Map of life expectancy at birth from Global Education Project.

Friday, September 18, 2009

One person's waste, fraud and abuse . . .

is another person's income. As Bix properly asks, how can we possibly get to anything close to a socially optimal health care financing system when there are such enormous vested interests in the insane mess we have now? The people who do medical underwriting, rescind your coverage as soon as you actually need it, charge a $250 co-pay for a colonoscopy because they figure you'll be on Medicare by the time your cancer is diagnosed anyway, cash their dividend checks in the Hamptons, etc. maybe parasites on society, but they have families to feed and bills to pay of their own.

If, by divine intervention, the health insurance industry was vaporized tomorrow and a government sponsored single payer system appeared in its place, only a small percentage of those people would find jobs in the far more efficient new administration. Now, it's fair to presume that in the long run, universal single payer national health care would be very good for the labor market. It would make employing people less expensive, which translates into more hiring. It would make it much easier for people to change jobs, meaning more workers would be better suited to their positions and happier, there would be more openings to fill, and the economy on the whole would be more productive and create more opportunities. Oh yeah, people would be healthier.

But, it's true, in the short run those health insurance workers would all be out on the sidewalk. The shareholders would also be wiped out, which means that in all fairness the government would have to buy out the entire industry; provide the workers with extended unemployment benefits and retraining, since they have no marketable or socially useful skills; and at the same time take on the enormous cost of transitioning the entire population and the entire health care industry into the new system.

So no, you can't just do it. The process of transition would have to take a long time. Setting up a public system and allowing it to gradually absorb the entire market -- which it could indeed do if allowed to exploit its cost advantages, in a regulatory environment which truly prohibited private insurers from medical underwriting -- would work. The insurance industry knows that, they know that many people do indeed have an ulterior motive for the "public option," which is indeed to destroy them. I won't lie to you.

But you know what? Industries come and go all the time. My office before I took this cool new job was furnished with stuff we bought at the Polaroid bankruptcy sale. And wasn't the Pony Express romantic and exciting? Lots of Americans are out of work right now because their jobs were automated or moved to China. Conservatives don't want to stop any of that, they call it progress.

If we're going to do this, we do need to take care of the people who will be hurt by it. But that's more than capitalism ever does.


Anonymous said...

The BLS gives 2.3 million people working in insurance (don't know how they count that.) Much less than I expected. Only a part, of course, would be in health insurance.


Bix said...

2.3 million people contributing to an industry that generates $2.3 trillion. (I'm no economist, I just took 1/6 of the US GDP). I don't know, is this one of those industries considered too big to fail? (Maybe not fail, maybe disassemble?)

What you wrote in this post is the kind of conversation I'd like to read out there. This issue is so hot, it stirs so much emotion, that sometimes you can't get beyond name calling.

What I learned from this is that it's really important to support a public option. If single-payer just isn't workable in the short-term, then single-payer advocates could be such! a powerful force for the public option, a proposal that I noticed the Senate Finance Committee didn't put forth..

kathy a. said...

the real objection is losing the profits that these companies make. we know that workers are expendable, so long as the profits keep coming.

but it would be helpful to know how many workers in health insurance industries would lose their jobs, and what their jobs are.

people in skilled occupations such as doctors and nurses could, naturally, go back to patient care. others might be re-trained to meet the needs of an expanded health CARE industry.

some of the clucking about expanding coverage is that there would be a shortage of providers. [this is not a great argument in support of "we're doing fine, don't change a thing," btw.] but more patients means a greater need for care all along the continuum, from specialists and GP's to nurses to LVN's to clerical and custodial staff. coming up with better treatment standards also means researchers and their support staffs.

what we really should be talking about is simply shifting resources away from supporting the profit of a few and toward supporting broad basic health care. if there are job losses in the insurance sector [and they won't be total losses, insurance companies continue to provide supplemental coverage in canada, for example], there also will be many new job opportunities in direct patient care and support of delivering that care.

industries and professions have retraining all the time, to deal with new developments affecting the work. something positive about shifting from health insurance to provision of health care is that most of the work cannot really be shifted overseas: these are jobs that will stay here, unlike jobs that have already been outsourced, like medical transcription.