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Healthcare debate still misses the mark

by | Sep 5, 2015 | Daily Life

Why are the concepts of healthcare and insurance so blurred? Here’s a quick primer on why a distinction is needed to impact meaningful change.

Iwas recently reminded that I wrote an article a couple years ago about how a major tenet of the debate is still being misunderstood. One of the arguments being made at the Court is whether people should just buy insurance when they walk into a hospital or emergency room for treatment. I’m sorry but that is not insurance. Since helping clients design smart policies and processes is part of what I do, I dug out that article, and interestingly, I didn’t need to change anything to make it relevant to today. So here it is as a reminder of why definitions in policy design matter:

As the healthcare debate has gone loud and national again (ahh weren’t the 90s great?) I am suffering from a head ailment that is progressively getting worse. No, wait it’s just a question that is bothering me. Whew.

In a past life I did some work  in the insurance industry and one of the key tenets of insurance, as I learned, was that insurance is purchased to cover the insured in the event that a covered cause of loss occurs. So, for example, when you buy homeowners insurance you are paying a monthly premium for the security of knowing that if a covered cause of loss, such as a tornado, destroys your home, you will be reimbursed for the cost of building a new home.

Medical insurance is meant to do the same thing for an insured (the patient) if they are stricken with a medical malady (unless it has been excluded for some reason at policy signing). Again this provides the security of knowing that not only will the patient be treated for the medical problem, but they won’t be financially ruined in the process. Also, like a tornado, there is no guarantee that this insurance will ever be needed. Some people do live an entire life without any medical problems while sadly others die unexpectedly. It is this fact that is the basis for how insurance rates are determined and premiums are charged to policy holders.

But then there is “healthcare” which is really so much more than insurance because it includes all care (checkups, cleanings, prescriptions, counseling, trials, wellness programs, etc) that are intended to help prevent the type of medical malady explained above. Not only is this healthcare often ongoing (sometimes for the rest of a patient’s life) but it is guaranteed to happen. If an obese person is put on a wellness program, he or she is going to have weekly costs for that care. That is guaranteed. What is not guaranteed is how long the program will be needed until the participant is no longer obese and is leading a healthy lifestyle (if ever).

This is where applying the traditional principles of insurance doesn’t work, because it is no longer about providing security against something possibly happening, rather it is providing a constant stream of money with no known end in sight. This is just one difference among many between these two concepts, but it highlights how each require different strategies, objectives and policies to make them work.

Now just to be clear, I believe firmly that fundamental changes to how individuals access healthcare, to how they take ownership of their own health outcomes, and how they will be kept out of financial hardship in the process need to happen.

But here’s a question.

If we don’t first separate “insurance” from “healthcare” and give each a clear definition that represents the reality of the situation, how can we possibly develop a plan that will ever achieve the type of healthcare we all should have?

I’m sorry, but I couldn’t hear your answer over all the yelling, flailing, finger-wagging, misdirecting, misinforming…

Feature photo credit: ZoofytheJi

Robert Westfall

Robert is a writer, behavorial researcher and decision-making consultant. He is the founder of Instinct, a firm specializing in helping organizations be more human focused and planet conscious.  You can learn more about his work at www.TheHumanInstinct.com and follow him at twitter.com/WeAreInstinct

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