The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Everyone Lives in Glass Houses

Posted by Alan on December 11, 2007


America’s health care system encourages a hunt for scapegoats. It’s expensive and bureaucratic. Some people don’t have it and those who do fear losing it. While there’s a lot that works in the current system there are also real problems with it. And those problems are challenging — just ask Governor Arnold Schwarzenegger and the Legislative Leadership who have been trying, so far in vain, to “fix” what they call California’s “broken system” for eleven months now.

Where’ there’s problems like these, Darth Vadar must be near at hand. That’s just the way we think in this country. So it’s not surprising that some folks sincerely believe the biggest problem with America’s health care system is for-profit insurance and pharmaceutical companies. This group would include, among others, Michael Moore and Physicians for a National Health Program. Those who believe profits is the root of all health care evil point to the fines imposed by the California Department of Managed Health Care on Blue Cross of California, a subsidiary of for-profit WellPoint, Inc. for recinding coverage as proof.

Yet non-profits have demonstrated an equal ability to earn fines. Just ask Blue Shield of California and Kaiser, to name two (for rescission and patient dumping problems, respectively). So some scapegoat the entire industry and conclude only the government can manage health care.

If so, how do you explain the more than half a billion dollars apparently misspent by the State Compensation Insurance Fund? That’s the findings of an audit, released today by California’s Insurance Commissioner, Steve Poizner. According to the Los Angeles Times, Commissioner Poizner’s report showed that over the past 10 years, the government-run workers’ compensation insurance company spent in excess of $500 million “for outside marketing help that often provided ‘minimal services ….'”

The Times article describes the “scathing” audit as painting “a picture of an obscure rogue operation with more than $22 billion in assets, little oversight, minimal public checks and balances, and indiscriminate spending with little attention until recently from top state officials ….” The State Fund, responding to the report, admitted to “serious shortcomings” in the way it managed its responsibilities in the past.

What does an agency managing workers’ compensation have to do with health care reform? First, it demonstrates that even state agencies managing insurance operations can do wrong. This undermines the conclusion of those who claim the profit-motive is the root of all health care evil.

Second, lawmakers tend to use the State Fund as a template for managing state health care programs. Like the State Fund, the Managed Risk Medical Insurance Board is a five person state board which operates out of the limelight and with relatively minimal oversight. Unlike the State Fund, there’s not been a single whiff of scandal in the way MRMIB operates its programs, which includes Healthy Families, Access for Infants and Mothers, and the state’s high risk insurance pool. I know some of the board members. They are trustworthy individuals of high integrity.

The point here, however, is not the virtuousness of MRMIB versus the State Fund. Nor is it that one state agency’s misdeeds means no state agency can be trusted any more than the questionable actions of a particular carrier means that health plan is thoroughly corrupt. On the contrary. Like humans, state agencies can do great things — and bad things. So can insurance companies, whether they’re for-profit or not.

The first point here is that no one — and no entity — is perfect. All of them operate in glass houses. People and organizations make mistakes. These are to be punished and corrected, not ignored. But they shouldn’t damn the entire organization and its kind. After all, Darth Vadar is fictional character. Scapegoating accomplishes nothing. It only distracts from the real issues we need to address.

One Response to “Everyone Lives in Glass Houses”

  1. joe said

    The reason there is a “Darth Vader” is because the people who control health care in this country and have all the power don’t value human life. They don’t see the difference between human like needs and widgets. They think they are selling Widgets They always say, “it’s just business”, that is their value system, most of them conservatives who say they have God and religion in their lives. Some of these religions, claim that they will be judged before God, when they die. I’m sure the line ” it’s just business” will go over really well!

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