Legal Commentary

The risks of health care finance

By Tom Kirkendall

A ran across a couple of particularly good articles yesterday regarding the current national debate over reform of the American health care finance system.

First, Canadian Mark Steyn does not believe that Obamacare's drift toward universal coverage will even be as effective as the underachieving Canadian model:

.  .  . Government health care turns out to be all government and no health care. Adding up the zillions of new taxes and bureaucracies and regulations it imposes on the citizenry, one might almost think that was the only point of the exercise.

That's why I believe America's belated embrace of government health care will be far more expensive and disastrous than the Euro-Canadian models. Whatever one's philosophical objection to the Canadian health system, it is, broadly, fair: Unless you are a Cabinet minister or a big-time hockey player, you'll enjoy the same equality of crappiness and universal lack of access that everybody else does.

But, even before it's up and running, Pelosi-Reid-Obamacare is an impenetrable thicket of contradictory boondoggles, shameless payoffs and arbitrary shakedowns.  .  .  .

Meanwhile, the WSJ's Anna Wilde Mathews provides this distressing analysis of the difficulties that a self-employed Phoenix businessman named James Mannett faced in tapping into catastrophic insurance coverage after being diagnosed with a particularly aggressive cancer:

In September 2005, Mr. Mannett felt a sharp pain in his abdomen. At the emergency room of Phoenix's St. Joseph's Hospital and Medical Center, a scan revealed a five-centimeter tumor on his small intestine, and three tennis-ball-size tumors in his liver. The doctor told him he likely had only two years to live.   .  .  .

Doctors removed the tumor on his small intestine and a third of his colon. He went home a week later, accompanied by his mother and a cousin, a nurse, who had come to care for him.

As Mr. Mannett recovered, the bills stacked up. Assurant (his health insurance company) wasn't making any payments, he says. Instead, the insurer demanded from Mr. Mannett the names and addresses of every doctor he'd seen for the previous five years, so it could verify that he hadn't concealed his cancer when he bought the policy. The investigation dragged on for months, until, according to Mr. Mannett, he called the insurer and warned that the next contact would be from his lawyer. Soon after, he says, Assurant paid the hospital more than $29,000, as well as several other bills.

Mannett's experience is the ugly side of the private health care insurance industry, which has a responsibility to shareholders to limit claims and maximize profits.

This dynamic is why I have always believed that a substantial governmental component -- preferably as a re-insurer on catastrophic policies provided by the private sector -- would be necessary in any well-structured health care finance system.

For all its virtues in terms of encouraging innovation and providing top-notch care, the current health care finance system simply does not deal well with the cost of catastrophic illness or injury, particularly where the cost exceeds private insurance limits.

Of course, resolving that issue necessarily involves tough choices, which is something that continues to be largely ignored in Congress during the current health care policy debate.

Full post as published by Houston's Clear Thinkers on December 30, 2009 (boomark / email).