Health insurance or healthcare: What’s the difference?
My blog is devoted to discussing the relationship between Health, and Healthcare 2.0/ 3.0 technologies.
To do this it’s necessary to have a handle on the definitions of health and healthcare.
Now, I’m going to leave a discussion regarding regarding the definition health to another time. Suffice it to say, there are fundamentally contradicting definitions of health at it’s heart, up to and including whether or not it is a state, a process, or something which cannot even be defined.
Healthcare, however, is an easier concept to get a handle on, and I believe is best clarified by comparing it to something which, in these politically charged times, it is often confused with: health insurance.
Health insurance is a financial risk management tool.
A great analogy o healthcare insurance is Homeowners insurance. You don’t buy Homeowners insurance to keep your home pretty. You don’t buy homeowners insurance to add-on an office, or to change the carpet to a wood floor, or to upgrade your gas fireplace.
You buy Homeowners insurance to protect you from financial damage which occurs in your home due to possible perils, such as theft. flood, or fire damage which may occur.
In addition,as with any insurance, the level of risk which one wants to assume is going to be different for different people. For myself, I am most concerned about deep financial risk and not so much concerned with losing two or three hundred dollars; the insurance premium that I pay will reflect this. Other people may want to protect themselves from all eventualities, including the small ones, and their premium will appropriately reflect this.
Bottom line: Homeowners insurance is not a home maintenance plan; Health insurance is not a health maintenance plan.
So what about healthcare?
Healthcare is not a financial instrument.
Healthcare is a system of delivery of disease prevention, management and treatment. (Notably in the United States, it’s mostly about management and treatment of disease with only a small percentage devoted to disease prevention!)
In the best case scenario, and if you are lucky, healthcare as a system may lower your actual health risks – which could protect you financially – but at its core, that isn’t its function; healthcares function is to be a system which intends to improve or maintain health – (whatever that exactly is).
This distinction between healthcare insurance and healthcare is where some contention arises in the debate about such hot political topics as Obamacare and Universal Healthcare.
Obamacare is not a healthcare; it is an insurance system.
It makes insurance accessible to everyone provided they can pay the premium, and it mandates the minimum coverage all that insurance.
It also maintains a legislative approach that insurance coverage cannot be denied to someone with pre-existing healthcare conditions (somewhat negating a fundamental principle of insurance, where the premium paid is tied to the individuals specific risk).
Finally, up until 2017, it required healthy people to have insurance coverage – similar to auto insurance requirement – to help lower the overall risk of the insured pool. This fundamental construct of Obamacare has been changed under the Trump Administration and will significantly reduce the financial viability of Obamacare as an insurance system.
Now, Universal Healthcare is an entirely different beast; it is a system which makes disease prevention, management, and treatment available to everyone.
There are pros and cons to a Universal Healthcare system.
My overall opinion is that the case for Universal Healthcare can best be made on economic grounds. Most large employers, such as Boeing and Ford, would rather not be in the healthcare game if a good alternative was presented, and most employees, if they had a choice of paying $14,000 a year to an insurance company for a high deductible insurance plan versus $8000 a year of increased taxes for a no-deductible healthcare system, would choose the latter.
(Of note, what factions most oppose Universal Healthcare? You will generally find the greatest opponents to Universal Healthcare will come from two industries: the Insurance Industry and big Pharma. No conflict of interest there, ey?)
But this is not meant to be a debate between Obamacare, Universal Healthcare, and the third alternative – “Every Man for Himself – care .”
Rather it’s to highlight the fundamental difference between health insurance and healthcare.
It benefits everyone – as citizens, patients and economic entities, to clearly understand this difference.