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When History Really Is Not Applicable or Relevant

When History Really Is Not Applicable or Relevant We wish to respond to the Commentary “A 300-Year-Old Solution to the Health Care Crisis,”1 in which the authors present an interesting analogy between fire insurance in London in the late 1600s and today's health care system in the United States, particularly between the incentives for insurers in both cases. The Commentary is thought provoking but the analogy and arguments fail to provide any fresh insights into how we might solve the current health care crisis. The analogy fails in 2 critical aspects. First, the incentives stated (reduced risk exposure and cost control and increased profits) for prevention and for effective and efficient fire fighting that property/casualty insurers had in London are absent for US private health insurers. This is because private health insurance companies and insurers can reduce their exposure to risk, control costs, and increase profits by other means such as “cherry picking,” denying claims (as the authors note), or by reducing reimbursements. Second, a medical emergency (eg, myocardial infarction or stroke) does not lead to another in the same manner as one house on fire can burn down the neighboring house. In cases where such an event can happen (ie, epidemic, natural disasters), governments are acceptably better equipped to deal with it than independent private insurers. Furthermore, while the authors argue for an increased role for private insurers in disease prevention and cost-effective treatments, the analogy and examples they cite seem to point to a greater role for government intervention in the health care system. The example that authors cite for designing economic incentives based on evidence-based care is that of the Centers for Medicare and Medicaid Services,2 which potentially makes the case that government may be the most effective instrument to provide incentives for insurers to work toward their collective interest as well as the interest of the society as a whole. While the “greater good” is certainly an important goal for governments, it typically has not, and should not be, a goal for private insurers in a free-enterprise system. An effective way to make “greater good” a goal for private insurers is by setting economic incentives through regulations, which could, for example, encourage insurers to minimize cherry picking and random denial of claims. We agree that the promotion of evidence-based preventive care could clearly reduce populationwide risks; the question is, in the absence of government regulation and oversight, what is the incentive for private insurers to do so? Correspondence: Dr S. Misra, Division of General Internal Medicine and Public Health, Vanderbilt University Medical Center, Ste 4, Medical Center East, Vanderbilt University Medical Center, Nashville, TN 37221 (Sumathi.misra@vanderbilt.edu). References 1. Diamond GAKaul SBoden WE A 300-year-old solution to the health care crisis. Arch Intern Med 2009;169 (11) 1019- 1021PubMedGoogle ScholarCrossref 2. Brush JE JrKrumholz HMWright JS et al. American College of Cardiology Work Group on Pay for Performance (A Joint Working Group of the ACC Quality Strategic Direction Committee and the ACC Advocacy Committee), American College of Cardiology 2006 principles to guide physician pay for-performance programs. J Am Coll Cardiol 2006;48 (12) 2603- 2609PubMedGoogle ScholarCrossref http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Archives of Internal Medicine American Medical Association

When History Really Is Not Applicable or Relevant

Misra, Amit; Misra, Sumi
Archives of Internal Medicine , Volume 169 (19) – Oct 26, 2009
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When History Really Is Not Applicable or Relevant

Abstract

We wish to respond to the Commentary “A 300-Year-Old Solution to the Health Care Crisis,”1 in which the authors present an interesting analogy between fire insurance in London in the late 1600s and today's health care system in the United States, particularly between the incentives for insurers in both cases. The Commentary is thought provoking but the analogy and arguments fail to provide any fresh insights into how we might solve the current health care crisis. The analogy...
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References (2)

Publisher
American Medical Association
Copyright
Copyright © 2009 American Medical Association. All Rights Reserved.
ISSN
0003-9926
eISSN
1538-3679
DOI
10.1001/archinternmed.2009.364
Publisher site
See Article on Publisher Site

Abstract

We wish to respond to the Commentary “A 300-Year-Old Solution to the Health Care Crisis,”1 in which the authors present an interesting analogy between fire insurance in London in the late 1600s and today's health care system in the United States, particularly between the incentives for insurers in both cases. The Commentary is thought provoking but the analogy and arguments fail to provide any fresh insights into how we might solve the current health care crisis. The analogy fails in 2 critical aspects. First, the incentives stated (reduced risk exposure and cost control and increased profits) for prevention and for effective and efficient fire fighting that property/casualty insurers had in London are absent for US private health insurers. This is because private health insurance companies and insurers can reduce their exposure to risk, control costs, and increase profits by other means such as “cherry picking,” denying claims (as the authors note), or by reducing reimbursements. Second, a medical emergency (eg, myocardial infarction or stroke) does not lead to another in the same manner as one house on fire can burn down the neighboring house. In cases where such an event can happen (ie, epidemic, natural disasters), governments are acceptably better equipped to deal with it than independent private insurers. Furthermore, while the authors argue for an increased role for private insurers in disease prevention and cost-effective treatments, the analogy and examples they cite seem to point to a greater role for government intervention in the health care system. The example that authors cite for designing economic incentives based on evidence-based care is that of the Centers for Medicare and Medicaid Services,2 which potentially makes the case that government may be the most effective instrument to provide incentives for insurers to work toward their collective interest as well as the interest of the society as a whole. While the “greater good” is certainly an important goal for governments, it typically has not, and should not be, a goal for private insurers in a free-enterprise system. An effective way to make “greater good” a goal for private insurers is by setting economic incentives through regulations, which could, for example, encourage insurers to minimize cherry picking and random denial of claims. We agree that the promotion of evidence-based preventive care could clearly reduce populationwide risks; the question is, in the absence of government regulation and oversight, what is the incentive for private insurers to do so? Correspondence: Dr S. Misra, Division of General Internal Medicine and Public Health, Vanderbilt University Medical Center, Ste 4, Medical Center East, Vanderbilt University Medical Center, Nashville, TN 37221 (Sumathi.misra@vanderbilt.edu). References 1. Diamond GAKaul SBoden WE A 300-year-old solution to the health care crisis. Arch Intern Med 2009;169 (11) 1019- 1021PubMedGoogle ScholarCrossref 2. Brush JE JrKrumholz HMWright JS et al. American College of Cardiology Work Group on Pay for Performance (A Joint Working Group of the ACC Quality Strategic Direction Committee and the ACC Advocacy Committee), American College of Cardiology 2006 principles to guide physician pay for-performance programs. J Am Coll Cardiol 2006;48 (12) 2603- 2609PubMedGoogle ScholarCrossref

Journal

Archives of Internal Medicine – American Medical Association

Published: Oct 26, 2009

Keywords: insurance carriers,health insurance, private,incentives,evidence-based practice,health care systems,economics

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