Balance billing is a payment required by physicians that is in excess of the benefits covered by the patient’s insurer. It is a prime example of the unfairness that permeates our system of health care financing. It can be unfair for all parties.

As the momentum for reform builds in our nation’s capitol, the board of directors of AHIP has made the wise decision to provide a definitive statement of their concepts of reform. Very soon the future role of their industry in the financing of health care in America may well be defined by political policy makers. Obviously the industry wants policies that will ensure a robust market for their products.

One of the many reasons that there is a push for comprehensive reform is that, in most states, individuals who have medical problems are denied the opportunity to purchase insurance on their own. This is one of the more serious flaws in insurance markets since this defeats the primary purpose of insurance – providing individuals with health care needs affordable access to health care.

The individual health insurance market in the United States has presented a policy challenge to those attempting to craft a health care financing system that includes everyone. In most states, insurers marketing individual plans have slowed the increase in their premiums by selling exclusively to healthy individuals. This is important because it takes only a modest number of individuals with health care needs to drive up premiums to ever less affordable levels.

We share with Alain Enthoven the concern over our very high and ever increasing spending for a mediocre health care system that leaves so many out. We have disagreed with him (sometimes obnoxiously so) on the best approach to return value and high performance to our health care delivery system. He supports “universal health insurance based on regulated competition in the private sector,” whereas we support a publicly administered and publicly financed single payer national health program.

Why is this article so important? Simply because there is a rapidly building momentum for similar health care reform in the United States built on a model of competing private insurance plans (possibly with a public plan offered as an additional option). The recent Dutch reform has important lessons for us.

This quote from AHIP was buried in another Quote of the Day last week, but it is being repeated here because of its importance in the health reform dialogue.

These three online reports from Health Affairs give us an update on a decade of experience with private health plan options in the Medicare program. The plans were sold to us as a private sector solution that would provide higher quality care at a lower cost than the traditional public Medicare program.

Professor Reinhardt already said it: “More and more Americans are being priced out of health care as we know it. The question is how long American health policy makers, and particularly the leaders of our private health insurance, can justify this enormous and costly administrative burden to the American people and to the harried providers of health care.”

5 Myths on Our Sick Health Care System
By Shannon Brownlee and Ezekiel Emanuel
The Washington Post
November 23, 2008 (Web posting Nov. 21)
… we dispel a few myths about how health care works and how much reform Americans are willing to stomach.
3. We would save a lot if we could cut the administrative waste of private insurance.
The [...]