Are Insurers The Problem?

Ezra Klein chides Brian Beutler and I for focusing too much on health insurance companies:

And one thing I'd caution liberals of is letting the insurers loom too large in our minds. They are one of many impediments to reform, but for various reasons, we tend to think of them as the primary obstacle. They're not.



Well, there are reforms and then there are reforms. The cost of people relying on private, for-profit firms as their primary source of insurance for medical expenses is large. When you pay out-of-pocket for health care, your money is going to buy health care services. When a public sector programs pays for health care, your tax dollars are going to buy some administrative bureaucracy and health care services. When a private sector insurance firms pays for health care, your premiums are going to buy some administrative bureaucracy, plus some marketing, plus some risk analysis aimed at avoiding acquiring the "wrong" customers, plus some people whose job it is to find ways to deny legitimate claims, plus health care services.

Insofar as the aim of health care reformers is to increase the number of people buying insurance from insurance companies (or having it bought for them by their employer) then, naturally, insurance companies won't necessarily be the main locus of opposition. But when I hear about how Ron Wyden and AHIP are getting along marvelously I don't think "Oh, look, the prospects for reform are better than I thought" I think "Oh, look, we're going to get an expensive-and-crappy reform." It's worth keeping in mind that a lot of the liberal interest-group pressure on the health care front is aimed primarily at improving the competitive posture of unionized firms vis-à-vis non-union or foreign rivals, rather than at improving America's health outcomes.