Whatever may be right, something is rotten in American medicine. It should be fixed. But fixing it requires the acknowledgment that, when it comes to health, we’re all in this together. Pooling the risk between everybody is the most efficient way to forge a healthier society.
Europeans have no problem with this moral commitment. But Americans hear “pooled risk” and think, “Hey, somebody’s freeloading on my hard work.”
I am witness to the fact that Americans can embrace a "we're all in this together" philosophy and that such an approach can help lower the cost and spread the availability of health care. More than two decades ago I covered health and medicine in Rochester, New York. At the time Rochester had an impressive system that helped hold down health care costs, achieve better outcomes, and broaden the reach of health insurance across the population. I covered this system on an ongoing basis for the Rochester Democrat & Chronicle and later wrote about it for the Washington Monthly.
It was a complex system that centered on hospitals agreeing to accept essentially a yearly cap on their revenues, which was the focus of my Washington Monthly story. But another part of what made it work is that employers and insurers agreed to "community rating" -- which meant that the entire population, rather than each workplace or other sub-group, was considered one "risk pool." This raised the cost of insurance for the lowest-risk groups (the young and wealthy), but lowered it for those at highest risk, and contributed overall to a better quality of life where health care was concerned.
I haven't been back to Rochester in many years and I've heard second-hand this progressive system is no longer in place. (That's an unfortunate contrast to predictions people made when I wrote about it that it would become a national model.) I'm not sure why it was dissolved, and I do plan to look into that question some time, but based on how it was working when I was there, all I can say is, more's the pity.
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I think it fell apart because as the dominant paternalistic employers like Kodak, Xerox, Bausch & Lomb and GM fell into decline, they lost the collective economic clout (through their pooled health insurance purchasing power) to force the providers to continue to accept pricing based on community rating and capitation. I think it used to be the case that a hospital or practice that didn't sign up for the price cap wouldn't be included in the big employers' approved provider lists. As you may know, Genesee Hospital closed down in 2001 for financial reasons. I don't know exactly when the old arrangements broke down, but that too may have shifted negotiating power and posed an unsustainable disruption to the delicate balance of the system.
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