Just recently, someone commented to me how fortunate I was to work in health care. They believed that a job in our industry must be lucrative and secure with excellent benefits – somehow untouched by the collapse of the financial industry specifically, and the economy as a whole. “You'll always have work. People will always need medical care”, was what they told me.
I was quick to point out that while health care may be necessary, it is not always funded. Hospitals in the U.S. operate in an environment where we cannot turn people away for emergent care regardless of a patient's ability to pay. Because people who lack insurance also usually lack a primary care physician they can call and see, they come to the ER. Remember when Bush told us that America had the best health care in the world and all people had to do to access it was go the ER? Well, that was his big plan for health care. Kind of like the Nike ad - “just do it” - people were just supposed to go the ER for whatever they needed. Of course, no one pays for care given to people without insurance. There is little we can do other than to write off the care as a loss.
Over the past several decades, insurance companies have been collecting higher and higher premiums from policy holders and actively working to pay out less and less in reimbursements for care given. They are for profit agencies and they are doing what our system allows them to do. But over the years, as health care sees and treats more and more people, and people expect more and more care and insurers pay less and less, we have been left with fiscal instability.
Adding to this imbalance is the current budget shortfalls of most states – the suppliers of the Medicaid programs. With states having less money available to fund their Medicaid programs, reimbursements have dropped. In some states, like Maine, the state owes hundreds of millions of dollars to hospitals over the past several years that have yet to be paid.
What makes me most concerned at the moment however, is the current state of the insurance companies. Without a funded national health care plan in place – that means actually funded, not just some numbers on paper – we are at the mercy of insurers. When they can't pay for medical care, we are all in trouble.
We have all heard about banks and financial companies and the troubles they are having, but much less discussed is the sad state of most insurance companies. Banks have been in the news for huge losses, but insurers have managed to slip by unnoticed as their losses, less impressive in size, have been as consistent over the past two years.
Check out a few stock charts on some of the largest insurers over the past 2 years. Below are charts on Cigna, Aetna, Humana and UnitedHealth.
Now, it might just be me, but I think there is a definite trend here. Notice the sharp downward turn each large company has taken over the last 2 years. That translates to less reserves on hand, bad investments, credit default swap exposure, and poor choices by management. The only reason the insurers have not been in the forefront of this disaster is because the banks have been so much more impressive in their losses. But not for long.
When the insurance companies start to fail, they will be unable to pay for health care provided for policy holders. The government will be forced to step up and fill the void. Of course, they could just try and bail them out (like they have already begun to do with AIG), but it would make much more sense at that point to just nationalize health care and be done with it. Like their larger siblings the banks, insurers will require support at unprecedented levels if they are to remain solvent - but that may not be the best plan.
What all this means for heath care workers is this: without a revenue stream to pay for care, we are all at risk until someone admits the current system is unsustainable and decides to rebuild it from the ground up, removing private insurers as the main source of reimbursement. How that should be done is another topic for another day.