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Wednesday, October 21, 2009

Today's Health Care Insurance Are Like Big 3 Before Competition Arrived

In an editorial on Sunday, the Janesville Gazette wrote that they are looking forward to the time when Dean's will open a new hospital to compete with Mercy.
JG Editorial Excerpt:
We also recall the words of Congressman Paul Ryan, long a student of the health care industry. He looked forward to the new hospital in his hometown and told us that the health care system is broken because it is built "for price increases because it lacks true competition based on quality and prices."
Ryan’s compartmentalized view on health care competition is the same one U.S. automakers held for decades among themselves before foreign brands were introduced. Offering multiple lines of corporate models based on quality and price was little more than an exercise to fabricate a sense of competition among the Big 3. Consumers caught on quickly to that charade and gravitated towards the foreign makers despite knowing they held a huge material/labor/legacy cost advantage over the American industry. While the American auto industry was nearly crushed, consumers felt they got a better bargain. That's all that mattered.

Those tough lessons taught me that true competition can only best be created with the introduction of a completely different brand – not more of the same. But we are talking about insurance here and regardless of the number of hospitals, there is really only one brand of health care insurance selling multiple lines of health care models in America. The charade is over. The problem now is the insurance industry is fighting to shut down any introduction of competition. Who could blame them?

But that's a mighty novel way to describe someone (as a student) who has received nearly a half-million dollars in campaign contributions from the insurance industry Oh, I get it. It’s a scholarship in progress!

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