"Insurers do not compete for insured business on the basis of improving health status and lowering the long-term costs of health care," writes economist Kay Plantes.
Except, she writes (and this is the important point) where companies self-insure.
"The data shows that the self-insured employers are winning at controlling health care costs relative to the rest of us," she writes.
How? By doing precisely what those who supported health reform said must be done.
- Individual risk assessments
- Health savings accounts
- Free primary care
- Case management for the chronically ill
All these are done routinely, in the private market, on behalf of those who have an incentive to capture those savings, she writes.
So how can the rest of the market capture those savings?
Plantes recommends that insurers create statewide pools, before the Affordable Care Act mandates their creation, to which anyone can subscribe, with a simple defined benefit and competition based on this concept of value that has already worked.
I understand why health insurers would not like the single pool – they make a lot of money by having oligopoly-pricing power over small and medium-sized employers and individuals. But can anyone tell me what is wrong with this approach to disrupting the insurance business model? In a nation facing epidemic obesity and diabetes, in adults and our children no less, with costs totally out of balance with health status results relative to other developed nations, disruption is our only health care policy option.
Learning lessons from companies which self-insure is the private market's best chance of resisting a future government takeover. We know what works. The only question is what will make it happen, the private sector or the political system.
Personally I prefer the former.