NCPA - National Center for Policy Analysis


April 15, 2008

The health insurance model is closest to the parasitic relationship imposed by the Mafia and the like, says Dr. Jonathon Kellerman, clinical professor of pediatrics and psychology at the University of Southern California.  However, when insurance companies insinuate themselves into the system, their first step is figuring out how to increase the skim by harming the people they are allegedly protecting through reduced service.

Insurance is all about betting against negative consequences and the insurance business model is unique in that profits depend upon goods and services not being provided.  Using actuarial tables, insurers place their bets.  Sometimes property and casualty insurers have collapsed in the wake of natural disasters.  Health insurers have taken steps to avoid that level of surprise, says Kellerman:

  • Once they affix themselves to the host -- in this case dual hosts, both doctor and patient -- they systematically suck the lifeblood out of the supply chain with obstructive strategies.
  • For that reason, the consequences of any insurance-based health-care model, be it privately run, or a government entitlement, are painfully easily to predict.
  • There will be progressively draconian rationing using denial of authorization and steadily rising co-payments on the patient end; massive paperwork and other bureaucratic hurdles, and steadily diminishing fee-recovery on the doctor end.

If substantial numbers of health-care providers shook off the insurance monkey on their back, en masse, and the supply of providers was substantially increased by opening more medical schools, the result would be a more honest, cost-effective system benefiting everyone, except the insurance companies, says Kellerman.

Source: Jonathan Kellerman, "The Health Insurance Mafia," Wall Street Journal, April 14, 2008.

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