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Insurance – How They Shape Social Behavior | Northwestern Professor Carol Heimer
18 Plays2 months ago
In this episode, we sit down with Professor Dr. Carol Heimer, a sociologist whose pioneering book Reactive Risk and Rational Action reshaped how scholars think about insurance, trust, and moral hazard. We chat about how concepts like moral hazard can affect consumers and physicians, and why insurance rules often lead to both overuse and underuse of care.
Dr. Heimer offers a rare lens on the U.S. healthcare system, explaining how insurer rules and reimbursement policies can affect medical practice and change physician discretion. We also discuss her research on neonatal intensive care units, where she shows how financial incentives, hospital policies, and insurance decisions shape care for critically ill infants, leaving parents to navigate trade-offs between quality and coverage. We close with her reflections on how healthcare is fundamentally interdependent, and why rethinking who sets the rules could help us build a fairer, more functional system of care.
See more: https://en.wikipedia.org/wiki/Carol_Heimer
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Transcript
Introduction to Podcast and Guest
00:00:00
Speaker
Welcome to the Healthcare Theory Podcast. I'm your host, Nikhil Reddy, and every week we interview the entrepreneurs and thought leaders behind the future of healthcare care to see what's gone wrong with our system and how we can fix it.
00:00:15
Speaker
Today we're interviewing Dr. Carol Hymer, an award-winning professor of sociology, Amarita, at Northwestern University, where she focuses on the sociology of risk and responsibility with a specific focus on health insurance. In 1985, she wrote the book Reactive Risk and Rational Action where she covered how the actual insurance contracts we use are unique because they shape doctor and patient behavior and how our healthcare system ultimately works. The book is still used as a textbook today. And in today's episode, we discuss how health insurers shape behavior for better or for worse, how health insurers function at social institutions, and the murky misaligned incentives to see in the real world from COVID to neonatal intensive care units.
00:00:58
Speaker
Hi, Dr. Hymer. Thank you so much for coming on today.
Dr. Hymer's Academic Journey
00:01:01
Speaker
Thank you very for having me. Of course. And it's really interesting. You earned your PhD at the University of Chicago and your dissertation from what I know became your first book on reactive risk and rational action.
00:01:14
Speaker
And I would love to kind of hear like what first drew you to study insurance and what were the main findings that drove you to not only create your dissertation, but create like an entire book out of it? Well, interestingly, it was the experience of graduate school that made me end up studying insurance.
00:01:29
Speaker
Because what I started off being interested in was actually situations having to do with trust, where it seemed like people were competing over various goods and services, even in in such routine things as friendship.
00:01:43
Speaker
um And in thinking about that, I first wrote a sort of theoretical paper on trust, which was my master's paper and ended up being published sometime later in an edited but book.
Insurance: Trust and Behavior
00:01:55
Speaker
um But then as I thought about it, I thought, well, I would like to study this empirically and where is a good place to study it? And then I realized that um insurers were ah in organizations that wouldn't actually be able to sustain themselves financially if they couldn't solve the trust problem. That is the problem of people in effect renegotiating contracts ah without formally doing that once a contract had been made. So for instance, you know, once somebody has insurance, then they often become a little bit less careful about things they would otherwise have been neurotically careful about, like whether they lock their car or, you know, remember to clean up things that might burn or whatever.
00:02:39
Speaker
um And so I thought by studying insurance, I could find out something about how so people who had to do this to make a living um what kinds of strategies they used. And then I quickly realized that, I mean, this was what I was particularly interested in was the part of risk that was under the control of human beings um and that then shaped um or modified the the risk that the insurers were intending to be covering. So that that's the kind of thing that made the risk of the hazards reactive.
00:03:10
Speaker
um And I wanted some variability in that. So I studied three lines of insurance um where there is some variability in it, but also there was huge variability in how the insurers themselves understood it. So marine insurance was one of the earliest forms of insurance.
00:03:26
Speaker
And from the beginning, the insurers understood that, you know, there was some human control. Yes, shipwrecks were to some degree acts of God when there were storms. but the sailors could do some stuff to control the amount of loss. and um And if it was the um cargo that was insured, people could either jettison it to save their lives or they could try to protect the cargo. And then I studied um fire insurance where people really thought that was entirely an act of God.
00:03:59
Speaker
And then they began to discover that, oh, well, you know if ah the Insurance salespeople sell policies with huge face values, um and then the value of some particular piece of property goes down, then the policyholders have an interest in no cashing it in. So there were a lot of arsons that resulted from that.
