Will a health care system run by the government under a single payor system be more efficient than a system run by private insurance companies that compete against each other?
Evidence around the world suggest that the competitive private insurance model is less efficient and less effective. It lead to higher costs and inferior results. The system in America is an example of how bad a private insurance system can be.
Here are the reasons:
a) The private insurance system imposes additional cost in marketing and advertising. They spend money to attract consumers to move from one insurer to another. This is a negative sum game. It leads to higher cost and wastage.
b) The insurers do not add any value through their underwriting practices. They try to avoid the high risk customers and to push them to their competitors. They do not aim to find the most cost effective way of looking after these high risk consumers.
c) The insurers aim for a high profit margin. This margin adds to the actual cost of the health insurance coverage.
d) They find reasons to deny coverage to consumers, even though it should fall within their scope of cover, The consumer are usually ignorant or unable to take legal action against the insurer for breach of contract. This practice allows the insurers to increase their profit. It is their aim to get away with as much profit as they can.
The argument against a government funded model is that government officials are inefficient and the bureaucracy does not aim to improve the efficiency. This argument is largely untrue.
Most doctors and nurses will do their best to improve the outcome for the patients. They should not, and usually do not, prescribe medication unnecessarily. If some do, they can be easily spotted through the medical audit.
The consumers, or patients, may have high expectation from the government funded system. This expectation can be managed and handled through consumer education. The risk of waste is largely a propaganda by those who prefer a private model where they can make a good profit.
There is another argument that a private insurance system can offer more choice to consumers to find the coverage that best meet their needs. In practice, consumers do not know how to make a wise choice. So, this choice is unnecessary, wasteful and costly. It is also an avenue for the sales person or insurer to get consumers to pay more than necessary.
I am in favor of a government funded, single payor system. I doubt that the insurance companies can play a useful role and contribution to the health care system.
Evidence around the world suggest that the competitive private insurance model is less efficient and less effective. It lead to higher costs and inferior results. The system in America is an example of how bad a private insurance system can be.
Here are the reasons:
a) The private insurance system imposes additional cost in marketing and advertising. They spend money to attract consumers to move from one insurer to another. This is a negative sum game. It leads to higher cost and wastage.
b) The insurers do not add any value through their underwriting practices. They try to avoid the high risk customers and to push them to their competitors. They do not aim to find the most cost effective way of looking after these high risk consumers.
c) The insurers aim for a high profit margin. This margin adds to the actual cost of the health insurance coverage.
d) They find reasons to deny coverage to consumers, even though it should fall within their scope of cover, The consumer are usually ignorant or unable to take legal action against the insurer for breach of contract. This practice allows the insurers to increase their profit. It is their aim to get away with as much profit as they can.
The argument against a government funded model is that government officials are inefficient and the bureaucracy does not aim to improve the efficiency. This argument is largely untrue.
Most doctors and nurses will do their best to improve the outcome for the patients. They should not, and usually do not, prescribe medication unnecessarily. If some do, they can be easily spotted through the medical audit.
The consumers, or patients, may have high expectation from the government funded system. This expectation can be managed and handled through consumer education. The risk of waste is largely a propaganda by those who prefer a private model where they can make a good profit.
There is another argument that a private insurance system can offer more choice to consumers to find the coverage that best meet their needs. In practice, consumers do not know how to make a wise choice. So, this choice is unnecessary, wasteful and costly. It is also an avenue for the sales person or insurer to get consumers to pay more than necessary.
I am in favor of a government funded, single payor system. I doubt that the insurance companies can play a useful role and contribution to the health care system.
ReplyDeleteI support 100% of your suggestions!