Insurers and Healthcare Reform

I don’t write a lot about healthcare here, a) because for the time being I like to focus on my primary area of understanding, campaign politics, as much as possible and b) because my preference is kind of in that middle ground where I figure I’m likely to get bashed from all sides for it. But anyway, Matt teed up an opportunity for me I can’t quite resist:

Sometimes you might want something widely provided with a government guarantee, but still want to keep private firms in business making the product. Every child needs a desk in school, but the government doesn’t need to build the desks. We want private firms in the desk-building business getting as good as they can at building desks. But insurance companies are in the business of screening people based on risk, and of finding reasons to deny people’s claims. And we don’t want them to do that.

The simplest way would be to just cut them out of the process and put the “insurance” function directly in the hands of the government. Most likely that’s not a politically feasible objective, but they could perhaps be put in competition with a public sector entity.

Competition is good, but public-private competition doesn’t strike me as all that great of an option because the government is invariably going to pull strings. Democrats will want to tilt things to the advantage of the public system, while Republicans will simultaneously tilt things towards private providers and gut the public system.

I don’t see why we can’t just manage to have both. Namely, why can’t we have a general public system that would cover everyone, exist as a single payer entity for the most part, and then have private insurance companies free to sell supplemental or further coverage? That’s not going to be popular with the insurance industry, but it strikes me as being fairly feasible, politically, in the somewhat near future and has the benefit of changing the focus of insurance from denying people’s claims and screening out risky policy holders to, ya know, selling policies above and beyond the public package. Or, in other words, to providing the most coverage possible in the most efficient manner in order to attract customers.

It also seems that we could do more or less the same thing with healthcare providers. Louisiana, I believe, has a system mixing some publicly owned, not-for-profit providers with private ones. That seems like a really good idea to me for our broader system, especially if we tailor the public providers towards primary and preventive care.