Peter Orszag, director of the Office of Management and Budget (OMB), was on TV recently, talking about his desire for us to convert increasingly to evidence-based medicine, by which he meant the practice of applying the scientific method to medicine, monitoring what's being tried and learning from what works and what doesn't.

At the core of this is increased knowledge by the government about the most private details of our lives. Of course, there's a lot of good that can come from that. But with genetic information, even something you know about someone in my family can end up being something you know about me.

The real problem is that the entire health insurance industry bases its ability to get profit not on “making more people healthy” but on delivering more accurate information to each person about what it costs to be them. Everything is about pooling, and if the health insurance industry had their way, everyone would be a pool of exactly one person, so that people who were expensive to treat would be charged astronomical rates, and people who were cheap to treat would be charged cheap rates. Then they could claim that all their customers would be happy (since no one who was expensive to treat would be a customer).

It's sort of like how the Army picked up the slogan “an army of one” to refer to their new focus on the individual. Insurance industries really want you to be “an insurance pool of one.” And if the Republican party had their way, I'm convinced it would have gotten implemented under their alternate slogan “taking personal responsibility.”

And it's great if you can arrange to have all your diseases or other ailments at the end of a long healthy life, saving up money so that at the end you can take personal responsibility. But for people who get a curable disease early, the option to take personal responsibility is right out the window unless they're just born rich with enough money to pay ahead. (Never mind the possibility that we might just want to have compassion for people who might never be able to totally pay for their plight. Under the Republican plan, they'd be told to take more responsibility. Under the health insurance “pool of one” theory, they'd just be told they could get coverage for precisely the cost of the item requiring treatment... plus a tidy markup so the insurance folks can get a profit—that's part of taking responsibility, too, isn't it? It would be irresponsible not to profit off of someone else's misfortune.)

Society as a whole has the benefit of large numbers to distribute the cost of these problems out smoothly. Reducing the pool size to anything below 350 million just makes it harder on individuals with rare situations.

What the President and Congress should do now:

• Eliminate pooling in insurance rates. Require companies offering insurance to offer a uniform rate without preconditions. For rare/expensive problems, the government should insure those cases in order to level the cost between companies and not turn coverage into a game of “hot potato” trying to get rid of the people who are rare extraordinary expenses.

• Require that information about patient health or genetic traits may not be used in pricing insurance so that people aren't afraid to share this information with those trying to get good data on the effectiveness of treatment, and so that people aren't afraid to get important tests that could improve their chances, and so that one family member getting a test does not up the insurance rates of other family members. This will also make sure that companies have less incentive to discriminate against certain individuals for hiring out of fear that their insurance rates will be higher.

For more discussion of these matters,
see my off-site essay on Health Care Reform.

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