00:04:19
Speaker
And then finally, um I studied fidelity and surety bonding, where from the beginning, people understood that the performance of contracts and the honesty of employees was something that was, in some senses, under human control. And at first, they thought you couldn't possibly have insurance for those kinds of things. But then they started to understand that it depended on who it was who held the insurance contract.
Moral Hazard in Insurance
00:04:43
Speaker
that and And so if there was some social distance between those parties, then it would be okay. But then since I wanted to take this back to sort of ordinary human life, I went on in the afterword of the book. And the know the reason I put it out as a book was partly because you know some people were interested in publishing it, but also because you know I was an academic and you know youre keep your job, you get your job and keep your job by publishing a book from that.
00:05:08
Speaker
um ah Yeah. You know, so this is a lightly realized version of my dissertation. But I went on then to talk in the book itself about fight. less if i um used car sales as another place where there's a lot of moral hazard, um, and showed how some of the, um, strategies that the insurers use showed up in that and product liability law.
00:05:34
Speaker
And then the one that the publisher was most nervous about bargaining about sexuality. Um, So that didn't take me into health care. But then i was interested after that in situations where, i mean, in some sense of speaking um as economists, what would be more inclined than sociologists to speak about?
00:05:56
Speaker
um issues of incentives and so on. mean, in some senses, if you think of it the way a sociologist would, you know, there's sort of criminology at one end of a continuum where people are just outright violating norms and, you know, any contract is there in effect to be broken.
00:06:12
Speaker
And then in the middle is moral hazard and shirking where people... um you know, are happy to make a bargain with you, but then they're going to keep strategizing after the bargain is made. And then there are situations where, you know, it's hard for people to even strike bargains about something because the rules don't really fit very well. And so I looked for a situation where um where that was
Regulations and NICU Discussion
00:06:35
Speaker
the case. And that's what took me into healthcare care because I decided to study situations where people had a child unexpectedly, nobody looks for this situation, unexpectedly have a child had a child that was critically ill and started its life in an infant intensive care unit.
00:06:52
Speaker
And in those situations, the incentive problem is quite different. It's about how to get people in some senses to break rules because that's the responsible thing to do. So you don't want the physician to exactly follow existing clinical guidelines because on the forefront of medicine, those don't fit the situation of your child.
00:07:12
Speaker
um And how to get parents, you know, taking the perspective of the physicians to understand that they can't follow ah kind of the rules and norms of ordinary parenting because they don't have an ordinary child.
00:07:24
Speaker
And so each of them has to induce a different orientation to the rules. And so that's how I got into studying medicine in the first place. um Yeah, and I think it's it's really interesting, especially with the new example of like neonatal care units. But i would I want to get into the perspective of how insurers are reading this problem in the first place, like you spoke on with Bauder Marie and then, of course, fire insurance. There's different perspectives of where risk and social interactions would come into play in those relations.
00:07:57
Speaker
But one i think idea I think that you spoke on, it interestingly, within health insurance is very predominant. And can be predominant is like that moral hazard problem. Of course, it's a really big one and it's like really hard to get into. But i would love if you could explain at a high level, like where does what does moral hazard really mean in health insurance? And what does this really look like um in terms of how consumers react to insurers when they get like cheaper health care, for example?
00:08:23
Speaker
Yeah, so you know a lot of people sort of think, well, moral hazard isn't going to be a big deal in health insurance because people's bodies are at stake, right? And so you know none of us are going to go in and ask for extra surgery because you know it's like our body is being cut up and so you know it shouldn't be as big a problem. But in fact, it is quite a big problem and it's a big problem both from the person ah you know as it affects consumers, but also as it affects health care providers.
00:08:49
Speaker
So as far as consumers are concerned, i mean, and whenever people have to pay for something out of pocket, whenever it's paid for them already, rather, um they'll consume more of it.
00:09:02
Speaker
And so um ah health insurance insurers have put in a series of policies to make um the consumers share the the cost of it. um Obviously, the big one is that they have to pay for the insurance. But beyond that, there are also co-pays.
00:09:18
Speaker
and deductibles and things like that, like there are in other branch and branches of insurance. But then interestingly, in healthcare, we have the problem that sometimes that leads people to under-consume.
