Axis of Reason

Need more evidence of a market failure?  Watch Bill Moyer’s interview with Wendell Potter, Cigna’s former Head of Corporate Communications.

There’s been an enormous amount of consolidation in the health insurance industry over the last several years. Aetna bought a lot of competitors. It reached 21 million members. And, but what it realized and what investors began to see is that a lot of the businesses that it had bought were not all that profitable. . . . among the things they did was bring Ron Williams in. And Williams, among the first thing he did was order a revamp of the IT system . . . so that the company could determine more about which accounts were not profitable or marginally profitable. So with that new system, he was able, and the other executives to identify the accounts that they wanted to get rid of. And over the course of a very few years, they shed eight million members.

I reject the view by many on the left who demonize Aetna, Cigna and other private insurers.  These corporations are rational actors who are doing exactly what they should be doing — maximizing profit. Unfortunately, the sick, the poor and the elderly are not profitable groups to insure at affordable rates.  As a result, I share Potter’s conclusion.

That we shouldn’t fear government involvement in our health care system. That there is an appropriate role for government, and it’s been proven in [other]  countries  . . .  You know, we have more people who are uninsured in this country than the entire population of Canada. And that if you include the people who are underinsured, more people than in the United Kingdom. We have huge numbers of people who are also just a lay-off away from joining the ranks of the uninsured, or being purged by their insurance company, and winding up there.

- SF