Day by Day

Thursday, October 24, 2013

You want to fix health care?

Two VERY SIMPLE things that could be done to cut costs of both health insurance and the additional costs of malpractice insurance for hospitals, clinics and medical personnel (which WILL get passed onto the consumers, e.g., you and me and everyone else).

First, a simple change to malpractice lawsuits: Loser pays. Court costs, attorneys fees for both sides, filings, costs associated with juries, all of it. That will cut down nuisance suits to damned near nothing, because when personal injury lawyers can file a suit over damned near any sort of "pain and suffering" and settling is cheaper than having to pay thousands or millions to fight even the most bullshit of cases. (Remember that case of "I didn't know coffee would be hot!"? Eventually settled while on appeal.)

If the lady who didn't know that hot coffee would be hot had been told up front that she would have had to pay the legal fees for the other side if she lost (because juries can sometimes suffer attacks of common sense), do you think she would have started attorney shopping, hoping for a big payday from a corporation with deep pockets? After all, she had originally only asked for $20,000, to cover both "past and anticipated future medical expenses", and what's 20 grand to a corporation that makes almost a billion in profits every year?

Yeah, I don't think so, either.

Second, allow for insurance companies to spread out. Right now, health insurance companies are operating under a federally-applid restriction to not cross State lines. That means you can get car insurance from a company in a different State, but your health insurance MUST be offered from an insurance company in the same State as you. MUST.

That limits the available pool out of which your company must make up its payouts, and in many small States, there is no real competition. Allowing your health insurance company to widen its pool and spread out the risk allows them to lower the costs for everyone, and the instant competition will drive down prices to truly competitive levels, since every insurance company will be looking to get as many customers as they can by offering better deals, while still turning a profit for its shareholders. Which is, after all, why the shareholders invested in the company in the first place.

The math behind actuarial tables hasn't changed since the time of Hammurabi, so it will also come down to better service, lower rates and happier consumers.

And all by opening up the State borders.

Easy. Simple. "Loser Pays" means lower costs to the providers of medical services, and opening the State borders means lower costs to the consumer of medical services. We save money coming and going.


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