Socialised coda
Social solidarity versus individual responsibility is I think the greatest difference in mindset between here and home. It's interesting that our chairman raised this with my when I was preparing my application to come here. Arguments about which is more useful strikes me as a rather unhelpful bit of theological wrangling.
At the international symposium in November, the Dutch delegates (who perhaps unfairly I always think of as Pim Fortuyn's lot) were by far the most rightwing - insofar as that means anything anymore - of the non-American governments and yet they stressed the centrality of strengthening social solidarity - particularly trangenerational social solidarity - being an aim of any health insurance system. in other words the insurance system was a pooling of societal risk where the young and healthy paid for the old and sick on the expectation that when they grew old and got sick their children's generation would pay for them. Thus premiums were related not to individual risk but ability to pay. A quite different notion of insurance to, say, motoring insurance - or private health insurance in the US or UK where premiums reflect risk.
Last week in Chicago I had the privilege of meeting the CEO of a hospital reinsurance system an he said somethign aout thie which was quite interesting. Simply put his view was that the publicly quoted insurers were so fixated with short term gains and losses that they were no longer effectively pooling risk, but seeking to avoid it entirely. Is it really realistic to guarantee any insurance scheme will be in profit every quarter? I'm not qualified to know (Bruce - if you read this could you comment!) - but it may explain some of the cost-shifting to patients that is going on through the Health Saving Plan/Consumer Directed insurance schemes.
At the international symposium in November, the Dutch delegates (who perhaps unfairly I always think of as Pim Fortuyn's lot) were by far the most rightwing - insofar as that means anything anymore - of the non-American governments and yet they stressed the centrality of strengthening social solidarity - particularly trangenerational social solidarity - being an aim of any health insurance system. in other words the insurance system was a pooling of societal risk where the young and healthy paid for the old and sick on the expectation that when they grew old and got sick their children's generation would pay for them. Thus premiums were related not to individual risk but ability to pay. A quite different notion of insurance to, say, motoring insurance - or private health insurance in the US or UK where premiums reflect risk.
Last week in Chicago I had the privilege of meeting the CEO of a hospital reinsurance system an he said somethign aout thie which was quite interesting. Simply put his view was that the publicly quoted insurers were so fixated with short term gains and losses that they were no longer effectively pooling risk, but seeking to avoid it entirely. Is it really realistic to guarantee any insurance scheme will be in profit every quarter? I'm not qualified to know (Bruce - if you read this could you comment!) - but it may explain some of the cost-shifting to patients that is going on through the Health Saving Plan/Consumer Directed insurance schemes.
posted by Exiled in mainstream at 4:45 PM
1 Comments:
The point of pooling risks is to make the claims predictible and to reduce expenses through efficiencies of large scale operations vs small scale operations. Effective pooling of risks reduces financial risks for insurers, so I can't see why insurers would stay away from effectively pooling risks. And without pooling risks there is essentially no product for the insurer to sell. (And, by the way, I think insurers can and should expect relatively consistent profits).
I think the game for health insurers in the US is to make sure that they do not get stuck with all of the expensive risks in their pools. "Cost-sharing" is one way to do this. I think the cost-shifting is being pushed more by the employers than the insurers, though. The employers have to keep costs reasonable and provide something to employees that looks like a good benefit. Once employees have a benefit it is hard to take it away, but it is slightly easier to convince them to share the responsibility of containing the costs.
As you have pointed out, it is not a good idea to get people to economize on their health coverage. Let's hope that the push by a few states towards universal coverage reveals this point in reverse.
Keep up the good work, Richard.
Bruce
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