Should we limit the profits of the health insurance industry similar to the way we treat utility companies?

Question

I am writing a paper on healthcare, and that is my tentative proposal. What arguments could be made for or against this argument?
I think of this as a compromise in the debate over whether or not we should have socialized medicine. I dont think that the government should run things, they should merely guide them in a way that is most benificial to our people. I think that insurance companies are too powerful and that they have a negative influence on our healthcare system. If we limited their profit and reduced their influence, I think our healthcare industry would be able to run more effectively and at a lower cost to everyone.

What do you think?

thank you for most of these responses. they are very helpful, bu let me clarify some things:

I do not intend to directly regulate other areas of healthcare, only the insurance sector.
by limiting the profits, i am suggesting that we set a mandate regulating the percentage of the premium from the consumers that is paid directly to the healthcare providers. My intention here is to minimize the role of the insurance industry in healthcare.

Answer 1

hello ?
can you read me now ?

Answer 2

The negative effects on limiting profits are that:

1) If you limit profits to a percentage, insurance companies will drive up costs to increase profits. If I pay my employees twice the norm, now my 10% is a higher number. So to counter this you would need a massive bureaucracy to monitor all costs which could costs tax payers, IMHO, much more than health care. There's no way to use any system other than a percentage.
2) You will reduce choices because many companies will move into other fields.
3) You are not addressing the real reason health care is so high, malpractice insurance. Limit malpractice suits to actual income loss (adjusted for inflation and raises), all medical care, and $250,000 in pain and suffering and you could cut health care insurance by 25%. Health care costs so much because they have to cost in malpractice insurance.
4) Limits on profits don't take losses into account. If I can only make 10% this year but face a 10% loss next year, does the government pay me? Where is my bad weather cash?
5) Limits on profits hurts all of the stock holders like you and me and our retirement funds.
6) The CDC DID limit the cost of flu shot vaccines. The result? All of the companies fled America because the costs kept going up but the profit didn't. Two years ago we ran out of vaccines because a company from a foreign country had a contaminated batch and we didn't have the production here to deal with it. We lost jobs, profits, production, and the ability to regulate the quality. When will we learn from our mistakes?

I don't necessarily think you are wrong, I'm just presenting opposing views. There may be a way to reasonably cap profits but we need to address malpractice first. Good Luck!

Answer 3

Sir,
I concur wholeheartedly, except that I would include drug companies, HMOs and for-profit hospitals. The FDA already has to police the drug companies so to speak and, just as with electricity and water, prescription drugs are a necessity for life. The same is true for hospitals.

I believe this is a better option than the sort of socialized medicine that offers everything to anyone with a complaint. This is the case with the health insurance packages that are now about to bankrupt many big companies. The adversarial relationships between companies and "entitled" employees gave rise to the HMOs in the first place because the companies were coming off as the villains. Socialized medicine is subject to the same dynamic, except when politicians want to be the good guy they spend the taxpayers money. This lead to over-use and escalating cost for no good reason.

And, I don't buy the notion that big pharmaceutical companies need huge profits to finance their R&D. I suspect that the huge profits go to exorbitant salaries and "golden parachutes" for CEOs, board members, etc.

Answer 4

We need a UNIVERSAL HEALTH INSURANCE system....a single payer, federally funded, non-profit public corporation. Private insurance companies simply can't do the job. If they could they would have done it by now. UNIVERSAL HEALTH INSURANCE is NOT socialized medicine. The HEALTH CARE system will stay private...the only difference is that there will be a single payer. Doctors and hospitals will get paid in full and on time...something that's rare today with so many people uninsured. The main point of your paper should be to point out the difference between CARE and INSURANCE....these are two seperate entities. Government isn't going to 'run' anything...it will simply pay the bills. Medicare and medicade will be phased out along with all the other plans both government and private. Don't let folks get away with arguments about 'Canada' or England....this is the USA...we can do what they can't!

Answer 5

There are some people who simply do not understand, or will not admit, that a Universal Health Care System has nothing to do with Socialism, but a lot to do with socialized medicine. Socialized medicine merely means that society, as a whole, takes care of the sick, infirm, and health needs of their citizens. We need to take the profit out of health care. It should be a right, and not a privilege. People who get life threatening illnesses should not have to choose between paying a doctor or hospital, dying, or feeding and caring for their family. Employers should not be burdened with the responsibility of paying for health insurance for their employees. People on disablity, who fear losing their health coverage if they go back to work, if they feel able to do something easier, would be free to rejoin the workforce, once again enabling themselves to become productive members of society and adding to the tax base again, instead of being burdens on it. There are way more reasons to opt for universal care, than not to.
Think of it this way; Yes, we limit the profits on utility companies, but if you get right down to it, people can live without them. The same cannot be said for healthcare. Insurance companies have an absolute negative effect on the health care system, and they are the main ones fighting to keep people deluded about socialized medicine. Take a look at the attached article, it gives a good perspective on the situation.

