Thomas Cox PhD RN
March 21, 2011 at 8:23 pm
I tried to post this on the Mad As Hell Doctors website in support of a single payer health care finance system, but they don’t seem to like it… It is awaiting moderation…
The missing detail is what I call “Professional Caregiver Insurance Risk.”
Small insurers are terribly inefficient risk managers. Their loss ratios vary far more than loss ratios of large insurers. That is important! It is the reason insurance works.
Soooo, when you have lots of small insurers or you transfer insurance risks to health care providers through managed care, capitation, DRGs or PPS, health care providers become our insurers.
But inefficient insurers have lower probabilities of earning profits, higher probabilities of incurring operating losses, and higher probabilities of insolvency than larger, more efficient insurers.
So small insurers and insurance risk assuming providers have to reduce benefits to cope with their inefficiencies as insurers.
Why do we need a single payer system?
BECAUSE IT IS THE MOST MATHEMATICALLY EFFICIENT INSURER POSSIBLE!
Its about math… The arguments agains SP are political double speak and Voodoo economics.