Posts about insurance

Health-insurance stagnation

America’s health care system – or lack of one – leads to a stifling of economic innovation and mobility. Consider:

* Daniel Taghioff argues that people are more likely to risk starting new enterprises – leading to economic growth – in countries that have health safety nets.

Turning to entrepreneurialism – would you rather risk all to start a new business in a place like the US where if you lose everything you may end up, literally, with nothing, no health-care, no decent schooling for your kids and so on? Or would you choose a society where, if all else fails, the state (or strong social networks) will take care of you? . . . The list of countries with the most new businesses per capita is full of small to medium sized countries with strong social safety nets, or small Asian countries with very high levels of social cohesion.

* I know I didn’t quit my job until I had new health care insurance lined up, for without an employer, I wouldn’t have gotten any (and in the interim had to pay $24,000 per year in COBRA). How many people are sticking with jobs, unhappily and thus probably unproductively, just because of insurance handcuffs? What if they were freed? It would be better for them and their employers.

* General Motors was brought down by more than its its health insurance obligations. Nonetheless, those obligations weighed heavily on the company as they do on many other companies with long legacies and large staffs.

* I was at a WEF event yesterday at which one of the wise counsels pointed to the exacerbation of the health-care crisis that is coming with so many Americans unemployed. This, I think, will force the political issue.

Rather than spending billions to bail out and now even buy crumbling legacy industries and crooked banks, how much more value would universal health insurance give to the economy?

What if, instead of bailing out the past and filling potholes, the government assured universal broadband access? What would that do to spur innovation and entrepreneurship and begin to reform education, which, in turn, would spur innovation? What if education were reformed to emphasis innovation over test-taking? What if investment in new companies were a high priority of the tax code?

We are not thinking strategically enough about these issues in the political debate. We complain about companies thinking short-term but so does the nation.

Googley insurance

I love it when folks extend the ideas in What Would Google Do? to their own companies. Peter Cameron-Inglis imagines Googley insurance in a cooperative community:

A Chamber of Commerce could be a perfect platform for this idea. Our local Chamber of Commerce acts as a referral/partnering agency right now with Underwriters Insurance. But, what if it started a cooperative insurance offering of its own and the coverage of claims were voted on by the board based on a collective set of rules. We live in a social community and fraud would be less likely if those of us who were insured through this cooperative program were held accountable by our own business colleagues and friends. I think it could work. What do you think? Wow or Whoa?

In control of health

After I wrote the chapter in my book on Googlified insurance — thanks to the wisdom of the crowd in the comments here — I tried out the ideas on a couple of insurance executives. “You may be mad,” one of them emailed later, “but you had some good ideas.” Actually, my readers did.

I proposed a scenario in which the community of the insured gained responsibility for its own health, which would require insurance and medical companies to hand over control to them, to be fully transparent with data and information, and to provide services the community could use to improve its health and reduce its own costs.

Let me play out two implications of this with my own health situation. First, a case of cutting costs:

Because of my afib, I have to take Coumadin, a blood thinner. I am required to go to the medical group every 2-4 weeks for them to prick my finger and make sure the dosage is OK. In some people, it can be variable and volatile. Not in me. I’ve been on the same dosage with the same effect since I started. But they keep bugging me to come in. They yell at me.

When I get there, I’m offended at the waste of money. There’s a nurse who sits at a computer and judges my results and then types and types and prints out a sheet. There’s an assistant who does nothing but prick my finger and then marks up that printout. It takes them two people to do what my diabetic mother does many times a day on her own. They charge me a $20 copay each time I do this. I shudder to think what they charge the insurance company. It’s like watching a government bureaucracy in white coats.

My point: If my interests and those of my community and insurance company were aligned, I would put up a fuss and whistleblow this boondoggle. If I knew it could have an impact on my costs, I’d report this to the insurance company. If I knew my community had the power to do something about it, I’d tell my tale in a community forum and gather critical mass around imposing efficiency.

But my interests are not aligned with the insurance company’s. They are out to screw me. They think I’m out to screw them. The doctors who are screwing us think we’re all screwing them.

By the insurance company holding onto the power in this relationship, it screws itself. We have no interest in helping them. If, instead, they enabled the community and each of its members to take control of health and costs, if they acted as a true service to the community’s and its members’ needs, then they all would benefit — except perhaps for the unnecessary and now jobless assistant and the doctors who can no longer skim a profit on this scam.

Second example: I’m tussling with my cardiologist about the dosage of the drug I take that stops my fibrillation (the poetically named Rythmol). I’m on a high dosage but it’s working well (knock wood). The doctor says he wants me on a lower dosage, but the last time I tried I nearly went into afib and had too many palpitations (and I couldn’t concentrate under the pressure to get my book written). The risk of the drug is that even as it stops afib, it can cause afib. The risk of not taking the high dosage is that I can go into afib — and the more you get afib, the more afib you’re going to get. The risk, either way, is getting more cumulative bouts of afib. I’ve already had enough to make me a life-insurance risk, which is to say that the condition was not sufficiently managed early on when I got it (after 9/11/2001) and before I went on Rythmol.

