According to news reports, the California Department of Insurance wants to slap health insurer PacifiCare with up to $9.9 billion in fines over alleged mismanagement and fraud:

California regulators seek up to $9.9 billion in fines from PacifiCare
By Duke Helfand, Los Angeles Times

California regulators are seeking fines of up to $9.9 billion from health insurer PacifiCare over allegations that it repeatedly mismanaged medical claims, lost thousands of patient documents, failed to pay doctors what they were owed and ignored calls to fix the problems.

In court filings and other documents, the California Department of Insurance says PacifiCare violated state law nearly 1 million times from 2006 to 2008 after it was purchased by UnitedHealth Group Inc., the nation’s largest health insurance company by revenue.

Regulators said the companies broke promises to maintain smooth operations for 130,000 of PacifiCare’s customers, resulting in what insurance officials nationwide believe is the largest fine ever sought against a U.S. health insurer.

“This is about intentional disregard for the interests of doctors, hospitals and patients in California, and the pursuit of cutting costs at any means possible,” said Adam Cole, the insurance department’s general counsel. “It’s a story of intense corporate greed.”

PacifiCare and UnitedHealth Group have rejected the state’s assertions, and they are fighting the proposed fines in a lengthy legal hearing that began 10 months ago in Oakland and could conclude as early as next month.

The insurers maintain that the state’s case largely involves administrative errors that did little harm to anyone. They point out that three-quarters of the allegations relate to PacifiCare’s alleged failure during a short period in 2007 to inform doctors and patients in correspondence of their right to appeal coverage decisions.

“The allegations concerning claims processing by PacifiCare are simply not true,” spokeswoman Cheryl Randolph said. “By all objective measures, PacifiCare pays its claims timely and accurately.”

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If PacifiCare is found civilly liable by a court, $9.9 billion still wouldn’t be punishment enough for a company whose parent, UnitedHealth Group Inc., had earnings of $23.3 billion in the second quarter of this year. None of the company’s executives are facing any prison time. And, PacifiCare will likely remain in business.

Why do we continue to allow a basic need such as as our health care to be handled by largely unaccountable private companies? A private insurer can swindle its customers and cheat doctors, but get away with only paying a fine. The customers can’t fire the executives and replace them with more competent and responsive people. Nor can the customers influence company policy. And  pre-existing conditions will make it difficult for policyholders to switch to another insurer.

There is a reason why we entrust our public safety, our roads, our water supply and other services we call “the commons” to the government and not to private interests. The public has the right to determine how and where its taxes are being spent. Public agencies have a duty to provide a service, and that’s all they are concerned about. If public officials are up to no good, the voters can toss them out and replace them.

Corporations have a duty to please their shareholders and make a profit. Actually delivering the service in a timely manner to the customers is usually secondary. If pumping up profits means cutting corners and leaving problems unfixed, then that’s what some unscrupulous companies will do. Insurers don’t care about your health. So why do we continue to be shocked when yet another health insurance company is accused of bilking customers and not providing a good product? Why does the United States insist on propping up a healthcare system that enables gouging and cheating?

We can no longer leave something as important as our health to the whims of a handful of corporate bosses and their bean counters. Health care is not a consumer product, but a public service. Health care is a shared responsibility, because we all benefit when everyone is kept healthy.