I have been driving a car for just over 35 years. During three and one-half decades, I have paid for automobile insurance, not only to cover me in the event of an accident, but also to cover my wife and my kids when they were licensed to drive. I’d estimate that my wife and I have spent from 35 – 40 thousand dollars on automobile insurance. We’ve also made precious few claims against that insurance – a couple of major accidents, a couple of minor incidents. The total cost of all my claims? Perhaps 18 thousand dollars (minus 5 thousand in deductibles). In other words, we invested 35 to get 13. A terrible return on investment.
Of course, I have haven’t mentioned the best and most critical element of automobile insurance. In the event of a catastrophe, my same investment of 35 could have easily become hundreds of thousands of dollars (and thank God it never was). That is the key when it comes to insurance – it is great for hedging against catastrophe.
However, it would be ridiculous to use my car insurance policy to cover routine expenses – like oil changes, new wiper blades, brake pads – or even gas. Can you imagine making an insurance claim every time your tank went empty? Getting approval to use a gas station outside your approved network? It would be cumbersome, bureaucratic, inefficient, and ultimately much more expensive than covering routine maintenance out of pocket (the old-fashioned way).
I have been blessed with generally good health, as has my family. I am 52 and I have never broken a bone, have no diseases, no chronic conditions that are expensive to treat, and aside from some minor dental surgery I have never gone under the knife. My wife has had a similar experience (only more healthy than me) and none of my 3 kids have had any conditions requiring extensive medical care.
In other words, my health history is a lot like my driving history – aside from occasional sinus infections, or cuts needing stitches, perhaps a flu – there has been virtually no need for insurance coverage at all. Except, like protecting against the catastrophic car accident, I don’t know anyone who doesn’t want catastrophic health coverage. We all want to hedge against the chronic disease, the hideous accident, or the fatal condition wiping out our life savings – or worse becoming so expensive to treat that we are forced to forego medical care. We all want to be protected against the worst case scenario – any of us could develop a disease tomorrow.
However, it is ridiculous to use insurance for routine medical care – a cholesterol check, a sinus infection, a check-up, treatment for poison ivy, etc. These are the wiper blades, oil changes, and gas station visits that make no sense to filter through the cumbersome insurance/government bureaucracy. This is what has been sold to Americans – not catastrophic insurance that we all obviously need (just as we need catastrophic auto insurance) – but an insurance that has become so all-encompassing, that if you want to get a flu shot every October it will be covered with the inefficiency of a healthcare establishment run amok.
When I was a kid growing up in Pembroke Massachusetts, our part of town had two doctors: Young Doctor Moffrey, kind and charming and old Doctor Angley, short-tempered and tough. My Mom took us to young Doctor Moffrey. It was the 1970s, and when I had an ear infection, Dr. Moffrey looked me over and prescribed some ear drops. My mother would write a check for the office visit. Then we would go to the drug store and Mom would write a check for the medication. There was no insurance involved. My parents had a catastrophic policy with Blue Cross / Blue Shield that only got used when my brother Michael had a concussion, or broken arm, or blood clot. Most of our medical needs were met the old-fashioned way – when we needed a prescription for an illness – we paid cash. We weren’t a rich family – my dad was a grocer and my mom stayed at home with 4 kids. At no point did my parents ever say “we need more insurance” and at no point did we feel like we were going to be denied health care because the government wasn’t involved enough. We were a middle class family with plenty of access to health care.
So what changed in America?
The American people have been lied to for more than 40 years with regard to “health care.” They have been lied to by politicians who told voters they could have “free” access to healthcare. They have been lied to by insurers who have convinced consumers that it is a good deal to have insurance cover a head cold.
The explosion of government involvement, regulation, price controls, etc. combined with all-encompassing policies pushed by insurance companies have only served to separate the consumer from the actual price of the product. You see, back in the 1970s, if Dr. Moffrey had charged too much for an office visit, my mom would have brought us to Dr. Angley no matter how salty his bedside manner. But for decades the US Government has intervened in the process, aided and abetted by insurance companies, and as a result, no one really cares what the cost of the office visit is because it will be paid for by an insurance company or the government.
Once the pricing of healthcare is isolated from the consumer’s interest you get wild inflation or product rationing. There can be no other result. Without the free market to keep everyone in line you get waste and tragedy.
Which brings me to what Americans actually need.
I don’t doubt that some of you are thinking –“cool stories, Cheetham – but my Aunt Sally has cancer; my nephew has a severe illness; my mom has Alzheimer’s – and yes they all need insurance.”
I agree. Americans need catastrophic coverage. I think everyone should have some kind of insurance against a broken hip, or cancer, or a chronic disease that will require lifelong care. The poor should have catastrophic coverage subsidized by their neighbors. I have no objection to that.
What we do NOT need is insurance against head colds. We don’t need insurance against fevers, rashes, or acne. The goal of a sane health insurance and health care system for America should be focused on a return to the old fashioned payment for services model. Consumers will shop for the doctor who offers the best price for a sinus infection. Doctors will discount their acne treatments to get more business. Prices will go down as doctors and labs compete for cash from real people.
Don’t believe me? Look at two aspects of healthcare that are by and large not covered by insurance: laser eye surgery and plastic surgery. Outside of the control of governments and insurers it has never been cheaper to get your eyesight fixed or your breasts enlarged. Doctors constantly offer deals and discounts for these procedures – and they compete for consumer money.
We could have the same innovative and competitive pricing for head colds and sore throats. The only thing stopping that from happening is an unholy alliance between government and insurance companies. They are both ripping you off and selling you on the fake idea that allowing the government to handle all your medical issues is the way to go. The people who brought you public education and the Veterans Administration want to be in charge of all your medical needs.
Of course, we want insurance against cancer and multiple sclerosis – but when it comes to treating our toe fungus – we don’t need a lot of help from government and insurance companies.
Tragically, this week in Washington D.C. we have a bunch of politicians most of whom know nothing about healthcare and nothing about insurance, crafting a ridiculously complicated plan for EVERY AMERICAN – all 323,407,656 of you. They know exactly what you need – and so they are going to craft a very expensive plan that covers everything from hangnails to Ebola. To make matters worse, the alternative plan is to have the government take over all of healthcare. Just think, when you have a sinus infection – do you want the efficiency of the Department of Motor Vehicles when you all you need is an antibiotic?
American healthcare so desperately needs innovation. The kind of innovation we see in laser eye surgeries and plastic surgery providers. American healthcare so desperately needs competition. The kind of competition that drives down smart phone prices every year.
Government has no interest in innovation or competition. It never has. It never will. You know who understood competition? Doctor Moffrey.
Copyright © 2017 cjcheetham
2 thoughts on “America – Demand Less Health Insurance, Before It’s Too Late”
Good perspective, Chaz. I always appreciate non-standard looks at hyper-partisan, seemingly intractable (& really expensive!) issues.
“Travel is fatal to prejudice, bigotry, and narrow-mindedness.” –Mark Twain
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well done chris