Why not problem solve health insurance?

Growing up I was fascinated by the fictional character Spock on Star Trek. His obsession with logic fascinated me, and lead me to the library where I was disappointed by the reality of how logic is taught. Nonetheless I have remained interested in the subject and with problem solving as well, so I find it weird when I come across relatively simple analysis in big areas, where logic dictates.

Like health insurance is a major issue and in the US it has been problematic to properly provide it for our citizenry for quite some time. So I sat down some years back and analyzed the problem space and came to some simple conclusions.

And I concluded that if you boil down all the debate in the US around health insurance it is just about who pays.

The way insurance is supposed to work is you insure against risk by pooling funds in advance of it.

If a person is sick then they have already incurred risk.

It's like, if you already wrecked your car then you can't exactly insure it, correct?

But what if a wealthy uncle pays for your car to be fixed anyway? Well that's not insurance, it's charity.

So it's impossible from the business side to "insure" people when you are actually giving them charity if they are already sick. But from society's perspective it's important to give them that benefit, and insurance companies are the best at delivering payment on claims as it's their business.

But they don't have to be the ones actually paying.

For instance a wealthy person can hire an insurance company to administer claims made against him, even though he is actually paying out, because he lacks the experience to process the claim.

For instance, his chauffeur might run his vehicle into the back end of someone's car. Should he hire lawyers himself and fight the case in court?

What if instead his insurance company handles it, and determines that the accident was engineered because they've seen such things many times before? And they also determine that the supposedly injured party is in the database as someone who has been in many such accidents and is merely a con artist?

How would the wealthy person know on his own without the insurance company's help? He might get lucky and figure it out. And hire attorneys who could figure it out, and properly fight the case or he could end up taken as he does not have that kind of information and why would he? For instance, he couldn't have a database of insurance claims to search on to find the name of the person who had engineered such accidents in the past!

How does all of the above relate to health insurance?

Well, what if? What if the US Government or some other government entity paid for people who aren't really insurable, but the health insurance companies administer? Just like with the wealthy person example above you get the benefits of their expertise but someone else actually pays.

Years ago I put it all together in a tweet of exactly 140 characters:

My healthcare plan: Preventive Care--everybody, Core Care--insurables, Expected Care--not easily insured, Elder Care--quality of life at end
— James Harris (@jstevh) July 27, 2009

Part of the way I use Twitter is to store ideas. And now it's easy to put them back up later by embedding the tweets, which I think is an efficient way to propagate the information.

If that tweet doesn't make sense you can read it all explained on one of my blogs:

lostincomment.blogspot.com/2009/09/my-healthcare-plan.html

I've explained in various ways since then, but I like showing how long I've had this approach out there.

I feel confident that eventually something like it will be the way health insurance will work in the US, but getting there will take some time.

Why? Because unlike the fictional Spock, who loved logic, politicians tend to love other things. As things play out in the US along a predictable path, it will take some time before people get frustrated enough with how things are done to do them better.


James Harris