For that matter, neither does he understand how insurance works.

Insurance is not pooling good and bad risks. It’s pooling risks of a like (but unknown) nature. Once you have heart disease, your risk of health problems is relatively known. One million people with heart disease could easily be underwritten. But their premiums would need to reflect their expected costs.

An adverse selection death spiral doesn’t occur when healthy people bail out of the risk pool. Rather, adverse selection death spirals occur when insurers (or politicians) attempt to cross-subsidize unprofitable customers by gouging profitable ones (this doesn’t even make good business sense).

While “common sense” might suggest that fee-for-service medicine encourages too much use of medical services, it also suggests that salaried doctors would have the opposite incentive: To see only healthy patients and chat to them about minor issues during hour-long appointments.

There’s no perfect way to pay any professional. The problem is not how doctors are paid, but who pays them. As long as it’s not the patient who pays, it’s a waste of time discussing anything else.