00:09:29
Speaker
And you know so it's a really complex problem to get that right. And in the US these days, I think we often have a problem of underconsumption. But of course, that also varies with, say, the social class of the people um who are getting the health care. So poor people may be more likely to underconsume than richer people for whom the copay or the deductible really don't mean much of anything.
00:09:53
Speaker
um And then at the same time, there's the issue about how the whole healthcare care environment is structured by insurance and how that affects the incentives of the physicians who are providing care.
00:10:05
Speaker
um And, you know, it's like we sometimes think of physicians doing this out of the goodness of their heart. And we expect healthcare care professionals like other professionals to be rather altruistic. Can you hear me?
00:10:16
Speaker
But they you know they also have to make a living. um And what kind of care they provide is shaped by what kind of care is going to be reimbursed.
00:10:27
Speaker
um And so sometimes that has meant increases in insurance fraud if you know there's some particular kind of of medical care that gets um a lot of of reimbursement and where there's a lot of potential patients. And so you know you'll read about doctors who did a whole bunch of tonsillectomies on poor patients, for instance, because Medicaid would reimburse it.
Insurance Protocols and Inefficiencies
00:10:51
Speaker
um But more than that, I think it's also, or in addition to that, it's also really important that um doctors these days and healthcare organizations are spending a lot of time sorting out the details of insurance. And so this is, I think, one of the cases, places where the U.S. is greatly disadvantaged compared with other healthcare care systems because people spend so much time on administrative work and they're incentivized um to ah cut down the amount of time they spend with patients, to have an excessively detailed division of labor so that you, instead of going in and talking to your doctor, so feel free to confide in her or him, um and where you end up in the course of the conversation, ah filling in details that wouldn't be filled in if somebody's simply, you know, checking off things on ah on a a chart,
00:11:45
Speaker
um And, you know, even more the problem that one person collects the information then passes it to another person, passes it to another person. So the health care encounter becomes a little bit like the game of telephone, you know, where the information gets distorted as people go along.
00:12:02
Speaker
um And all of that has you know has sort of false economies built into it where it looks like you're saving money by having a less expensive, less skilled worker provide care. But a lot of times what it ends up meaning instead is that you have degraded health care because the information isn't transmitted effectively and relationships aren't developed.
00:12:23
Speaker
And um sometimes um you're cycling people through Forms of care that everybody knows are not the correct forms of care um because the insurance companies requires you require you to demonstrate that um some cheaper form of care, some cheaper therapy, or some cheaper medication actually doesn't work before they'll give you the more expensive thing.
00:12:47
Speaker
Yeah, and it's definitely like a big issue because I think one thing I've noticed is that it's really hard for people to kind of be good consumers of their own health care because oftentimes like you don't really know when something's going to be a good or bad use of your health care. So it's easy when you have this issue of moral hazard, when health gets cheaper just to overconsume and oftentimes… Or on the contrary, if you don't know something is good for your health care, then you might under consume with despite what um health care costs might look like.
00:13:14
Speaker
And from this area, i would love to kind of hear. I know one thing you've spoke on is that like insurers are basically um like they have like copayments and deductibles and other ways to basically help.
00:13:26
Speaker
kind of create choice architecture to make people better consumers, like where does that really come into play? and what And why do insurers like use things such as like deductibles and copayments within health
Consumer Challenges and Insurance Tactics
00:13:37
Speaker
insurance? Because I think a lot of people attribute it to just like they want um more, like more profits. But I think a lot ah bit of it is about like having skin in the game.
00:13:45
Speaker
So where do you think that interplay comes in between for like how insurers make those decisions? I mean, you know, ah it it does have both aspects to it, right? I mean, so, you know, if you look at what's happened, and I can't give precise figures on that, but the the amount people are paying for health care has gone up a lot.
00:14:03
Speaker
And ah the proportion of the health care bill that's paid, say, by um um the consumers rather than by their employers, since most of us get our health insurance through employers,
00:14:16
Speaker
ah the part paid by the the individual policyholders has gone up faster. um So yeah, there's definitely an issue of and let's deal with the rising cost by putting more of it onto the policyholders.
00:14:31
Speaker
um So that's a strictly economic thing that has not very much to do with moral hazard, but has to do with the cost. um But the moral hazard part, you know, is it's in principle, it's a good idea, right? In principle, it's a good thing to say, you know, show us that you really want to have this care and that you really think this care is going to benefit you and that you're going to use it wisely by helping to pay for it directly at the time when you get it.
