The “Sorry” State of American Health Practice

The “Sorry” State of American Health Practice

The “Sorry” State of American Health Practice

Joe Tarantolo, M.D., Psychiatrist

"Sorry, this medical practice does not take Medicare." "Sorry, I don't take Medicaid." "Sorry, I am not in your insurance network." "Sorry, your insurance does not cover this procedure." "Sorry, your insurance does not pay for this medication." How often do Americans hear these laments! The American medical "insurance" industry is fraught. I put “insurance” in quotation marks BECAUSE  AMERICAN INSURANCE IS NOT REALLY INSURANCE. Let me explain.

If you own an automobile, you are required to have automobile insurance. This insurance does not pay for gas, oil, new brakes, and other usual maintenance. You pay out of pocket for these. And you shop around ( if you are the thrifty type) to get the best price for these products and services. Insurance pays up if you have an accident or if your auto is stolen or vandalized. The same applies with homeowner insurance. It does not pay for maintenance. It pays up for fire or floods or if the wind blows your roof off or if you are robbed or vandalized. What we have come to call medical “insurance” is actually a way to pay for any medical attention. It is an elaborate bill paying scheme.

An example:  A couple years ago I had an inguinal hernia operation. A year later I needed a second repair on the opposite side. Same surgical problem, different side, and different surgeon. Both went pretty much as they should, the second with a bit more post surgical discomfort, nothing dangerous, in the hospital a few extra hours. I was interested in why I was a bit sicker post 2nd operation so I did some inquiries. It seems the 2nd anesthesiologist gave me more drugs.  Maybe that was why I needed a few more hours to recoup. Okay, each anesthesiologist has his own way to do the procedure. Interesting, but no significant complaints on my part. The shocker was in my research I discovered that the first operation cost about $8,000, and the 2nd operation cost about $16,000. When discussing what procedure to use for the 2nd hernia ( the surgeon was well versed in both), it didn’t occur to me to ask the price. I/we chose the 2nd procedure because it gave some quite small advantage to avoid relapse, i.e. failure of the repair. And the surgeon liked the 2nd procedure a bit more. The point I’m making here is: I NEVER ASKED HOW MUCH THE PROCEDURE(S) COST! (Note: There is a "Hernia Clinic" in California that offers hernia repairs for under $4,000)

I’m a capitalist. I’m also a progressive democrat. So I believe both in competition in the market place and I also understand that regulations are necessary given human insecurity and greed. I also understand the concept of universal responsibility for the poor, the hungry, the lame, the homeless, and children. So I see “universal health care” not as a political right (health care is not mentioned in the Bill of Rights) but a moral responsibility.  Oh, I have existential and  libertarian leanings as well, i.e. I believe in personal responsibility. How does a capitalist, a social democrat, a humanist, an existentialist come up with a plan for universal access to medical care. The answer: SUBSIDIZED PERSONAL HEALTH ACCOUNTS.

The US spends roughly $10,000 per person per year for medical care, twice the amount of other 1st world countries. Even so we get poorer outcomes as indicated by significantly decreased longevity and increased infant mortality. What Richard Nixon taught us (besides never to record personal criminal conversations) is that price fixing does not work. At least it does not work in the USA. His Executive order #11615 placing a nation-wide price freeze was a gross failure. “Ranchers stopped shipping their cattle to the market, farmers drowned their chickens, and consumers emptied the shelves of supermarkets.”  (Daniel Yergin and Joseph Stanislaw explain in The Commanding Heights: The Battle for the World Economy, 1973).  


We need 329,000,000-payor medical coverage, not single-payor


Medicare, Medicaid, and most insurance plans dictate both to the doctors and the patients not only what procedures and treatments are allowed but also how much they will pay. And oh yes, let's not forget the “co-pays”. There are even terrible plans that pay nothing until you spend $2,000-3,000. How many of you are told, “No, we will not pay for services with that doctor. He is not in your network!” And, you are not rewarded for being thrifty. Dr. X in your plan may charge $1,000 for a test whereas you might be charged $500 by Dr. Y. But Dr. Y is not in your plan. And there is no incentive to challenge or negotiate with your doctor. “Do I really need that expensive MRI?" "Can’t we wait a few weeks and see if  X clears?” And we never ask “How much does it cost?” No, we only want to know if our insurance plan pays for it.

Personal health accounts would require each of us to contribute to our own account. Those who can’t afford the contribution would be subsidized by public funds. Those whose Labor Union or corporation supplies coverage would place that money into each private health plan. So no one would lose the coverage that they like. But, it would give individuals more control of their coverage. And, this is important, each of us would have more responsibility. “How much is that going to cost, Doc? Hmmm, maybe I can get that cheaper!” Those who value their health and rarely use the medical system could be rewarded: A yearly refund out of their private health account!

One last important issue. There would have to be medical insurance for catastrophic events. Middle class incomes would be able to afford medical “maintenance” out of their health account. Very few would be able to afford hundreds of thousands dollars for a protracted hospitalization. That would require insurance.

In future blogs I will spell out how our horribly dysfunctional insurance system has a particularly injurious impact on the "mentally ill."


  • Again Joe, I like this idea. It is very similar to the Republican idea on how to pay for healthcare. The only difference is that Republicans don't want to subsidize the accounts of people who don't have any money. They don't have an answer to the question: What are you going to do about people who, through no fault of their own, can't afford healthcare and don't have any money to put into a health savings account? I was talking several years ago with a young Republican. I asked him if he thought healthcare was a right. He said Yes. I then asked him about what to do about people who can't afford healthcare. His answer: "They need to get a job."

  • I like this idea Joe. There is another way in which health insurance is not insurance. Insurance is predicated on the idea that risk is randomly distributed, i.e. that the probability that an insured will get sick and need care is equal for each insured person. But that is not the case at all. If you give me information on the lifestyle, social status, education level and mental state of a group of people, I believe I could predict which would get sick way beyond chance. So it turns out that our health insurance system is really a "welfare" system in which the people with higher incomes, better social status, healthier mental states and lifestyles are paying for the people with lower incomes, poorer social status and unhealthier mental states and life styles. And I'm sure the Pareto principle is at work here, i.e. 80 percent of the healthcare expenditures are attributable to 20 percent of the insured persons.

  • Thank you for your thoughts. I'm waiting patiently for your next blog.

  • To see whether government regulation or free market forces control prices better, I once obtained two addresses within about hundred yards of each other on opposite sides the New Hampshire/Massachusetts state line and requested automobile liability insurance price quotes for each address for the same person owning and driving the same vehicle. The price was about double in Massachusetts where owners of motor vehicles were required by law to buy automobile liability insurance, but prices were regulated (theoretically) in the public interest, compared to New Hampshire where prices were not regulated but consumers were not required by law to buy motor vehicle liability insurance.

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