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October 04, 2004
More insurance
I've been thinking a bit more about insurance companies. It isn’t that I’ve had a change of mind, just wanted to flesh out my thinking a bit...
The easiest way to cut healthcare costs would be to limit insurance company profit to X%/dollar spent on each patient. The government would then (every 5 years or so) sub-contract Medicare costs to whichever insurance company had the second-lowest 10 year costs/patient.
This would give insurance companies incentive to spend as much as possible (to maximize profit) and also as little as possible (to get employers/government contracts. The resulting tension should allow for a very well run system. Unless I am missing something...
Terminus has Sen. Kerry's proposal...
Posted by Andrew at October 4, 2004 07:27 PM
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Comments
I hate to shoot you down because it sounds common sensical, but history shows that most price/profit controls like this fail as the companies in question find ways to worm around them.
Which is why I personally believe that forcing them to compete with each other is better than trying to regulate their profits directly.
Posted by: Dean Esmay at October 4, 2004 07:29 PM
I will (belatedly) add that the plan has no incentives for doctors to keep costs down--Just like it is now, they will be fighting against the insurance company's attempts to cap their income.
And there is no incentive for the patient to try to control costs. An un-needed procedure or trip to the doctor costs them nothing.
Think HSA's...
Posted by: John Weidner at October 9, 2004 08:28 AM