Casino Health Care

Roulette wheelEarlier this month, Alabama Sen. Richard Shelby told FOX News' Chris Wallace that President Obama was going to ruin France's health care system. In an interview, Shelby said that Obama's health care reform ideas were the "first step in destroying the best health care system the world has ever known."

While he would seem to be talking about the US health care system, the facts don't really back him up. According to a 2000 World Health Organization (WHO) study (the most recent available), "France provides the best overall health care followed among major countries by Italy, Spain, Oman, Austria and Japan." The US "spends a higher portion of its gross domestic product than any other country but ranks 37 out of 191 countries according to its performance." So Shelby has to be talking about top-ranked France, because the US health care system is a rip-off.

In fact, the US system goes out of its way to deny care. "[Insurance companies] confuse their customers and dump the sick, all so they can satisfy their Wall Street investors," Wendell Potter, a former Cigna senior executive, testified at a hearing of the Senate Committee on Commerce, Science, and Transportation yesterday. "They look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment... dumping a small number of enrollees can have a big effect on the bottom line."

So much for our ranking as the "best health care system the world has ever known." For the record, 37th in the world doesn't qualify as "best." That ranking doesn't even make us Miss Congeniality. It just makes us "one of the health care systems the world has known." Not the best, not the worst, just unspectacular and nothing to brag about. It's not gruel, it's not filet mignon, it's just a bologna sandwich. Pretending it's the pinnacle of human endeavor doesn't really help much and no one's really buying it -- even if you throw in chips and a pickle.

According to the WHO, a big problem dragging down the ranking of health care systems is the ability of patients to pay. "The poor are treated with less respect, given less choice of service providers and offered lower-quality amenities," said WHO Director-General Dr Gro Harlem Brundtland. "In trying to buy health from their own pockets, they pay and become poorer."

Sound familiar? It should. Not only are health insurance costs hurting the poor, it's driving people into the poorhouse. According to a American Journal of Medicine report issued earlier this month, medical expenses accounted for 62.1% of all bankruptcies in 2007.

"The US health care financing system is broken, and not only for the poor and uninsured," the study reported. "Middle-class families frequently collapse under the strain of a health care system that treats physical wounds, but often inflicts fiscal ones."

That's not extremely surprising given Potter's testimony that insurance companies try to "confuse their customers and dump the sick." A system that routinely turns patients away isn't going to do all that well. Even people who are insured can find themselves uninsured -- despite a perfect payment history.

It helps to think of the American system of health care funding as gambling. Basically, you bet that your health care costs will be higher than the average person's, then you find an insurer willing to take that wager. Normally, this would be a sucker's bet on your part, since the odds dictate that you're going to be average. But since the costs of being sicker than average are so high, you need to be able to cash out if things take a turn for the worse. In other words, if you can win that bet, you need to win that bet. It's the only way you can pay for your care. And if you have nothing to bet, you can't play.

But health insurance companies aren't really comfortable being in the gambling business, despite being more than willing to take your bet. Probability is a fickle thing and the law of averages is by no mean a constant -- the odds of rolling a six on a die is one in six, but sooner or later someone's going to come along and roll a lot of sixes. This is because each event is a separate event; i.e., if the odds are one in six the first time, they're one in six the second and the third and the fourth, etc. Each time you pick up that die, you're playing a new game. A belief that the odds "owe" you a win or that they absolutely have to apply to a series of events is known as the "gambler's fallacy." The truth is that you could sit there all day and never roll a six or you could roll sixes all day long.

So Shelby's "best health care system the world has ever known" is a casino. And that casino is run by people who don't want to run a casino. They're in the business of risk and they want to be in a riskless business. If you win your bet, they'll try anything they can to welsh on it -- including kicking you out of the casino without your winnings.

Put that way, it doesn't sound like the best way to run a health care system, does it? It's not surprising that the US ranks 37th in the world, behind countries like Colombia, Chile, and Costa Rica -- while barely above Cuba's 39th. Casino capitalism isn't working any better with health care than it has on Wall Street.


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