Health Care

Yesterday, the Wall Street Journal ran an article about subrogation – when a company that has paid health care claims related to an accident seeks to recoup those costs by going after money paid to the accident victim in an injury lawsuit.

A collision with a semi-trailer truck seven years ago left 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, and three sons found a small source of solace: a $700,000 accident settlement from the trucking company involved. After legal fees and other expenses, the remaining $417,000 was put in a special trust. It was to be used for Mrs. Shank’s care.
Instead, all of it is now slated to go to Mrs. Shank’s former employer, Wal-Mart Stores Inc.
Two years ago, the retail giant’s health plan sued the Shanks for the $470,000 it had spent on her medical care. A federal judge ruled last year in Wal-Mart’s favor, backed by an appeals-court decision in August. Now, her family has to rely on Medicaid and Mrs. Shank’s social-security payments to keep up her round-the-clock care.

This practice is hardly unique to Wal-Mart, an easy target for criticism in most things related to how the company treats people. But in this case at least, the mega-retailer can’t rightly be singled out. As companies, and their health plans in turn, seek ways to reduce costs, any source of third party funds for medical care is going to be a target.

What’s interesting to me is how this particular example reflects so many current issues in our health care system – the effects of tort reform (especially caps on awards for such catastrophic cases), the financial interests of for-profit payors and how they conflict with the health and quality of life interests of insureds with significant medical needs, the need for a strong public safety net for people who have significant medical needs, the additional administrative costs associated with a piecemeal system…

It doesn’t appear to me that health reform proposals from the presidential candidates will address many of those issues. If we get mandatory universal coverage, then at least we take care of the safety net issue. However, as long as we continue to have insurance company middlemen, issues around conflicts of interest and additional administrative costs remain. Health savings accounts just undermine the concept of spreading risk through insurance, which will hurt people with significant medical needs the most. Tax breaks for purchasing insurance and permitting purchase of insurance in another state would have so little effect on anything that those proposals don’t rate mentioning, IMO.

I’ve always said that as long as we get to universal coverage, I can figure out how to be OK with however we manage to get there. That’s still true. I would rather everyone have at least a decent chance at getting the health care services they need than have the most efficient, effective system possible. And unfortunately, I don’t think the American public would approve construction of the most efficient, effective system possible because in our culture, health care is viewed largely as a commodity and not so much as the responsibility of society to provide or a right of the individual to obtain. But if we could get past the ideas that everything has to be profitable, that the right of insurance companies to continue making money trumps the social responsibility to take care of people, that the private sector is always a better option than government – there is a much better way to do health care.