What is called "health insurance" in the U.S. is not insurance. People buy insurance to protect themselves against unlikely but costly risks, like having a car accident.
The purpose of purchasing automobile insurance is not to pay for routine maintenance costs; the purpose is to pay the huge costs that could arise if there is a car accident.
As opposed to covering true health risks (the costs of broken bones or surgeries), health insurance pays the costs for routine health events, such as a visit to a doctor, that are not health risks at all.
What we call health insurance is simply pre-paid health care funded by a third party payer (i.e. Medicare, Medicaid, or a private insurer).
A third-party payer system requires patients to grant the payer control over their personal health care decisions. Patients declining control over their own health care decisions under a third-party payer system creates an ever-widening array of arbitrary restrictions, many of which lead to health care policies that preclude a patient’s best health care option.
Medicare’s willingness to cover more expensive gastric-bypass surgery but not anti-obesity medicines that can achieve the same goal exemplifies the types of arbitrary restrictions that should be expected.
Medicare and many private insurers cover the costs of gastric bypass surgery for morbidly obese patients. And this makes sense. Obesity is associated with many chronic diseases such as diabetes, heart disease and hypertension.
The additional health care costs created by obesity are significant. The annual health care costs for obese people are $3,000 higher than the costs for non-obese people.
Controlling obesity saves patients’ lives and, in the long run, saves health care dollars. But if this is true, why would Medicare cover the costs of bypass surgery but not also cover obesity medicines that clinical evidence has shown can also result in significant weight loss for morbidly obese people?
Obesity drugs, like pharmaceutical drugs in general, may appear expensive but can lower the overall costs of treating an illness or condition. For instance, gastric-bypass surgery can cost between $15,000 and $35,000, with the average price being $22,000.
The costs of obesity drugs are approximately $150 to $200 per month or $1,800 to $2,400 for a whole year.
If it makes sense for a payer to cover a surgical option to help a morbidly obese person lose weight, then it would logically make sense for Medicare to cover the costs of the pharmaceutical drugs that create similar benefits without the costly surgical procedure.
But arbitrary restrictions are the natural result of our current health care system where third-party payers have gained control over health care decisions at the expense of patients. This trend needs to be reversed.
The best way to control health care costs and increase health care quality is to empower patients. In coordination with their health care providers, patients should have both the responsibility and capability to establish the health care treatment that makes the most sense for them.Dr. Wayne Winegarden is a senior fellow at the Pacific Research Institute and a contributing editor to EconoSTATS at George Mason University.