Answer 6

I agree with your proposal. Guidelines should be set that are similar to Medicare and Tricare that help to protect the public from the medical community. The medical community should be protected from the public and abusive lawyers. Many of the test prescribed by doctors are defensive in nature and not really indicated by the patients condition. Doctors should be rewarded for their education and good work. When they do wrong, they should be subjected to criminal and not civil penalty. Mistakes do happen even with the best doctors. No doctor is perfect. The overall record of each doctor should me monitored and the results published and available to the public. State should be the action agency with federal oversight.

Have thought about this over time and concluded that most of the doctors are good and most of the lawyers are not. The insurance companies are a large part of the problem and should be eliminated or strongly regulated.

Answer 7

Let me get this straight. You want to take away competition and reduce profit? That same profit that is used today to invest in new technolgy, training, and state of the art equipment? Sure, they could lower costs. They could spend less time with each patient (more patients per hour would improve profit), not spend on new equipment (hey, why invest in something new when the old one works - even if it doesn't see that cancerous tumor as easily as new technology might). Hope you don't mind checking out of the hospital a couple of days after surgery (that bed means money, and more money can be made off patients that still need surgery rather than the one that already had it). Regulation is counter to the free market system we have developed. Take the perspective of ANY industry that is regulated and see whether it was better or worse when under unregulated conditions. Samples - telephone (hope you liked basic black), cable television (what a change when competition is allowed - the prices were better when it was unregulated), or transporation (think airplanes). Regulated industries are bad, bad, bad.

Answer 8

Sounds like a good first step. We need nationalized healthcare. Those who seem to think government involvement in healthcare will lead to insufferable waits and red tape should look at the things the Fed does well: for instance, Social Security checks come on time. The FBI is (generally) well run and efficient. Our armed forces are the best trained and best equipped in the world.

And we are the only major nation on earth with no national health plan.

Only those with a vested interest, such as income derived from the medical or medical insurance scams.... I mean, businesses, are against national health care.

Answer 9

Why stop there? Set the salaries for doctors, dentists, nurses and other health care professionals. Set the rates for a hospital stay or doctors office visit. Come on, we need more government intervention in the private sector.

Socialism, a failed system yet to be tried in the US. Democrats just love the concept. Uniform cradle to grave poverty for all except the politically privileged. Maybe we can get some consultants from the old Soviet Union to assist us.

As someone who is entitled to use government health care (I'm retired Army) and doesn't, I think those people who believe the government can run a health care system effectively are delusional. The VA and the military system are marginally effective at best. I don't want a trip to the doctors office to become the equivalent to a trip to the DMV. On the bright side, I only visit the DMV every 4 years or so. To compare the governments ability to deliver a check on time to administering a health care system is asinine.

Edit for diana1b:

Your assertion is the ultimate in absurdity. Socialized medicine is one more step toward socialism and saying it is not doesn't change the fact.

Answer 10

This country is financed in large part by the insurance industry. We buy insurance to protect our assets. Our premiums are invested into the economy which creates jobs. This country needs more young people like you to battle the insurance companies, maybe even from the inside making a difference in the mindset. It is part of the ongoing struggle between labor and management. Remember, obesity is having a PROFOUND effect on health care costs. Also, group insurance has been an enabler for people to take poor care of their bodies. Be part of the solution. America was founded on capitalism, not socialism. We don't have the interest in being enablers.

Answer 11

If you limit the industry's profit, you will limit the amount of money invested in the industry. Do that to a sufficient degree, and you will cripple the industry. All of a sudden, you will not be able to get health insurance - at all. And that would lead to a financial crisis in the health care industry. If there's no money to be made, the student doctors will switch their major to something else.

Would you care to risk a drive across town, or even a little work in your own yard, knowing that a scratch could potentially lead to lockjaw, tetanus, septicemia, gangrene, and death? Would you rather revert to health care that is practiced by the town barber, as once was the case? (Go look up how the barber pole got its stripes, if you doubt me).

Health care in the US may have its problems, but starving it to death won't help it. I suggest two things: take a course or three in economics when you get to college, and change your tentative proposal.