Friday, October 16, 2009

Competition? What do YOU mean by competition?

Everybody in the health care debate talks about it. Everybody in the health care debate says it’s a good thing. On the face of it, you’d think both sides agree but that’s not the case. Those who favor the “public option” say that it will create competition.. Those who oppose the “public option” say that the option will generate “unfair competition.”

What is missing from the discussion is the definition of “competition.” If you think about it for a moment you have to come to the conclusion that both sides of the argument are using different definitions of the word.

To the health insurance companies, “competition” means the pursuit of more profit dollars for its shareholders than the other insurance companies. Profit dollars are based on the ratio of income to expenses, as it is with any corporate entity. More income and fewer expenses yield greater profits.

On the other side of the issue are those who favor a “public option”. Their definition of “competition” is the pursuit of the best health care for the greatest number of American citizens.

The two definitions are at odds with each other. Greater profitability comes from lower expenses. Lower expenses don’t come from providing health care; they come from weeding out those who will most likely need health care because they are an expense and it means courting the people who are less likely to need health care because they represent more premium dollars and therefore greater income. Claims denial exists as a means of protecting profits. Caps on benefits are not designed to provide superior health care. They exist as a means to protect profitability. Pre-existing conditions are not about providing health care. They are totally about profit protection.

If health insurance companies were competing with each other to provide the best health care to the greatest number of people, we wouldn’t have a debate, but that’s not the case.

Unfair competition? A public option would certainly create unfair competition for profit dollars. Profits are not the point of the public option. But, would a public option create unfair competition in providing better health care for everyone? Not at all. There is no one currently in that end of the healthcare insurance business. There is no competition. Insurance companies would be forced to change their whole priorities structure, lowering the profit priority in favor of the priority of providing healthcare service … a far less profitable proposition.

The invisible hand of the market only works if we all define "competition" the same way. So, the question is, how do you define "competition"? What's your priority? Is your priority the best, most affordable health care for the greatest number of American citizens or is your priority the greatest profitability for healthcare insurance companies at the expense of actual healthcare?

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