A good group or private health insurance company will use about 80% of the money it receives in premium dollars to pay for the medical expenses of its policy holders. The health care debate focuses on who has to pay for our health care and on reducing the 20% that is left over. If we want to win this battle and have a country that is healthier both medically and financially, we need to focus on the 80%. If we do nothing to reduce the cost of healthcare, the cost of the insurance that pays for healthcare will continue to escalate.
I believe in universal health care. I believe that we have enough resources to ensure that basic medical care is available to everyone. I don’t believe that the other countries that provide this to their citizens are better than we are as a people. However, whether we pay for medical care through premiums or through our taxes, the cost that drives the cost needs to be addressed.
Greedy Health Insurance Companies
The idea of the big company with greedy people at the top is common theme in literature and movies. However, insurance company profits have little to do with the escalating costs of medical insurance. Even the 20% that is left over after the medical bills are paid isn’t profit. The insurance companies have other expenses. They have buildings, employees, utilities and enough other expenses to drive the typical profits down well below 10%. Do you think that reducing the cost of health insurance by ten percent or even twenty percent will solve our health care crisis?
When we have to dig too deeply into our wallets to fill our gas tanks, some of us blame the greedy gas station owner, not realizing that her hands are tied. If the cost of a barrel of oil has gone up she would have to operate as a charity in order to keep gas prices down. It is a lot harder to have empathy for a big company in a similar situation. But we need to recognize that the situation with health insurance is similar so that we can focus on the real problem.
Health Insurance Costs – the real problem
What drives the high cost of medical insurance is the cost of medical care; doctors and hospitals charge more and we use their services more frequently. I don’t know if we want to lower the salaries of our medical professionals. If we want our brightest students to consider medicine as a career, we need to make the field attractive. Paying our doctors, nurses and other medical professionals well is one of the ways we do this. On the other hand, reducing the frequency that we visit these professionals for sick-care as opposed to preventative care will reduce the overall cost of health-care and thereby reduce the cost of health insurance.
As I see it, we have to increase awareness regarding the impact of a healthy lifestyle verses an unhealthy one. We perhaps need to give incentives to people who do certain things or don’t do other things. There should be a cost-benefit analysis done to see if we should invest more money enforcing seat belt laws or OSHA regulations. Perhaps we should tax table salt. We should certainly be much more aggressive in regards to tobacco use.
Lowering Health Insurance Costs – final thoughts
Whether we pay for health insurance through our tax dollars or through our premiums, we will only have impact on the cost if we focus on the 80% instead of the 20%. We can’t reduce the cost of medical insurance if we continue to increase the frequency of our hospital stays, doctors’ visits and prescription use. If we drive to dinner each week and order steak and lobster we may wind up arguing about the who pays for the ride and the food. If we walk to dinner and have salads and have a tasty, but less expensive entree we might have to find something new to argue about.