Uncommon Sense

October 11, 2019

Something is seriously wrong with this system.

Filed under: Economics,Politics,The Law — Steve Ruis @ 10:04 am
Tags: , ,

Over at the Naked Capitalism site there is a significant post on the costs of healthcare insurance—Wolf Richter: How Employees & Employers Get Bled by Health Insurance.

It is no secret that the healthcare insurers figured out that union-negotiated healthcare insurance was a spigot to tap the wealth of the nation so as to flow into their coffers.

The unions thought that they were negotiating a “fringe benefit,” a non salary-based benefit and that this would make sense for one and all. Everyone needed access to healthcare services, so making it a fringe benefit made sense. It also allowed a larger “purchase” to be made, thereby holding down the costs.

But insurers recognized that the prices they charge were made invisible to the employees and so they used the specter of employee unrest to jack up prices wholesale. Even employers were caught off guard.

Here’s a taste of the article, check out this graphic. It covers only a 20 year span, in which healthcare “costs” increased at a substantially higher rate than, well, anything else. (Why? Because there was no one in charge?)

As a contrast to this consider the school textbook market. All states buy textbooks for their schools. Some states, like Texas and California, are so large that textbook publishers cannot lose sales to those states, so they cater, fawningly over the states with the most buying power. Imagine if there were one giant healthcare insurance customer. Imagine the buying power. Imagine the ability to oversee this entity (as there will be only one customer, with only one suite of paperwork, one set of reports, etc.). Imagine the pressure on drug manufacturers and all of the rest to make sure they get their piece of the pie.

Can’t possibly work, you say? Well it is working . . . in numerous places around the globe . . . and even right here in River City. In the form of Medicare and the Veterans Health Administration.





  1. The whole system is starting to fall apart now because of rampant profiteering by health care providers, the pharmaceutical companies, insurance companies, etc. It’s gotten way too expensive to afford. Even relatively well off companies, and certainly isn’t affordable for families whose employers don’t provide health benefits. We badly need some kind of auditing system to determine what health care services and drugs *really* cost, and price controls of some sort to get things down to a more rational level.


    Comment by grouchyfarmer — October 11, 2019 @ 3:56 pm | Reply

    • Grouchy farmer, I agree with you totally. I was born in dairy country, southern Wisconsin. Now I’m on Medicare and even that can get costly with annual premiums to be met and the part D med plans are not cheap.
      This country we most of us here live in, the US of A, could have completely free health care for ALL of us, cradle to grave, IF, we stopped all the goddamn, useless, wars of choice that can never be “won” as WW1 and WW2 were supposedly won. We could also have free education through a 4 year college degree and/or technical schooling and even properly maintained roadways, bridges, and high speed rail. We don’t have those things and will not until we take the huge profits out of there damn fool wars of choice. ‘Merikkka has not won a war since 1945. Of course we have not been in a declared war since then either. As a former US Marine, honorably discharged (Vietnam war 1970-71) I feel I can be as critical of this country as anybody else, in particular all the moronic asshats who occupy various political offices but never wore any US military uniform, let alone ever been in any war.
      Man, I got to stop these long winded ranting comments on Steves’ blog.

      Liked by 1 person

      Comment by Walter Kronkat — October 11, 2019 @ 7:55 pm | Reply

      • Yeah, but I kind of like them.

        On Fri, Oct 11, 2019 at 7:55 PM Class Warfare Blog wrote:



        Comment by Steve Ruis — October 12, 2019 @ 12:44 pm | Reply

    • I couldn’t agree more. Switzerland has a system where all health services are provided by private companies, but the government writes all of the rules. They create risk pools, limit profits, and what gets covered, then they say to the insurance companies “You in or out?” The last book I read on the topic said that 8000 Swiss companies opted into the health insurance biz. This is the way insurance used to be: small margin but a stable income, cowboys need not apply for management positions.

      On Fri, Oct 11, 2019 at 3:56 PM Class Warfare Blog wrote:


      Liked by 1 person

      Comment by Steve Ruis — October 12, 2019 @ 12:36 pm | Reply

  2. You’re right, Walter. The money we’ve spent on the conflicts we’ve been in over the last few decades is mind boggling. I’m not sure of the total amounts, but I suspect we could have fully funded college educations and health care for just about everyone in the last twenty or thirty years with the money and resources we’ve on these wars that never seem to actually accomplish anything.


    Comment by grouchyfarmer — October 11, 2019 @ 10:18 pm | Reply

  3. I did the math at one point: what I’m paying for health insurance (including what comes out of my paycheck plus what the employer pays – but what is, essentially, a part of my compensation) is roughly equal to my federal tax, state income tax, property tax, Social security tax, and Medicare tax, combined. If my federal tax gets doubled (or even tripled) in exchange for a public health care, I’ll still come out ahead.


    Comment by List of X — October 16, 2019 @ 10:29 pm | Reply

    • Yep. I don’t see how people can’t get that removing insurance company profits won’t make everything cheaper. (And with a single provider, leverage in negotiating drug prices etc. will be higher. … Of course, then politics gets injected, but so far, Medicare seems to have fared well.)

      On Wed, Oct 16, 2019 at 10:29 PM Class Warfare Blog wrote:


      Liked by 1 person

      Comment by Steve Ruis — October 18, 2019 @ 9:29 am | Reply

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