We desperately need Healthcare Insurance Innovation. We cannot go back to socialism because our Healthcare Insurance providers failed to Innovate and meet the needs of the 21st and 22nd Century economy and workforce.
Frustration with healthcare insurance is real and it has frustrated the American public for decades. The frustration is understandable. Healthcare Insurance is expensive, byzantine, time-consuming, uncertain, and, we’ll say it again, expensive. Of all the routine chores that a household is required to maintain on an annual basis, health care is the most frustrating, and dealing with your healthcare insurance provider never fails to come at the worst time, when you or a loved one is sick or in need of surgery.
Socialism is a sub-optimal and lazy solution to solving Healthcare Innovation. Its argument to insure or cover more Americans, however, is valid. Socialist healthcare is lazy because it fails to account for the additional waste that will occur in an already bloated industry. In some socialist healthcare proposals, there are no auditing requirements for healthcare service providers. More so, socialist healthcare policies will ruin the technological ability of the entrepreneurial health services industry by eliminating merit from advance and technology-based care options.
When we cannot solve a societal problem through corporate business model innovation or Federal Government policymaking we once turned to small business and local economies for solutions. Small business is ever the breeding ground for ingenious solutions that bring people together. We have not adequately considered small businesses and local economies as a major option for solving Healthcare Insurance’s most intractable problems.
The notion of a “guild” originated for craftsman and skilled artisans as a way to eliminate fraud and forgeries from highly ornate craft markets. From the “guild” manner of organization comes modern day groups such as trade unions, professional or business associations, and yes, even secret societies, a concept that I remain heavily skeptical about! Nevertheless, guilds provided an elementary organizational structure for business operators, entrepreneurs, and craftsman that helped bring significant integrity to the economies of the high Middle Ages and beyond.
When local, small businesses cannot afford something as an individual firm, a guild, or a professional association can offer the service at a discounted rate. The collective purchasing power of groups of firms or individuals can lower the price. This type of offering occurs minimally, and in watered-down versions, in the form of business associations that might cater to industrial manufacturing or other specific industries.
Why have we not seriously considered innovations that center upon guilds as a solution to Healthcare’s challenges?
Healthcare Insurance is a game of risk. The system becomes burdened when individuals who cannot afford care overutilize care or when catastrophic loss occurs. Like all insurance, it works because many people choose to care for the few who need it. Why do socialists frame Insurance, especially Healthcare, as an abusive system? It is already, quite literally, a practical demonstration of wealth redistribution at an astonishing level. The socialists of today look at Healthcare and say, “that’s not enough distribution.”
Currently, the healthcare insurance marketplace operates as generally one marketplace in the sense that premiums across companies utilize the same set of underwriting data to draw conclusions about the price of policies. In other words, the Health Insurance premiums that we all pay are costed out by looking at the total cost to provide Healthcare to all of America’s residents.
This is wildly inefficient and penalizes those who proactively take care of themselves and their families. I argue that our current Healthcare Insurance, long-before Obama’s single marketplace, is already an extreme version of socialist pricing scheming. The result is a woefully rigid system where young, healthy American adults, many who are entrepreneurs, freelancers, or contributing independent professionals, are forced to should the burden for all of those less fortunate who maybe because of mental illness overutilize the health care system, a known and acknowledged problem by both Democrats and Republicans. We can and should provide the highest quality of care to those with long-term illness, but if the Healthcare Insurance system limits product solutions and options for everybody, it creates a system whereby those with long-term needs are pitted against those who are simply seeking to provide for their families.
If we can standardize the underwriting process, which we have the resources and technology to do, we could allow independent guilds to form that pool coverage, similar to how a Trade Association might offer Health Insurance components to their membership, but without requiring an independent legal entity or restrict the insurance policy to component parts.
For example, why can’t a group of digital freelancers, let’s say anywhere from 20 to 200, form their own independent Health Insurance policy? An underwriting professional will surely tell me that I don’t know what I’m talking about, that the risk profile of 200 young adults would “overshoot” their ability to afford a premium. Then, if disaster struck within that pool, it would become overwhelmed and fail. If the pool’s policy required some form of out-of-pocket cost, the cost would be too high and defeat the pool’s initial purpose. If the pool didn’t require an out-of-pocket cost it simply would not have enough funds left to pay its bills.
But what if the underwriting process at the exchange level, the firm that sells template policies to “pools,” could manage risk across different pools. Any insurance system will need a pot of cash to cover claims. We can keep the same insurance industry structure by simply adding a new line of business to Healthcare Insurance providers. They can sell template or automated policies, that calculate risk and premium in real-time, to separate “pools” of customers. The pool simply pays a fee to access the Exchanges’ capital when needed and will adjust their policy premium when claims are filed providing accountability to the Healthcare Insurance process.
How does this process ameliorate risk?
Because risk is total in our current Healthcare Insurance industry, we cannot price risk across sub-segments such as:
- Long-term disability.
It would be far more efficient for our Healthcare Insurance system to provide free services to pools of people who are in need such as those with long-term disability then to go through the cumbersome and administratively intensive process of having these pools of individuals be factored into the risk and pricing system, having wealth redistributed to meet their needs, then have their care be Government subsidized or paid for through Medicare. Again, another point that both Republican and Democrats agree on about our Healthcare Insurance system, the administrative cost is insane!
By eliminating administrative inefficiency at both the exchange (redistribution) level and Government, we can decrease significant cost. By separating pools of risk, we can identify groups of insureds that fall below a current standard of risk. How does this lower the total risk? Because it allows underwriters to specialize their offering to these low risk individuals. Alike, groups with long-term disability can also pool together so that insurance products can be tailored to their health and affordability needs.
Conservatives need to consider the power of small business and custom products as a real solution to the Healthcare Insurance crisis in our Country. The Conservative platform is currently lacking a genuine ideological alternative to the ascendant ‘Medicare-for-all’ plans that will now be a major policy plank for young Democrats in Congress.