Health Insurance
So there has been a big splash recently about CIGNA denying a liver transplant to a girl who was in liver failure. I first found out about it from Jason Calacanis. Apparently CIGNA is an evil bad company that is only out to make money. They killed the girl…or did they?
First I want to say that insurance companies should make money. Anything that is worth doing is worth doing for profit. If you are providing protection against catastrophic downside risk then you should be compensated. However most health insurance is not this but rather cost pooling. Since the individuals premiums usually cannot adjust appropriately with risk healthy people subsidize the sick people. Given the amount of technology out there (and the cost of using it) health insurance companies need to draw the line somewhere. In America we are lucky enough not to have the government doing this for us right not.
Secondly it is easy to portray doctors as both completely independent unbiased caregivers who are not out to make money or conversely money grabbing heartless tycoons. Neither is true. In my experience most doctors are trying to do what they feel is best for the patient. However we cannot discount that we are all rational economic actors that want to consume the scarce resources of this planet and want the means to do so. So doctors want to be paid too. Also hospitals deserve to be paid for the care they provide. Because of the way insurance works hospitals often have teams of people to ensure that claims submitted to insurance companies have the appropriate CPT codes attached to them, even if for instance the patient had a different primary indication for a study or procedure.
Thirdly now that we know that doctors are not completely good or completely bad we must admit that healthcare is not a competitive market. Because of the tax code and regulation individuals don’t have a plethora of good choices when it comes to health insurance. Usually people get insurance through their employer who has a contract with one company. Imagine if there was not this bias. Insurance companies would have much more incentive to ensure that their patients received the best care possible since you could take your money elsewhere.
Fourth I ran across this article this morning arguing that CIGNA did not kill the girl. Makes for interesting reading.