Column: Minor tweaks can’t fix health systemThe steady drumroll of controversy regarding health care has continued locally in recent months.
The steady drumroll of controversy regarding health care has continued locally in recent months.
Budgeteer writer Tammy François wrote of choice in medical care and complained about proposed federal legislation that would allow corporations to refuse to pay for health care to which they objected. (Presumably, this specifically addresses the national issue of contraception and Catholic employers.)
Meanwhile, Budgeteer columnist Virgil Swing advises that the school district and other public entities should be trimming back employee perks, including health insurance costs and retiree health care subsidies.
We are willing, apparently, to argue about these things forever, while we let the real problems fester and stink.
Even though I’m generally healthy, I have a minor healthcare hassle that may be a good example of the fundamental problem.
I happen to have seasonal allergies that have become worse over the years. In the spring for a few days (it’s impossible to predict which ones) it can be an exercise in suffering to do much outside. My eyes itch so badly that I’ve caused blisters by rubbing them. I’m tired, but can’t sleep at night. During the day, I struggle to work because I’m exhausted.
Fortunately, there’s a medication — one medication out of several I’ve tried — that solves my problem. With the medication my eyes are fine, I can be active and, perhaps most importantly, I can work.
The medication costs about $180 per month. What happens if employer-paid health insurance doesn’t cover the cost?
No big deal, right? This is just a laudable example of an insurance company working to keep costs down. I can certainly pay my own way.
But it might not work that way because I might not want to pay $180 per month, especially since hundreds (probably over 1,000) dollars per month are already missing from my family’s paycheck to pay for the insurance. (Employers don’t really provide health care for free. They just pay lower salaries.) Plus, I’ve usually received sick pay, so if I stay home,
I face no financial consequences.
In this situation I have an incentive to avoid paying a couple hundred bucks for medication, and thereby risk missing work.
The incentive for the insurance carrier is to deny me the medication, even though it results in lost productivity and increased costs for my employer. The incentive for my employer is to continue with an expensive policy from El Cheapo insurance company because my employer doesn’t know that the decision by the insurer is costing the company money and goodwill.
This whole story may sound like meaningless whining on my part, but in fact similarly misplaced incentives run throughout our healthcare system, sometimes with disastrous (and deadly) consequences. Insurers are incentivized to deny coverage that customers thought they paid for. Medical systems are paid for treating the sick, not for keeping people well, so the incentive is for more treatments at ever greater cost. Patients are incentivized to gamble by avoiding preventive care, because a major disease might never develop, or might develop many years in the future; or emergency care might be paid for by the insurer or subsidized by the public. And employers are incentivized by tax benefits to choose overly expensive health plans for employees.
And it’s not just me that’s saying this system is messed up. Even Pat
Geraghty, who as CEO of Blue Cross/Blue Shield of Minnesota could be expected to defend perverse incentives, said “We’re tired of defending a broken health system.”
But I need to focus my complaints.
So look back to that list of controversies at the beginning of this article. Does Ms. François want choice? Eliminate employer-paid health insurance. Do people want to be able to get birth control with their insurance? Eliminate the system of employer-paid health
insurance. Someone doesn’t want to pay for insurance for public employees? Eliminate the system of employer-paid health insurance.
Fundamentally, this isn’t about choice, or excessive public employee benefits, or freedom of religion. All these controversies are about the bizarre situation where our employers reduce our salaries to provide overly expensive insurance that doesn’t do what we want, and we act like we like it.
Any other way of providing insurance would be more rational, with the incentives more aligned with affordable and effective health care.
Budgeteer columnist Pete Langr writes monthly in the Budgeteer. Contact him at email@example.com.