00:14:58
Speaker
But the difficulty with that is that the incentive system is so complex that that people don't track it very well, right? um And they're often in situations where they're having to make choices in um circumstances where nobody has the capacity to make a ah sensible choice. So one incentive that's put in place is often that you should be ah getting care from um in-network physicians and other healthcare providers.
00:15:26
Speaker
Well, I mean, when you have some healthcare emergency, first of all, you're not sitting there saying, you know, should I find that the healthcare care facility that's in network? and And secondly, there's no way for you to tell whether the people providing the care in that facility are covered by your health insurance. And so the incentives kind of get lost and as they get lost because of the nature of healthcare.
00:15:52
Speaker
that it's a kind of good that people are often consuming because of a desperate need, but they also get lost um because the information environment is so complex ah that the signal is lost in all of the noise and nobody has any incentive to provide the signal clearly.
00:16:10
Speaker
Yeah. And I know one example you brought up and just referenced earlier was like kind of a little bit adjacent from this issue is like the issue, the neonatal intensive care units.
00:16:21
Speaker
And I mean, within that, I think you also pointed out how like doctors and nurses, because of this, like different interplays and rules that come from insurers, um a lot of them struggle to keep up with these like hospital policies, insurance guidelines, like raw rules and laws.
00:16:35
Speaker
And you said that can like really shape the care for newborns. Like the medical decisions can be shaped by these external rules. was wondering you can like kind of walk us through this, like where do insurance policies and not only just how you pay for healthcare, but the actual policies and what's covered, what's not, what's reasonable, what's unreasonable, where does that really affect people in the way they get healthcare, especially with this example of the NICU units?
00:16:57
Speaker
Okay, so with a NICU, I mean, when a baby is born and it has healthcare problems that lead it to need the kind of intensive care that you get in a NICU, it can end up there because it's born in a hospital that already has one of those units, or it can get transferred there from a hospital that doesn't have a a NICU.
00:17:20
Speaker
um And um the so generally, that kind of intensive care is covered by insurance and is covered either by private insurance or, say, by military insurance or by Medicaid, right?
00:17:36
Speaker
um Medicaid reimburses it lows at a lower rate. And so, you know, if a baby is covered by Medicaid, that ends up meaning that the physicians are eager, more eager to get that child out and into their home um yeah as compared to a child who has private insurance.
00:17:53
Speaker
But because ah intensive care is one of those things that's basically always covered, um hospitals are eager to have infant intensive care units.
Hospital Incentives and NICU Experiences
00:18:04
Speaker
They're even in ah hospitals that are um supposed to be not-for-profit. In effect, a NICU is a profit center. They make a lot of money. Okay. So people want to have them because there's a lot of intensive stuff going on there.
00:18:18
Speaker
A lot of high-powered nursing, a lot of other medical specialists in addition to the neonatologists are consulting there, you know, checking on you know, the babies, the status of the baby's brain and the status of the baby's gut and, you know, all sorts of the lungs, the heart, whatever. So there's a lot of stuff going on and a lot of machinery like echelon machines and the isolates and things like that.
00:18:42
Speaker
um And the ratio of nurses to babies is quite high as compared to with other units in the hospital. um But um so what ends up getting reimbursed by the insurance companies um is ah shaped in part by the guidelines that are in place. Right. And these are medical guidelines, but the insurance companies are.
00:19:06
Speaker
differ somewhat in exactly what they will cover. So insurers are sort of the ultimate decision makers on whether some, not what the physicians are going to do, but whether there's going to be reimbursement for it. And so then they have a whole fleet of of workers who go over the records of babies who've been in infant intensive care units to decide what part of the care is going to be reimbursed and what part is going to be paid by the parents.
00:19:34
Speaker
And all of this is as happening after the fact, right? And so the parents, when I was doing the interviews for that book, you know some of the parents would bring out They showed me lots of pictures of babies, but they also brought out their their medical records.
00:19:48
Speaker
And, you know, years after the baby had gotten out of the infant intensive care unit, they were still sorting through the bills and sometimes having arguments with insurance companies and with hospitals. And so there are many actors involved.
00:20:01
Speaker
And of course, the insurance companies are repeat players in this and the hospitals are repeat players in this. And the parents, um in some ways wonderfully and in other ways tragically, are one-shotters, right? And so they don't have the expertise to sort this all out, although sometimes they become quite expert, both in dealing with the child's health care problems and in dealing with the financial issues.
