Three Words That Health Care Should Stop Using: Insurance, Market, and Quality (Part 1 of 2)

Reading the daily papers, I have gotten increasingly frustrated at the misunderstandings that journalists and the public bring to the debates of over health expansion, costs, and reform. But you can’t blame them–our own industry has created the confusion by misusing terms and concepts that work in other places but not in health. Worse still, the health care industry has let policy-makers embed the incorrect impressions into laws and regulations.

So in this article I’ll promote the long process of correcting the public’s impressions of health care–by purging three dangerous words from health care vocabulary.


The health care insurance industry looks like no other insurance industry in the world. When we think of insurance, we think of paying semi-annually into a fund we hope we never need to use. But perhaps every twenty years or so, we suffer damage to our car, our house, or our business, and the insurance kicks in. That may have been true for health care 70 years ago, when you wouldn’t see the doctor unless you fell into a pit or came down with some illness they likely couldn’t cure anyway. The insurance model is totally unsuited for health care today.

The Affordable Care Act made some symbolic gestures toward a recognition that modern health care should embrace prevention and wellness. For instance, it eliminated copays for preventative visits. The insurance companies took that wording very literally: if you dare to bring up an actual medical problem during your preventative visit, they charge you a copay. Yet the “preventative” part of the visit usually consists of a lecture to stop smoking and go on the Mediterranean diet.

Effective wellness programs jettison the notion of insurance (although patients need separate insurance for catastrophic problems). They keep in regular contact with clients, provide coaching, and sometimes use intelligent digital interventions such as described by Dr. Joseph Kvedar in The Internet of Healthy Things (which I reviewed shortly after its release). There are scattered indications that these programs do their job. As they spread, the system set up to deal with catastrophic health events will have to adapt and take a modest role within a behavioral health model.

The term “insurance” is so widely applied to our healh funding model that we can’t make it go away. Perhaps we should put the word in quotation marks wherever it must be used.


This term is less ubiquitous than “insurance” but may be even more harmful. Numerous commenters have pointed out the difference between health care and actual markets:

  • In a market, you can walk away and refuse to pay for a good that is too expensive. If the price of beef goes through the roof, you can switch to beans (and probably should, for your own health). So the best time to argue with someone who promotes a health care market may be right after he’s fallen from a ladder and is clutching at his leg in agony. Ask him, “Do you feel you can walk away from an offer of health care?” Cruel, but a lesson he won’t forget.

  • A market serves people who can afford it. It’s hard to find a stylish hair dresser in a poor neighborhood because no one can pay $200 for a cut. But here’s the rub: the people who need health care the most can’t afford it. Someone with serious mental or physical problems is less likely to find work or be able to attend a college with health insurance. Parents of seriously ill children have to take time off from work to care for them. And so on. It’s what economists–who have trouble discarding the market way of thinking–call a market failure.

  • In a market, you know what you’re going to pay for a service and what your options are. Enough said.

  • In a market, you can evaluate the quality of a service and judge (at least in retrospect) whether it was worth the cost. I’ll deal with quality in the next section.

The misconception of health care as a market came to a head in the implementation of the Affordable Care Act. Presumably, millions of “young invincibles” were avoiding health insurance because of the cost. The individual mandate, combined with affordable plans on health care exchanges, would bring them flooding into the insurance system, lowering costs for everyone and balancing the burden created by the many sick people who we knew would join. And yet now we have stubbornly rising health care rates, deductibles, and caps, along with new costs in the states where Medicaid expanded Where did this all fall apart?

Part of the problem is certainly the recession, which caused incomes to decline or stagnate and exacerbated people’s health care needs. Also, there was a pent-up need for treatment among people who had lacked health insurance and avoided treatment for some time. This comes through in a study of prescription medication use. Furthermore, people don’t change habits overnight: many continue to over-rely on the emergency room (perhaps because of a shortage of primary care providers).

But there’s another unanticipated factor: the “young invincibles” actually start using health care once they get access to it. An analysis showed that mental health needs among the young are much higher than expected. In particular, they suffer widely from depression and anxiety, which is entirely reasonable given the state of our world. (I know that these conditions are connected to genetics and biology, but environment must also play a role.)

Ultimately, until we get behavioral health in place for everybody, health care costs will continue to rise and we won’t realize the promise of near-universal coverage. Many health care activists–especially during the recent political primary season–call for a single-payer system, which certainly would introduce many efficiencies. But it doesn’t solve the problems of chronic conditions and unhealthy lifestyles–that will require policy action on levels ranging from improvements in air cleanliness to new opportunities for isolated individuals to socialize. Meanwhile, we still have to look at the notion of quality in tomorrow’s post.

About the author

Andy Oram

Andy Oram

Andy Oram writes and edits documents about many aspects of computing, ranging in size from blog postings to full-length books. Topics cover a wide range of computer technologies: data science and machine learning, programming languages, Web performance, Internet of Things, databases, free and open source software, and more. My editorial output at O'Reilly Media included the first books ever published commercially in the United States on Linux, the 2001 title Peer-to-Peer (frequently cited in connection with those technologies), and the 2007 title Beautiful Code. He is a regular correspondent on health IT and health policy for He also contributes to other publications about policy issues related to the Internet and about trends affecting technical innovation and its effects on society. Print publications where his work has appeared include The Economist, Communications of the ACM, Copyright World, the Journal of Information Technology & Politics, Vanguardia Dossier, and Internet Law and Business.


  • Well said. I would replace “insurance” with payment, “market” with perhaps access depending on context, and “quality” with outcomes. Certainly health “insurance” isn’t really insurance in any traditional sense. And healthcare “market” would only apply to device vendors and the like. The most important thing is are we keeping people well rather than simply moving from crisis to crisis.

  • It never ceases to amaze me the blinders that those of you continue to maintain when it comes to health care, healthy choices and costs.
    Policy makers have this fantasy that you can regulate behaviors, well wake up, you cant. If someone is required to pay a tax because they dont have health insurance it becomes their personal situation that dictates whether they choose to take the risk of spending more on a health insurance policy or risk it. Choices that policy makers have eliminated prevent individuals from meeting their own needs based on their own health perception needs and financial considerations. Thank obomacare for that. Young people have limited discretionary income as it is, starting careers, families, paying college loans…
    And “single payer”…i believe you are deluding yourself if you think that would help. You will have less primary care if you went that route. Profit is the mothers milk of an economy, didn’t you learn this in economics. Take this motive away in any industry even those that espouse altruism and you will get what you deserve.. antiquated equipment, bloated bureaucrats, fewer providers and greater distance between those who can afford private care and those that cant.
    I believe the author has never experienced the day to day decisions that patients and health care providers need to make to help make their lives work and to provide appropriate care for their patients…
    Try thinking out of the box and come up with some novel ways people can get health care paid for…

  • I appreciate all the comments, although I’m not sure how some topics apply to this article (the commons, the tax, etc.). Although you can offer opinions on other aspects of health care, I do ask that respondents refrain from attributing opinions to me, such as on single-payer, that I have not expressed.

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