Many years ago, while I was involved in developing the pre-hospital emergency medical care system in Massachusetts, I went with a group to meet with the then-president of Blue Cross Blue Shield of Massachusetts, John Larkin Thompson. We were ushered into a magnificent office, larger than any I had seen in the state offices or hospitals where I worked. I was taken aback to find that this was not Mr. Thompson’s office, but that of his secretary! We were soon shown into the office of the Great Man himself, and one could barely see him at the far end of his office. Plush carpet made our approach to his desk soundless, and the furnishings would not have been out of place in the Presidential Suite at the Ritz. I realized, of course, that all of this was paid for by our health insurance premiums. I also realized that this magnificent suite of offices benefitted only its occupants. It certainly added no value for its subscribers.
The idea behind insurance is in essence a simple one: share risk among many people so that an illness or accident does not ruin any one person or family. The original health insurance cooperatives functioned in this way and were quite affordable. Insurance per se shares the risk but adds no value and should not carry a large overhead of its own — but in the United States it clearly does.
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