In the fall of 2007, when the U.S. economy first seemed in peril, I began answering reader queries here on the Business Desk. I still do so occasionally, but this page has expanded to include posts from eminent economists, "far-flung correspondents," and a variety of voices that have intriguing and/or useful things to say about economics, broadly defined. Please feel encouraged to respond to any and all of them.
The Health Care Debate: Eliminate the for-profit middle man and all is solved?
City & State:
Question/Comment: When the NewsHour does segments on health care, I would love for you or any of the staff to ask the health care administrators, economists and especially the politicians why people support a health care system that requires a middle man (the health insurance industry) to profit on human suffering. This is the premise underlying our system: that the insurance industry needs to profit from the diseases and health tragedies of U.S. citizens. We are the only industrialized country that does this. I would like to see the health care debate include this question. Presently we have a disease-treatment, for-profit system. Keep asking challenging questions!
Paul Solman: The debate over a single-payer system is based on this question, isn't it? But before we vilify the insurance industry, let's face the awful truth: someone's going to have to be the "middle man" between those paying for the system and those who need its benefits. It could be a for-profit firm, a non-profit or even the government. But no one's going to be able to perform the service for free. Even the government has to buy computers, hire claims inspectors, etc., etc., just like private insurance companies. Think Medicare. Indeed, one argument against a single-payer system is that Uncle Sam will do business so inefficiently, it won't save the system a dime.
The argument against the current system, of course, is that it may be far more expensive than need be, because so many insurance companies duplicate services while weighing down health care providers with different rules, procedures and forms. Health care insurance "profits" - the difference between total costs and total expenditures - are something like 5 percent. If you think that's immoral, fine. But in terms of cost to you, me and our fellow Americans, the question is whether ridding the system of the profit-seekers is going to make it more efficient or - God forbid, but not impossible - 5 percent less efficient, in which case paying them their current profit rate is a good idea.