Insurance is a strange model for health care
It's meant for life's uncertainties, but illness is actually a pretty sure thing.
By EDWARD P. EHLINGER, M.D.
Minneapolis Star Tribune, Oct. 5, 2010
For once I agree with Jason Lewis -- sort of. Using an insurance model to cover preexisting health conditions doesn't make any sense, as he says ("Government health care is on the way," Oct. 1).
But I would take his notion a step further. Using an insurance model for basic and essential health care also doesn't make any sense.
Insurance is a great mechanism that people can use to offset their risk of losing some material thing of great value like their house, boat, car or jewelry. It can also be used to protect a valuable personal occupational asset like a voice for an opera singer, a hand for a surgeon or a knee for a football player. And it can be useful in providing protection from a singular catastrophic event like a malpractice suit or the premature loss of life.
But for something that is predictable, ongoing, needed by everyone, or necessary for the welfare of our community, an insurance model makes absolutely no sense. That's why we don't use an insurance model to provide police or fire services or to provide an education to our children. For these we use the tax model. Basic essential health care should also be in this category.
We know that almost everyone will eventually need some health care and much of it will be ongoing. For a defined population, the health care needs are predictable, and we know that the health of individuals affects the overall welfare of our community. In addition, most believe that people should get treated for illnesses, diseases and injuries that might befall them and expect that everyone should have access to preventive services like prenatal care and immunizations that make our communities a healthier and better place.
Our insurance-based model doesn't match our societal needs and expectations in many respects. It denies coverage to those who need care the most. Since health and income are related, it charges more for the people who can least afford it. It encourages a link with employment that has numerous negative side effects. By its reimbursement mechanism, our insurance-based health care system has also fostered maldistribution of resources between primary and specialty care.
The proof of the folly of using an insurance-based model for health care is that, while we have the most expensive health care system in the world, approximately one-third of Americans are uninsured or inadequately insured. The consequences of this are that health status indicators for the United States are far from the best.
Lewis suggests that "most (perhaps not all) existing conditions can find coverage already -- for a price." That is true, but a free-market approach puts care out of reach for many of those who need it the most. Historically, it was the failure of the free-market approach that prompted us to go to an employer-linked health insurance-based model in the first place.
When health care costs, access to care and health status concerns became a major issue in the 1940s, the United States had a chance to implement a more rational tax-based health care financing system. However, the country did not have the political will to implement such a system and opted for the insurance-based model we have today. In the 1960s, the failure of that system for the elderly prompted the passage of Medicare, which has dramatically improved both the physical and economic health of senior citizens.
Lewis also rails against an entitlement mentality. As members of a civilized society, there are lots of things we should feel entitled to -- police and fire protection, clean air and water, a functional electrical grid, basic education, safe borders, stable currency, etc. It's logical to me and to most Americans that access to basic and essential health services should also be one of those entitlements.
With the continued problems of our insurance-based model of health care financing, perhaps it's time to implement an improved Medicare-for-all approach. Then preexisting conditions would not be only redundant, they would be irrelevant.
Edward P. Ehlinger is a Minneapolis physician.