In the last awkward post, I brought up the fact that health concerns of an individual may not be in line with ideas about the health of the group.
Insurance plays a large role in the current health care regime. With insurance, people pool together their resources with the hope of funding their individual care by withdrawing funds from the pool.
The people administering insurance inevitably stop seeing the individuals and start seeing themselves as administering to the care of the group. Pooling resources for health care immediately creates a conflict between the individual and group.
The conflict between the group and individual becomes most pronounced in employer based insurance. When a person changes employment, that person is no longer part of the group. Attending to the needs of the former employee is no a priority of the group insurance plan.
The conflict also shows up when some members of group insurance game the system to get more than their fair share of care. Some policy holders blatantly commit fraud. If you look at any group policy, you will find that there are some people who get a great deal of care, and others who are underserved.
Group funding of private care also creates a moral hazard: The simple fact that policy holders spend group money on their individual health care means that they are less attentive to costs than they would be if they were spending their money.
The conflict between the individual and insurance pool is the source of most our angst in health care. The solution is to create a new business model that creates a healthier balance between the individual and group.
The Medical Savings and Loan is a new business model for funding health care. The business model differs from standard insurance in that it centers all of the accounting on the individual. The heart of the system is the individual's savings account. Policy holders deposit a portion of their income into their savings account for anticipated medical needs.
In addition to savings, policy holders will have access to interest free guaranteed loans.
Considering that people who suffer medical emergencies often see a decline in income, the program will anticipate a high default on the medical loans.
Like insurance, the Medical Savings and Loan transfers some wealth from the healthy to those in need. The difference between the medical savings and loan is that the accounting is done on an individual basis and that each policy holder ends up owning their individual medical history and ends up building equity in their policy.
The Medical Savings and Loan does not eliminate the conflict between individual and group. Nor does it completely eliminate moral hazard. The main thing the program does is create a more accurate accounting of one's individual health care to help the individual take better control of their health care resources and consequently of their health.