Whether you are a Democrat or a Republican, if you are now or ever have been or ever will be a patient, here is how you should look at health care. You should look at it from the perspective of the private health insurance company. You’ll see. They’re not bad guys, generally speaking.
If I were a private health insurance company I would want to make as much money as possible. So, look, here’s the situation. Look at it from our perspective. If I want to start a health insurance company, I need some very big investors with solid credentials and very deep pockets. Either big corporations or maybe individuals with very deep pockets.
Let’s suppose I get going and, just for the sake of argument, get one thousand customers. Not bad. And I charge them…through their employers, because I want the employers to do a lot of the paperwork, and I want one point of contact…one thousand dollars a month. Company pays a portion; individual pays a portion. I get one thousand times one thousand or one million dollars a month, 24 million dollars a year. And let’s suppose that just ten percent of those employees get really, really sick. And it costs me a hundred thousand dollars per person for those really, really sick people. Well, I calculated for that, so, figuring I have a monthly cost for the ongoing regular health care costs and overhead and I leave a certain amount for these potential big claims, I still make maybe between 15% and 20% for these big investors. That is what they want for the large amount of capital they put at risk. So I can do this.
But what happens if I miscalculate the number of people who get really, really sick, and it turns out to be 15% rather than 10%? It literally wipes out my profit and it makes me unprofitable by some amount. It may not be much, but remember, these big guys with deep pockets are being sought by everybody for their investment. The result: they may pull out. That is a very bad situation for me, so what do I do? I raise rates and I cut out as many of those really, really sick people as I can. I say to the employer: you have a choice. I can raise your rates through the roof or you can go along with me and help the rest of the employees by allowing me to knock off at least 5% of those really, really sick people, ones that I can identify.
So why are you, the employee, getting upset with me? I am simply trying to make a living and pay off my investors and provide a valuable service to a lot of people. I do provide good health care for the ones I provide it for. You employees simply have to understand that we cannot insure people who are going to put us out of business. It is the greatest good for the greatest number. Who said that originally? Marx? I’m not sure, but anyway that is the idea. The sicker of you may have to be knocked off the list. Not always. It’s kind of a crap shoot. And, yes, we happen to be running the crap table. Someone has to. Remember, it is really for the good of those other 85% who can keep good insurance.
So what happens to you, if you are one of the really, really sick people? Well, we are not completely callous. We have some suggestions. You can, to some extent, self insure. You can try to save some money. I think that there are health savings accounts that are tax deductible. You could try to negotiate prices with independent clinics, “doc’s in the box” places. You can go to the emergency room. The emergency room is not free. You will be billed and it could be a very big hit. But they will take care of you. Later, yes, you will get some pretty big bills and you will be expected to pay them. After all, it is not free to them. They have salaries and if they are a for-profit institution, they also have investors who want a big return on the money they put at risk. The service isn’t free. There are real costs…doctors, nurses, drugs, bandages, lights, very expensive equipment that all have to be paid for.
So, we could, perhaps, say: “What do you want want from us….we’re not a public utility?” Right? I mean, we’re a private company. If we don’t serve our stockholders we go out of business and no one benefits. Our business model, unfortunately, is simply not suited to helping everyone get medical care. That’s life. We’re sorry. We do a very good job of helping take care of the people we insure….until they have a really, really bad illness or accident. Then we have to get rid of them somehow. Some of them. Sometimes we can’t, so sometimes we have to shave services for other customers.
Now, yes, there are some companies, we’ll admit, who really push the profit thing. They will fight you and your doctor on every bill. If you get with one of those companies, we sympathize with you, but frankly all health insurance companies experience some amount of fraud and we all have the same tax issues, so we all have to stick together to make sure that Congress helps us when we need some legislation. So, it isn’t that easy for us to knock the bad companies. We may be in the same boat with them on some important issue. It’s a professional deal…you understand that. That’s what trade groups are for…mutual protection. And, hey, if Congress lets us control the market in certain areas and we make more money in those areas…our investors consider that good management on our part. We managers need to make a good living too, you know.
So, look, we’d like to help. But we can’t. And, let’s be honest, shall we? A lot of you need protection and we can’t give it to you. We’re going to tell you we will do something to help provide universal coverage. But we can’t. We have to say we will and offer up some scheme any time Congress gets on us about our lack of coverage. So we have to come up with some ideas, and we do try. But, let’s face it, it’s not what we do. And, we don’t want a public option, one where a lot of people could leave us, especially if they are those people who aren’t really, really sick. I don’t know what would happen, but it can’t be good. The larger the base of healthy customers we have, the more we are protected against the really, really sick ones.
So, please understand…it is not that I don’t want you to have good health care. If you get really, really sick, and you have our insurance, I can help. That’s what we do and we’re proud of it. But if you are not my customer, I will avoid you like…no pun intended…the plague. Unfortunately, your particular situation is not my problem. There is no way that I can take on a lot of very sick people and make a living. I am not in business to cure the world. That’s someone else’s job, someone like Mother Theresa or Doctors without Borders. But in my case–I have to be honest–I am in business to make money.