PNHP Blog, inaugural posting, date May 23, 2008
Posted by John P. Geyman, M.D.
Professor Emeritus of Family Medicine
University of Washington
Adapted from my book Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It (2008), with permission of the Publisher, Common Courage Press
The most basic question underlying the so-called debate over reform of U.S. health care is being dodged by most participants, policymakers, and politicians. As health care costs spiral out of control and exclude more and more millions of Americans from even the most rudimentary health care services, what debate we have deals with incremental tweaks as delusional and false hopes of reform. The air is filled with claims and hopes for a long and growing list of ‘reforms’ — for starters, these include employer and individual mandates, expanding prevention programs, chronic disease management, pay-for-performance, state high-risk pools, association health plans, information technology, tax credits/vouchers, and more. Within this cacophony of noise, the big issue is being missed.
What then is the big question? It is whether or not we should continue with private multi-payer financing of health care. Although private health insurance served the public interest in its earlier years, those times have long since passed. The industry has been transformed over the last 50 years to a largely investor-owned industry within which profits to shareholders and CEOs trump service to patients and the public.
The industry’s track record speaks for itself. It is on a death march. The costs of insurance premiums alone have become unaffordable for tens of millions of Americans, and are increasing several times faster than costs-of-living and median family incomes. Insurance covers less and less of total health care costs. Access to affordable health care has become a major concern affecting all middle-class Americans, with no relief on the horizon. Private insurers go to great lengths to avoid coverage of sick individuals and even high-risk groups. As the employer-based market shrinks, they seek out new lucrative markets in generously subsidized public markets, especially Medicare and Medicaid, for revenue growth. This industry is unsustainable, as some insiders are starting to fear. Even Wall Street analysts are beginning to see dark clouds on the industry’s horizon.
Private health insurance is obsolete for these kinds of reasons:
* less efficient than public financing
* fragments risk pool by medical underwriting
* increasing epidemic of underinsurance
* excessive administrative and overhead costs
* profiteering as shareholders’ interests trump patients’ needs
* pricing itself out of the market
* unsustainable and resists regulation
The industry’s 60-year report card is in, and it has failed the public interest.
It is now time to require an efficient, equitable, and sustainable financing system that can enable universal coverage of all Americans for necessary health care by spreading risk across our entire population. Subsequent commentaries will focus on the many ways in which private health insurance cannot meet that challenge.