By Samuel Metz, MD
Many Europeans use private health insurance companies, a few of them for-profit. These Europeans enjoy better care for more people at lower cost than we do. But the European business model differs radically from that in the US. In fact, American insurance companies find the European model not only alien, but intolerable. Imagine American insurance companies playing by these European rules:
- You can set any price on your policy, but you must sell it at the same price to everyone, regardless of health.
- You must sell a policy to anyone who applies, no exceptions.
- No policy can be cancelled for any reason, not even failure to pay (the government will step in). Patients, however, can change companies without notice.
- Every policy must cover all treatable diseases. No matter what policy they purchase, patients will never risk destitution (or death) if they suffer a treatable condition.
- Your company must pay every claim from every licensed provider within 30 days. You can protest the payment, but only after you pay the bill.
- Every provider receives the same payment for the same service, regardless of patient or their insurance.
- Your records are an open book. Every dollar (or Euro) that passes through your hands is open to the public. There are no proprietary secrets.
- If you still manage to cherry pick healthier patients, the government will impose a premium to subsidize other companies with sicker patients.
With this model, European companies compete with lower prices, extra benefits, and better customer service. Isn’t that a refreshing change?
The American business model has no such rules. How do American insurance companies compete?
- They avoid sick patients. Highly paid underwriters detect potentially expensive patients before policies are offered. And the best way to avoid sick patients is with high policy prices.
- They slash benefits. Reduced benefits both discourage sick patients from buying a policy and reduce provider payments if they do.
- They pass costs to patients with increased deductibles and co-pays. Healthy patients (the ones companies want to keep) won’t notice because they don’t need health care. At least until they get sick.
- They delay or deny provider payments. If the payment process is frustrating enough, many providers simply give up trying to collect. That’s money they keep.
Profit? No difference. To succeed, both for-profit and not-for-profit companies follow the same rules. If not, your company is toast.
It is not profits but the business model that places the financial interests of our health insurance industry in opposition to the medical interests of its clients. Neither removing profits, nor enhancing competition, nor deregulation will increase health care quality or make health care more accessible.
Our American insurance business model is the source, not the solution, of our health care problems. We must run – not walk – away from letting private insurance companies determine our health care.
Samuel Metz is a Portland anesthesiologist active in health care reform. He is also a member of two organizations advocating publicly funded universal health care: Mad As Hell Doctors and Physicians for a National Health Plan. He is the local chapter representative of Health Care for All Oregon, an umbrella organization of over 50 groups working for better health care in Oregon.
Photo by Mattes under Creative Commons license.