Let’ s take a look at health insurance. In this diary I’ll be looking at health insurance in two countries, the US and the UK. Did you know health insurance exists in the UK even though the socialist National Health Service covers everyone? Well, it does, but it plays by substantially different rules. However, it still does work, and I’ll be discussing how.
But first let’s look at how things work in the US.
To understand how the health system in the US works, you have to do one major thing – eliminate the human aspect.
The US health system is like a huge machine. Its program, that it runs each year, is to make more profit than it did the previous fiscal year. That is its only purpose, and its only goal.
So every person that has health insurance is a tiny component of this huge machine. And components are controlled by managing the risk, money making vs money losing. There are always some components that will make money. From a human aspect these people don’t get any long term injuries or diseases. Yes, they still have colds, the occasional mild bout of flu, but by and large they pay into the system far more than they ever claim back. From the machine aspect, these are the most desirable components, because the more of these the machine has the more efficient it is at achieving its programmed objective, the more efficiently it can beat last years profits.
However, as the law of averages dictates, there will always be components at the opposite end of the spectrum, those who claim back more money than they put into the system. These inhibit the smooth running of the program, and are undesirable by the corporate machine. They often have to be removed from the machine and ‘repaired’. And this is where the health industry differs from any other industry.
If your washing machine goes wrong, you have to obtain the services of an outside engineer to repair or replace the faulty component, but when you do that engineer sets their own price and you have to pay what they want or the repair doesn’t happen.
In the health insurance industry, there is nothing that prevents the corporate machine from negotiating with the ‘repair engineer’ whether it is the machine or the faulty component that pays for the repair. Thus, the machine does the most logical thing – it shifts as much of the cost of the repair to the component – the person who is ill – as it can, paying for as little of the repair (hospital) cost as possible. Wherever possible it shifts the entire bill to the component, by the method of finding ways to avoid paying out, one of the most popular of which is to shape the rule of what defines a pre-existing condition so that it covers each situation as broadly as possible.
Note that it does not do this out of evil or malice. It does this because doing so helps it to achieve its programmed goal. There is no human factor, all there is in the equation is maximizing profits.
This is where healthcare reform is a direct threat to the status quo of the machine. The government will set rules which will make it very hard, and in some cases completely impossible, for the machine to shift any repair costs to the component. Instead, it will have to do what it was originally billed to do; to actually pay for repairs from the moneys paid to it, instead of putting this money towards profits.
The machine has run like this for so long, that it cannot comprehend any other existence than how things are now, the status quo. This is why it makes perfect sense to pile as much of the cash that has made up the year by year profits into stopping any kind of reform; because if reform does occur then this will effect ALL future profits. It is more logical, more economical, to spend substantially more in the short term to kill reform because once reform gets killed then it is unlikely to be attempted a second time by the administration that brought the first attack. It would be political suicide to be beaten twice on the same important subject, and thus the years between killing reform and a change in administration – particularly if one parties administration has no desire to bring reform effords – generate profit at the same high rates.
This is where we stand now. Health insurance companies have a LOT of money to pour into trying to destroy health reform, because if they manage to do it, it is unlikely that Obama’s administration will try again. They can then support the administration and do their utmost to keep it in power for the full two terms, because doing so will ensure that a further attempt at reform is at least seven years away, and possibly a further term after that. Each year, the insurance companies continue business as usual – their aim, to fulfill the program of making more profit this year than they did last.
Now let’s look at the UK. An important point to make now is that even though things are the opposite way around in the UK – health insurance exists, but is completely optional – health insurers in the UK like BUPA still make profits. Why is this? Well, it’s because they exploit holes in the system.
The thing about healthcare is that like the military, it’s always going to make a loss. If a military aircraft drops a bomb or fires a missile, the money it cost to make that bomb or missile is gone. Likewise, every time you give someone an injection or inoculation, the money it cost to make that inoculation is gone. That is always going to be the case.
Where socialist medicine runs into trouble is that because it’s readily available people actually use it. Radical concept. The truth is that although the British have a reputation for "stiff upper lip", a Brit is more likely to consult their doctor about minor issues than an American is. Americans have to pay for visits to the doctor, particularly if they are uninsured, and thus don’t go unless they actually have to. Where this extends to the area we are looking at is that with socialist medicine there is always queues, there are always more people wanting to use the system than there is capacity to process them. And this is where healthcare insurers such as BUPA find a niche.
BUPA run private hospitals. If you are a member, and you pay your insurance premium, you have one major advantage over someone who does not – because there are less people with insurance, there is a much shorter queue, and in many cases no queue at all. Thus, although social medicine will ensure you will always receive treatment, it can take a long time to get to the top of the queue, and thus healthcare insurance companies offer a shortcut – for a price.
Socialist medicine will not destroy the American health industry, but it will alter it. It will lead to healthcare companies making more modest profits. It will lead to oversight which will in turn lead to more of the money that has so far gone to profits, being used to actually pay for treatments. But let’s finish by bringing the human element back into the equation because in order to properly evaluate the current situation we’ve had to remove it.
The human part of the equation is priceless. Yes, it’s inefficient to a balance book, but every father, mother, son or daughter whose life is saved is priceless to the rest of their family. And this is why we need healthcare reform. Because the status quo at the moment doesn’t take into account the human factor, and we owe that to ourselves as a society. We owe it to ourselves to give ourselves the chance to stop needing to look upon our health industry as a machine, and start looking at it as healthcare, something that daily has life and death power over individual human beings.
That’s why we must reform it.