00:20:23
Speaker
um But, you know, in some senses, the incentive properties get lost here because, um you know, the ah bill comes after ah babies have gotten the care.
00:20:34
Speaker
And, you know, you can't say when a baby is, you know, needing, desperately needing some kind of care, nobody's going to sit there and sort out the insurance implications in advance.
00:20:44
Speaker
Right. And so, you know, that's kind of um emergency medicine or quasi emergency medicine that babies are often getting in infant intensive care units is something where, the incentive effects get lost a lot because um nobody's sorting them out in real time.
00:21:00
Speaker
Yeah, and what's the effect of that? What actually happens in your interviews, for example, with these families, like, what are some of the issues that they deal with? Because, like, of course, they're dealing with the insurance, the billing after the fact. They don't really know exactly what's going into it, but when they make the decision and they they are basically forced to make the decision to put their child in a neonatal intensive care unit, like, what is the effect and what are these conversations, like, when you first interview these people?
00:21:25
Speaker
um What do they go through as a result of this kind of problem? Well, one thing to point out is that the parents don't get to decide whether the baby is going to be in an infant intensive care unit, right? I mean, so the baby is basically born in a hospital and transferred to the unit. I mean, every once in a while, there were babies who were born in other places. So for instance, one was born in the doorway of 7-Eleven, recall. Yeah.
00:21:54
Speaker
And one was born in a hotel room, right? But in those cases, emergency medical workers are called and they transport the baby to the hospital and the baby is taken right to the infant intensive care unit in those cases. you know and I mean, these are often premature babies or or twin or triplet pregnancies or something like that, or a baby with some kind of anomaly.
00:22:16
Speaker
um And, you know, the parents don't get to decide. um So in some senses, it doesn't matter what the insurance and incentive properties of the insurance contract are because, the you know, the parents are not ah ah not important decision makers in that at that point.
00:22:30
Speaker
um As the care goes along, sometimes the parents will decide they want the baby transferred to a different hospital. And sometimes that's because, um um well, I saw a variety of situations like that. And some of them were because, know,
00:22:46
Speaker
they wanted the baby to be closer to where they lived. I mean, cause sometimes people would be, you know, a day's drive away and they couldn't afford to, they were having trouble doing their jobs while being in the hospital a lot of times with a lot of time with the baby or they had other children or whatever.
00:23:03
Speaker
um So they would try to get to the baby transferred to a different place. And, you know, sometimes their insurance companies were in favor of that. Sometimes their insurance companies were opposed to that. So there could be negotiations about that.
00:23:13
Speaker
But also the fact that different hospitals had different policies and presumably articulated with their insurance the insurance that was covering it as well.
00:23:24
Speaker
Sometimes the parents would become quite savvy about that. So, for instance, there was one set of parents whose baby had a tracheostomy, You know, it had a tracheotomy. And so then she, um the baby, they had to clean the trach and wear the trach fastened to the baby's neck.
00:23:40
Speaker
And the baby had been in one hospital that again got transferred to another. And the mother had picked up the way that it was done in the first hospital and thought that the second hospital was really sloppy about it.
00:23:51
Speaker
And, you know, so um was complaining loudly about this and tried to get the baby transferred. and And, you know, this was like a 19-year-old kid, you know, who had a high school education. And yet she was willing to take on the hospital because she cared, you know, here's the big incentive factor, right? She cared about the life of her child and was worried about her child getting an infection.
00:24:15
Speaker
But the parents in those cases are at a huge disadvantage speaking to people who have professional, you know, professional credentials when they don't. Um,
00:24:26
Speaker
So, you know, the insurance part of it is one thing and, you know, quite incomprehensible. And generally when the parents started to become expert, they became expert first in the medical stuff because in some senses that was the stuff that mattered for the child's health.
00:24:42
Speaker
And then only later that they become a little more savvy about the insurance part of it and learn how to negotiate with the insurance company. By then, generally the baby was out of the hospital, but the babies often had to have continuing care.
00:24:56
Speaker
um So they would be in programs for zero to three, or they would have to go back to for physical therapy or, you know, they would get infections and so forth. And, you know, so the parents would.
00:25:08
Speaker
then start facing questions about, well, does our insurance cover taking the baby to this particular um hospital or this particular um emergency room? And are the besides whether they the the place was covered, did they think that the the caregivers there would understand what the baby's situation was? Because if you take a small baby,
00:25:33
Speaker
to an emergency room where they're not used to dealing with babies who are as they say, graduates of NICUs, they sometimes don't know what care to give.
