Thursday, August 09, 2007

A great takedown of an atrocious health-care reform idea

I'm on the final stretch of my packed summer travel (hi from San Francisco, from the LinuxWorld press room), so my brain remains scattered. Tomorrow I'll chime in with thoughts on this week's "jumbo loans go boom" news, but I wanted to quickly drop in and point out a truly excellent article in today's Slate: "I Can Get It for You Retail," a dead-on critique of the health-care-reform plan backed by Rudy Giuliani and several other Republicans.

Dan Gross carefully dissects the fatal flaw in health care policy proposals that call for tax breaks and other incentives to encourage more people to buy individual health insurance: individual shopping is disastrously ill-suited to the economics of health insurance. "Economics of scale" is a familiar enough concept, and so is "collective bargaining." Unions exist (or, they did once upon a time ...) because workers realized that employees who are individually disposable gain power by acting as a bloc.

A cancer patient running up six-figure annual medical bills will never be a profitable customer. Companies, naturally, do whatever they can to offload unprofitable customers -- and when we, through the representatives we elect to govern, put legal constraints in place to limit the actions companies can take, they often take them anyway and gamble that they'll gain enough to outweigh the possible consequences of a lost lawsuit.

The only way to turn a cancer patient from an unprofitable client that insurers will fight to dump into a valuable customer is to bundle that patient in with a bunch of other customers and "sell" them to the insurer as a group. In my ideal system, we'd have single-payer universal coverage and treat the entire U.S. citizenry as one insured mass. In the current, barely-hanging-in-there system, we at least band people together into corporate blocs. Very helpful for me and David, who both work for sizable companies; not so helpful for the millions of people employed by small businesses -- or, even more precariously from an insurance perspective, employed by themselves. Broken as the current system is, breaking the blocs up still further and encouraging even more individual insurance would be a tremendous, destructive step backward.