Sunday, January 23, 2011
Friday, January 14, 2011
Health Insurance Fable
Once upon a time, there was an insurance company named Profit Insurance. The Profit Insurance company sent it's marketing people across the land to determine the best price to charge for health insurance. The marketing results were that the best price for insurance was $100.
Management sent the the database trolls to the dungeon to work out a strategy for achieving the $100 price point. After examining years of health cost data, the trolls determined that they could sell insurance for $100, and still make a profit, if they did not sell it to people who were already sick. The managers liked the plan and made it so. Many people bought this insurance, but even though it was inexpensive, many young healthy people decided not to buy it. Profit Insurance managed expenses by artful claim denial and returned generous profits to the stockholders.
Now it turns out that in the same kingdom, there was a socially responsible insurance company that did not think it was nice to exclude people from having insurance just because they were sick. This benevolent insurance company decided to sell insurance to anyone who wanted it. Unfortunately, the trolls of the database told them they would have to charge $120 for this insurance policy. The management decided that the good hearted people of the land would surely be willing to pay $20 more to enable anyone to get insurance. Management put the Benevolent Insurance on the market.
People who were excluded from Profit Insurance because of existing illness flocked to Benevolent Insurance. Unfortunately (for Benevolent), existing Profit Insurance customers were not willing to pay $20 more for Benevolent Insurance, nor were the people who opted out of Profit Insurance willing to buy Benevolent Insurance. With only sick people in it's insurance pool, Benevolent Insurance was unable to survive at $120 and they went out of business.
The moral is that if you are in the insurance business and you want to maximize profits, it is best to limit your clients to the youngest, most healthy people you can find and deny as many claims as possible.
If, however, you want everyone to have the opportunity to buy affordable health insurance, you need to spread the risk across the entire population so that the young and/or healthy (while they are young and /or healthy) pay the majority of the costs of the old and/or infirm (until they become the old and/or infirm).
Single Payer/Medicare For All..... the only way to achieve reasonably priced coverage for all. If you bring in everyone, including the young and/or healthy who previously opted out; and eliminate the wasteful administrative duplication across the private insurance companies, everyone can be covered for the $100 (or less) policy.
Management sent the the database trolls to the dungeon to work out a strategy for achieving the $100 price point. After examining years of health cost data, the trolls determined that they could sell insurance for $100, and still make a profit, if they did not sell it to people who were already sick. The managers liked the plan and made it so. Many people bought this insurance, but even though it was inexpensive, many young healthy people decided not to buy it. Profit Insurance managed expenses by artful claim denial and returned generous profits to the stockholders.
Now it turns out that in the same kingdom, there was a socially responsible insurance company that did not think it was nice to exclude people from having insurance just because they were sick. This benevolent insurance company decided to sell insurance to anyone who wanted it. Unfortunately, the trolls of the database told them they would have to charge $120 for this insurance policy. The management decided that the good hearted people of the land would surely be willing to pay $20 more to enable anyone to get insurance. Management put the Benevolent Insurance on the market.
People who were excluded from Profit Insurance because of existing illness flocked to Benevolent Insurance. Unfortunately (for Benevolent), existing Profit Insurance customers were not willing to pay $20 more for Benevolent Insurance, nor were the people who opted out of Profit Insurance willing to buy Benevolent Insurance. With only sick people in it's insurance pool, Benevolent Insurance was unable to survive at $120 and they went out of business.
The moral is that if you are in the insurance business and you want to maximize profits, it is best to limit your clients to the youngest, most healthy people you can find and deny as many claims as possible.
If, however, you want everyone to have the opportunity to buy affordable health insurance, you need to spread the risk across the entire population so that the young and/or healthy (while they are young and /or healthy) pay the majority of the costs of the old and/or infirm (until they become the old and/or infirm).
Single Payer/Medicare For All..... the only way to achieve reasonably priced coverage for all. If you bring in everyone, including the young and/or healthy who previously opted out; and eliminate the wasteful administrative duplication across the private insurance companies, everyone can be covered for the $100 (or less) policy.
Thursday, January 6, 2011
Death by Budget Cut
In Arizona, a second person has died after he was denied Medicaid coverage for a transplant. Coverage was denied primarily due to budget cuts needed to close a shortfall. It seems to me that this is being reported as a tragic scenario. While it certainly is tragic on a personal level, it indicates one of the primary reasons our medical costs are out of control. Each and every one of us believes we are entitled to any and all procedures regardless of how much we make or how much they cost.
Unfortunately, when reality sets in, there ARE constraints on funding and someone, somewhere has to fall outside those constraints. If there is less money this year than last year, more people will fall outside. Unfortunate, but true. We have to accept it and move on.
Unfortunately, when reality sets in, there ARE constraints on funding and someone, somewhere has to fall outside those constraints. If there is less money this year than last year, more people will fall outside. Unfortunate, but true. We have to accept it and move on.
Saturday, January 1, 2011
End the "Official Review" Crap
When a player in a sporting event makes a mistake, he doesn't get a "do-over". If he makes a lot of mistakes, he gets fired. Why can't we go back to that mode of operation for the officials. All this review crap totally destroys the flow of the game. The referees get to see it once in real time, they make a call. Sometimes they blow one. They aren't any more perfect than the players. Let's give the human element back to sports officials.
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