I spent many frustrating hours studying up on the Washington Legislature’s formation of a health insurance exchange called for under the federal Affordable Care Act. The exercise cemented my long-held view that this country is soup-with-a-fork crazy for using the hopelessly convoluted insurance model to deliver health care. Individuals and small businesses will shop the exchanges for health care insurance, if they don’t already have it.
The United States is unique in that it has a health care system that fosters the practice of segregating the sick. For-profit insurance companies really have no choice but to attempt to scoop up as many healthy clients as possible to offset the “medical losses” incurred by the rest. The main responsibility of any chief executive is to maximize shareholder gain. It’s in the bylaws.
We often hear that the “paramount duty” of Washington state government is to deliver basic education. Well, the paramount duty of private insurers is producing profits. This is accomplished by avoiding the heaviest users of health care. That would be the elderly, who were funneled into government health care when the private sector showed little interest. But what if we had a system whose goal was to treat all sick people? On purpose.
“Willkommen” to Germany, home of the first – and thus oldest – health care system in the world.
While nobody has a system like ours – apparently the world’s highest costs without commensurate results, while leaving millions of people uncovered, just isn’t catching on – Germany’s might come the closest. But instead of for-profit insurance policies, Germans are mandated to choose a nonprofit “sickness fund.”
First, let’s stop to honor that simple, straightforward name. A fund designed to pay for sickness. Insurance has always been a bizarre way to pay for this. We have auto and homeowners insurance, but we don’t send the bills to insurers when we buy new tires or replace the roof. Insurance is purchased to pay for unforeseen events, except in health care.
So why are insurance companies in the health care business? To make money. There’s nothing wrong with capitalism in general but, in this instance, it’s a bad fit. Are you really going to shop around for the best deal when you break a leg? “We’ll set the bone. The cast is free!”
Health care is different from every other product or service. If you don’t buy ketchup, I won’t be expected to cover your condiment costs. If you don’t buy health care coverage, I will end up paying in some way. This is why governments around the world have built systems to ensure (but not insure) that all sick people get help before their maladies become emergencies.
Germans have more than 200 sickness funds to choose from, but whatever the choice, the prices for treatments and tests are the same. They compete on service, not price, and the competition is heated. As a result, administrative costs are kept low. To pay for this, Germany imposes a payroll tax, which amounts to about 15 percent of an individual’s income – half paid by the worker, half paid by the employer.
Germans never see a bill. They don’t have long waits to see a doctor. If a doctor orders care, no bureaucracy intervenes to refuse. Germans don’t lose coverage if they change jobs or are out of work. The country scores high in comparative quality studies.
The United States could do this, and lower our costs to about 11 percent of GDP, rather than the 17 percent we pay now. We could even decide to spend more, so that U.S doctors can continue to make more than their German counterparts.
Instead, we’ve chosen to keep the insurance model, even after reforming health care. And insurers are still doing what they can to avoid the sick. At present, they’re complaining that the new state exchanges, like Washington’s, will hurt them, because they will no longer be able to cherry-pick the healthiest clientele.
What we need is a system that acknowledges that health care is a unique product. We all get sick. We’ll all need care. The young and healthy of today will be the old and infirm of tomorrow. So let’s look for the most efficient way to pay for it while protecting quality, and let’s stop compromising so that an inefficient player can put shareholders, rather than patients, first.
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