The barons of American industry discovered long ago that they could get people in other, less well off, countries to do factory work for less money than what Americans wanted for pay. It all started with the outsourcing of American jobs within the country itself. Good paying jobs in the textile and other industries migrated from the industrialized north to the south. These factory owners made a fortune by paying the Americans in the south much less than they had been paying those in the north. It didn’t take too long before the owners of the businesses noticed that they could get even cheaper labor a little further south – and a lot of jobs went to Mexico. Now, it’s hard to find any items of clothing that carry the label Made in USA. It turns out that even the Mexicans are now feeling the bite of low cost competition and today, when you buy any item of clothing, you could just as easily see a tag that says Made in India, or China, or Egypt or almost anywhere – although I have yet to see a tag that says Made by Eskimos in the Frozen North.
But, as they say, it is an ill wind that blows no one any good. Or, to perhaps paraphrase – sort of – what’s sauce for the goose is sauce for the gander. It turns out that outsourcing can help not only the fat cats who own our big businesses, it can also help the little guy who has to buy their stuff. One prime example is that we are able to outsource our selection of automobiles. We can buy foreign made cars instead of American made cars – and we do. The American consumer has pretty much decided that they get a better value by buying Japanese or European made cars instead of American made cars. Of course the American car manufacturers could give us better value than they do, but they don’t. They choose not to. So we have the ability to choose something else. Most of us happily outsource our automobile choices to other countries.
Well then. If we can outsource the purchase of cars, and lots of other stuff to China, India, Japan, Germany and so forth, why can’t we buy our health insurance from foreign countries too? After all, a health insurance policy is nothing more than a sort of reverse lottery. You get money, but you would probably rather not have won this sort of lottery, because it means you are sick. The more money you win, the sicker you are. But my point is that this is just a really big gambling game, and the boys who run the health lottery in the U.S. make big bucks in this game. Essentially you pay a lot more into the pot, via your bets (i.e. your policy premiums), than you ever collect (on the average). The insurance companies score! They take in a lot more money that they pay out. (Ask yourself this: how many health insurance companies have failed or needed a government bailout during the Great Recession?) The question we need to ask is this: how much do our U.S. insurance companies really compete with each other? Could their idea of competition be sort of the same as how the American car companies compete against each other?
What would happen if we let Chinese companies provide our health insurance? If there is one thing I have noted about the Chinese I have met throughout the world, it is this: they love to gamble. My guess is that they would love to be in the insurance/health-gambling business. They would undercut the absolute Hell out of the U.S. insurance industry, but they would also pay off on their claims because they are also excellent businessmen. They know they need to keep satisfied customers. My guess is that India could be a good source of health insurance too. Another great source might be Ireland, a place where bookmaking is entirely legal and companies like Paddy Power will take a bet on anything. It could even rejuvenate the fading Celtic Tiger. If there is one thing Paddy Power knows how to do, it’s calculate the odds. And they always pay off too. There’s no denial of claims from Paddy Power. You score, you win. They pay. No questions asked. That’s the way insurance should be.
So, while we are thrashing about and wringing our hands about a Public Option, and how it will generate competition for the fat cat health insurance industry, maybe we should generate some real competition. Let’s allow the outsourcing of health insurance to foreign companies and open up the health insurance business to the world. How about some real competition? Then maybe we’ll see who the real Capitalists of the world are. Is it the Americans, the Irish, the Indians, the Chinese or someone else?
Guess who my money’s on.
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