00:25:44
Speaker
um And so they would sometimes be choosing between, do I want to be sure that I'm getting my kid to the person who can take care of it versus am I taking my kid to a place where the insurance is going to cover it? And that's, you know, really hard trade-off.
00:26:01
Speaker
Yeah. And there really is no right decision there, right? Because, of course, both will have severe like impacts on their family, both to the health of their child and the health of their financial health, of course, which are both important.
00:26:14
Speaker
um And one thing I think that's interesting is that there's this is weird middle ground where like you want to have like too few rules could like invite abuse or unfairness. It can like disrupt the system, make it hard for insurers to provide a good service. But then, of course, like you mentioned, too many rules can create confusion and hinder care.
00:26:31
Speaker
And through your work, I mean, i I'd love to hear if you found like where we can strike a better balance between these rules, like these formal rules, like insurance regulations, and then of course, balancing that with like personal judgment, professional judgment and trust. Like if insurance is a social institution, where do you think they should be towing the line between these kind of different constructs?
00:26:52
Speaker
Well, let me make it a little bit more complicated even than that first. Okay. So yeah after I did the work on infant intensive care units, I went on to do ah research on HIV.
00:27:03
Speaker
um And the reason that I studied HIV was because while I was in the infant intensive care units, I noticed that even though nobody could master all the rules, they were busy writing still more rules, right? And these would be clinical guidelines um about things that, you know, this was on the forefront of medicine. And so say they would be figuring out, you know, what mixture, you know, when to give breast milk and when to give formula to babies or, you know, when to do one kind of therapy versus another. And, you know, over the...
00:27:32
Speaker
last few decades, how infant intensive care is done has been is being done has changed quite a lot there've been a lot. There's been a lot of innovation there and you know some serious mistakes along the way. but um So they need to be writing these new clinical guidelines. But when you have a situation where people are so overwhelmed with knowledge,
00:27:52
Speaker
um embedded in these guidelines that they can't master at all, then, you know, there's there's ah a big problem. It helps a little bit to have handheld devices now that have a lot of the information put into them.
00:28:03
Speaker
But these are also training institutions, right? And so a lot of the people doing hands-on care, the physicians doing hands-on care, are residents, right, who are going cycling through that for the first time.
00:28:14
Speaker
um Okay, so um so most of the time, the people on the ward aren't facing the insurers directly, right? And so, um you know, in some senses, I think what we want to do is we want to have...
00:28:30
Speaker
you know Honestly, of course, what we would prefer is ah to have an environment where we have a streamlined set of insurance are oversight because we had a national health insurance system. right That would dramatically reduce the amount of to-ing and fro-ing over what the rules are and what's covered and what isn't covered.
00:28:53
Speaker
um So when I was studying HIV, I was looking at you know it's ah what happens across different healthcare environments because you know it's like the rules for HIV, the clinical guidelines, and also the rules about the conduct of research are not only used in the U.S., but they're used in other countries where you know until the last few months, ah the U.S. has provided a lot of funding for HIV treatment and research.
00:29:17
Speaker
um and But that that treatment and research came with American guidelines that really didn't fit in those situations. And you know so the incentive problems then really get out of whack in situations where people are not only having to master the rules, but having to modify the rules and explain why they've modified the rules because they don't fit in their environments.
00:29:38
Speaker
right And so I think one of the things that we want is we want to put more of this back in the hands of the physicians who are actually dealing with the interface between the patient and the rules, right?
00:29:52
Speaker
um Because a lot of times, you know, the insurance company is kind of second guessing that without adequate information about um what's actually going on with the patient. And the physician is the one who has to make the quick assessment.
00:30:05
Speaker
of what needs to be done on the ground. um And so, you know, sort of making these excessively legalistic puts um ah puts discretion at the long place. It puts it too high up in the system rather than at the the ground level where the encounter is actually occurring. So I think something that switched that would be really helpful.
00:30:27
Speaker
Yeah. And I definitely think that's like something that would be really like a true value add to the system because, of course, like right now it's a really difficult line that we're kind of towing between these different like things that come into play.
The Social Role of Insurance
00:30:37
Speaker
um And i would love to hear your role as a sociologist. You provide a really different perspective from a lot of other guests who like are on the commercial side of things or they're economists and are constantly looking at incentives.
