Map of life expectancy at birth from Global Education Project.

Monday, April 24, 2006

The rest of what health insurance is

Okay, so health insurance is partly sorta kinda like casualty insurance. However, 90% of the time that's not what it does for us. It's more like a maintenance contract. It pays for most of the routine and preventive medical services that people ordinarily use even when they haven't just been hit by a bus or collapsed with a squeezing pain in the chest.

Now, some percentage of that is basically predictable -- there are recommended intervals for mammograms, it's recommended that people have their blood pressure, cholesterol and blood sugar checked, etc. Most people get physical examinations every year or two. Then there's is a part of it that varies somewhat from person to person. If you are diagnosed with hypertension, your doctor may prescribed medications, for example. You may have acute diseases that aren't extremely serious but still result in treatment, such as an antibiotic prescription or minor surgery.

Health insurance smooths out the budget for those lesser expenses and also spreads it among individuals and families. There is some benefit in convenience and predictability, and a justice interest, although the justice issue is not as sharp as it is in the case of emergencies or life threatening disease.

However, an even more important reason why it makes sense for people to have this kind of insurance is that spending a little bit of money now can save a lot of money later. Vaccinations are an obvious example of a very inexpensive intervention that has a huge impact on later medical expenses and also prevents a great deal of disability. (You may be too young to remember the devastating effects rubella on fetuses, causing the birth of severely retarded infants; or deafness caused by measles; or paralytic polio.) But there are many other examples. Cervical cancer and colon cancer are almost entirely preventable by screening and early intervention. Control of hypertension and diabetes pay enormous dividends in prevention of disability and the need for very expensive medical procedures.

It has been shown by gold standard studies -- randomized controlled trials -- that when people have to pay out of pocket for such routine care, they often decide not to get these preventive services, or they delay seeking medical attention for symptoms until disease is more advanced and more expensive (if not impossible) to treat. Some people, of course, can't afford them at all; others just decide to do something else with the money. Are they irresponsible, or self-destructive, or crazy? No, they just aren't experts on primary care medicine. They are making decisions that seem right to them at the time, but which they might regret later.

And that brings us to the Ownership Society proposal for health care reform: have people buy really crappy health insurance that only insures against catastrophe, and save up money in tax advantaged accounts to pay for routine and preventive care. This is supposed to control medical costs because if we're spending our own money, we won't be subject to moral hazard. Yup, Chimpy and his friends apparently assume that people are gobbling hydrochlorothiazide, lovastatin, and erythromycin; having lumps in their breast biopsied and tubes stuck up their colons; having their appendices removed and their coronary arteries reamed out, not because they actually need any of these things, but because their insurance is paying for it so they might as be freeloaders.

This is so patently absurd that every human being with common sense should hold them in utter contempt. But Bill Frist and the Decider go around the country spouting this idiocy in front of college educated journalists and even audiences of physicians, and they are taken seriously. Of course, I'm not being fair and balanced, I'm relying on facts and logic.

No comments: