In anticipation of an interview I'm doing with him in a few minutes, I've been transcribing the speech Dr. Mark Smith, CEO of the California Health Care Foundation, gave to America's Health Insurance Plans a few weeks ago. A few of my favorite parts:
It's a strange business you're in. What you are selling is four different things. Why do we want people to have health insurance? I always get some variant of four answers. 1) We want people to be protected against rare, unpredictable and uncontrollable catastrophic events. 2) We want people to be covered so they can have their preventive services paid for. They're not rare, they're not unpredictable. But if we have them put it on their Visa, they don't do it. So we prepay for it. 3) So you can get discounts, and don't have to pay rack rate at the doctor. But that's not insurance, it's market leverage. 4) so people who have chronic diseases don't have to pay for the cost of their care, transferring assets from the known healthy to the known unhealthy. Each of these is a socially useful function, but they operate very differently. Saying you need to protect assets from financial loss is a difficult proposition for someone who has no assets to protect. [...]It's like trying to sell a car that's bundled together with car insurance and three dozen eggs every week and a trip to Bermuda when you turn 27. Those are kind of different things and people will be differentially inclined to buy them, but if they're bundled together you have a pretty dysfunctional product. That's part of why we have such difficulty in the public space agreeing on what is adequate insurance. Particularly if our notion as to how people will get it is they will be forced to buy a product from a company that they do not like or respect and which they have a hard time seeing how they will personally benefit from. That's what some of this debate about mandates comes down to. In fact, I don't really see how we've gotten to a situation in which we've managed to fetishize this insurance product as the be all and end all of access to care. What people are talking about when they say they want to expand coverage is not that they want to expand people's access to health insurance but that they desperately want to protect them from the monstrous cost of the underlying care.Perhaps at the end of this someone can explain to me why we would insist on paying Aetna 12 bucks so Aetna can pay Medco 10 bucks, so Medco can pay CVS 7 bucks, so CVS can collect a 5 dollar copay per patient, for a drug that the patient could have gone to Costco and paid 4 dollars for. I'm not sure how that is good for society. I understand it's how we've been financing this. But that's different.
