A funeral dirge for private health insurance?

Do Not Resuscitate: Why the Health Insurance Industry is Dying, and How We Must Replace It
By John Geyman, M.D.
Common Courage Press, 2008
Softcover, 251 pp.

Book review by A.R. Strobeck Jr.

Dr. John Geyman, a longtime physician and professor emeritus of family medicine at the University of Washington, has written several books about health care. In his latest work, “Do Not Resuscitate,” he provides us with a highly informative and critical analysis of the U.S. private health insurance industry. Given the current health reform debate, it could not have come at a better time.

Geyman opens with a startling premise: the current debate of how to pay for health insurance ignores “a profoundly important fact: … the health insurance industry is dying.” Private health insurance, the historical cornerstone of U.S. health care financing, is quite simply “not sustainable and has failed the public interest.”

As evidence, he cites 50 million uninsured Americans; 18,000 deaths annually from lack of insurance; and tens of millions of underinsured persons who would face severe economic hardship were they to get sick. Medical bills contribute to more than half of all personal bankruptcies in the U.S. today; about three-fourths of those had insurance at the onset of their illness.

Meanwhile the cost of insurance premiums goes up and up. If the rate of increase continues, he says, premiums will consume all of an average family’s income by 2025. Yes, you read that right: all of family income.

Geyman has a knack for presenting statistical data in plain, accessible language, a trait he may have learned as a rural doctor. But make no mistake: his data is up-to-date and relies on the latest medical literature. The book is also heavily footnoted and amply illustrated with charts and tables.

The widespread consensus that health care is broken and in urgent need of repair is reflected in daily headlines and in recent pronouncements from the Obama administration. But Geyman points to a growing conviction among health policy experts that just any kind of reform will not do, that “incremental ‘reforms’ will not resolve the inequities, access, cost and quality problems of our unaccountable market-based system.”

Before outlining the kind of reform he says is needed, he traces the historical roots and evolution of the U.S. health insurance industry from the early decades of the last century. The industry started largely through the efforts of not-for-profit groups who controlled costs by spreading the risk over large groups of people.

Since the end of World War II, however, private health insurance “has been transformed from the quasi-public partnership in its pioneering years to an enormous industry on a corporate mission of profit over service.” Whereas private health insurance “once had a mission to serve the public interest,” today “the industry places its own self-interest above the public interest” and avoids risk rather than spreading it.

Geyman explains how today’s private health insurance companies – dominated by giants like Wellpoint, United Health and Aetna – strive to maximize profit through devising new ways to cut the quantity, quality and access to care.

Private insurers understand well that a relatively small proportion of persons account for a large proportion of health care spending, so the companies find ways of excluding those who need care from coverage, e.g. by invoking pre-existing condition clauses, re-underwriting policies with higher premiums for sick enrollees, denying claims and cancelling policies outright.

Much of the private insurance workforce and administrative overhead is dedicated to denying care and avoiding the payment of medical costs. An army of claim deniers has sprung up over the past three decades: the number of administrative personnel in the private insurance industry has grown 25 times more rapidly than the number of U.S. physicians.

The bulking up of these and other administrative costs – including marketing expenses, payouts to shareholders and CEOs, and the huge paperwork burden on doctors, hospitals and patients – has resulted in the intolerable situation where more than one-third of every health care dollar in the U.S. goes to wasteful bureaucracy.

Geyman effectively debunks many of the myths private insurers tout – that people are uninsured because they prefer to be, or that the uninsured usually find care anyhow. And as for those on the right who cry “Socialism!” every time national health care is mentioned, he reminds us that Teddy Roosevelt was attacked as a socialist in 1912 for advocating a national health insurance program.

Finally, Geyman describes the type of national health insurance program that he would support – single payer – similar in most aspects to that found in Canada. He believes that the transition from a for-profit system run by corporate stakeholders to a not-for-profit system “will eliminate much of the profiteering that goes on today.”

The new system will spread risk among the entire U.S. population. Care will be publicly funded, but privately delivered. People will go to the doctor and hospital of their choice. By eliminating the fragmentation and waste of our multi-payer system, the single-payer system will yield administrative cost savings – estimated at $350 billion annually – sufficient to provide comprehensive and quality care to everyone and to eliminate all co-pays and deductibles.

Geyman’s book is compelling. It’s also a must-read for anyone concerned about the future of health care in the United States.

A.R. Strobeck Jr. worked for many years in health care administration. He resides in Chicago.