Sunday, July 5, 2009

Food Insurance?

I am grateful to Vicki Riba Koestler for the idea resulting in today's blog post. She wrote a letter, published in the New York Times on July 4, pointing out that, like education and food, health care is a necessity. However, rather than spending our money on health care directly, we buy health care INSURANCE, positioning (with rare exceptions) a profit-oriented company as the gatekeeper between ourselves and the desired product.

Maybe we're missing a really good bet here -- an opportunity to provide jobs for hard-working Americans, investment vehicles for would-be shareholders, and executive positions for top-flight managers who feel they deserve million dollar salaries and bonuses.

Basically, here's how food insurance would work. To get an individual policy, we'd first need to do a complete inventory, detailing all the foods we have ever consumed that might have caused an upset stomach (including that incident when we were six months old and we spit out that yukky spinach). We'd submit the application to one of three or four major loosely regulated food insurance carriers that, like all corporations, are required by law and custom to make decisions in the best interest of their shareholders. Hope would be high that we'd be accepted, despite costly premiums, because without food insurance we would no longer be permitted to enter the local supermarket. (In an emergency, we'd could drive 45 miles to the nearest public food bank and wait in line several hours while all those who showed up were assessed (triaged) for the urgency of their need. Of course, we'd be on the hook for the expenses associated with such a visit.)

Perhaps our neighbors would be luckier. The husband (or wife) might still be employed, making him (or her) eligible for food insurance for the entire family through the employer. This would be fortuitous, just in case someone had an allergic reaction to broccoli at the age of four. The premiums would eat up 28% of the net paycheck, but hey, at least the family would be covered. And the wage earner would be able to feel very patriotic, knowing that a hefty percentage of the premiums would be devoted to providing employment to industrious Americans, performing such important tasks as: planning and implementing marketing campaigns on behalf of the insurance company; lobbying Congress; and determining how much people would have to pay for their food insurance, how often they could buy free-range chicken, and whose policies would be canceled retroactively when it came to light that they forgot to state on their applications that they have an occasional craving for sushi.

Generally, the system would work pretty well. Three days before each shopping trip we would submit a list of desired foods to the insurance company, which would approve or deny each item based on its own interpretation of what we should be eating. After paying the deductible at the entrance to the grocery store, we would proceed to fill our cart and check out. The store would then send us a bill, since the insurance would cover only 80% of the actual cost of the approved items.

If Aunt Jenny, her second husband, and a gaggle of cousins decided to drop in unexpectedly, the need for food would skyrocket. Quickly we would submit a supplementary list to the insurance company, and the underwriters might be kind enough to approve 50% of what we request, claiming that our policy includes in the small print a limitation on the number of visitors we can feed during a holiday.

OK, the analogy isn't perfect (but it's instructive nevertheless). Unlike treatment for cancer or other long-term, debilitating conditions, which some people need and others don't, the food bill is fairly predictable. But over the collective lifetimes of reasonably small groups of people, healthcare is also fairly predictable. We all need it regularly throughout our lifetimes, and large expenses can be anticipated sooner or later as a function of age.

So, seriously folks, why can't we devise a system for getting medical care without wasting a large percentage of our resources on profit-oriented middlemen? (I'll provide a partial explanation next week -- stay tuned, faithful readers!)


  1. Food for thought, Mr. Woolf. (Sorry, I couldn't resist.) Your analogy made me look at HMO's in a different light, though. How did we get into this mess?

  2. "But over the collective lifetimes of reasonably small groups of people, healthcare is also fairly predictable."

    No. Not even close. This sort of thing requires predicting prices and incomes and diseases and breakthroughs decades into the future.

    The health insurance system in the US is supremely screwed up, and it is the most heavily regulated industry in the country. I think this is not a co-incidence.