Ethics in Health Insurance–Only with Regulation, and/or a public option

Another article on inadequate health insurance coverage, this from the NY Times.

As noted in previous posts, the U.S. health care non-system is unique in the industrialized world. First, it’s does not provide for universal coverage. Furthermore, it allows, no it encourages, private for profit insurance companies to eliminate people who need coverage (the sick) from their roles.

I say encourages because the first responsibility of a private corporation is to make money. Having these people provide “health” insurance is an unstated sanction for them to cull their rolls of, or otherwise scam beneficiaries, particularly those who are sick and use health care. A paradox? No, it’s simply how insurers make money!

From the Times:

“Last week, a former Cigna executive warned at a Senate hearing on health insurance that lawmakers should be careful about the role they gave private insurers in any new system, saying the companies were too prone to “confuse their customers and dump the sick.””

“The number of uninsured people has increased as more have fallen victim to deceptive marketing practices and bought what essentially is fake insurance,” Wendell Potter, the former Cigna executive, testified.”


“He and the hospital say they were surprised to eventually learn that the $150,000 hospital coverage in the Aetna policy was mainly for room and board. Coverage was capped at $10,000 for “other hospital services,” which turned out to include nearly all routine hospital care – the expenses incurred in the operating room, for example, and the cost of any medication he received.”

Medicynical Note: The mythical free market in health care has never existed. And given the complexity of health care, the myriad conflicts of interest among the participants (patients, docs, institutions, patent holders, insurers), a so-called “free market”would never work to decrease costs. The proponents of such schemes inexplicably omit addressing the issues of the poor, the working poor, the sick and the asymmetry of information available (costs, options, outcomes) that would tend to distort such a “new” “free market” system.

So, if we are to reform health care coverage, we are left with what must be a highly regulated insurance scheme. Insurers would offering some standard government mandated clearly defined package of coverage using community rates (as opposed to individual ratings) with extra options at extra costs. They would compete with each other on price and service. To keep these people honest a competing public insurance program would provide an objective benchmark from which to rate the value of the private company’s offerings.

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4 responses to “Ethics in Health Insurance–Only with Regulation, and/or a public option

  1. As Atul Gawande stated in a recent New Yorker article, physicians are often looking at patients as a commodity. They see each procedure as an opportunity to increase their own income. Physician owned hospitals are very problematic. We often get transfers from our local physician owned hospital after complications from surgeries their doctors have performed. It is very frustrating.

  2. Hospitals view the areas of medicine as “product lines”. Is there any hope that such an approach could provide healthcare in a sensitive responsive fashion?

  3. It’s true. The nicest floors in our hospital are the joint replacement, ob and cardiac floors. The regular medicine and surgery floors look neglected.

  4. Cay Edwardson

    Physician owned hospitals shouldnt all be lumped into a category with others. The one in our area is basically the CARDIAC wing of the NON-Physician Owned hospital. The hospital owns 49% The Physicians own 51%. They have a full service ER also…

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