Healthcare Reform – Part I

I keep hearing critics cite the one thousand page length of the healthcare reform bill as evidence it is hopelessly complicated; that it will crush healthcare providers under the weight of government regulations. Quite frankly, I’m surprised it’s only a thousand pages long. I would’ve thought reforming a system as large and complicated as healthcare would take far more ink. It sounds daunting to the average citizen, but we’re talking about revamping a huge chunk of the nation’s economy. Too little (or too much) specificity in the bill is a recipe for loophole exploitation. It’s difficult to find the right balance, but I wouldn’t say a thousand pages, per se, is too much.

Rules and regulations will likely cut into the profit margins of healthcare providers. No doubt some insurance companies will lose customers to the government plan. Who knows, some businesses might even fold if they dip too far into the red.

But the critics are forgetting the powerful engine of capitalism. The great economic strength (and moral weakness) of capitalism is its ability to find and exploit opportunities for profit, wherever they may be. Profit opportunities in America are like weeds growing through cracks in a sidewalk. Where some die, others spring up. Those who claim health insurance companies will die out and become a shadow of the past are vastly underestimating the driving force behind capitalism, namely greed. And I don’t think history is on the critics’ side.

After the stock market crash of 1929, what did the government do? In 1934 it introduced the Securities and Exchange Commission (SEC) to crack down on fraud and corporate malpractice in the stock market. Did the SEC crush out our economy? No. Did corrupt companies fold under the SEC’s wrath? Yes they did (and they still do). And we should be glad for it. It has been strongly argued that a little more regulation of risky lending practices might have prevented this whole darned recession in the first place. But I digress.

If healthcare reform is passed, you can bet that lip-smackingly opportunistic business executives will find a way to cope with the new system and turn a profit. After all, the business (racket?) of insurance is inherently profitable — for every claim, there are thousands of healthy patients paying more in premiums than they receive in benefits.

Furthermore, I find it mildly ironic that those critizing reform and portending the doom of the entire health insurance market are the same people who argued that big banks and auto companies should be left to sink or swim, according to their ability to adapt. Which is it? Do we allow businesses to adapt and survive to changing circumstances or not? If so, then let the health insurance companies adapt to the new regulations, just as Wall Street adapted to the SEC.

I will speculate by positing a simpler, albeit cynical, explanation for all the doom and gloom you hear on Fox News: Health insurance companies don’t want healthcare reform to pass because it will eat into profit margins. They’re accustomed to lining their pockets with record profits while denying the most deserving customers their due care. The moment someone has a catastrophic claim, they give the patient’s medical history an enema, looking for the slightest reason to disqualify them, even irrelevant ones. Take, for example, the case of the California woman Tarsha Harris. After being diagnosed with leukemia, her insurance carrier, Blue Cross, gave her medical history the aforementioned enema and dropped her after discovering she failed to report a yeast infection several years earlier. What the HELL does a yeast infection have to do with her leukemia? Nothing, but she didn’t disclose it, and so they uncovered a fine print loophole to evade covering her much needed care (after she dutifully paid her premiums year after year). And insurance companies routinely tell doctors they won’t pay for prescribed medical procedures, in effect letting profit considerations dictate the level of patient care. You can guess who draws the shortest straw in this deal. So the scum of the healthcare system, fearing a cut in the spoils of their wicked racket, spill doom and gloom into conservative think tanks and leak pseudo statistics into the media about how awful reform will be, and that it will drive them into bankruptcy, causing more job losses. Then it goes straight to the talking heads on Fox News and into the hearts and minds of the credulous.

Plainly now: What’s more likely, that some government regulations will bankrupt the entire healthcare market and doom it to failure, or that greedy healthcare companies want you to believe doom and gloom in order to stymie the bill and keep up their record profits? I think Ockham is on my side.


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