00:30:48
Speaker
You really bring a great insight into how social constructs and insurance's role in society can really, um should impact how we view insurance. And we'll have to hear, like, I mean, kind of as we end off here, like, what message would you like to leave our audience with, like, about insurance's role in society?
00:31:03
Speaker
And, like, for our everyday people, like, where do you think we should be, like, how do you think we should be thinking about insurance, both, like, when we encourage our policymakers to make decisions and just, like, overall, when we interact with insurance ourselves? Like, what should the average person or policymaker understand about insurance and risk that we often um kind of overlook?
00:31:21
Speaker
Well, I think one thing that we haven't thought through as a society is that a lot of times in American society, we've been leaving the hard decisions about healthcare care to organizations that are not ah public institutions. I mean, so like...
00:31:37
Speaker
um The regulation of insurance of health care has often been done not by public ah organizations, not but but by instead by um entities that began in the health care world and then were gradually sort of incorporated into the regulation of healthcare. So for instance, one of the big organizations is the Joint Commission.
00:32:02
Speaker
And the Joint Commission, you know, it's it's changed its name over over the years from JCHO to just the Joint Commission and so forth. But, you know, it began with ah the American College of Surgeons.
00:32:14
Speaker
And um you know So it was it's basically, it does a lot of accrediting of healthcare organizations and healthcare programs and training programs and so forth. um And the way that it became a big regulator was that when Medicare and Medicaid came in, in order for entities to receive reimbursement from the government, um they had to be accredited but did by the Joint Commission, right? And so this was in some sense as the American government sort of um shirking on a responsibility to set standards and letting these other organizations set standards.
00:32:49
Speaker
I mean, honestly, right now we're kind of lucky about that because our government is stepping away from sensible standards, right? So I just heard something yesterday where somebody was saying, know, it was an interview with a pediatrician about the changing rules about ah COVID vaccinations for children.
00:33:07
Speaker
And, you know, they were saying, well, you know, we don't trust the CDC at this point, but we still trust the American Academy of Pediatrics, right? So these private organizations are not subject to the sort of the political winds that are going on right now. But as a general matter,
00:33:23
Speaker
you know, questions that have been hard, rather than debating them in Congress and so forth, they've kind of been left to insurance companies. But it's been left to insurance companies rather than being left to the groups of professionals like physicians who are closer to the ground. And so, you know, i think we need to get our heads on straight about who are the people who should be setting the standards and how those should be articulated with payment schemes.
00:33:49
Speaker
um And the other big thing, of course, is that You know, it's like we need to find ways of providing coverage for people, whether they are employed or not, and whether they're poor or rich. um And, you know, it's a really screwy society that thinks that um but our health is not interdependent with the health of other people.
00:34:10
Speaker
um And, you know, there was a period during the Obama era when some of these things were sort of taken out of the realm of insurance. And, you know, it's like everybody can have COVID vaccinations, for instance, and everybody can have COVID tests.
00:34:23
Speaker
Very sensible because, you know, this is an infectious disease. um And it really emphasizes the way that we're interdependent with each other in a way that insurers have kind of stepped away from.
00:34:35
Speaker
So... Yeah, I think one thing we often overlook is that like insurance is it's more than just like about a single person's health care. Like, of course, like it might not be directly infectious like COVID, for example, but like it still plays a huge role in how we spend money, like what the U.S. spends money and like that, of course, like Well, and insurance policy at the high level, even if you are like an employer sponsored insurance, if the US, for example, expands Medicaid, like that will do a lot more and can impact a lot more people than just the people on Medicaid directly.
00:35:03
Speaker
and things I think that's something important to acknowledge. Yeah. Yeah. and however Yeah, and i I think it's, I really appreciate your time today. Also, Dr. Heimer, just kind of walking us through your entire story. And I know like your first book was i was like really going deep into like um how in ensure risk and reactive risk is super important across the different lines. And it's really interesting to hear like how you got into health insurance specifically and those different like nuances within it.
00:35:27
Speaker
um But thank you again for coming on today. it's been super great to have you and kind of share your story and learn more about like these, the way social, constructs and things interplay with the way like insurers make decisions and vice versa. Thank you so much. It's been interesting for me as well.
00:35:43
Speaker
Awesome.
Episode Wrap-up
00:35:58
Speaker
Thanks for listening to The Healthcare Theory. Every Tuesday, expect a new episode on the platform of your choice. You can find us on Spotify, Apple Music, YouTube, any streaming platform you can imagine.
00:36:10
Speaker
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