The health insurance industry is dying. It’s dying because we’re not. Not like we used to. How did things get so good for us and so dire for the companies selling health insurance? Let’s find out.
First of all, the insurance business is based on a kind of “keep your fingers crossed” business model. The premise of their profitability is the hope that the majority of the people covered won’t file a claim. Home owner’s insurance works because most people’s houses don’t burn down or get flooded. Car insurance works because most people don’t get into an accident or have their car stolen. And so, spread over a large enough portion of people an insurance company can make a profit because they pay less in claims than the amount of money they take in from the policies they sell. That is unless a hurricane or an earthquake hits, which is where the “keep your fingers crossed” aspect comes in. Nevertheless, “health insurance” is different because keeping your fingers crossed won’t keep people from getting sick. And that’s a problem. A problem, however, that wasn’t always such a problem.
For a long time people died quickly. Life expectancy in 1970 was around 65 years old, and if you had a stroke or a heart attack, or developed cancer or diabetes, you either died immediately or you didn’t live for very long afterward. But as better medical practices, better drugs, and better facilities became a reality, people started surviving and living longer after getting seriously ill. Good news for us, bad news for the insurance companies. Which meant health insurance companies had to stop “crossing their fingers” and start crossing people off their benefits list. This kind of behavior would put almost any other industry out of business. So why is “for profit” health insurance still around? Industry sponsored propaganda. The health insurance industry has helped to promote the idea that unless an entity that provides a service does so for profit, it won’t do a good job. While this may be true for some services, the notion that this must be applied to all services can be dismissed as easily as dialing 911.
According to the health insurance industry, fire departments suck. Their logic dictates that without being able to make a profit, there is no way fire departments should be able to provide you with good service. So let’s see what would happen if we changed the fire department into a “for profit” business, and ran it like the health insurance industry. Meaning, just as health insurance companies make a profit by providing as few benefits as possible, suppose the fire department only made money if they kept the fire trucks in the fire house? In this scenario, would you get better service or would the fire department respond to as few calls as possible? And if they operated like the health insurance industry, once those calls came in, how many questions do you think the person who called for help would have to answer before the fire department would decide to respond?
“Is this your first fire? “, “How big is the fire? “, “Have you tried putting it out yourself? “, “Did you fill out your fire response form fully and correctly? “, “Do any family members have any other fire department policies that you could use? “, “Have you gotten a second opinion about your fire? “
By the time the fire trucks arrived, your house would be gone. That is if they didn’t find a reason to deny your request in the first place: too many rooms, too many windows, too small a driveway, too many pets, etc. The truth is, as a society we’ve decided that it’s a good thing that we all subscribe to a fire department. Our taxes pay to keep each other safe from fire or immediate medical emergencies. Our property and our lives are protected by a fire department that responds no matter where you live, where you work, or how much money you make a year. Same is true for the police department. And so the question becomes, why have we decided that it’s in all our best interests to save someone from a burning building, or if they’re having a heart attack, or if someone is breaking into their home, but not if they’re dying from cancer or diabetes?
There are people who will argue, “…but those are local agencies. The federal government isn’t involved and would do a terrible job if they were!” Well, we do in fact have a national police department that seems to do a pretty good job. They’re called the F.B.I. We also have the A.T.F., the D.E.A., and the U.S. Secret Service to name just a few. And again, no one is pointing fingers at those folks and saying they suck. So why are we still arguing about whether or not we should all subscribe to a public health service?
Money and denial. Just like anyone who is approaching death, the health insurance industry is in denial. They’re trying to maximize profits while minimizing care, beholden to share holders who are demanding higher margins and don’t want to hear any notion that medical science is rendering their investment as unsustainable as a record store or VCR repair shop. The fact is people are living longer with illnesses by taking drugs that cost a lot of money, and because of this the amount of money health insurance companies are going to have to pay out will be too great to be able to maintain a healthy profit. Not to mention the fact that, because of our Western diet, people are getting sicker sooner in life. Younger sick people living longer using expensive treatments means the health insurance industry is finding themselves in the middle of a candle that’s burning on both ends. And if we continue to buy into their denial, we’ll get burned along with them. So what’s the solution?
The health insurance industry would like us all to die quickly after getting sick, with as little recovery as possible. That’s not going to happen. Which means it’s not us, but rather the health insurance industry whose time has come to pass on. Their business model is a hold-over from an era that has come and gone, and being nostalgic is for high school reunions not health care. Just as we have formed and financed communal fire and police departments to guard our immediate health, we need to form and finance a communal medical department to guard our long term health. And just as the makers of phonograph needles wish we could return to the days of 33’s and 45’s, the health insurance industry can cross their fingers all they want, but we’re never going to return to the days of dropping dead at 65.