Health Insurance as a Parasite

Babe_Ruth

Sultan of Swat
Staff member
V.I.P.
#1
Health Insurance Mafia
By JONATHAN KELLERMAN
April 14, 2008; Page A15

Most discussions about the rising cost of health care emphasize the need to get more people insured. The assumption seems to be that insurance – rather than the service delivered by doctor to patient – is the important commodity.

But perhaps the solution to much of what currently plagues us in health care – rising costs and bureaucracy, diminishing levels of service – rests on a radically different approach: fewer people insured.

You don't need to be an economist to understand that any middleman interposed between seller and buyer raises the price of a given service or product. Some intermediaries justify this by providing benefits, such as salesmanship, advertising or transport. Others offer physical facilities, such as warehouses. A third group, organized crime, utilizes fear and intimidation to muscle its way into the provider-consumer chain, raking in hefty profits and bloating cost, without providing any benefit at all.

The health insurance model is closest to the parasitic relationship imposed by the Mafia and the like. Insurance companies provide nothing other than an ambiguous, shifty notion of "protection." But even the Mafia doesn't stick its nose into the process; once the monthly skim is set, Don Whoever stays out of the picture, but for occasional "cost of doing business" increases. When insurance companies insinuate themselves into the system, their first step is figuring out how to increase the skim by harming the people they are allegedly protecting through reduced service.
The Health Insurance Mafia - WSJ.com
 

CMK_Eagle

Registered Member
#2
I don't doubt that most people view health insurance as a form of protection, but IMO that's not entirely accurate.

The benefit provided by health insurance is that it spreads risk. At least in theory, health insurance prevents an otherwise economically productive individual from becoming a burden on society due to factors beyond his control. It also allows all individuals, healthy or not, to more accurately predict both their short-term and long-term health costs. This means they need to save less to protect themselves against potential future expenses, which results in each person having greater disposable income, and thus increases GDP.

Because providing this service is economically beneficial, it naturally (and rightly) creates oppotrunities for profit.

Problems of inefficiency in the current system are certainly very real, and very costly. However, as has been shown time and again, the best solution to inefficiency is greater competition and transparency, not elimination of a productive service.