Heath care financing

I got a bit worked up over on Facebook over the post of this picture, posted by someone with the organization name "Americans Against the Tea Party", but linked to by a high-school acquaintance:

My initial response was:

Buy your own d*&^ birth control. What people are pushing for isn't reproductive rights; what they want is to take money out of other people's pockets to pay for their sex life. Pay for it youself [sic, unfortunately]!!"

To that, the usual high-level, high-culture liberal argumentation began: I was asked, literally, and I do mean literally, whether I knew what an org-sm was, then accused of wanting to put women in prison for menstruating. That was actually the answer I got. Since this walking brain also mentioned taxes, I ignored the sexism of her response and responded with a lengthier:

Did I say taxes?

What do you think insurance is? Everyone puts in their money, and the people who need it get it...and it was supposed to be people who NEED it--like people with chronic conditions, accidents, serious illnesses--not just people who want their bills managed by someone else.

What I really, and I mean REALLY don't get, is why people think it is more efficient and will cost less to hand all health care money to a bureaucracy--whether a private insurance agency or the government--then have that bureaucracy take their cut, paying for their salaries, offices, training, pensions, outreach/advertising, etc. instead of simply paying for the regular yearly costs--check ups, the occasional ear infection, routine preventative exams, etc., out of pocket and then leave insurance to be INSURANCE--meaning shared RISK.

There is no RISK involved when everyone gets a checkup--no one has a mega-expensive, bankruptcy-threatening annual physical (I'm perfectly willing for there to be a Medicaid-style program for the people who really can't even afford this.)

The current problems of insurance-distorted pricing--where no-one knows what the real cost of anything is, because there is so much dealing going on between insurance companies and providers--would be solved by the simple expedient of requiring there to be a single published price for any piece of health care (preferably set by the provider.) Knowing the price beforehand would allow consumers to price and quality shop on their own. A much simpler, more-efficient, and more-cost containing system than building an insurance bureaucracy to ride alongside the health care bureaucracy.

At that point I was accused of wanting to run away with newt [sic] to the moon (this was, I believe intended to be sexually suggestive) where we wouldn't have to pay for anyone else's anything.

Keeping a relatively level head, my response was:

It's a waste of money to pay insurance for routine health care (or dental care.) It's much more efficient to stream-line it and pay the provider directly. The indirect route just lets an intermediary take their cut. What is the point or the benefit of that? If someone truly can't afford it, that's one thing. Yes, let's help them. But for people who pay for health insurance, or get it as part of their pay package, it's really dumb to have a first-dollar, third-party health-care payment system. Let's have insurance for things that actually are shared risk, and pay directly for the normal, routine stuff.

Since I'm two time zones to the left of this brilliant debater, they may have gone to bed...or they may have just shut up...or plugged their ears. Regardless, no additional "argument" has yet been posted. Still, I couldn't leave it there...First I posted this:

Is your best argument really that I'm a newt-effing rich b*(&^%?

Then sat down and went on for a while...

Here's a hypothetical, let's say you have two relatively-healthy, middle-income, middle-aged women. Neither has any major medical condition nor do they get into an accident (those things would require real insurance, not first-dollar health-care financing.) They simply have the usual annual costs for health care; they get mammograms, maybe birth control, they get dental check-ups twice a year, occasionally they might have a rash or a minor infection that needs a cream or Z-pack.

Now let's say that the cost of their annual health care is roughly $1,500.

Woman-A buys an insurance policy that covers the first-dollar health care. For her, she gets $1,500 in care, but she also has to pay the overhead of the financing system. She's paying for the person at the financing company who receives the bill from the provider, the person (often an expensive nurse) who checks to make sure it's a valid health-care expense, the accounting department which keeps the balance sheets and cuts the checks, the lawyers to handle lawsuits, the underwriters who write the policies, the marketing department that sell the policies, the managers who keep everything running (or crashing), and the suits who take long vacations on islands in the Caribbean. Now, according to Obamacare, insurance companies are required to spend at least 80% of their revenues on actual health care, but get to spend 20% of their revenues on all of this overhead. So for $1,500 in reimbursements to health care providers, they will actually spend $1,875 (0.80 * X = 1,500. X = 1,500 / 0.6 = 1,875,) or $375 extra on non-medical payments. Since Woman-A is paying for all of her insurance, she is paying all of this, and the extra is reflected in her nice, big premium payments.

Now, let's look at Woman-B. She pays all of the costs out of pocket, she simply hands over the $1,500 directly to her health-care providers. She's done, and she's spending $375 less than Woman-A. Her lower costs are also reflected in her, cheaper, premium payments.

Now, let's reverse the question. Let's say each only can spend $1,500 on medical expenses. For her money, Woman-A has to pay 20% of the $1,500 to the financing agency, meaning she can only get $1,200 worth of health care. Woman-B, on the other hand, gets to spend $300 more on actual health care. She could choose to spend this by going to a better doctor, getting her mammogram at a more-convenient facility, getting a DNA test for BRCA genes...or, she could just keep the savings.

Which system is preferable? A wasteful system where an intermediary gets a cut of every health-care dollar? Or a system where most every-day expenses are simply handled between the patient and the provider without extra overhead? Which system would be cheaper for the country? And, which system would be more-likely to keep costs in check? One where the actual customer/patient doesn't notice how much something costs because they're only paying for it second-hand through their financing premiums, or one where the customer/patient is the one cutting the checks?

As a final point, all of this would be true whether the health-care financing agency is government-run or privately-run. The overhead is still there, and is still unnecessary.

I guess I probably overdid it, but I'm sick of letting this stupidity go unchallenged.