[Note, as an aside, that my life insurance company is screwing me for a condition that I got from 9/11 and it’s a company run by and for military people. I wonder how they treat Iraq veterans. More on that another day.]

There’s a health decision to be made here. It’s about balancing risks. The only way to make that decision is to look at as much clinical data as is available and judge that against the comparative risks and against my personal experience. The doctor will come to a conclusion based on his education and reading and a few minutes’ consideration in my case.

But the decision is properly mine. My health should be under my control. It is ultimately my responsibility. But the system is not set up for me to make that decision. It is not set up to inform me or give me control.

At Davos last year, I sat at a table with a bunch of doctors who complained about their patients going to the internet to get what they said was misinformation. They didn’t want the internet to get in the way. They wanted to remain in control. I told them they were looking at this the wrong way. Instead, I said, they should point their patients to what they though were the best resources.

Doctors, I said, should act as curators of information for patients. That’s not what doctors do. They don’t have the means or, they’d argue, the time. Insurance companies offer some information to patients, but it’s lite and not too valuable. (Did you know you should eat less? Not smoke? Exercise? No, really?)

If insurance companies and doctors tried to empower patients and their communities to take control of their health and the costs surrounding them, if they gave us information about both the medicine and the business of it, they might succeed. Right now, no one does.

We’re in the insurance business

So we’ve essentially nationalized an insurance giant. Now that we, the people, are in the insurance business, let’s rebuild it as a real community service (as my commenters suggest).

: Now that we are in the insurance business, Rex Hammock wonders whether we can appoint Warren Buffett to the board.

Social insurance, continued

Great discussion going on in the post about social insurance below. Please keep it coming there. This is very helpful in my thinking for my book. Thanks, all.

Social insurance? Naw.

For my book, I’ve been thinking about a few industries that I think are impervious to social, Google-age, web-2.0, VRM goodness; we are bound to hate them.

Take insurance. I can’t see any way that I’m going to see insurance as a social experience. Jeremiah Owyang went looking and came up pretty much empty-handed.

The problem is, of course, that the insurance industry is built around getting us to take a sucker bet. Indeed, it’s a bet we want to lose. Nobody wants to have a legitimate reason to collect collision, fire, flood, health (apart from preventive care), or certainly life insurance. Worse than Vegas, we know that the industry stacks the odds against us; that’s the essence of its business and it is open about that. If we don’t collect, we are losers (we’ve lost our money) — and we we do collect, we’re still losers. The industry has to treat us like liars, only reluctantly giving us back the money we paid in. They make it all overcomplicated so we don’t know just how screwed we’re getting and so we make more safe (for them) bets. But we can’t afford to do without them. Insurance is our hedge.

So can you imagine what insurance 2.0 would look like? I can’t. I can imagine that we use social tools to gang up on the insurance industry, to, for example, create groups to take advantage of their rules or to decipher fine print for each other (but that’s really the antiinsurance). Could I imagine a truly cooperative, social insurance company where we insure each other — microinsurance? Frankly, no. There’s too much mistrust involved, too much suspicion of gaming and fraud; that negates the possibility of a system of social trust. Is there any point in having a MyAllstateIdeas, a la MyStarbucksIdeas, to work collaboratively with insurance companies? No. What am I going to suggest — make less and charge me less? Am I going to invent new products to give them money? (Gee, maybe I should insure my blog.)

No, I think our relationship with an insurance company is necessarily adversarial and one of mutual mistrust.

I come to the same conclusion about the law. Can you imagine the 2.0 lawyer? I can’t. They, too, are adversarial by definition.

So two questions: Could you imagine insurance 2.0?

And what other industries are similarly impervious to the possibility of our collaboration and affection?

Godspeed, Terry

One of my very favorite people I’ve met in this new world is Terry Heaton.

Terry has just told his friends on his blog that he is facing surgery for a tumor this week. And he is facing it without insurance.

He is approaching this with his characteristic bravery, openness, and grace.

Terry asks for our prayers. I suggest we also give him thoughts, candles, crossed fingers, and incantations.

: Terry also discusses his insurance situation in detail.

Here is another blogger, Rob Smith, who has to check himself into the hospital‘ for different reasons and he says he will not be covered. [via Glenn Reynolds]

Now that I’m also without benefit of benefits, I am paying $21,000 a year for family health insurance.

I was going to suggest to Terry that he put up a tip jar so his friends in the blogosphere could help insure him. (I’ll still suggest that.)

But the better gift to him and Rob and so many others would be the creation of a group insurance plan for bloggers. Perhaps that could be one of the fringes of creating a blog trade association. Anyone who know about such things have suggestions?

: In the meantime, Godspeed Terry. And Rob.

: UPDATE: Terry now has a tipjar up on his blog. Mutual of Blogosphere is open.