No one in their right mind would argue that our healthcare system is a wonderful system.
It is, to be sure, one of the most bizarre systems imaginable — too whacked out to be believable in a Borges or Garcia-Marquez novel, too fraught with damaging outcomes to be believably scary in an Orwell or Herbert or Shelly novel.
A great example of how broken our healthcare system is is the difference between the medical lives of people who are medically insured through a group medical insurance policy — usually through their employers — and the medical lives of all other people [did I just say is is? Must be because Bill Clinton’s library is opening today, and is in the news].
People who are fortunate enough to be medically insured through a group medical insurance policy have all sorts of rights not enjoyed by others. First and most saliently, people with group medical insurance pay the lowest prices for all sorts of medical goodies, while the un-insured pay by far the most (often more than double and not unusually more than triple or quadruple), while those with individual, rather than group, medical insurance policies pay prices falling somewhere in between.
A less salient but often far more important difference is portability. Portability allows people with medical needs (i.e., those with pre-existing conditions) to move from one group to another group with relative ease (e.g. moving from one employer with group medical insurance to another employer with group medical insurance).
That ease comes from the person’s right (a) to become a member of the new group no questions asked, thank you very much, and (b) once he or she is in the new group, to get full coverage, even for his or her pre-existing conditions.
Now, try to do that outside of a group and see what happens.
The first thing that will happen is that, if you or a member of your family has a pre-existing condition, a lot of medical insurers won’t sell you an individual medical insurance policy. They don’t want your business. Bye bye.
The second thing that will happen is that, if some insurer agrees to insure you, it very well might exclude coverage of your pre-existing conditions for quite a spell. So you can get the insurance, but not for what you need it for.
It is, as a dear friend says, non-insurance insurance.
So in this one area the healthcare system is quite bizarre, isn’t it?
It says this to people: if you are sick, or if your spouse or child is sick, you have to work for an employer with group medical insurance.
Forget your entrepreneurial spirit. Forget that whole I hate working for other people thing. You have to work for someone because you have to be part of a group, and you have to be part of a group because, if you’re not part of a group, then you are going to join the tens of millions of uninsured people paying out the wazoo for everything.
To some people’s way of thinking, this amounts to the uninsured cross-subsidizing the insured. Read that again: the uninsured cross-subsidizing the insured. So well-to-do employed people, all of whom have group insurance, will spend $10 to fill a prescription for their sick child, while an uninsured person (some of whom are well-to-do) you will spend $100 for doing the same thing. And if that’s once a week and if that makes them go broke . . . why that’s just the way it is.
And don’t even think about going into a hospital . . ..
That’s the message: be employed. Do not be self-employed.
But there’s more bizarreness further down this path because, here in CA, a group for group insurance purposes is quite simple to build: all it takes is two or more people.
And, guess what? Medical insurers who write group insurance have to take groups, no questions asked, all comers accepted. So all you need to do is have a partner in your business and you can get a group policy. And once you’re in a group policy, you are ensconced within the world of group insurance and the world of portability, and, so long as you stay within the group world, you’ll be fully insured.
So you can form a fake-me-out group to get into the group world, and once you’re in a group, so long as you stay in group-land, you’re hunky-dory insofar as medical insurance goes.
So here the system says: if you are recently self-employed and happen to have some medical issues, then you sure had better hire someone because, unless you are part of a group, you sure as hell ain’t gonna get insurance (COBRA only lasts so long . . . )
Now, you can say what you will about how wonderful our medical care is. You can say that the U.S. has the finest medical care in the world or you can say that any country that has tens of millions of people fending for themselves on the medical front cannot be considered to have wonderful medical care.
But when you look at the broader system — the healthcare system, which includes the medical care system with its doctors and nurses and machines, together with the administrative and insurance envelopes through which the medical care system reaches its patients — you cannot say it isn’t way Way WAY broken.
But there’s a very important system in all of our lives that’s even more broken than the healthcare system is broken. It’s a system touching a part of our lives that, for most of us, is third in the hierarchy of what it takes to have our wellbeing up to snuff, right after physical health and love.
What might it be?
If you’re thinking that it’s the financial health system, then you’d d be right.
So who out there has a doctor for his or her financial health? Or a nurse? Or even a nutritionist?
The answer is: pretty much no one. Such people pretty much don’t exist.
Instead, people have, at best, financial salespeople who might, or might not, be mindful of the conflicts of interest inherent in caring for somebody’s wellbeing only as an adjunct to selling products out of his or her necessarily-limited product line.
Now how would you feel if your doctor worked on commission, and whose prescriptions had to be filled by a pharmacist within the doctor’s business who only carried 25% of the prescription drugs out there?
That would be scary, wouldn’t it?
One medical context in which many people experience something akin to this is at the eye doctor, because a lot of eye doctors give away (relatively speaking) their doctoring in order to get a clean, unobstructed shot at the commission on the expensive eyewear.
Doesn’t feel so great does it? How do you know if their advice is self-less or selfish? As in: Do I really need that fancy contact lense — the one that costs three times as much as the other one, the one I’ve been using for years?
And how about laser surgery on your eyeball? That costs a whole lot, and you just have to wonder: the doctor knows that there’s a machine s/he bought a while ago and knows to the penny how much that machine cost, so what’s to say that the doctor doesn’t look at every patient as a way to make back that investment?
That’s just human nature, isn’t’ it? Put a rat in a box and the box will dictate, at least to some extent, the rat’s behavior. And so too it is with people.
So maybe it’s time for a new box for the rat?
This is, indeed, how our financial health care system operates. It is a products-based system that sells products through a network of financial services providers acting as sales agents and distributors.
Now when most of us go in for a checkup at the doctors, we feel pretty assured that the doctor really truly is there to help us, don’t we? We don’t view the doctor as simply scoping us out, to discern our willingness-to-pay curve and to then suck all the economic utility for him- or herself out of our marrow, do we?
Or at least we remember that feeling from our childhood . . .
But how about our financial health? How many of us have someone who helps us with our financial health in that way? Someone who truly cares about our wellbeing above all, and way down the list is trying to make a living?
The answer is this: essentially, zero. The financial services industry has not evolved towards that end. It has, in fact, evolved in precisely the opposite direction: suck the financial marrow out to the max. More for me, less for my customers.
There are many, many exceptions to this, but overall, that is the modus operandi.
That is the box in which the FSP rats live. And we all respond to the boxes in which we live.
So what’s a mother to do? Or a father?
The financial health care system needs to change. But it won’t be easy.
But just as fixing the healthcare system is a fight that must be fought just because we can’t be a wonderful, beautiful, caring people when the healthcare system is this broken, so too we cannot be a wonderful, beautiful, caring people when the financial healthcare system is based on sales.
So how is that fight fought, and what does a financial health care industry look like?
Well, not only is that the topic for another day, but that is also the topic for the next many decades of my endeavoring.
Bright moments . . .