Childrens heal thyselves
Currently we have the two sides of the aisle in Congress wrangling over the extension of the SCHIP program. This got me thinking about the health industry and compensation as a whole. Doctors earn a lot of money to ensure a high degree of devotion and accuracy in the services they perform and to encourage research and advancement. A similar line of thought applies to pharmaceutical companies. Drugs have a high price, at least initially, because of high research costs and profit encourages the company to develop new and/or improved products to improve the human condition.
President Bush vetoed the current SCHIP bill because he believes that people should be finding their insurance in the private market. However, an insurance company is designed as an instrument to share risks among a group and transfer wealth from one party (the patient) to another (the doctor/health care provider). A private insurance company has the legal duty to enrich it’s shareholders to the maximum extent possible. It does this by collecting as large a premium from its policyholders it can and paying health care providers and pharmaceutical companies as little as possible for the services they render and products they sell.
The insurance companies have a vital row in allowing many people to afford treatment for which they would not be able to pay if the risk was not shared. However, the insurance company offers no innovation in this process. Now, here’s the point of this whole thing. Because of the importance of medicine in human survival and the value we place (or purport to place in some cases) on human life, should the insurance role, which while important is merely one of weath transfer, be allowed to be a profitable one? Would converting all insurance companies to non-profit or mutual organizations (where profits are re-distributed to policyholders in the form of dividends or reduced premiums), or high regulation (limiting the amount of profit, creating legal requirements for what treatments must be covered, who must be accepted or rejected as a policyholder or what rates could be charged) at the federal level of for-profit companies lower the price of insurance premiums to the point the every American (with an income) could afford it?
The movie Damaged Care describes an interesting view of the health care industry.
