Michael Moore's movie SiCKO has promoted the health care debate to front and center. While I have not seen the movie -- and probably won't -- I firmly agree with the need to create some type of national health insurance. There are three primary reasons for this.
While I will almost always advocate for a market based economic approach to allocating resources, health care is not an area where the profit motive should dominate decision making. Simply put, the end product is, always, a patient's health. Private health insurance has a conflict of interest between the insurance company and the insured which will be resolved in favor of the insurance company, almost, all the time.
Hypothetical case in point. Insured makes a claim with the insurance company, which is a publicly traded company. Because the insurance company is publicly traded they must turn a profit and increase their profits to maintain their share price. In order to make a profit they have every incentive to either
1. Deny the insureds claim, or
2. Delay payment to increase the possibility the insured will drop his claim
There are numerous stories about an insured making a routine claim only to be inundated with paperwork, or being told the policy doesn't cover that procedure, or being told the insurance company has to look into the claim to see if the insurance company can make a payment. In any of these situations the central idea of insurance -- to provide some safety for the insured at a specific cost -- is compromised.
In addition, insurance companies will seek to minimize the amount of money they would have to pay to the insured. Again, remember the product here is the patient's health. Supposed the insured has a disease where the cure is expensive but a cheaper alternative exists. However, the cheaper alternative would moderately or seriously compromise the insureds quality of life. Because the insurance company is profit-driven, it will probably opt for the cheaper treatment that compromises the insureds quality of life.
Secondly, private health care is more expensive than public health care. Here are three charts compiled from the Organization for Economic Cooperation and Development. The figures are from 2004.
First, the US spends the least amount of public money on health care.
However, the US spends the most on health care as a percentage of GDP
and on a per capita basis.
Notice the partially inverse relationship between public expenditures and total amount spent on health care. In short, publicly available health care is cheaper.
Finally there is the issue of competitiveness. General Motors of Canada is a good example.
"The Canadian plan has been a significant advantage for investing in Canada," says GM Canada spokesman David Patterson, noting that in the United States, GM spends $1,400 per car on health benefits. Indeed, with the provinces sharing 75 percent of the cost of Canadian health care, it's no surprise that GM, Ford and Chrysler have all been shifting car production across the border at such a rate that the name "Motor City" should belong to Windsor, not Detroit. Just two years ago, GM Canada's CEO Michael Grimaldi sent a letter co-signed by Canadian Autoworkers Union president Buzz Hargrave to a Crown Commission considering reforms of Canada's 35-year-old national health program that said, "The public health care system significantly reduces total labor costs for automobile manufacturing firms, compared to their cost of equivalent private insurance services purchased by U.S.-based automakers." That letter also said it was "vitally important that the publicly funded health care system be preserved and renewed, on the existing principles of universality, accessibility, portability, comprehensiveness and public administration," and went on to call not just for preservation but for an "updated range of services." CEOs of the Canadian units of Ford and Daimler-Chrysler wrote similar encomiums endorsing the national health system.
Health care costs are killing American business. Our international competitors don't have to deal with these costs. As a result, private health care is making US business less competitive. This in turn shifts jobs, business and money, overseas, thus impacting the US economy, even more. Get the picture?
So, public health eliminates a conflict of interest that compromises individual health, is cheaper and makes the US more competitive. And we don't have a public health system because?
