Employer-based health insurance: Is it a dinosaur?

I agree with Jim. Actually, we have seen the move to become dependent on 401K’s when they were designed to be a “supplemental” to retirement.

We currently have two systems for healthcare; employer supplied coverage and the government. Anytime a move is made to change the status quo, there is a chorus of fear mongerers who state that it is a move to “socialized medicine.” As it stands right now, most people are destined to be on the government healthcare system (tax payer supported) at some point in their life. The real profit is in providing coverage for those who don’t need it and charging more than it costs, which is how the employer based system is currently set up.

My hope is that a mandate comes down that ALL insurance companies must cover ALL citizens and that the rates reflect the cost to the whole pool from cradle to grave and ALL people must participate. I’m sure the numbers exist on how much healthcare costs on average for most American over an entire life time. Take that number and pro-rate it over the average life expectancy and add an administrative fee and you have the cost for healthcare for every man woman and child. Now if there are those who cannot afford the coverage, then the government can augment the payment for those at the bottom of the economic scale. Once that is done, you have universal healthcare so that every person is covered and you have private industry supplying the services.

The cost for health services need not be outrageous. Doctors need to presribe tests that are needed and not tests that give referral fees or are for CYA. Healthcare has not significantly improved with the addition of MRI machines in every hospital and clinic. X rays still work for a sprained or broken arm or ankle. For those who want additional tests that may not be medically necessary, they should be able to pay for them out of pocket.

Exactly Keith. I have various insurance policies to cover those things I would need help in the event of disaster plus an umbrella insurance policy to provide additional coverage above and beyond. That’s a choice I make and pay for – plus, I don’t try to keep up with the Jones. With the exception of my home (which I could payoff), I have no debt. I save a lot for a rainy day because I was taught personal responsibility. That seem rare these days.

Mike, I think the argument is one for the private sector insurance companies. I saw the Dutch study under a single payer system. In the US, people move from the private sector to the public welfare medical system when they retire or become disabled. Private insures don’t calculate costs over a lifetime but a period up to retirement or disability. They should thus be able to charge based on their experiences during their “insurance” lifetime.

With respect to my own medical care, yes, my doctor doesn’t always have the answer but I don’t press for all the latest treatments nor must I have a MRI each time I get a headache. No extraordinary efforts for me when my number is up. Life is good, but not that good.

The government and employers should not be in the business of delivering or influencing health care or insurance in my view (they never were until recently). I have adequate insurance at the moment to pay for almost any event, including health – provided the government doesn’t screw that up. People go through their entire lives incurring little or no cost to the system and then die. Should they have a choice as to if and when they wish to insure against their health and in that choice, should they not take the financial responsibility for choosing not too or choosing too little? In a free country, that should always be my choice. As my grandfather would say, “Since when is my problem yours?”

Jim,

I agree with most everything you posted. I think counting on the government to care for the most costly and letting the insurance pool cover everyone else is the problem.

Most people I know do not abuse the system. They want to care for their immediate health needs and then move on. They rely on their doctors to provide them with choices. My experience is that doctors don’t have the time to provide choices and have incentives to run you through extra procedures because it decreases their liability or they get a referral fee. I have been prescribed so many medications “just in case” where I would prefer not to take any.

Your grandfather was wise. Unfortunately, I do know MANY people who owned their homes and had savings and a good healthcare plan, then became ill, lost it all and dragged their families into debt with them. When illness strikes it effects not only the individual, but the friends and family, co-workers, and others. Youth thrives on the assumption that we are supermen and will live forever and that it will never happen to us. Experience tells us different. I am concerned that devestating illness is so subtle and a “death by a thousand cuts.” If we are mostly destined to lose all we worked for and become destitute at the end of life, then why not insure against that by charging more when you are healthy and young? Now THAT would be insurance! And if we do affect those around us, then it IS our problem and we should require that everyone choose to prepare for the devastating illness that will hit us all eventually.

If someone is foolish and doesn’t prepare for that eventuality and feels that it is just their business and choice, I may feel a little justified in “not caring” so much as I see them waste away and lose everything. But I will still pay a cost for their choice cause I’m human.

Jim,

I believe that most people would like security of knowing that if and when they have an illness, that they will be able to recieve reasonable healthcare that preserves their dignity. I believe that the numbers exist to predict the average cost of this healthcare over an entire life. I also believe that it would be more reasonable and honest to have everyone pooled and the charges prorated over their life, rather than have a private insurance system for the healthy (employer supported) and the government system (taxpayer supported) for the ill and elderly.

