Health Insurance Abuse

Health Care That Spares No Expense (
Health care is a major issue in this country for a variety of reasons and it depends on who you ask as to why. I would say market failure: we insulate people from the cost of the care they receive by using insurance companies too much. Better to use medical savings accounts and hospitalization policies — also known as catastrophic care policies — to get people in touch with the cost to get them to shop around for their care.

Others would mention tort reform — I agree — and the latest Democratic line is that it’s not tort reform, it’s the money the insurance companies have lost in the stock market that has driven malpractice insurance up. There’s probably some truth to that as well.

UPDATE: Regarding the stock market argument being put forth by John Edwards, trial lawyer, and others, that rising malpractice insurance is a result of losses in the stock market by the insurance companies, I’ve given it some more thought. It raises questions like: why haven’t we been seeing insurance premiums of all types increasing at the rate of malpractice insurance? After all, insurance companies in general invest in the stock market and they would have suffered the same losses as the insurance companies that provide malpractice insurance.

One could answer that there are fewer insurance companies offering malpractice insurance — making for a less competitive market — and they have been disproportionately harmed by the drop in the stock market. True enough. But why are there so few companies offering malpractice insurance? My guess is litigation, which leads us back around to tort reform. That is the fatal flaw in the Democrats’ argument that malpractice insurance has increased because of the drop in the stock market.

What Ms. Applebaum describes here, among other things, is part tort reform — unnecessary procedures to act as cover against lawsuits — and part opportunism on the part of the hospital because they knew she has insurance and saw a chance to increase revenues.

The difficulties we have in this country are multilayered and not easily analyzed. What I do know is that divorcing the consumers from the cost of their care even further will lead to more waste. For me that’s the test of a good plan and none of the alternatives offered by the Democratic presidential candidates addresses it.

The following day, someone asked me how I’d had the nerve to just leave like that, and I found it hard to explain. There was nothing wrong with the emergency room doctors, who were both professional and kind. But they did seem to be operating by a preestablished playbook — one with little consideration for juvenile hypochondria on the one hand, and with an enormous predilection for overkill on the other. They had amazing, space-age, high-tech equipment, which, fortunately, no one else was using that night. They must have calculated, although they denied it when I asked, that mothers of 5-year-olds with undetected internal injuries are prone to lawsuits. They must have realized I had insurance. So — just to be certain — they carried out every conceivable test, even some that might have been unnecessary, or very expensive, or both.

All of this, I realize, is a long-winded way of getting to the subject of Medicare reform, Dick Gephardt’s health care plan and the Medicaid-induced state budget crises, but it is not as irrelevant as it might seem. A part of the current health care debate is about costs: General Electric reckons the price of health insurance for its employees has risen 45 percent since 1999. A part of the debate is about who should pay: General Electric’s employees have already been on strike, and may strike again, because the company wants them to absorb some of the rise. The rest of the debate is about the 40 million people who don’t have health insurance at all, because costs are so high that nobody can pay.

In response, Democratic presidential candidates and Republican congressional staffers are making claims about the greater fairness of government health insurance and the greater efficiency of private health insurance, respectively. Some tout the virtues of managed care, others believe the solution lies in tort reform. But the real problem is far deeper. We have come to expect, in this country, very high-tech health care, delivered without reference to price and thorough to the point of parody. Our doctors meet our expectations. No disease is too rare to test for, no technology is too expensive to use, and fear of litigation is not the only explanation. I suspect that nine out of 10 people would have reacted to my account of my son’s over-the-top emergency room experience as another friend did: “Weren’t you relieved?”

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