The Health Care Debate: Eliminate the for-profit middle man and all is solved?
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.