Someone Else's Money

[Blue State Blues]

My review of This American Life #392: Someone Else's Money -- a different take on the health insurance reform debate

Free for download on iTunes or available on the This American Life Website. A one hour enlightening and entertaining look at why health care in the US is the way it is. If you have an hour to listen, it is well-worth your time. If not, download it today to listen later -- I think today is the last day to download this episode, but after it's no longer available as a download it's still available streaming on the This American Life Website.


Prologue: Ira explores the baffling world of insurance company codes and talks to a doctor in private practice who says, largely because of these codes and the paperwork that insurance companies require, that 25% of his practice's revenue goes to their billing department and not to patient care.

(Add that to the up to 30% of overhead cost that insurance companies charge and that is a lot of money that is not going to patient care.)

Act 1: One Pill Two Pill, Red Pill Blue Pill: Explores the high cost of medication, and the war between Big Insurance vs. Big Pharma. Insurance companies use co-pays to encourage customers to choose cheaper medications and pharmaceutical companies use marketing approaches to encourage customers to choose the most profitable medication options over generics. Also looks at the role of doctors and patients, who don't know, through no fault of their own, what the medications really cost.

Act 2: Let's Take Your Medical History: The History of Health Insurance in America from the Great Depression through World War II, the birth of Blue Cross and how we accidentally ended up with a system of employer-based health insurance. (The most clear and concise history I have ever heard of the American health care system, though I don't entirely agree with the conclusions drawn by the analysts at the end of the piece.)

Act 3: Insurance? Ruh Roh!: Explores the growth of pet insurance as veterinary care mirrors human care in both sophistication and cost.

Act 4: Sorry Johnny... It's Only Business: Challenges the belief that insurance companies dump the sickest members and the basic premise of the current health insurance reform proposal that increasing competition will lead to lower premiums. According to former Aetna CEO Jack Rowe, when they dropped 8 million members, they didn't drop the sickest patients, they dropped the most expensive patients. The most expensive policies were in markets where Aetna had sold the fewest policies and therefore had the least bargaining power with hospitals and other providers, so Aetna withdrew from those markets. According to Uwe Reinhardt, a health economist at Princeton University, competition among insurance companies does not drive down premiums. Instead, because each insurance company has less bargaining power with hospitals and doctors, each insurance companies can't negotiate the most favorable rates. Because the rates for medical services are negotiated with hospitals, a single insurance company may pay $1500 for an appendectomy at one hospital, but pay $13000 for the same procedure at a different one. Reinhardt praises the All-Payer System used in Maryland. Under Maryland's All-Payer system, a state commission sets the prices for all procedures at all hospitals. As a result, any patient at any hospital, with any insurance is charged the same rate. So the insurer's costs are not based on their individual negotiating power with each hospital system.


My Analysis.

(Full disclosure: I am a longtime fan of This American Life, though I'm currently behind on the podcast. I am also an advocate for Single-Payer or Medicare for All and not a fan of the insurance business.)

While providing an interesting and unexpected view of health insurance reform, what is most interesting about this program is what isn't discussed. While there is acknowledgment over how broken the current system is, little emphasis is given to finding the most effective or efficient solution, much as in the national debate over health insurance reform.

I suppose it's not surprising that market-driven solutions will be emphasized when the issue is discussed almost exclusively with economists and representatives of the insurance and pharmaceutical industries. Sound familiar?

For example, the economist interviewed in the pet insurance segment thought it would be a wonderful thing to model human health insurance on pet insurance, which forces policy-holders to pay a larger share for procedures and therefore be more cost-conscious.

But what these worshipers of the invisible hand of the market ignore, is that health care is not merely about money spent, it is about lives saved.

Although it is a huge portion of our economy, health care is not merely an economic issue, it is a human one. And that when we are at our most vulnerable -- when we are sick or injured or when we are caring for a sick parent or a sick child, we cannot think in terms of cost. We cannot be expected to second guess medical professionals about the necessity of a test or procedure. Unless we are medical professionals ourselves, we simply are not qualified to prescribe our own treatments. And that it is ultimately immoral to have the survival of a sick person come down to what they are able to pay.

What is conspicuously missing from the program, as it has been missing from the national debate, is any mention of the cost-savings that a Medicare for All or single-payer system could provide through better negotiated rates with providers and through more efficient billing practices.