Comments on: Non-Profit Does Not Necessarily Mean Low Cost

By: Paul Mah

Paul Mah — Wed, 23 Sep 2009 20:19:31 +0000

The sweeping declaration that medical care is better in countries like the UK and Canada is not accurate. It uses the same false measure of health care quality used in the premium comparison shopping exercise. Cheap does not mean better just like expensive doesn’t mean bad.

The higher costs for health insurance go hand in hand with higher expectations for high quality services. The myth thrown around these days in health care discussions is the term “quality health care” … Every one gets quality health care even in rural Somalia. The problem is would you be happy with the quality health care provided in the UK and Canada. I know that Canadians have long waits (years) to be assigned a primary care provider. That means the doctor is not one chosen by the patient. Likewise the news media in the UK has reports routinely about quality care failures.

http://www.telegraph.co.uk/comment/5010722/Heads-should-roll-over-the-Staffordshire-hospital-scandal.html

http://www.telegraph.co.uk/health/healthnews/6156076/Daughter-claims-father-wrongly-placed-on-controversial-NHS-end-of-life-scheme.html

By: Joe

Joe — Tue, 18 Aug 2009 16:32:39 +0000

Great discussion. Although there is waste in the medical delivery end of the system, the administrative costs of the American health system are a major issue. A 1999 study found "fter exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada." Link.

By: Aaron

Aaron — Wed, 12 Aug 2009 17:24:56 +0000

Mike’s comment on the 28th deserves deep consideration. While it appears that the insurance company’s profit motive is under attack as a primary culprit in our current heathcare debate, I think a less visible and more costly issue is that of efficient delivery. PriceWaterHouseCoopers recently estimated that $210 billion could be saved by eliminating duplicative testing (aka defensive medicine). Another $200+ billion was attributed to billing administration. A medicare reform bill that directly addressed these issues without spending trillions more money would be much more broadly welcome.

By: Don Levit

Don Levit — Sat, 01 Aug 2009 20:55:22 +0000

Regarding the IRS’s intent of publishing that paper, your opinion is mere speculation.
What we can go on is not only the text of that paper, but texts of other papers and rulings published by the IRS.
To maintain non-profit status, an organization needs to do more than simply not providing profits to various participants.
It has to maintain its mission, which, as I pointed out, would be to differentiate itself from the insurance shenanigans you pointed out.
Don Levit

By: Reticuli

Reticuli — Sat, 01 Aug 2009 18:17:34 +0000

Hah! That IRS paper was written specifically in an attempt to get non-profit insurance to start paying taxes, which it completely failed at. It doesn’t matter how similar in other respects to profit status a non-profit is to profit-making entities. If ANY organization is not sending profits to owners (individual or shareholders) on the basis of its intent, organization, or charter then it gets non-profit status. The rest of that paper is just noise. Private for-profit insurance exists for one purpose: to deny coverage (either by rejecting applicants or rejecting care after acceptance of applicants) in order to increase profits. It is the very denial of acceptance to plans and UNREASONABLE denial or alteration of physician-prescribed care that are the cause of the current health-care crisis.

Insurance, whether it is a complicated deductible, denial of coverage, or simple co-op system, is at its most fundamental level a risk-buffer that has specific utility due to the fact that not everyone under its care will get sick at the same time. The larger the single buffer (i.e. the more people are paying into the plan), the better it works. That is why countries with mandated single-payer health care systems give far better care PER DOLLAR than the United States currently does. Systemically, the uninsured are getting care that is too late and therefore expensive, and too mismanaged, causing tax payers, the disparate and already price-gauging & care-stingy insurance industry, and the entire economy to bare the excessive costs.

By: Don Levit

Don Levit — Tue, 28 Jul 2009 17:09:17 +0000

Mike:
Excellent point about the “options” of Medicare versus private insurers.
Actually, Medicare (as well as Social Security) has completely leveraged not only the trust funds, but also the payroll taxes themselves, to pay for general governmental expenses like battleships.
No private insurer has that kind of flexibility.
Don Levit

By: Mike

Mike — Tue, 28 Jul 2009 15:29:45 +0000

Keep in mind that insurance companies (for profit or not) are not the main reason for rising costs… there needs to be control of the costs associated with the care one receives. As an example if you have a bad headache in the USA you will receive a CT scan to check for cerebral bleed (this is best practice)… but for 99% of the people the headache is caused by another reason so a CT is not needed (a wasted expense)… Another example have a backache and you go to a orthopedic specialist when the muscle strain could be resolved by your weight loss, care by a primary MD.. etc… One more point, current federal plans (i.e. Medicare) are also struggling with the rapidly rising costs… their solution is they have Congress print more money, a solution commercial insurance companies do not have..

By: Jill

Jill — Wed, 22 Jul 2009 02:28:14 +0000

I think the above commentary and comments missed the real point, which Steve C. stated very well: “on the whole, if you move beyond premiums to what the participants are actually receiving, I think you’ll find that the non-profits win hands-down.”

Most health insurance plans aren’t a problem while just paying premiums, it’s when a claim is actually made and they fail to fulfill contractual obligations to the policyholder in favor of maintaining huge PROFITS for their corporate shareholders. that’s when an efficiently run nonprofit structure should be superior–in actually paying out claims.

By: Louise

Louise — Mon, 22 Jun 2009 05:14:16 +0000

Steve,
I’m sorry about your son’s experience with his Assurant policy. But it’s important to note that short-term policies are nothing at all like standard health insurance plans. They’re typically designed to only cover large claims; most have no coverage for doctor visits or prescriptions (or anything at all before the deductible). They also are less expensive and have much more lenient underwriting than regular individual health insurance plans. Short term policies are popular with people who are between jobs or who need a policy to cover them until an employer group policy kicks in, for just-in-case coverage. But beyond that, they can’t really be compared with standard health insurance policies, regardless of whether the carrier is for-profit or non-profit.

By: Steve C.

Steve C. — Sat, 20 Jun 2009 22:34:50 +0000

The important difference between Kaiser and the other for-profits you mention is that with Kaiser, you actually get some coverage. My son acquired a short-term policy through Assurant which was a joke. The only benefit it provided was allowing him to see a Dr. who otherwise would not have accepted him as a patient if he had had no coverage. Other than that, they provided nothing. They would not even count his out-of-pocket toward his deductible. The only thing they deducted was $1500 from our family’s safety net.
Not-for-profit does not mean not-high-salaries, but on the whole, if you move beyond premiums to what the participants are actually receiving, I think you’ll find that the non-profits win hands-down.
Steve C.