What value *do* insurance companies add to American health care?

[BurtWorm]

This was the question Anthony Weiner asked Joe Scarborough that shut him up. It's an excellent question. I've been trying to think of a reasonable answer and I'm stumped myself. Scarborough finally suggested that the main value they added was something to do with "free enterprise." But this is like saying that the main value snake oil adds to health care is something to do with free enterprise.

Anyone want to take a crack at it?

[t0dd]

1. Here, let me break it down for you..

[BurtWorm]

Well put.

:toast:

[Winterblues]

14. The question is whether Health Care is a personal problem or a national problem

Republicans say it is a personal problem, and do not wish to donate their energy nor money for the betterment of society. That is why Insurance Agencies exist. The Democrats believe maintaining the Health and Welfare of the Nation is the Governments duty and feel all are obligated to do their part. That is the National Debate that is going on today. Obama is not as yet on the right side of the Debate. He knows America has a major problem but doesn't seem to get that it is a National problem and not just Individual's problems. National health Care is every bit as important as our Military. More people die from poor health than from any world enemy. Hell tobacco alone kills more people in three days than died on 9-11. A Healthy Nation is also a Productive Nation. We need to frame this issue in the right context or we will not win it..

[Ron Green]

24. Another question is whether the risk pool ought to be controlled by people looking to

make money from misery. With a national system, we're all together as a people. With the existing system, each "nation" is a group of customers at a sideshow shell game where they're asked to buy in but screwed if their disease comes up under the wrong shell.

[Mr Generic Other]

27. #1, your diagram visualizing how the insurance industry fits into american society

is clear and accurate. thank you for providing the model.
the insurance industry is nothing more than a toll booth, charging travelers for the right to continue on their journeys.
they are middle-men, whose role in society mirrors that of street pushers. we give them our money and they take a cut then "step" on the product they deliver to us.
the same model can be used to demonstrate how all of our public institutions that have been "privatized" now work.
it amazes me that anyone ever bought the notion that private enterprise was more cost effective than government sponsored, public works. even if every government employee was as unprofessional and lazy as we are told (which is demonstrably not true) they could never waste as much of our money as paying for private CEOs salaries.

[Junkdrawer]

2. Wealth based health care allocation....

Preventing the needs based allocation that haunts the nightmares of the wealthy.

[el_bryanto]

3. I think it's a case of unintended consequences

Back in the day when they were set up, we were seeing legitimate medical care for emergencies and the like costing what the average citizen couldn't be expected to have on hand. Since socialized medicine had about as much chance then as it does now, insurance was a way of ensuring that your family could respond to a medical emergency.

What should have been obvious in retrospect, but wasn't, was that once you took the consumer largely out of the equation, prices skyrocketed. There was no real reason to keep costs down; since the customer wasn't paying, he didn't care about the price. This went on for a little bit, until Insurance companies started not to be as profitable as they once were and started adjusting the way they do business in the new environment; thus they started doing everything they could do to keep from having to pay for medical services, thus becoming the parasites they are today. Most people pay or have payed on their behalf a lot of money to company that is trying its best not to have to provide the product you think you are paying for.

Bryant

[cdsilv]

4. In some instances, they actually pay for medical care.

Sometimes without having to be fought with. Overall, just for me, they have worked. For my kids its been a mixed bag. I really think that I should be able to bill insurance cos. for the time I spend arguing/clarifying etc.. with their representatives at the rate I get paid. After all, I have to call them from work (they close at 5 just like most businesses) and the time I spend with them is time I should be working.

This argument will get the attention of my employer's insurance representative when I have no success getting claims paid - they will then contact the insurance cos. and get things done.

[BurtWorm]

6. They're not in business to pay for medical care.

They're in business to profit from your need for medical care. That was Weiner's point, and it's a difficult one to argue against. It's why the insurance industry is scared shitless of reform.

[LuvNewcastle]

11. True reform is what they're scared of.

It would mean their end. And I would love to see that.

