From "The sinews of American commerce" by Roy A. Foulke, a history of the Dun & Bradstreet credit bureau, in a section titled 'Evolution of credit institutions, 1841-1941.'
"In the early days of life insurance, a surrendered policy was considered by many companies to be a justifiable source of profit. ... Someone who cared nothing for the insured bought the policy [of a man who could no longer pay the premiums] at a small fraction of its obvious worth and waited impatiently for the unfortunate old man to shuffle off to his grave. Or perhaps not wait. [Actuary Elizur] Wright heard some very ugly rumors of policy buyers who thought nature too slow and hired the handiest villain to dispatch the insured. He investigated ... and uncovered certain cases where the evidence fairly shouted 'Murder!'"
On 9-Sep-09, at 10:22 PM, Michael McIntyre wrote:
> Here's one way these instruments could enhance incentives for shitty
> care. HCA and its ilk start buying these policies, giving them
> further incentives to deny care to the critically ill, thereby
> skinning the cat twice - first by avoiding payment and second by
> collecting the insurance (perhaps sold by the insuree in order to pay
> the bills that her "insurance" had already failed to cover!). For
> this to really operate, insurers and their cousins would have to
> collude to some degree, but they seem to be quite good at that.
>
> Or we can just imagine what some bizarre genetically engineered
> combination of Michael Milliken and Barbara Stanwyck could do with
> this!
>
> MM
>
> On Wed, Sep 9, 2009 at 8:30 PM, <RicardoStarkey at aol.com> wrote:
>> In a message dated 9/9/2009 6:14:02 P.M. Pacific Daylight Time,
>> matthias.wasser at gmail.com writes:
>>
>>
>> "Private health insurance creates bad incentives, limits access,
>> and so on.
>> So that's bad. But given that it already exists I don't see what
>> additional
>> evil is created by allowing insurers to redistribute risk among
>> each other
>> in this way. (Allowing them to run wild with risk redistribution
>> is what
>> led
>> to the crisis in the short run, but the devil's in the details.)
>> Are the
>> incentives to provide shitty care amplified by this practice? I
>> don't see
>> how they would be on first blush, but I'm willing to find that
>> they are."
>>
>>
>>
>> I anticipated a response along these lines, and I find myself of two
>> minds. My left brain admires your high level of rationality.
>> (Really. I take
>> your point.) And my right brain pities you for the madness into
>> which
>> advanced capitalism has driven you. (But who of us is spared?)
>>
>>
>>
>>
>>
>>
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