Insurance, Justice, and Access to Care

There's a sentiment that I often hear regarding the private health insurance market.  A given insurer will act in such a way that results in a denial of coverage (or a decision not to insure a putative subscriber).  Of course, such behavior is entirely predictable for anyone who knows anything about insurance given that insurers have significant incentives to limit losses and payouts wherever possible.  Naturally, the mere fact that as rational maximizers of utility, insurers will seek to limit their exposure whenever and wherever possible as market conditions allow does not thereby imply that any particular limitation is ethical or reflects a just allocation of resources.

The sentiment often criticizes the insurer's decision as unjust insofar as it creates substantial barriers to care for the party affected.  There are myriad examples of this phenomenon.  I have surveyed the story of HDT/ABMT on this blog, and this is one example.  Women with advanced breast cancer sued their HMOS for denying coverage for HDT/ABMT on the grounds that it was experimental.  Given that the procedure is expensive, this denial created a significant barrier to that care. 

Yet, there is always something that has bothered me about the argument that the private insurers' attempts to limit the care they must cover reflect an unjust allocation of resources.  Namely, where did the idea ever come from that the private health insurance market is the means to creating access to care? The history of the rise of MCOs and HMOs easily puts the lie to this notion.  The best article I have read on this recently is Allen Buchanan's Rationing Without Justice, But Not Unjustly, 23 J. Health Politics, Policy, and Law 617 (1998).  Buchanan argues that many of the common criticisms directed at private insurers are erroneous insofar as they seem to presume that private insurers ought to facilitate access to care.  In point of fact, this is not why MCOs and HMOs profligated proliferated, and there is little reason to foist such a duty on private insurers when as for-profit corporations, duties of social justice do not seem to be their primary raison d'etre.  Note that this doesn't mean such corporations have no social responsibilities; it only means that their primary responsibility is not to allocate scarce health care resources according to the requirements of social justice.  The MCOs were never intended to mediate the problems of justice and health care.

Of course, this argument cuts both ways.  On the one hand, it suggests that many of the most common criticisms of the private insurance market are questionable.  On the other hand, where private corporations are not fairly tasked with the duty to allocate scarce health care resources justly, it also suggests that relying on private resources to maximize justice is also questionable.  This is partly what Buchanan argues in his contention that the common, misguided criticisms of MCOs obscure the larger issue: that as a society, the U.S. has not committed to answering the fundamental questions about justice and the allocation of scarce health care resources.  As a society, we have not devised any system that is expressly intended to allocate health care justly.  Unsurprisingly, then, the 'system' we do have does a markedly poor job of meeting what many perceive as the demands of justice.

Thoughts?

UPDATE: Frank Pasquale over at Concurring Opinions touches on insurance and access to care from a personal narrative.  As the Professor might say, "highly recommended."

Comments

[Daniel Goldberg]

The following are Patrick S. O'Donnell's comments, which computer snafus are preventing him from getting up here:

Daniel,

I absolutely agree with you (and Buchanan: he's one of my favorite philosophers, his work on articulating a moral theory of international law, for instance, is first rate and very important). Although I think much anger and frustration is directed to medical insurers because they're close at hand and tangible objects (availability heuristic?). Nonetheless, HMOs and other medical insurance companies often do act in dastardly ways, as not a few investigative pieces I've read in the Los Angeles Times over the years (and not a few years at that!) testify. In point of fact, this morning's paper has the following headline: 'Blue Cross cancellations called illegal': http://www.latimes.com/business/la-fi-health23mar23,0,6376637,full.story?coll=la-headlines-business

[Incidentally: I think you meant to say 'proliferated' rather than 'profligated'--evidence you're working too hard on that dissertation!]

All good wishes from a devoted reader,
Patrick

[Daniel Goldberg]

Hey Patrick,

I agree completely, and I did not mean to suggest that insurers do not often act in "dastardly ways." My point in part was that such behavior is eminently predictable given the nature of insurance (which is widely and woefully misunderstood, IMO), but also that its predictability does not imply its ethical permissiblity. To argue, as some do, that because insurers are going to act in such ways that it is permissible for them to do so is of course to commit the naturalistic fallacy (which I perceive as a big problem for much economic analysis).

And of course you're right re "proliferated"!

Thanks, as always, for participating so much.

--Daniel