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Post details: Blue Cross anyone?

Blue Cross anyone?

Michael Moore sure knows how to stir up the hornets' nest. But there was one aspect of his latest movie "Sicko" that I wished he had accentuated a bit more: Why is it that the insurance companies HAVE to make a profit?

Let's look at the simplified cash flow of the insurance companies. Ideally, they would take some money in the form of insurance premiums, keep a bit to pay for their administrative expenses (rents, salaries, office supplies) and the rest should be disbursed to providers of medical care. And if it turns out that there is a surplus of money flowing in, rather than reaping the profits, they should lower the premiums.

Now don't get me wrong. I believe in profits; they are the best incentive for innovation. McDonald's or Intel wouldn't function very well on a non-profit basis. What motivation would they have to deliver better chips? But insurance companies are not supposed to be the innovators. They should deliver specific money to specific doctors. As effectively as possible. The physicians should push the frontiers in this business. But pushing can be really difficult when some of the funds that were intended for doctors driving the medical innovation end up in pockets of bureaucrats driving expensive sports cars.

By letting the insurance companies turn up profit, even in situations when sick people are denied treatment, we are effectively saying this: "We, as a society, believe that it is more important for the insurance executives and major shareholders to get that new spiffy motor boat than it is for some person in the Middle of Nowhere to get adequate medical attention."

I find this implied attitude puzzling. Especially in a country that bills itself as predominantly Christian.



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