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I think we would have to be very naive if we think that the private sector is free from corruption. Historically, the private sector has existed for one and only one purpose: profit.
Health insurance companies did not go into that business to give away free health care. They went into that line because it makes them a lot of money. If that business were not profitable, they would have left it long ago.
Money has one effect on people. It can bring the worst out of them. If at some point private health insurers make the wrong business decisions, they could find themselves going bankrupt. When that happens million of people could face being without healthcare and just as with banks, the government (that is taxpayers) will be called in to bail them out.
To me it is not a matter of "if" it will happen but a matter of "when". Health insurance companies are financial institutions, just like banks. They deal with billions of dollars and they hedge positions against the financial markets, just like banks do.
I am convinced that the United States (and the rest of the world) will have to learn the lesson the hard way, just as we have done with banks. Maybe my views are too negative, but considering that the collpase of the banking system has happened several times in the past, I am led to believe that we as human beings repeat the mistakes over and over.
It will take the failure of a big insurer, and people lining up outside their offices demanding for services that the company will not be able to provide because they squandered their customers money out of greed and unwise investments. Is it unthinkable? As unthinkable as Enron collapsing, or the biggest banks in the world begging the Federal Reserve to give them billions of dollars to bail them out.
Is the government any better? That is a good question. Capitalist governments insist on contracting out services, and that makes things more expensive because the contractors called on to provide those services skin taxpayers alive. Then, where there is big money there is big corruption, and government employees can be just as greedy and stupid as anybody else.
Is there a solution? I think that if the government is not able to create a reliable public healthcare system, then there have to strict checks on what healthcare insurance companies do because if those companies fail their customers could find themselves with no coverage at all, and no government system to fall back on. Probably a hybrid system has to be in place, with government and private insurers working together. Unfortunately, at the present time greed is in the way of better judgement and the political environment is in favor of private insurance.
Over the next ten years millions of baby boomers will retire and enter the later stages of life. The pressure on private health insurers will become enourmous as the baby boomer generation ages in big numbers and the cost of providing services skyrockets. At some point the cost will exceed the profits that these companies make from their external invesments. Then these companies will start failing one after the other because for insurance to work, profits have to exceed costs.
Modifita de Übergeek 바둑이 (28. Septembro 2009, 06:01:23)
Artful Dodger:
I agree with you in that competition would force companies to shape up. An inefficient, poorly manged company would fail, at least in theory. In practice mismangamengt can be resilient and survive, but that is not the point. I just wonder the not-for-profit insurers can compete with the capital of insurers that operate strictly for profit. I imagine that if they are efficient and preperly capitalized they have a fighting chance.
I think that the inability of insurers to sell across state lines is probably a throwback to decentralization of government. Since different states operate under different laws, some insurers could operate in a different way depending on which state they are based on. To allow insurers to operate across state lines would require all states to harmonize their legislation and to many state legislators that might feel like big federal government intruding on local legislation.
At the same time, companies operating in some states might feel that they lose thier monopolistic legal advantage if companies from other states can suddenly compete against them. They will lobby to keep the law as it is.
It is a complex problem. If the solution were simple this debate would have ended decades ago. Countries like Canada came up with a workable public healthcare system in the 1950s and 1960s because they did not have to deal with the legal complexity of harminizing the law across 50 states.
I think that ultimately the US will find a solution that is uniquely proper to American reality itself. Somewhere in all this the US will find its balance between the public and the private sector. Perhaps the sense of urgency comes from 2010, the years in which people born in 1945 turn 65 years old. Economists see this as the start of the baby boomer generation reaching retirement age, and the pressures on the healthcare and pension systems will be great. 2010-2020 will be the years that will define whether the private sector can truly cope with high demand for healthcare services being met at low, stable prices.
Übergeek 바둑이: I think lobbying should be outlawed. It's not always been allowed. The government represents the people, not the corporations. I think Unions ought to be banned from lobbying especially. I quit the teacher's union because of their political action crap.
My bottom line is this: Fix what's broken. Minimal government intervention. Set high standards for qualifying for any public health care. Focus on personal responsibility. I grew up poor (relatively) and in a family of 9. I put myself through school while married and with two kids. I am not yet 60 and am debt free. Completely. Keep in mind Im a teacher. I don't make much. I don't accept the excuses I hear from others on how hard their lives are. I grew up in the inner city. There were gangs where I grew up. I witnessed gang fights. There were certain areas within walking distance to my home that we were told never to go. I could have a thousand excuses why I need government help. But I simply had a strong work ethic and believe that paying one's own way is right. Sucking off others is wrong. Many people who are for public health care are for it for one of two or three reasons: It absolves them of personal responsibility to look out for others. For politicans, who really don't give a rat's behind, it means votes, and for those who would benefit, it means they can continue being lazy excuse making do-nothings who think the world owes them. Only a small percentage of people are actually entitled to help out of a real need. The rest are lazy slobs.
Temo: Re: The NY State company cannot sell insurance across state lines. The government says no to that. One way that government interference keeps costs up. Competition and proper regulation can deal with corruption.
Artful Dodger: So why are you against the markets being opened up and more competition?
And as such, from what I have read.. it seems alot of lobbying is going on, and from the last time (in Clinton's presidency) healthcare reform was tried.... the lobbyists worked overtime to stop it and were paying off politicians (especially on the Republican side by the news) left right and centre.
Yes.. there is corruption in government and in business.
"It cost him nothing. He had some costs, but they were minimal."
It didn't cost him nothing then.
"And there are some health care companies that are not for profit. "
So was Help the aged back when it got exposed for swallowing about 75% of all the money donated in admin costs...
Temo: Re: The NY State company cannot sell insurance across state lines. The government says no to that. One way that government interference keeps costs up. Competition and proper regulation can deal with corruption.
(V): you may want to double check this info...in order to sell insurance in the state of NY...an insurance company must have its home office in the state of New York. I dont think this law stops them from selling outside of NY.
Temo: Re: The NY State company cannot sell insurance across state lines. The government says no to that. One way that government interference keeps costs up. Competition and proper regulation can deal with corruption.
Bwild: I don't know.... I'll have to check. But what I found is that there is a problem in that in some cases there is only one hospital available, and it appears certain companies like keeping it that way. I'm of the inclination that just like with our building industry, there is a long standing 'agreement' over areas of operation.