Wednesday, August 12, 2009

Demonizing insurance companies

President Obama and Congress changed their strategy in the last several days. They no longer campaign for health care reform, it is now health insurance reform. (Sidebar: Obama rightfully rails at the out of control cost of Medicare and Medicaid as threats to the national economy, but sees as his priority, reforming the private health insurance market. Strange logic.)

Health insurance policies are contracts. Contracts are supposed to be enforced by governments.

Health insurance policies are, to my understanding, filed with and approved by government agencies.

Health insurance policies are subject to the political gamesmanship of state legislatures and are, therefore, politically-negotiated and approved contracts.

Health insurance companies must collect enough premium to pay the bills of those with whom it contracts (people who own the insurance policies) and the physicians, hospitals, and other providers whose services are used by those people who own insurance contracts. If they do not collect enough premium, they will go out of business. Yes, they must also cover their administrative expenses, but only at levels allowed by the laws passed by elected officials.

Health insurance is held hostage to some extent by economic forces, of course, but within the constraints allowed by the political process (in the case of health insurance, usually driven by ideological populism and the cancerous desire to be re-elected rather than pass good laws).

Since health insurance is, by this logic, already controlled by the political process, and since our tax dollars already support in part or whole, health care services for 103 million people, plus government employees, why has Obama and Congress made the insurance companies public enemy number one? I believe they should admit they have met the enemy, and the enemy stares them in the face each morning.

A health care system driven by politics, rather than economics and individual moral responsibility, will always need demons – and the insurance companies are catching it.

Governments should establish the basis of an enforceable contract, and then enforce them, not demonize them.

Monday, August 10, 2009

Venture capitalism and health care

Just a rambling thought, but wish for responses from you learned folks.

Venture capitalism is under attack from zealous Congressional and SEC pinheads who believe they can best manage individual lives and money. See the WSJ today. Why should we care?

The Bio-Pump, the world’s largest selling hear assist blood pump, was developed with high risk investment money. This little device has saved millions of lives. Its inventors, Dr. Harold Kletshcka and Edson Rafferty, created this device to save lives. Never once did they consult with insurance companies to make sure it would be a covered benefit, nor did they seek permission from the federal government to build it. On the contrary, FDC laws regarding medical devices that went into effect in 1976 impacted its progress, and a false SEC lawsuit in the early 1970s nearly drove them out of business. (See To Change the Heart of Man – www.tochangetheheartofman.com).

Now here is my question. Should venture capitalists invest only in new medical devices that they predetermine will be covered by health insurance, or that they predetermine the federal government will approve? And should new laws regulating venture capitalists require that they prove beforehand that their chances of earning a ROI are without risk, or at least low risk? And if all this happened, would it serve to advance the efficacy and value of health care or defeat it?

As you evaluate health care reform, you must, must look at the threads running through all new policies that are under consideration. The impact of further centralization of all aspects of commerce, whether directly related to health care or not, will prove deadly in the long run.