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Market Meditopia : A Glimpse at American Health Care in 2005. Larry R. Churchhill. Market Meditopia. The made up name “Market Meditopia ” was used in an editorial in the Economist it criticize the US Health Care system as a market run system.
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Market Meditopia: A Glimpse at American Health Care in 2005 Larry R. Churchhill
Market Meditopia • The made up name “Market Meditopia” was used in an editorial in the Economist it criticize the US Health Care system as a market run system. • However, some politician in the US have turned it into a name that refers to something positive: the market produces the best quality health care system. • The US Health Care is the best in the world (utopian) because it is market driven.
Corporations Running Healthcare • After the demise of the 1994 Healthcare Reform, the market controlled healthcare. • The market made it difficult for small insurance companies to succeed. • By the year 2000, the healthcare market was monopolized by large manage care systems. • They provided everything from birth centers to hospice care.
Managed Risk and Profit • It is no secret that an insurance company that insures only sick people will go of business very quickly. • In fact, to make the most profit possible, the ideal situations for a health insurance company would be to insure only very healthy people. • However this is impossible simply because no one can know the future. • However, there are known risk factors and the more and better insurance companies understand these risk factors the more profits they can make.
Conflict of Interest • There appears to be an almost an obviously absurd inherent conflict of interest when we consider the purpose of insurance with the purpose of profit-making corporations. • Goal 1: On the one hand, we have an entity whose purpose is to cover the financial burden of health care treatment for people in case they become ill. • Goal 2: At the same time, this same entity, strives to cover as least as possible of the financial burden of health treatment for people, whether sick or healthy.
Conflict • There is an inverse relationship between these goals: The better we do in accomplishing Goal 1, the worse off we are with respect to Goal 2. • Objection: It might be argued that a balance could struck, so that we could possibly do some of Goal 1 and some ofGoal 2. • I agree with to objection, and I believe that if corporate greed could be controlled and regulated, then there might be some hope for such a system.
Problem with Market System • The problem with the market system is that the Goals do not have equal value for a for-profit corporation. • Instead, for most for-profit corporations Goal 2 is the primary goal and outweighs Goal 1. • Corporations have an obligation to their shareholders to maximize profits. Of course not at all costs; corporation cannot just do anything they want and they might have higher standards than simply obeying the law. • Nevertheless, profit maximization remains a corporation purpose of existence!
Insurance Companies • Given what has been argued, it follows that insurance companies will seek out to insure the healthiest portion of society, because ultimately this is the best way to maximize profits– by minimizing their risk. • 30% of the population uses 90% of the health services. • Therefore, there is an easily identifiable segment of society that insurance companies can avoid to maximize their profits.
Genetic Testing • As genetic testing improved, future risk cases for diseases could be identified, thus allowing insurance companies to prepare more sophisticated actuaries to better predict “undesirables” from a cost perspective. • The issue of confidentiality for these genetic markers becomes crucial.
Pre-existing conditions • Pre-existing condition clauses allowed insurance companies to screen out people who were genetically predisposed to certain illnesses. • These people became know as Genetically Predisposed Persons orGEPPEs.
Consequences • Rate of Increase of uninsured of 1,000,000 persons per year (1995-97).
Overall Health Insurance Coverage • For calendar year 2011: • 55.1% of the population was covered by employer-sponsored insurance • 15.2% of the population was covered by Medicare • 16.5% of the population was covered by Medicaid • 15.7% of the population was uninsured or about 50,000,000 people! US population in 2010 was 308,000,000
Uninsured Rate • Among Hispanics 30.1% • Among Blacks 19.5% • Among Asian 16.8% • Among non-Hispanic Whites 11.1% • See source: http://aspe.hhs.gov/health/reports/2012/uninsuredintheus/ib.shtml
Medicaid • In 1998 Medicaid funding for uninsured was reduced because it was given over to the states. • As a result of this shift, millions of American found themselves no longer covered and uninsured.
The Case Of the Spencer • Herbert and Jane Spencer lost all of the savings because they had illness and no insurance. • The story ran in the NY Times and won a Pulizer Prize. • The US population were scandalized that something like this could happen in the US, and it moved forward the push for Health Care Reform.
Health care Reform • Corporate capitalism has had some positive effects on health care. • Primarily its aggressive manage care engendered substantial cost reductions. • However, the overall effects of market forces on the health care system, raises serious human rights and social justice issues.
Current Situation • Patient Protection and Affordable Care Act 2010 • The purpose of this new law is to insure more people and make health care more affordable.
