As the basis for attacking business, I often hear the argument that companies are greedy SOBs. Instead of fellow human beings, they see market share. They care more about profit than curing diseases.
This tactic seems effective because of the emotion it invokes. Damn them for being so selfish. They're probably rich too. Certainly more wealthy than I am - those jerks. Why shouldn't I have some of what they have? (And so on.)
All that self-righteousness must cut off circulation to the brain, because as often as I hear someone deplore the profits made by another, I never hear anyone complain of his own earnings.
Anyone who works and saves money is guilty of making a profit. Moreover, if you're managing to save more than 3-5% of your income, you're even greedier than the health insurance companies are.
Companies are just groups of people, and you can always count on people to do what's best for them first. That's not me being cynical – it's actually a good thing. If a person doesn't take care of himself and his family first, then they become a burden on others.
In a free market, companies have an incentive to make customers happy. If they take advantage of people, they might make a huge profit for a little while, but then it's only a matter of time until others crowd into the industry to get some of that profit.
More firms in the industry means competition – which means it is in a company's best interest to keep customers as happy as possible. Neglecting customers for long enough could put them out of a job.
Wait a minute, aren't health insurance companies not making their customers happy? That's all I hear about in the news – how insurers are just screwing us out of money and driving up the cost of health care, right?
Firstly, insurers' profits only account for 1% of total spending on health care.
Secondly, according to this Gallup poll, 57% of Americans are satisfied with the total cost of their health care, 70% categorize their health care coverage as good or excellent, and 83% of them categorize health care quality the same way (with 95% confidence that the sample numbers are within +/- 3% of the population).
Finally, insurance companies already operate under a tangled web set of regulations at the federal and state levels. For example, every health insurance website I've visited has almost the exact phrase: "health insurance prices are fixed by law." However, if you want to find out exactly what laws they follow, you must look at each state individually. It's amazing we have people willing to work in health insurance at all!
Back to the original point. You can count on the people who work in health insurance to put their own interests first, and to condemn that is nothing short of hypocritical.
In a purely free market, you know that a company's best interest is to serve the customer, for fear of losing market share. However, as the market becomes less and less free, the incentive shifts from pleasing the customer to pleasing the government.
If the government fixes the price and mandates levels of coverage, is it really the fault of the insurers and their shameless 'greed' if we think there are problems in the insurance industry?
Perhaps the answer to health care reform is less self-righteous altruism and more free-market greed.
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