Affordable Healthcare Insurance—Say What?

Politicians like to couple the adjectives “accessible” and “affordable” with the word “healthcare” when describing the goals of healthcare reform.  They say that with reform, all Americans will have health “insurance” and that it will be “affordable”.  I’d like to suggest that we eliminate the term “insurance” when talking about healthcare.

image Insurance protects us from experiencing an unexpected loss that is greater than our ability or willingness to pay.  I spend thousands of dollars a year on home owners insurance to protect me from financial catastrophe if my house is destroyed by fire or an earthquake.  I spend thousands more to insure my automobiles against theft and collision.  In both cases, I amimage pooling my money with tens or perhaps hundreds of thousands of other people to protect me from a loss that statistically only happens to a very few those who are insured.

But healthcare is a different kind of animal.  Insuring people for healthcare expenses, especially with low deductible plans that cover almost everything, simply doesn’t pencil out and especially doesn’t if we try to affix the word “affordable” to the premiums needed to support such “insurance”.  How much would my home owners insurance cost if every covered home would one day image burn to the ground?  How much would car insurance cost if everyone in the country drove a red Ferrari, and every red Ferrari got totaled?  To my perhaps simplistic way of thinking, that is the conundrum of health “insurance”.  We are asking for “affordable” premiums that will protect us from the financial burden associated with services that each and every one of us will need; services that will cost hundreds of thousands of dollars over the course of a lifetime.  In fact, I’ve read recent statistics suggesting that the average American will need $240,000 just to cover out of pocket healthcare costs not paid by Medicare between eligibility and death.  Affordable?  I don't think so.

When it comes to discussing healthcare, I think politicians need image to start using a word other than insurance, and they certainly need to get rid of “affordable” in the same sentence.  Yes, there’s plenty of room to make healthcare “less expensive”.  Technology, preventive services, disease management, and process design re-engineering can make healthcare less expensive and more accessible.  But no country can deliver affordable healthcare, insured or not, that provides everything than can be done for everyone who wants or needs it.  Healthcare reform should not be debated without a healthy dose of “tough love” on basic economics and a whole lot more detail about what we’ll really be getting.  And for goodness sake, let’s stop talking about “affordable” insurance.  Am I missing something here?  I don’t claim to be an economist.  I’m just a doctor who gets really confused when people throw around terms that don’t “add up”.

Bill Crounse, MD   Senior Director, Worldwide Health  Microsoft

Comments (6)

  1. John says:

    Kind of like flood "insurance".  It’s not a matter if if a flood prone area will flood, it is just a matter of when.  

    If you’re in the hundred year flood plain that’s one thing.  If you are in the 10 year flood plain, you have problems.

  2. hlthblog says:

    And if everyone who is insured lives in a flood plain, and a flood is guaranteed to wash away everyone’s home within their lifetime, then no one could afford flood insurance either; yet that is essentially what we are trying to offer with comprehensive health "insurance" at "affordable" premiums.

    Bill Crounse, MD

  3. Why are Market-Based Policies Better than Publicly Funded Health Care Policies?

    Market-based policies are more cost effective for the government – and therefore the taxpayers- than publicly funded healthcare. According to the Kaiser Commission on Medicaid and the Uninsured, January 2005, if every uninsured individual was covered by a government program such as Medicaid, the cost to the federal and state governments is approximately $2000 each. If, however, low-income and modest-income Americans could purchase their own health insurance by utilizing a $1000 tax credit, the federal government would save 50% of that money. With over 45 million uninsured Americans, that savings would be substantial indeed.

  4. L. Becker says:

    I agree that a word other than "insurance" would better describe a program that pays the costs of getting healthcare. Health "insurance" dates from a time when people normally covered their own basic medical expenses. The insurance was only for catastrophic situations, such as injuries from a car accident or a major diease. Now, a person can’t really get healthcare without it, even if ability to pay the cost of an office visit and blood test is there, because of cose shifting. Cost shifting is the practice of adding to the bill of someone unprotected by a negotiated health insurance agreement in order to subsidize the costs of those who cannot pay or those whose plans don’t cover costs (Medicare).

    However, removing the word "affordable" leaves universal healthcare open to amassing staggering debt. Affordable is now used in terms of costs to patients, but healthcare needs to be affordable to the government funding program and the healthcare providers as well. I think we need to keep the word so that the concept of affordability remains out there as a reminder.

    True, as things are set up right now, it is not affordable for everyone to get the optimal healthcare that they need. But there are ways to cut costs and improve care, and these need to be explored. To take just one small example, if I need to see my doctor about three conditions, I often have to make three appointments, because the doctor can’t handle them all in the one 15-minute time slot that the insurance company will pay for. So instead of one $15 copay, I must pay three of these ($45), not to mention the extra gas and time wasted commuting, plus the extra time the doctor must spend refamiliarizing herself each time with my case before we can get down to business. Simply by approving a half-hour visit to treat the multiple conditions a) saves the doctor time (1/2 hour vs. 45 minutes) b) saves me copays, gas money and time, and c) gets me better treatment because the doctor can evaluate my conditions all together, maybe finding a diagnosis that isn’t clear when treating each thing independently and on the run.

    Technology is another way if we remember that technology is supposed to make things more affordable for the end users, not just reap huge profits for the tech companies.

  5. You pose an entirely valid question Bill.  This is an on-going concern, and one that is not going to be resolved until we have better data.  What we really need to understand is the impact of the uninsured and concentrated (high) risk pools like Medicare and Medicaid on the current cost-per-person for health insurance.

    If, in fact, we have some 46,000,000 individuals who are consuming some portion of health care in America today, but we’re not routinely paying dues/premiums/deposits into the funding structure to cover that care, then we have a fairly large opportunity to spread out the overall risk much further.  

    Of those 46 million, I’m willing to bet that a statistically significant proportion are individuals who could either A) afford insurance premiums if they could get underwritten, or B) could afford to contribute some part of the cost of the insurance premium… perhaps up to the amount of the basic care they’re receiving for minor care for things like bladder infections and tetanus injections.  

    Add to that the fact that there are huge opportunities both in the public and private sector to reduce administrative costs and refine care delivery to focus on more effective evidence-based treatments.  Further, monitoring of patient outcomes on a national basis could yield additional opportunities for improvement.  

    I think it’s too soon to conclude that we can’t provide more comprehensive care to more people for an over-all reduced cost per capita.  What we need is a much deeper understanding of the matrix of inter-related root causes for the consistently increasing costs of health care, and the persistently lack luster outcomes.

  6. Amir says:

    Very interesting post and comments. I have written up many of these ideas on my site about health reform and I think anybody interest in this blog will find the information there very salient. Many of the ideas are things I am studying right now at The Wharton School as an MBA, although I combine thoughts as a practitioner in industry as well.

    Please do check it out!

    All ad profits go to fight ulcerative colitis!



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