Reality Check?

23Oct09

The White House – Blog Post – Reality Check has some interesting thoughts on the on-going health-care debate. And I’m afraid I don’t really mean that in a nice way.

First, the blog points out that a recent survey from WellPoint uses obviously “flawed” techniques to make an unsustainable point, as part of a “misinformation campaign designed to confuse and distract attention from those who are seeking real health care solutions.”

Then, the blog responds to “one novel argument worth noting”: the survey claims that “imposing fees on health insurance providers and drug and device makers represents a tax on individuals and families” (because the costs will be passed along to customers). The blog discounts this notion with three arguments:

  • The bookkeeping necessary for insurance companies to pass these costs along would be prohibitive. But, excuse me: too much bookkeeping for an insurance company? They live and die, quite properly, on extensive, exhaustive, constantly revised bookkeeping. You think they can’t divide a fee based on their number of subscribers, by the number of subscribers?
  • Even if they took the trouble to pass the fee on, other parts of the plan will save them money, so obviously they’ll pass the savings along, too. Again, excuse me? The very people using trumped up surveys to block progress are suddenly going to turn all nicey-nicey? We have what reason to expect this?
  • And, anyway, consumers save because of the reduced hidden tax currently paid in care for the uninsured. But this “hidden tax” is paid through the mechanism of providers spreading costs to paying customers—i.e., insurance carriers—and ultimately of course to consumers (the legendary $100 slippers and all that). This last blog argument is so vague, I’m not even clear whether it foolishly supposes health care providers are not actually businesses, or whether it’s just reapplying that faulty logic to the insurance carriers. But either way: the current debate, the very survey that occasions this blog, provides all the evidence you need to know it ain’t so.
I’m not interested in vilifying anyone. Providers and carriers are businesses, with a strong and proper obligation to pay their own bills and make a profit for their investors. But capitalism is the art of harnessing corporate profit for the betterment of society. If we lay out reasonably fair, reasonably clear, reasonably enforceable rules for all to follow, these companies will follow them. If we skip the rules and rely on their good will … well, sorry, competitive advantage really does win out over nicey-nicey; without it, there’s no profit to harness.
These are the reasons why health insurance reform needs either extensive, intrusive, and expensive oversight and regulation, or a viable competitive public option for all. Either of these measures would remove the opportunity to compete by being unreasonable, and these corporations, relieved of that competitive obligation, could as fiscally responsible businesses be “nicey-nicey.”
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