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Friday, July 24, 2009

Conventional wisdom and health insurance

Everyone seems to assume that a big part of the excess cost of our medical system is excessive prescribing of tests or expensive procedures by doctors -- either to squeeze more money out of insurance companies or to protect themselves against malpractice suits, I guess. All I've ever heard, though, is surmise or some anecdote here and there. Is there any reasonably persuasive evidence that this, in fact, is measurable in the first place, and if so, that it is taking place, and if it is, how much various proposals would reduce it? Basing national policy on the premise that professionals are routinely violating their ethical principles – which unnecessary procedures would be -- seems like a frail reed to me.

Too many are trying to throw in everything but the kitchen sink in order to "reform the healthcare system." How about starting with administrative waste, and one obvious candidate for that is focusing on reforming the insurance system. When Duke University reports that its hospitals has 900 billing administrators and 900 beds, there's a hint.

Why does Duke need 900 billing clerks for a 900 bed hospital? It's the insurance, stupid, or the lack therof. For the healthcare provider, it's the threat that a bill, especially a really big bill, will not be paid -- and that bill, of course, is bloated in the first place to cover those 900 billing administrators (and the independent-contractor collection agency). For employers that are being asked to shoulder the insurance burden, its the threat of an ever-escalating cost of benefits that makes hiring employees more and more problematic, not to speak of the possibility that some of those they have are holding onto the job solely not to lose the benefits, and therefore may not be operating, shall we say, at maximum productivity. For people, and that means virtually all people from upper-upper-upper middle class to low income, it's the lack of insurance, that is, either actual now or threatened in the future. It is this single most gaping hole in the safety net, plus the fact that the beleaguered employers aren't hiring, that makes the future hard to believe in.

Could these problems be a gigantic drag on the economy? Does this affect everyone, no matter how good their insurance is now? Get it now?


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