Friday, October 09, 2009

Medical Insurance: Small Battles of Attrition

Forget all about the big philosophical questions of reforming the health care system. Let me tell you a couple of small medical insurance stories that my family has gone through over the past two months.

Chapter I - the twin mix-up - we have twin boys. When one is sick, the other quickly follows suit. It's the whole contagion thing. Anyway, some weeks ago both twins came down with a nasty cough, that progressed to the point where the doctor prescribed them both antibiotics. The two prescriptions were delivered within a couple of days' difference from each other, and while we had no problem filling the first prescription, our health insurance refused to authorize the second prescription, assuming that this was for the first child. An hour on the phone with the insurance company while at the pharmacy was not enough to correct the problem, and eventually we paid for the prescription out of pocket and waited several days while the insurance idiocy was worked out and we got reimbursed for the fiasco.

Chapter II - my wife took the kids to the dentist the other day - regular check-up and cleaning. She paid the dentist and filed a claim with the insurance. The insurance company sent us an explanation of benefits, but didn't send us a check. Alpaca called them to figure out what was going on. Turns out they sent the check to the dentist. They will now cancel the checks they already issued and send new checks to us.

Two small incidents. Nothing earth shattering, just tedium and annoyance. But there's more to it than that. Think of all the money that our health care system just wasted in the process of providing routine service to a generally healthy family. Now multiply that waste by 100 million households and you get some staggering amounts of waste. What a burden on the system. What a burden on health care premium paying consumers.

Folks, there is no reason on earth why we should put up with this insanity. What is Congress waiting for? Where is meaningful reform?

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Kim Stiens said...

The very idea that for-profit companies who make more money when you are denied treatment are a better, more efficient system than single-payer is idiotic. And now, Congress has decided that having a public option, a single option that I can choose that doesn't have a vested interest in my getting sick and in their denying me coverage, is also a bad idea. I've lost my faith in the Democratic supermajority.

Shadox said...

I am with you, although I am also politically realistic. Single payer is the most sane option, but it is also politically non-viable. Pragmatism is a good thing, not a bad one.

Anonymous said...

Perhaps a big part of the problem is that the insurance companies are both the arbiters of payments and the beneficiaries of non-payments. Likewise, the patients should be the arbiters either, though I often get the impression that some people think that's the way it should work.

Also, it isn't clear to me that single-payer is the "most sane" option. I think what's really missing from this discussion is a clear consideration of the goals. Goals such as "health care for everyone" certainly lead toward single-payer, but the goal is too nebulous to be useful. It ignores the simple fact that providing limitless care to everyone is beyond our capabilities.

Another concern I have is that the better we get a treating acute medical problems, the more people are going to live to end up with chronic problems requiring ongoing treatment. Unless we make some significant advances in curing chronic issues, something's going to have to give.

Shadox said...

Ren - you make a very strong point re the beneficiary of a decision also being the decision maker. Economics 101: if marginal cost equals zero, consumption will continue until the marginal utility is zero... i.e. there will a lot of over consumption.

Your second point I don't entirely agree with. I believe that we can and we should offer health care to everyone. Just as every other industrialized country in the world can do so. However, once again, to your first point, I think the health care coverage that should be provided should protect against catastrophic damage (i.e. major diseases, chronic conditions etc.)

To your third point I think that your point re chronic conditions is a valid one, however, what is the option? Pull the plug on granny?

Anonymous said...

To be clear, I'm not convinced that single-payer isn't the right solution, I'm just not convinced that it is, either.

The biggest concern I have with a single-payer system is that it seems impossible to predict how much medical innovation can occur in that environment. Currently, other countries with single-payer systems could be benefiting from innovation that occurs in other countries. I say "could be" simply because I honestly have no data on this topic.

This is part of a larger question I have. How much is Europe's ability to operate more "socially responsible" governments supported by the more free-market economies of Asia and the US?

I think it is very possible that if we were to convert to a single-payer system we would solve a number of problems with the current health care system but, at the same time, create an entirely new set of problems. Whether the resulting situation would be an improvement or not seems impossible to predict. The mantra that our current system is broken so we have to change it shouldn't ignore the fact that there are lots of things that do work in the current system as well, and shouldn't make the assumption that all changes are good.

However, I still maintain that all of this discussion is quite possibly just a game of rearranging the deck chairs on a sinking ship. If we cannot due something to address the ever-increasing costs of medical care itself (above and beyond costs due to litigation and inefficiencies), we will eventually be overwhelmed by it.

You asked what the option there is and I have to confess that I don't know. That's the problem. Here's a thought experiment I've proposed before. Imagine that a cure for cancer was discovered, but that the procedure was so complicated and time-intensive that it the actual cost was $1 million per person. Who pays for it? Does it matter if it's only effective 75% of the time? What if it's actually more effective if you get the treatment *before* you're even diagnosed with cancer?

Kim Stiens said...

1. I think medical innovation will continue to occur so long as there are problems to solve. Whatever happens to healthcare, America still has the most robust system of medical research universities in the world. And that's most grad students working for little or nothing, and professors working for far less than they could get in the private sector (which, as long as drug companies exist, will retain robust research programs themselves).
2. The US does very, very little subsidizing of Europe directly, pretty much all we do is export out innovations to them (see point 1) and have our military there, which I think is pretty much irrelevant.
3. A lot of the radical increase in the cost of healthcare in the US is not needed and often not seen in other countries. Its because American hospitals spend tons of money on machinery that we don't need. Every hospital doesn't need an MRI machine, for instance. But because so many of our hospitals are for-profit, they buy machinery that a hospital 2 miles away also has so they can compete, but this drives the average cost of treatments for that machine way higher than they need to be (and way higher than they are in countries with non-profit based systems, where its OK for one hospital to lose the "business" of referring a patient down the street.
The way I see it, basically, is that single payer is a system which works in every single other developed country that has tried it. Polls of people in those countries show overwhelming support for those systems, despite their minor flaws that they're always working on. The idea that the wealthiest country in the world couldn't pull it off is, frankly, a little silly (I don't think any of you were making that argument directly, but its one i hear a lot).