We Need Order, Not Chaos, In Health Care Financing

Private insurance or Medical Savings Accounts could provide the bottom dollar coverage (deductible), co-insurance and catastrophic coverage above the Medicare limits. Such a plan might resemble the following illustration.

One of the advantages of such a system is that it would require everyone to participate in the government-sponsored portion and provide some relief to the costs of private insurance. It might also reduce the number of those opting out of the present system.

When the private sector financers of health care (insurance companies and HMOs) try to control health care costs, they are usually villianized in the media and often hammered by lawsuits. Every horrible example resulting from attempts at cost containment are spread over the news with the most ominous of overtones. The image of the insurance industry is never portrayed as the institution that makes financing health care practical for most families, but more often than not the cold-hearted bullies that kick new mothers and their babies out of the hospital hours after birth.

Consumer activists have long criticized insurance companies for not being a more proactive surrogate for the policyholder patient at bill paying time. But just let them try to exercise that duty and all hell breaks loose. I believe government is better able to handle such grief.

But no new system is going to be fully effective in reducing costs unless we tackle the problem of expenses associated with litigation. The surgeons in West Virginia have a legitimate beef–malpractice insurance rates, which reflect the costs of litigation and "jackpot justice," are a travesty.

I believe there is a solution because the present conditions are not without precedent. At the turn of the century, clever lawyers were defending their corporate clients from industrial accident claims with numerous tactics. There was the principle of "assumed risk" that held that when an employee was hired, he or she could see for themselves that there were dangerous conditions and so if they got hurt, it was their own fault as they had assumed the risk of working in such a place. Then there was the co-servant rule, which held that if you were injured by a fellow worker, then by virtue of the fact that you worked with him, you should have known he was dangerous to be around and should have taken precautions. Additionally, there were delaying tactics that often prolonged the proceedings until long after the claimant was dead.

These were the conditions that gave rise to Workers Compensation to protect American workers from terrible working conditions and the misery they often caused. Now the shoe is on the other foot and we need a patients compensation system to replace the expensive and capricious process we now have.

In the final analysis, if a person is injured as a result of a medical procedure, it makes little difference to the patient whether or not it was an accident or simply the consequences of an unavoidable risk. In either instance, they need help and it should not be left to the whims of a jury or the talent of the respective lawyers to settle matters.

Today that tactic is creating chaos–what we need is order.

Reproduced from National Underwriter Life & Health/Financial Services Edition, January 27, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.