[brewens]

5. If Not Reform; Outsource Insurance.

With all the outsourcing going on; tech support in India and all that. I've been asking why we can't do that with insurance?
Why can't some kid in India that makes about $10 bucks a day sit at the computer that handles my health insurance?
Is it illegal for overseas companies to sell medical insurance in the U.S.? If these medical insurance companies don't want to cooperate with reform, maybe we should allow foreign competition?

[LibDemAlways]

7. They add nothing, but they do allow a handful of CEOs to

live lavishly while sick people struggle to pay for services that were denied or launch futile searches to find other coverage after being cancelled. The whole rotten corrupt system should have been scraped long ago.

[eleny]

8. They're pretty much fiscal agents taking care of paying providers

Weiner did people a good service pressing that question over and over. There's just no answer except that they help negotiate the prices/fees for services and pay the bills.

If there was Medicare for all, the government could negotiate prices and previous insurance company workers could work at paying the bills perhaps under contract or as government workers.

I'd love to buy into Medicare.

[cliffordu]

9. Zero, Zip, Nada, Nyet, Ought,

[BurtWorm]

15. Nichevo

(means nothing in Russian)

;-)

[cliffordu]

16. Oh, Right! There's a value-add!!

[No Elephants]

10. They insured us when no one else would, paying our bills and keeping us from losing

our homes when we got really sick. (The good ones, anyway.) Mine provides me with other things, like 24 hour nurse calll hotline, too, for those times you wake up at 2 am in pain and are not sure what is happening. I've never used it, but it's nice to know I can if I need it.

Some have paid for gyms, dmoking cessation, weight loss and other preventive measures (the smart and good ones.) They process claims from doctors and hospitals, so that I don't get billed for anything but the deductive. Nothing that government could not do, especially as the system gets more sophisticated.

Government could also hire their employees. Maybe not every single one, but government is going to need people who are experienced in the field. The executives could move on to other companies. Somehow, though, I think government would take care of them, too, somehow.

P.S. Kudos to Weiner: Scarborough is not easy to shut up, more's the pity.

[truedelphi]

31. I can only imagine that you were insured through a large employer

If you are a small business owner, the first time you use your insurance for any significant affliction will be the last. As the premiums will be upped beyond belief.

Then you will be uninsured. And no one else will take you on account of pre-exisiting contiditions.

But I am glad to hear that someone out there had some good experiences with insurers.

[redqueen]

12. A cut for the execs, investors, lobbyists and whores in DC?

Just a guess. :shrug:

If you were asking what they provide for their clients... headaches, bankruptcy, stress, etc.

[Kansas Wyatt]

13. The Democrats should have been screaming this from the start

And at any idiot who brought up "Socialism."

[Phoebe Loosinhouse]

17. They add about 25% in additional administrative costs that could be eliminated

Medicare overhead is 4%. Private insurance is somewhere between 25%-30% according to different sources I have read.

There is obviously a LOT of costs that could be eliminated from American healthcare. Most insurances are for PROFIT. I've posted it so many times I'm just sick of it, but United Healthcare paid a former CEO approx 1B (that's BILLION with a B) in salary, bonuses, profit sharing, etc in a single year. How many premiums would that have paid? How many procedures? How many personal bankruptcies could have been avoided with 1 Billion dollars? And that's just one particularly egregious case.

That guy Wendell that's running around, the former head of marketing for Cigna confirms that every horrible thought you've ever had about insurance companies is actually true. They really do try very hard to deny treatments and cancel policies.

http://www.pbs.org/moyers/journal/07102009/profile.html


Putting the very lives of Americans in the hands of a profit driven private industry that MAKES money if treatment is denied, is nothing short of insane.

[HamdenRice]

18. I can answer that historically. It's an important question about how we got into this mess.

As recently as the early 1980s, insurance companies were very passive, stolid companies. They had almost no control over health care delivery. You submitted a claim and they paid it. They did not, in general, negotiate with health care providers. Health insurance companies were dull, heavily regulated entities, run like state-based utilities, with modest, but almost guaranteed profits.

