The Healthcare Debate (Part 2)
I’ve been spending a lot of time looking through the House Healthcare Bill and looking for things that you may not have heard about from the media. After quite a bit of research, I discovered something I think is critical. To sum up at the start, the very foundation of how the program would be administered is built in quicksand.
Medical Loss Ratio.
Medical loss ratio is basically defined as the amount of your insurance premium goes to actual medical care as opposed to how much goes to administrative costs of your insurer. A good medical loss ratio is considered anything above 75% (3/4 goes to medical care, 1/4 goes to administrative) and there are some non-profit insurance providers which have achieved a ratio of 96%.
The House and Senate bills go into great detail about how the Secretary of Health and Human Services will use medical loss ratio as a measurement of success and failure as they regulate current insurance companies, but also as the building block of the public healthcare option (the government health plan).
Sounds reasonable doesn’t it? I mean, we all looked closely at similar ratios a couple years ago when we discovered several of the largest charities in the US were using way more money to cover salaries, perks and offices than actual money going to those in need?
Here’s the problem. Medical Loss Ratio is an accounting gimmick. The math they will be using to control, regulate, and build this massive program is an “obscure statistic”(1).
James C. Robinson, a professor of economics in the School of Public Health at the University of California, Berkeley wrote an article called “Use and Abuse of Medical Loss Ratio to Measure Health Plan Performance.”(1) The subtitle of the article says it all…”This accounting tool was never intended to measure quality or efficiency.”
To add to the whole argument…and I’m not sure if Mr. Robinson will appreciate me pointing this out today…he said in the article “Juxtaposition of low medical loss ratio with for-profit status has fed the flames of HMO bashing but is completely without substance.” So…all the “big-insurance” claims by Obama and Congressional Leaders is also based on bad math.
The main point here, is that an accounting gimmick is being used as the foundation of the entire administration of this healthcare program. Haven’t we had enough accounting gimmicks in our recent history? Aren’t the very people proposing this massive expenditure the ones who have been screaming about corporations that used accounting gimmicks to pad their profits?
Do they know this is a gimmick? If they do, they’re intentionally screwing all of us in the name of ideology. If they don’t, they’re being irresponsible and screwing us.
Look. I’ve been watching crappy science and crappy math become the basis for policy for years. For my regular readers, check this article out (MIT Scientist sez Carbon Dioxide irrelavent in climate debate)… Once again, we are using emotion to make decisions, not science, not math, NOT LOGIC.
This has to stop.
Get informed or stay out of the argument.
(1) HEALTH AFFAIRS, Volume 16, Number 4
