The SF Chron had an interview with Blue Shield of California CEO Bruce Bodaken . In general when you’re looking across the spectrum of the self-interested actors in American health care, the genuine non-profit insurers (e.g. Kaiser and a few of the Blues like BS of CA) are the ones doing the most innovative work, and are certainly — given the system that we’ve got — better than most of the shysters who are taking over our insurance system. And that doesn’t even count the Richard Scrushy’s and Fred Hassan‘s of the world who think that the health care system should be run exclusively in their personal interest. However when asked about why, if he supports universal health insurance (and by implication community rating) we need the extra cost of a private health insurance sector, Bodaken’s speechwriter let him down badly.
Q: What is your response to those who say the ultimate way to promote efficiency is to avoid wasting money on red tape and bureaucracy in the insurance system?
A: When we look at the administrative costs of a single-payer system versus the private system, we often are comparing apples and oranges. We are doing things that the government isn’t doing. The government isn’t managing chronic disease. The government isn’t providing Web sites and opportunities for people to interface with their physician as well as with their health plan. If the government can administer the program more efficiently, you would (save money).
So by that logic back in the early 1990s, before there was any chronic disease management (which by the way should make care cheaper overall and therefore should not be a cost-add) and before anyone had heard of a web site, public and private health care administrative costs should have been the same. The really has me ROTFLMAO. And yes Steffie and David’s classic article on the vast differential between private and public program administrative costs was published in the NEJM in, wait for it,1991.
Now I understand that Bruce has a tough spot to defend, and that he’s an advocate of universal insurance — but please can he come up with a better answer than this for the seminal question of why health plans need to stay around.
Hint: For just a teeny portion of that huge "surplus" BS of Ca is running as it put my rates up again this year, I can help.