Unless the insurance industry rapidly changes course, its unbounded shortsightedness — combined with its lack of creativity, innovation and courage in the health care debate — will cement its recalcitrant reputation and destroy its opportunity to meaningfully participate in and profit from a system of national health care.
Insurance companies are the perennial whipping-boy for any two-bit demagogue seeking to gain political advantage on social issues. If one had just listened to the politicians, it would have been easy to believe that the insurance companies had caused Hurricane Katrina, because home owner’s policies contained flood exclusions. Have a hot issue and need a boogey-man to distract attention? Just figure out a way to blame the insurance companies! The same is true when it comes to discussion of health care. The insurance industry is being painted as the bad guy in the debate.
However, the insurance industry must accept some responsibility for its plight as a public relations pin cushion. Insurance companies can relate to Richard Nixon when, in his 1977 interview with David Frost, he said, “I gave my enemies a sword and they stuck it in me.” Too many times the self-serving positions taken by insurance compant execs have given their enemies a sword to justifiably skewer them.
The insurance industry has a consistent history of coming down on .the wrong side of major social reform. Fearing they would be put out of business, the insurance industry fought hard against the 1935 adoption of the original Social Security System. Then, worried about loss of future pension business the industry lobbied hard to prevent the passage of the 1974 Employee Retirement Income Security Act (ERISA). (The irony is that both of these initiatives actually stimulated growth in the insurance industry.) Concerned over potential lost sales, the insurance industry was the leading opponent of President George Bush’s effort to repeal estate taxes.
Today, the insurance industry has come down on the wrong side of the health care debate. Seemingly more concerned with status quo than with what is right; the insurance industry is in the forefront of the battle to prevent recognition of basic health care as a right for all Americans. And, even worse, the industry seems to be condoning the despicable tactics of fear, disinformation and demagoguery to protect the status quo. Companies such as Met Life and others have been identified as contributing large sums of funds to defeat national health care.
It is embarrassing and sad to see the insurance industry treat such a serious issue as health care in so selfish and cavalier fashion. In the meantime, 50 million Americans have no health care services at all and scores of millions more are provided only inferior coverage.
But no matter. The insurance industry continues to sharpen the sword for its enemies when it clings to the position that the quantity and quality of health care should be determined by how much money an individual has to pay an insurance company. The ultimate reality of this position is that the insurance industry could find itself excluded from the solution. The irony of course is that health care reform has the potential to become the most profitable opportunity of the 21st century for the insurance industry.
It is clear that the private insurance sector has been unwilling or unable to offer efficient, effective and affordable health coverage for all Americans. And now the industry faces the prospect of being run out of the business all together. There is a lesson that insurance industry would do well to learn: If you are being run out of town, get in front of the crowd and make it look like a parade!
And the Moral of the Story is …
Rather than fighting what is right, the insurance industry should use its clout, knowledge and experience to lead the way in developing the best solution to providing all Americans with basic health care. In doing so the insurance industry would not only begin to change its image in the eye of the consumer as a selfish, uncaring ogre and carve out a productive and profitable role in the effort.