Medicine is a complicated and expensive field. The USA is the number 1 country on healthcare spending, aprox. 18% of its GDP but only ranks on 64th place in the list of healthiest nations. Many aspects explain this sad situation, one of them being preventive care and health insurance.
Do insurance companies make a big enough effort to keep the insured population healthy? Does the health care system provide a clear incentive for them to do so?
Does a country need an all encompassing regulation covering healthcare or is this an issue private companies and citizens can solve on their own?
It seems that regulation should go a long way and create the right incentives to get out of the current viscous circle of ever increasing costs and diminishing health of a nation. One of the first steps could be to consider the very controversial aspect of a compulsory minimum insurance coverage. If people, especially at a young age have to contract an insurance policy and the insurance company is forced to keeping them insured for the whole life, would there be an incentive for the insurance company to promote preventive healthcare?
Well intended healthcare insurance provided by companies to their employees would have to change slightly, the companies would help the employee cover part of the cost of the insurance instead of providing the insurance itself. This would solve the big problem, that once an employee leaves a company he does not have an insurance any more.
Many people turn to insurance to cover the costs and knowing that they will keep the insured for “a lifetime” would that give insurance companies an incentive to keep those costs low. Some insurance companies already strive to to reduce costs and they have found ways to make healthcare more efficient and improve the outcomes for patients at the same time.
The Advantages for the Companies
Insurance companies cover some or all of the cost of medical treatments for their clients. Those medical costs are a major expense. Like all businesses, they want to keep their expenses as low as possible, which means that they have a strong incentive to reduce the cost of treatment. Any project that does so while also leading to better results for the patient can lead to a significant financial advantage for the insurance company.
The Advantages for the Buyers
Cheaper healthcare benefits the holders of insurance policies just as much as the insurance companies. If they are covering some of the cost of the treatments out of pocket, they will save money directly. People who purchase complete coverage may benefit from reduced premiums as the cost of care drops. Of course, they also benefit from any changes that make them healthier, especially those that do so without any increased expense or significant lifestyle changes.
What is missing?
A clear incentive for insurance companies and the insured to improve preventive care and to significantly increase the health of the US population.