Should health insurers be held accountable for skyrocketing premiums?

Congress and the President are beating up on health insurers for raising premiums at rates that are literally killing people. The rate increases are so high that many people who desperately need health care will no longer be able to afford their premiums. Anthem Blue Cross, for instance, raised rates for non group coverage as much as 39% this year: www.bit.ly/9uNKw6.

While increases of 39% are no doubt extreme, health insurers are not the sole villains in this story. Behind these increases are sharp increases in the sale and use of unnecessary high tech medical care. Medical device and pharmaceutical manufacturers, hospitals and specialist physicians have been overselling questionable medical technology to US consumers for decades. They have been dipping into our wallets without our permission and it is time we figured out how to make them stop. In today's Washington Post health blog (www.bit.ly/98BfPK), Ezra Klein points out correctly that insurers tried to say no to some of these practices in the 1990s, and they got killed in the courts over it.

Health insurance premiums are by definition equal to health spending plus health insurance overhead. While overhead might be too high, the real reason that premiums are going up is that spending is going up.

Medical care seems to get less value from technology than other industries do. One reason for this is that physicians and hospitals regularly oversell unnecessary high tech procedures at an astounding rate. For example, a recent study in the Journal of the American College of Radiology www.bit.ly/a6zmev showed that 1/4 of all radiology referrals in a large medical system were unnecessary. In the US healthcare market, there are no players around to stop referrals of this kind from being carried out. All of the incentives for hospitals, specialists, medical device manufacturers, pharmaceutical companies - and yes, health insurers - are aligned keep healthcare consumers on an ever-rolling treadmill toward higher spending.

In the US, we have few solutions to this growing problem. This problem is going to continue unless we find the right way to say no to unnecessary medical care. We must find a way to stop the sellers of unnecessary medical technology from killing our wallets and our budgets. Until we do, health insurance premiums will continue to grow at rates that are literally killing people.