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Further evidence that Health Insurance companies should not be private, for profit entities November 12, 2007

Posted by The Armchair Economist in Business, Ethics, Health Care, Medicine.
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Woodland Hills-based Health Net Inc. avoided paying $35.5 million in medical expenses by rescinding about 1,600 policies between 2000 and 2006. During that period, it paid its senior analyst in charge of cancellations more than $20,000 in bonuses based in part on her meeting or exceeding annual targets for revoking policies, documents disclosed Thursday showed.

The simple view is that corporations exist to make money for their shareholders (ie: their fiduciary duty), insurance companies make money by paying out less money than they collect in premiums, thus it would make sense that companies would try to reduce their risk by eliminating clients that need paying out… which is contrary to the whole idea of insurance. All the more galling is that these companies can collect premiums for years, but when they are called to pay out claims (ie: their customer gets sick), only then do they do a careful review of the customers application to see if the customer is ‘eligible for care’ (shouldnt this be something they figured out before they started collecting premiums?).

The question is how can we fix this conflict of interest? Perhaps requiring insurance companies to be mutual companies rather than for profit entities, so that all balances (if there are any) at the end of the year are returned to policy holders (ie: there is no ‘for profit’ motive, and money are returned to the people who paid out the premiums in the first place). Another idea might be to place the burden of ensuring accuracy of medical information on application the insurance companies responsibility, thus once they accept premiums from a customer, they are on the hook for their care as long as the patient continues to pay their premium (ie: they cannot walk away from a contract). Additionally, even IF the patient neglected to mention a preexisting condition, claim payout denials should only be restricted to those relating to the omitted condition (ie: the article discusses a woman whose insurance company who denied coverage for breast cancer surgery and chemotherapy claiming she omitted having a heart condition). Or perhaps, we can do without health insurance companies all together, or have one quasi-governmental, non profit insuring agency.. having all policies under one roof would aid in information sharing (ie: no need to verify ‘preexisting conditions’), reduce overhead (ie: $$ spent on marketing), and likely improve medical care (easy access by medical professionals to the patients past medical care).

Any thoughts on whether these solutions would work? How other solutions to this problem?

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The Privatization of the Office of Vice President June 4, 2007

Posted by The Armchair Economist in Business, Commentary, Ethics, Politics.
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Just as he pays little attention to old-fangled notions of the separation of powers, Mr. Cheney does not overly bother himself about the bright line that should exist between his last job as chief of the energy giant Halliburton and his current one on the public payroll. With the attention being paid to corporate executive compensation and questionable ethical judgment, it makes you wonder why Cheney’s actions haven’t been more carefully scrutinized.  Oh wait, to do so would be pose a danger to national security. (I’d like to see the next corporate exec who takes the stand use that line).

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Want to be part of a medical experiment ..without your consent? May 29, 2007

Posted by The Armchair Economist in Commentary, Ethics, Health Care.
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The federal government is undertaking the most ambitious set of studies ever mounted under a controversial arrangement that allows researchers to conduct some kinds of medical experiments without first getting the patients’ permission.

This research is targeted towards trauma patients who come in unconscious and where every minute counts, making it not practical to get the appropriate consent from their family. While informed consent is never a bad thing.. (just ask those folks who took part in the Tuskegee Syphilis study), perhaps there are times where consent is negotiable. Studies such as these certainly have to undergo the most rigorous of screenings for approval, but without the ability to confirm trauma protocols, how will we ever improve our treatment in the future? These experiments are testing physiologically sound concepts and aren’t as ‘experimental’ as one would think (ie: unlike the ice pick lobotomies for treatment of various mental illnesses).

Medical BraceletI guess an option is to offer some kind of ID bracelet that says ‘Only treatments proven with a prospective randomized double blind placebo controlled experiments please’.

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