Under this system, health providers began to run up costs dramatically. There was little incentive for health insurance companies to control costs, because their model was simply to average all costs over policy holders and charge premiums to cover those costs. If health care providers, especially hospitals, jacked up costs, insurers just jacked up premiums. At the same time, many health care providers were non-profit hospitals that acted like charities. Anyone could go there without insurance and get taken care of, and these charities would try to recoup costs from the insured, again jacking up costs. Many non-profit hospitals were going bankrupt.

There were many calls during the Reagan years for insurers to play a greater role in controlling costs. No other entity was in the position to do so because no other entity paid the bills. There were lots of experiments set up, and incentives for insurance companies to (1) become bigger, (2) negotiate with health care providers, (3) set up health maintenance organizations (hmo's) which supposedly would control costs by practicing preventative medicine and employing doctors directly, and (4) directly acquire health care companies, including non-profit hospitals.

Insurance companies were freed to earn unlimited profits, to bargain with health care providers and to become integrated insurance, provider and hmo companies.

Those "reforms" created the monster we have today. They chiseled doctors until they had accomplished some reductions in the growth of health care costs; but they realized that they could do other things to increase profits even more. That's when they began an orchestrated campaign to game the system by dropping the sick, only enrolling the healthy and denying as many claims as possible.

So at one point it was believed they would add value to the system by controlling costs, and they did for a year or so, but then they became the Frankenstein monsters they are today.

[BurtWorm]

19. Very interesting post.

Talk about value added! Thanks!

[HamdenRice]

21. I'm sure I'll be called a shill for big pharma or something.

People who provide historical background or economic or accounting analysis have recently been declared to be class enemies here at DU. It's kinda like during Mao's Cultural Revolution around here lately.

[stray cat]

20. Currently - ask those who don't have insurance?

or discard your own for a few years.

[gmoney]

22. once upon a time, insurance was based on "spreading the risk around"

In old time communities (presuming I can believe the movies), if one farmer's barn burns down, the community all kicks in and provides lumber and nails and labor and such to replace the barn. This is based on the premise that if someone else's barn burns down, that person will pitch in to help. Many hands make light work, and rather than driving the one farmer into poverty, everyone helps get him back on his feet, because he'd do the same for them.

Then someone came along and decided to formalize it, with everyone paying money into a pool that would be available if something happened to one of them. The premiums were kept as liquid investments, with earnings from the investments being where the insurer made their money. Premiums were based on the likelihood of claims, etc. Some would even refund money to customers if claims were lower than anticipated. This idea is why you see (or saw) so many companies with "Farm" or "Mutual" as part of their name.

At some point, the insurers got greedy and decided that premiums should be a profit center, not just the principal for their investment earnings. So, denying high risk applicants, denying claims, etc. became the new rules of the game.

If Washington could legislate that insurance companies can not make profit from premiums, and that premiums must be based on actuarial calculations and actual costs from the prior year, that would allow the private insurers to stay in the game, and still make a reasonable profit.

[auditguy]

23. error, removing

[demodonkey]

25. Insurance Companies add NOTHING to USA healthcare but stress and heartache.

They TAKE out dollars (profit, advertising, paper pushing) that COULD be used to pay for care.

Anthony Weiner is an emerging hero. :patriot:

[area51]

26. Kick. (n/t)

[Bluerthanblue]

28. they provide employment for a segment of the population?- but

not employment which actually benefits society beyond giving people "something to do".

We can't really "export" the product. But it does provide a market for other enterprises that ARE tangible like, software, business supplies, office furniture, etc. etc.

They also sap precious energy and time from Health Care Providers, and actually endanger the health of our society, when they dictate to MD's how they are to deal with illnesses and injuries, or delay or deny treatments that could save lives or lessen suffering. IMO-

:hi:

[dem mba]

29. what would you say you...do here?

"I'M GOOD AT DEALING WITH PEOPLE"


http://www.youtube.com/watch?v=iKa68kWkP48

[hunter]

30. It's their job to throw workers off the train when they become sick and unprofitable.

Geez, if a dairy farmer kept cows after they stopped producing milk, he'd go broke!

[DU GrovelBot]

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[OneBlueSky]

33. none . . . but they're very well paid for it . . . n/t