What Value Do They Add to U.S. Healthcare?

By Donna Smith –

Most Americans I know really don’t like to get ripped off. We don’t mind paying for something that is what we thought we were paying for. We just hate the feeling of having been taken. And boy, are we being taken en masse by the private health insurance industry.

Doubt that? Then answer for me what value private health insurance brings to the U.S. healthcare system? I asked this yesterday when I was a guest on GRITtv.

Wendell Potter, insurance industry whistleblower, was also a guest on the program. But Wendell, as much as I like him and respect his efforts in recent months, continues to somehow believe that because the insurance industry is so deeply entrenched in the U.S. healthcare system and about to become even more deeply so that we will have to keep fighting to reign them in and control them. He doesn’t think we can remove them from our system.

To me, it’s like asking a con-artist to reform. It’s not going to happen. I don’t trust the private health insurance industry to do what is best for me or for my nation. I trust the private health insurance industry to do what’s best for the health insurance industry. To the extent that doing some of the right things is necessary to doing business with other profit centers in the healthcare industry, I trust the private health insurance industry to know how to work all the angles.

Private health insurance is not a health product or provider. Private health insurance is a financial product.

I was standing in line yesterday at a taxi stand in New York City and heard the classic street corner pitch person walking behind. “Buy a discounted computer from me today and a full warranty applies just like in the stores,” he said. I suppose it was the modern day version of the trench-coat watch display and the appeal of “Hey buddy, wanna buy a watch?”

I feel the same way about private health insurance. It’s sold to the nation as a tangible healthcare product but actually is a financial product with the same amount of stability as other financial products. Scary stuff. Dangerous stuff. Even misleading stuff. Ripping off millions of people without regard for the trauma caused.

So, would someone, anyone, please tell me what value the private health insurance industry brings to the U.S. healthcare system? Does private health insurance control costs? Clearly not. Does private health insurance assure better health outcomes? Clearly not. Does private health insurance prevent personal financial collapse? No.

So, let me say again that private health insurance is a financial product sold to you and sold to me to protect our health and wealth which may well do neither. That’s a defective product, in my view.

And let’s keep asking one another and our elected officials: What value does private health insurance bring to the U.S. healthcare system? And until we get a sufficient answer, keep asking. If we never do get a sufficient answer, let’s do what the rest of the civilized world already does and find a progressively financed way to provide a single standard of high quality care for all. Let’s create value where none exists.


  1. TerryFlowers on November 20, 2010 at 5:31 am

    I agree wholeheartedly with you Donna. The healthcare insurance industry consumes over 30% our the healthcare dollars that they collect. While they may report a profit of only 3 to 4% we must realize that is after all their overhead, CEO and top executive salaries, bonuses, etc are paid out. Medicare consumes only 4-5% of its revenue on overhead. The rest is paid out in healthcare benefits. That’s what we need for everyone. An enhanced and improved Medicare for All.