Imagine an America with no health insurance companies.

What do health insurance companies do?

They take as much money as possible from people who want health insurance coverage. They pay out as little money as possible — so-called medical loss — to settle claims from creditors for health services and products that have been delivered.

They keep as much money as possible for the incomes of their executives and other employees, and to enhance share value for their owners.

They do try to attract enough premium money from customers — so-called covered lives — so that they can spread the risk of a few high-cost customers across the premiums of many low-cost customers.

They try as much as they legally can to cover as many low-cost customers as possible, and to keep as many high-cost customers out of their plans in order to maximize revenues and minimize expense.

They do employ a lot of people, all “following the money” — sort of a jobs program.

Why do we need them? There must be a better way.

It is true that health insurance companies use market clout to attempt to “keep costs low.”

And they are motivated to try to keep their own costs low by limiting use of expensive procedures.

But, by any fair, rational, national, international, and outcome measure, health insurance companies have failed to keep utilization low and failed to keep costs low.

But they have succeeded splendidly at growing their workforces, paying their execs highly, and rewarding their shareholders handsomely.

The for-profit American health insurance industry — and many of those not-for-profit lookalikes — is a poster child for the triumph of poorly-regulated and misplaced capitalism in a historically fundamental service profession.

Why does the United States need health insurance companies at all?

The answer is we don’t, at least not in their current forms. They cause more harm than they do good.

There must be better way to use our national and personal resources more effectively and efficiently to keep our people healthy and manage their illnesses when they get sick.

Let’s create it.

Having abolished health insurance companies in this fantasy, how would you start over?

I would grandfather in Medicare, but insist that it be greatly improved before implementation.

I would expect most ambulatory care to be paid out of pocket up to a means-based annual deductible.

And I would insist on means-based “catastrophic coverage” for ALL Americans.

I would expect the government to pay for preventive services for all that had been proven to be safe and effective, considering them to be public health.

I would take the profit motive out of the health insurance market.

What do you think about these ideas? What would you do?

George Lundberg is a MedPage Today Editor-at-Large and former editor of the Journal of the American Medical Association.

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