Tuesday, August 18, 2009

Carpe inceptum quam minimum credula postero

This is an industry with rare consumer praise, even though consumers may want or need its services.

Although there are far more than 1000 competing firms in this market, prices do not go down across the industry, suggesting competitive pressures have failed.

It's a mature product, been around for most of our life times, yet the product has not earned more loyalty from consumers.

Consumers die every day because of the failure of this industry to safely and effectively meet consumers' needs.

It's been propped up by government through a number of different methods including market guarantees and supportive legislation.

What industry is this?

It's not the American auto industry and its supply chain, trying to reduce capacity and costs while taking government financing and benefitting from Cash for Clunkers.

It's not the banking industry and the fat cat banksters wallowing in their TARP-funded bonuses.

Give up guessing?

It's health insurance.

If health insurers don't catch a clue about their failed business model, we should do what we've done to other failed enterprises. It's a step not substantively different from preventing a massive loss of jobs and manufacturing capacity by stepping in on General Motors and Chrysler, or trying to prevent a market meltdown by salvaging what's left of the banks who are needed to fund business and provide services to citizens.

I say we rethink the public option and tell the industry it's time to quit screwing around and face up to the truth: their business model is bankrupting us, it's not delivering what we need, it's literally a threat to our health as a nation.

And then we tell them to start negotiating in good faith to deliver a public option or we're going to seize them because they have been cooking their numbers for years by dropping insureds at will off their rolls (and if you really think about it, you can think of numerous other ways they cook their books, like systematically denying claims unless forced to pay). At the end of the day, there may be a new industry with a smaller number of players who can provide coverage for all by way of economies of scale and by eliminating so many middlemen who don't add value while obstructing competition.

If it's good enough for one of our largest manufacturing industries and good enough for our banking industry, why not use the same approach with the health insurance industry?

Place no more trust in their intentions; they've proven they will not act in good faith.

Simply seize 'em.

[Graphic: Sign in MA restaurant window by Spatch via Flickr. Cross-posted to FDL's The Seminal.]

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