensive administration that benefits them, but costs us. Care they deny, again, does not save the system money, it only makes the insurers richer. I'd rather "waste" a little extra care and get the benefits to our system of healthier patients, more experienced doctors, and more efficient practices, instead of spending the money on abusive paperwork mills designed to cheat sick people. Of course, we that's a lot of care we could lavish on our populace for three-quarters of a trillion dollars annually.

People with money can pay to get the care they need if they want better, but they could do that if we went to single payer, they would just have to pay less because the overall cost of care would go down. (If you don't believe me, just look at the overall cost for heart procedures at a country like Switzerland where labor costs are significantly higher, medicine is equally or even more high tech, and the rest of the world are now going to for certain advanced procedures instead of the US.) What constitutes the best available care suffers when doctors and hospitals spend so many resources on paper pushing and paperwork confrontation, and will improve when doctors are able to devote their time to practicing medicine again.

In other words, insurance isn't working for anyone except the insurance companies. We either need single payer now, or we need a new administration with an attorney general with fire in the belly and a yen to using RICO statutes (i.e., never going to happen with a neocon).

We currently spend less than half of the money spent in our $2.4 trillion dollar health care economy on actual care. Given everything else going on in this economy, isn't it about time we decided we can't afford this insurance racket? Particularly since it isn't giving us anything at all that its defenders tell us it should.

When does the cost to our economy become great enough that we are willing to stop allowing this shakedown, if $1 trillion annually isn't enough? If the staggering numbers of preventable deaths isn't enough?

KInd of begs the question - if the government now owns AIG essentially, couldn't the government now offer a reasonable "private" healthplan for everyone, one that actually pays for care, and put other insurers out of business? Let the real marketplace work for once...

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