Tuesday, November 17, 2009

The consequences of a single payer

Single payer insurance system sounds like a good idea.  In fact, if you listen to the news it’s not only a good idea, but the best idea ever, EVER.


Except that a single payer system doesn’t work very well for electricity, cable, telephone, banking, retail, manufacturing, air travel, space travel, or any other industry ever, EVER.


So, let’s take a quick look at two of the possible consequences in the context of today’s advice regarding mammograms.


Today we find out that after the age 50, you don’t need but one mammogram every 2 years, instead of every year.  We are told that the annual tests result in millions of extra, unnecessary tests that generate millions of false positives, resulting in unnecessary biopsies and lab work that only save 1 in 1500 from death.  If you’re the 1499, you’re relieved that you don’t have to have that extra mammogram.  If you’re the 1, you’re wondering why catching YOUR cancer isn’t worth their effort, but you can’t save all the people, all the time.


Now, the extra mammogram and biopsy doesn’t cost the PATIENT anything outrageous, because the patient is presumably insured and pays the copayment for the service rendered—the rest of the procedure is “covered”, which many think means “free”.  In actuality, that extra mammogram, which is really millions of extra mammograms, means the hospital has to devote staff to processing that photo, which means the staff has to be paid to do that work and not some other work, like taking care of all the old people who are flooding into the hospital right now.  It means there’s a lab technician who has to review millions of extra biopsies every year when their time could be spent filtering out blood tests and other things that are waiting in line behind the false positives and pointless tests.  It means entire intake and processing systems have to be maintained for tests and scans which we now know to not be cost effective.


All for the price of a single co-pay, each time you visit the doc.  All the rest is paid by insurance, which is funded by your premium, and millions of other premiums from all around the state, nation, and the world.


Therefore, if there is a single, national insurance giant, that company can say “We’re only covering 1 mammogram every 2 years.  If you find a lump and want a mammogram in the intervening period, you’ve got to pay for it yourself.  Good luck.”  Some call this “rationing”.  Others call it managing the “cost effectiveness of the service”.  Whatever you call it, it makes perfectly good sense.  If the insurance company—government or private—is paying for the service, they have every right to say “we’re not covering that because it’s not a necessary procedure.”  It’s like buying 2 newspapers in the same day.  Nobody does it because the news doesn’t change between this copy and the next, it’s a pointless expenditure.


On the other hand, the single, national insurance giant can say “We know what the guidelines are, but if the doctor recommends it then we’ll pay it, no questions asked.”  This never, ever happens, not even now, but let’s just imagine that a single, national company with no competitive pressure and unlimited funds and ability to go trillions of dollars into debt decided that’s how it was going to operate.  A test is requested (365 mammograms a year?  Why not!), the test is taken, the test is paid for without regard to the effectiveness of that test.  Hell, I can go in and get tested for ovarian cancer if I wanted to.  I’ve got no ovaries, but that’s just semantics.  The net result?  Big transfers of funds to hospitals and doctors’ offices, staff hired just to process tests that are paid for by trillions of Chinese reserves, and everyone wins because the dollar is so inflated by the deficit spending that your house can be paid for with just 1 hour’s worth of work.


On still another hand, if there are several companies competing in the market place, some can cover the mammograms every freaking day, but for a higher premium, others can cover fewer for a lower premium, and you don’t have to pay for my ovarian cancer tests since I don’t have ovaries.  The market place requires companies to differentiate themselves either by price, product, and/or packaging so some companies will offer more, for a little more, some less, for a little less, some a little more for a lot more, others a little less for a lot more.


I’m not convinced a government operated system can operate side by side with a private system.  I foresee the market out competing the government in the short run with better product, but the government ultimately presenting an inferior product at a superior price (like Wal-Mart).  This price strategy will allow the employers—who are the real customers of the insurance companies—to offload employees to the government program in order to save money.  This leaves me, the employee, with no choice in the matter whatsoever, because there will no longer be any profit in offering affordable insurance to an individual.


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