The private insurance ‘trap’; or How to make non-evidence-based health policy
The recent murder of the CEO of a major US health insurance company, UnitedHealthcare, has catalyzed a new wave of discussions about the inhumane nature of a private insurance-based healthcare system. There has been an outpouring of what appear to be spontaneous testimonies from ordinary Americans about their horrible experiences with both United and other health insurance companies, pointing to the widespread rage against these corporations. As a doctor and public health expert who’s lived in the US for more than ten years now, I am somewhat familiar with how obstructive the private insurance space is for genuine, proper, and timely healthcare delivery. I never, of course, imagined that a CEO of a company would be killed over this (at least that’s what the current theories about the murderer’s motivations point to).
[On a side note, it has been striking and nauseating to witness the American media and political elite shed tears over the CEO’s murder, even as over the past 14 months they have applauded or turned a blind eye to the daily murders of hundreds of Palestinian children and adults in the Israeli genocide.]
However, the fact that private health insurance, and privatized commercialized healthcare in general, lead to negative health outcomes, is not news. I studied public health in the US, in a school with a sizeable number of international students, and the one thing that most of us vehemently agreed on was that America is a complete dud when it comes to health systems and healthcare policymaking: very few things in those domains make any rational sense. The international students among us were also aware of the unfortunate fact that despite the nonsensical nature of how healthcare operates in the US, it was an attractive ‘model’ for many other countries, primarily because it gave the outward appearance of what mainstream economists like to call efficiency, while helping politicians and corporation executives accumulate more and more wealth. Here’s, for example, a July 2024 article on “How UnitedHealth harnesses its physician empire to squeeze profits out of patients”. In fact the private insurance model is so profitable for the Global North elites and their Global South partners that they have helped suffuse much of the global public health discourse with misleading ideas about how it is the “best” way to provide the “best” of healthcare while avoiding “inefficiency” and “wastage”.
This broader propaganda about the supposed public benefits of private insurance is what Amartya Sen and Jean Drèze call the “private insurance trap” in their book An Uncertain Glory: India and its Contradictions. I would like to sincerely urge people interested in public health, and public welfare in general, to read at least that part of this excellent 2012 book. Drèze and Sen are brilliant thinkers and writers, and they lay their case very well. They explain how a healthcare system that is dominated by private insurance is seriously flawed, and also suffers from an irreversibility issue: “the private health insurance model can be, in effect, something of a one-way street — the health insurance industry can easily become a powerful lobby and establish a strong hold on health policy, making it very difficult to move away from that model if it proves ineffective. The current drift in India towards private health insurance, without developing a solid base of public health care, has that problematic feature — aside from others.”
I have copied one more excerpt below. I have also uploaded a PDF of the private insurance trap section of the book at this link: bit.ly/insurancetrap, or here. Happy reading.
The US health care system is one of the most costly and ineffective in the industrialized world: per capita health expenditure is more than twice as high as in Europe, but health outcomes are poorer (with, for instance, the US ranking 50th in the world in terms of life expectancy). This system is also highly inequitable, with nearly 20 per cent of the population excluded from health insurance, and terrible health conditions and risks among deprived groups. Further, attempts to reform the health care system in the US have proved extremely difficult, partly due to the power of the health insurance business, and partly due to deep-rooted political resistance to the idea of ‘socialized’ health care, which resistance has been much cultivated by private health insurance companies. The contrast with Canada, with so-called ‘socialized medicine’, which achieves more at far less cost than the USA for normal health care through state-provided health care, brings out some of the problems that the USA has to overcome before it can become a ‘model’ for the world — in particular India — to follow. This is not to say that Canada itself is a flawless model: its exclusion of private health insurance, except for very limited purposes, may be seen as too extreme (it is not clear why the rich should not be allowed to pay for extra health insurance while remaining quite free to spend money on expensive holidays or yachts), and surely there is much to learn also from the European system of reliance on national health services and social insurance without ruling out private health insurance.
