"How Insurers Can Help" was the headline.
According to the 9-30-12 article, they can help reduce the cost of health care by replacing "fee for service" with "fixed budgets" that reward doctors for delivering less service.
This is what they've done at Blue Cross & Blue Shield of Massachusetts, where the results of such a scheme have been encouraging and the strategy is now spreading to other states---and even to Medicare. The New York Times article leads off:
Private insurance companies should be leading the way in the struggle to control health care costs. They know about every contact a patient has with the health care system and can see how much is wasteful or redundant. By altering the way they pay doctors and hospitals, they can potentially push providers to reduce costs, improve quality and even transform the whole culture of American medicine.
One problem. Eliminating waste and redundancy is not the same as promoting health. It's kind of like having a big gaping hole in the bottom of your ship. Instead of plugging the hole---all of the smartest people on board are busy at work---designing better pumps to constantly remove the gushing waters to keep the ship afloat.
Eliminating waste and redundancy is not the same as promoting health.
We know from many studies that a truly health-promoting diet will enable us to cut an estimated two trillion dollars a year from our health care tab in the United States. So why don't we hear the insurance industry talk about truly promoting heath? Wouldn't they make a lot more money if medical claims were suddenly slashed by 80%?
The simple answer is NO. That's because the health insurance industry is comprised of many independent companies, all of whom are competing for our business. As with any form of insurance, when risk approaches zero, the cost of insuring against that risk moves in the same direction.
So what would happen to the health insurance industry if everyone adopted an optimal diet and our nation's health care expenditures suddenly dropped from $2.8 trillion to less than one trillion---a 75% drop? Simple arithmetic tells us that within a short period of time, the size of our entire health insurance industry would shrink by 75%. You see, you don't need much insurance when the risk approaches zero. Continue reading this article...
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