Education and health care are both dominated by government as the single largest player in the marketplace. The U.S. government actively sets the number of doctors, the types of procedures that can be covered by insurance, and dominates market spending through its Medicare, Medicaid, and VA programs. And if you aren't on a government program, the tax code forces you into a employer-provided insurance ghetto.
Healthcare innovation will remain low, and costs will continue to grow at double digits, until America passes real healthcare reform. Allow insurance competition across state lines, give private individuals the same tax treatment as employers when buying healthcare, and allow individuals to form groups to purchase health care (e.g. alumni groups, church groups, etc). Those three steps would go a long way to opening up the industry to the web and to innovative, competitive forces.
I don't think more small risk pools are a good solution, due to adverse selection. The very sick or old often need more treatment than they can possibly afford (because what we develop isn't limited to the value of the typical patient's labor, which is a good thing!) so our choices are to let them die through triage, or to subsidize their treatment by preventing the well and young from gravitating into cheaper risk pools which find ways to exclude the sick or old. Tax-funded Medicare and Medicaid are effectively additional risk pools you're paying for even when they aren't covering you, and yet they aren't really acting as insurers of last resort (except for certain people who meet the criteria).
First, most Americans fall outside Medicare, Medicaid and the VA programs. The government currently does not regulate individual/employer coverage. I would not characterize the entire private insurance industry as an "employer-provided insurance ghetto" - what does that even mean?
The whole second paragraph makes it clear that you don't understand the complexities of the Healthcare industry. You provide very broad brush statements like "allow insurance competition across state lines", the complexities of that single issue alone are staggering. Are you aware that the strength of most in-state insurance carriers is their in-state network. An insurance company IS it's network. In addition each individual state has a Department of Insurance which also regulates all carriers in that state. DOI rules and regulations vary from state to state. Expanding your coverage to another state is a very complex undertaking.
Also, Individual groups do have the ability to purchase healthcare - see many professional organizations(AIGA, etc) as working examples of this today.
In either case, making those changes won't just magically open the industry to "the web and to innovative, competitive forces". There are already competitive forces at play. Any new player attempting to join the fray faces an uphill battle just in the regulatory aspects of the business alone.
What do the advantages of the web and new technologies bring to insurance? How do these changes the provider networks which are the backbone of major insurance coverage today? These are the types of questions which need to be posed, and the people in the best position to answer these questions and change the game are insurers themselves. There are many smart and talented people working in insurance. The recent proposed Healthcare changes have helped to begin the process of moving forward and thinking differently, but with an industry like this it will take time.
It is happening, insurance providers are looking at new technologies and ways to provide the coverage that people expect, for lower costs, in new and different ways.
It is a common tactic for people invested in a broken status quo to dismiss critics as "not understanding the complexities". Which insurance company or regulator do you work for? I've worked on health care policy professionally, I assure you I understand the issues.
Much of the distortion in the current system come from the fact that employers can deduct health care expenses, which means that you save around 15-30% versus buying healthcare as an individual with aftertax dollars. That single policy is what ties health care to your employers-- in my mind, a kind of serfdom that keeps people tied to jobs simply because of health care insurance.
So getting tax equality by eliminating the deduction, or extending it to individuals, would rock the market. Beyond that, it actually is as simple as allowing interstate competition, which will allow people to escape all of the insane state regulations, and lack of choice, that drive up costs.
And groups can't organize to purchase health care-- I'm talking about a world where my university alumni association or church has a plan, and I could choose that for life, and it has the same tax and regulatory treatment as my employer's health care offering. I want vastly more diverse delivery mechanisms, all competing for my business, and ideally with a long-term relationship that would naturally incentivize preventative care.
Didn't they bring up ending the employer deduction for insurance during the 2008 Presidential election? I'm all for it, but to make it politically viable you need to spin it in a way which doesn't look like raising taxes or reducing benefits, which is hard when eliminating a deduction. The only way I think it would work is to make personal insurance deductible, and somehow ensure that salaries take into account the implied value of current healthcare.
(Personally, I am so glad I have $100/mo $3500 deductible HSA coverage, personally; I'll eventually set up employer healthcare at my startup, but in the perfect world, I'd rather pay employees 1.5x as much to manage it themselves, and maybe another .5x to the government for other people's care; trying to find and manage benefits like that is a big pain.)
It's not forbidden. It's just rarely considered worth the space. I hate to say "lurk more", but you are new here, and you don't yet understand the complexities.
>"The government currently does not regulate individual/employer coverage."
Are you sure about that? Last I checked, the feds mandate an immense number of details about how private insurance is provided, and that is only growing with the new health care law.
>"I would not characterize the entire private insurance industry as an "employer-provided insurance ghetto" - what does that even mean?"
1 of every 2 dollars spent in health care in the US is spent by the government. These three programs are clearly the 800 pound gorillas in the room. Medicare's price controls directly drive shortages and oversupply, and its billing practices set the standard for the rest of the industry.
Most Americans aren't Medicare or Medicaid beneficiaries, but we're all affected by these programs. Medicare sets a price floor on all procedures covered by the program.
Also, Medicare will not compensate providers for bad outcomes, but Medicaid is state-administered and usually just pays claims blindly. Entitlement arbitrage is bankrupting many states, but that's a whole other issue.
IMO, we've created a multi-headed hydra, where the only winners are the mandarins who understand the arcane regulatory structure.
Medicare and Medicaid are such large payers that the decisions they make move the rest of the market. Second, at some point most Americans are eligible for one program or the other if for no other reason than the good fortune of old age.
Fortunately for students education had fewer licensing requirements than healthcare. This allowed for the home school loophole, and for a network of alternative education providers to slowly grow and flourish outside of government control. Healthcare faces much stricter regulations as to who can provide care and how they administer it, so I expect much less change and improvement.
clayton christensen advises that the solution to healthcare is personalized medicine, technologies like portable diabetes monitors. Imagine if you needed surgery, a robot comes to your house and performs it, much cheaper than doctors and hospitals. such system are currently being developed with military funding - battlefield telerobotic surgery
creating a small area of sterility isn't a impossible task, if you can create large one in an operating room, creating a smaller one can't be all that hard (with robotic equipment)
Creating even a small sterile environment is actually quite hard. What is the robot going to do, autoclave or boil everything in my bedroom? The main reason that most patients actually survive surgery now is that a huge amount of effort goes into keeping operating rooms sterile.
Healthcare innovation will remain low, and costs will continue to grow at double digits, until America passes real healthcare reform. Allow insurance competition across state lines, give private individuals the same tax treatment as employers when buying healthcare, and allow individuals to form groups to purchase health care (e.g. alumni groups, church groups, etc). Those three steps would go a long way to opening up the industry to the web and to innovative, competitive forces.