The Well has an interesting piece by a doctor regarding the difference in managing health care for people versus those of our pets:

My own patients have a far harder struggle in every respect. My foray into the insurance world as a patient exhausted me and pointed out everything that was wrong with our health care system. How is that the simplest routine medical matters have been made so complicated by our insurance companies? Why does every encounter require a veritable girding up for battle? And how many patients do not get the care they need simply because they are defeated by the bureaucracy?

There’s a lot we can learn from animals in many facets of life — Lord knows, a nice massage behind the ears could do a lot of us some good — but I am consistently impressed by how much smoother veterinary medicine runs. Of course it’s too simplistic to make a direct comparison, but I hope that in this ongoing health care reform we consider ways to make things easier for patients.

As Dr. Ofri points out, insurance companies don’t exactly have incentives to make collections easy. I agree with her that it’s not an accident that they make it as complicated as they do. I don’t think it’s a huge conspiracy, but they have no incentive to make it simple and the specificity that comes with making it difficult benefits them even apart from discouraging people from making claims.

Conservatives will be quick to point out that one of the chief differences between animal health care and human health care is that the former is purely market-driven while the latter is a combination of public, private, and private but driven by public policy (namely health care tax exemptions for employers). This is quite true. Veterinarians have every incentive to make pricing as transparent as possible and without the intrusion of insurance companies they don’t have to negotiate different rates with different entities that leads not only to opacity, but disparate pricing.

This is one of my main frustrations with our health care system, though it could be addressed either with a market system or a purely socialized system. Namely, when I go visit the doctor I have no idea how much I am going to pay. I don’t know what the insurance company is going to quickly agree to and what they’re not. And then, if they don’t agree, then suddenly I am on the hook for more than I would have paid if I’d simply paid up-front. There’s no way of knowing, up front, what the cheapest method of paying is. Since I am healthy I saved money when I was on catastrophic health insurance, but what I remember most fondly about it was the fact that since I knew I was paying for all non-catastrophic care out-of-pocket, I didn’t have to worry about any of this stuff. Even under the current system, when you tell them that you’re paying up-front, the pricing becomes a lot more transparent and you can even save money in the process as they will often charge you less than the listed price in return for not having to submit claims to insurance companies.

However, there is another significant difference between human and animal care, which is that we as a society are willing to let animals die for non-payment and we’re simply not willing to let humans do so. This changes a lot and makes a purely free-market health care system very problematic. Since we force emergency rooms to treat anybody and everybody that comes in, people that are uninsured can simply go there if they’re worried about it, racking up substantial bills that they will never be able to pay but who cares because they need the help now. This ratchets up the price on those that can pay who have to pick up the tabs for the former. (Yes, I am aware that illegal immigrants play a role in all of this, but if they all disappeared tomorrow we would still have a problem in this general area. And this is not a post about immigration.) And apart from emergency rooms, when you force insurance companies to pick up the tab on people with pre-existing conditions and people know that they can get insurance at any point and coverage will be assured, they can wait until they get sick before they get coverage. We are simply far more reluctant to deny care to people than animals and this has wide-ranging repercussions.

Anyhow, back to the health insurance companies. It’s easy to attribute the Charlie Belcher Theory of Economics to the insurance companies that they are only denying care and making payments difficult because they want more money. Insurance companies are an easy target and I dislike them myself as a matter of course. On the other hand, I have been covered by for-profit and non-profit insurance companies and I can’t say that I ever really noticed a difference in terms of paperwork and thriftiness. They all have incentives to hold down costs and even the for-profits tend to have small profit margins (which they make up for in volume). The only really good insurance company I’ve ever felt really comfortable with is our current one. It could be related to the fact that they’re not-for-profit, but I also wonder if they treat us differently because they know my wife is a doctor or she works at a hospital.

The biggest problem with insurance, as I see it, is not so much the profit motive as it is the incentives. They have no incentive to make it easy on us because we’re not the ones that chose them. In some ways, our current system is the worst of both worlds where we have profit-seeking by many of the players but not the consumer choice that guides these institutions to serve the consumer’s needs. Not just on price, but on simplicity and transparency. They have to be cheap in order for our employers to sign with them, and if they don’t cover anything the employers won’t sign with them, either, but they can thread the needle by being opaque enough and, from their perspective, it’s easy to justify the opacity as caused by the cloud of the inherently complicated nature of health care generally.