I find it absurd the way healthcare administration runs today. I feel that there was better healthcare 50 years ago than today. I don’t necessarily believe that life expectancy has increased due to healthcare, but to the change in overall lifestyles, diet, and working conditions. Administrators seem to spend more time building and decorating new wings and ensuring more advanced equipment is in those wings, rather than looking at the needs of the community and ensuring that the basics are provided. There are now two hospitals within walking distance of my house. The community would be better served by one hospital and a nurse or nurse practicioner that could do house calls. It is almost impossible to shop around to find out what a test or procedure will cost beforehand. Those costs in many cases vary widely not on what the cost of the equipment or what the overhead is, but who you have insurance with (what amount has been negotiated). Many more procedures can be performed at a doctor’s office and clinics than at the hospital. Many tests and procedures are unecessary, but doctors order them either to CYA or because they get a referral fee. Many medications would be cheaper if everyone was pooled together. It appears that even finding a primary care physician is getting more difficult because the money is to be made in having a specialty. I do agree that some mentalities on the part of people need to change, too. The emergency room is not the place to take your kids to see the doctor for routine care. Just because a procedure or test is covered by insurance is not a good enough reason for everyone in the family to recieve it. Insurance companies and the government need not continue shipping new meters and other devices unless needed and requested. Pharmaceutical companies don’t need to produce 25 different products that do the same thing to maintain their copyright and profits.

After hearing all the arguments about foreign healthcare, I can say that I have seen their healthcare system. Overall it is cheaper than ours and provides overall better care. Cerrtainly the argument is that you can’t get the fancy specialized treatments that foreigners come to our country for, but I can’t get those treatments now.

Mike, I had also found this recently about the highly touted German system on which many other Europeon systems are based. I like the authors suggestions at the end.

In the early 1990s the German government, in a move designed to cut health-care costs, limited – and in some cases completely blocked – access to new drugs and medical technology. Since 1993 the German government has set separate budgets for each segment of the health-care market, with provisions of heavy sanctions if these budgets are exceeded. The 1993 pharmaceutical budget was set at $15 billion – a 9.1% cut from 1992. The government ruled that money spent over the budget would be taken out of doctors’ incomes. This caused a 25% drop in spending on medicine. Similarly, the sale of the seven largest research-intensive drug manufacturers fell by 16.5%, while the sales of generics (copycat drugs which are cheap because they were developped at least 15 years ago and hence no longer protected by patents) rose by 36%.

While these measures were successful in the field of cost control, they had devastating consequences for the pharmaceutical industry. The German pharmaceutical companies, no longer keen on developing new drugs, saw their world-wide share of drug patents drop to 8% from 16%. Doctors, afraid that they would have to pay the pharmaceutical bills out of their own pockets, started to refer their patients to specialists and hospitals. Patients with minor illnesses, requiring common and cheaper medicines were helped, but the doctors would “dump” their more serious cases instead of treating them in more costly ways. As a result, in 1993 Germany saw an increase of 10% in hospital patients and 9% in referrals to specialists.

The next year a similar phenomenon occurred at the level of the hospitals. They, too, were assigned budgets that they were not allowed to exceed. Consequently German hospitals, faced with patients who might cost too much, referred them to university clinics, which by law are not allowed to refuse patients. “Patients are being turned away, acutely ill patients are wandering from clinic to clinic, and expensive drugs are being withheld from cancer sufferers,” the German weekly Der Spiegel wrote in 1994 (April 11). “Money is being saved – even if it costs lives to do so. Whenever possible many hospitals are turning away expensive patients covered by the sickness funds. The only good patient is a cheap patient.”

Unfortunately, the German system has become the European model. Politicians in neighbouring welfare states, noticing the drop in German health expenditure, started to follow the German example. The only thing that mattered in their eyes was cost control. Many adopted the policy of adding drug volume control to price control and finally to prescription control. France introduced so-called negative recommendations, telling doctors what they are allowed to prescribe and what not. These recommendations have been made compulsory and doctors risk heavy financial penalties if they go against them.

At the root of these decisions is the understandable desire of governments to control health-care costs. But rationing is clearly not the answer. What many governments in Western Europe have overlooked is that there is nothing wrong with a society devoting more of its resources to health care. This even appears to be an indication of prosperity. The higher and the more developed a society becomes, the more its citizens are willing to spend on keeping healthy. Modern technology makes everything cheaper except the highest quality of medical care, which is constantly improving. To try to limit access to this technology in the name of “cost-control” is irresponsible.

Meanwhile, the larger and more fundamental problem of how to finance the health-care systems is not addressed. Instead of funding the provisions of today’s sick with taxes from today’s healthy and young, people should be building up reserves for their own future liabilities. What Europe needs is to replace its pay-as-you-go systems by privatized and capitalized health-care systems. This, however, would imply that the governments relinquish control over the system, which is the very last thing they are willing to do.

A great way to help decrease costs would be to limit lawsuit awards. I believe this will always be a non-starter with this administration and Congress since most of them are beholden to the lawyer lobby. I am a benefits manager at my company and opted out of the plan because I felt it was too expensive for the coverage. I was able to get a HDHP and combined with a HSA for a fraction of the cost and feel it is the solution to a lot of what ails the system. I have a wife and young son and still feel this is a better approach than the ever increasing cost of the HMO’s. We make thoughtful choices of when to visit a doctor rather than always going in when all we have to pay is a co-payment. I believe the govt should get out of the insurance, health care, car, banking, energy and education businesses and just take care of national defense and immigration enforcement. Those are the two areas they truly have the constitution on their side for providing. Leave all the services to the states and cut everybody’s taxes on the Fed level to a minimum and life would be good once again.