We’ve known for decades that health care costs are bankrupting the U.S. (though many Americans mistakenly believe that the government spends more on the military). The latest New Yorker has a good article on how the money actually gets spent.
6 thoughts on “Health Care Costs”
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Interesting article. As the article itself points out, the cause for high costs is the same as what caused the current economic crisis. Greed and lack of regulation.
My healthcare prescription looks something like this: All physicians are paid a salary by the Federal Government as their only income. Everything else healthcare is provided by “qualified healthcare organizations” (QHO) which may be for-profit, non-profit or government (local, state or federal) operated. While the Feds pay their salary, the QHOs hire and fire the physicians that work for them. While there are some minimum standards of care, the basic rule is “what the Physicians involved in a patient’s care say goes”. Physician decisions may only be reviewed/reversed by other physicians who are personally involved with the care of the patient involved. The country is divided into service regions; the QHO may choose which regions they operate in but must accept all applicants within the regions they serve. No advertising is allowed for QHOs or medications. An independent organization is created to evaluate the performance of QHO’s and Physicians. Workers compensation (medical only) and work related medical monitoring become the responsibility of QHOs. All individuals receive a voucher from the Federal Government which covers the full cost of enrollment with a QHO.
“He gave me a quizzical look. We tried to imagine the scenario. A cardiologist tells an elderly woman that she needs bypass surgery and has Dr. Dyke see her. They discuss the blockages in her heart, the operation, the risks. And now they’re supposed to haggle over the price as if he were selling a rug in a souk? “I’ll do three vessels for thirty thousand, but if you take four I’ll throw in an extra night in the I.C.U.”—that sort of thing? Dyke shook his head. “Who comes up with this stuff?” he asked. “Any plan that relies on the sheep to negotiate with the wolves is doomed to failure.””
I suspect he make a little too much light of this. The sheep negotiate with the wolves in every other aspect of their lives, and the sheep don’t always do too badly. It’s called shopping around. I’m not sure how this is any different than when you go to buy a car, or a house, or a washing machine, or have a new roof put on. The consumer has the normal protections; more can be added. It’s the usual third-party payer problem. The current situation completely removes any ability of the
I recently went through surgery and due to the way my insurance works was exposed to all the costs, some of which I paid upfront and then got reimbursed for.
The exact same procedures in a hospital vs. surgery center, and hospital labs vs. independent labs, are literally 4 to 10 times more from the hospital. This despite the fact that the hospitals in my area are all non-profits while the independents are for-profit.
Example 1: Chest x ray needed as pre-surgery testing (since I was going under general anesthesia): hospital charge: $185 plus interpretation charge. Independent, pay on day of service charge: $31 including interpretation.
Example 2: operating room charges: hospital prices from 2 hospitals in my area ranged from $7500 (cash price $5000) to $9500, and they could not give me a set price since they charge for every minute difference in operations. Surgery center: flat rate $1800, discounted to $1200 if I paid on the day of surgery (I paid with a credit card).
Dealing with the independents was easy and forthright, even compassionate at times. Dealing with the hospitals was arcane, Byzantine, “not my department” bureaucracy with all the compassion of the DMV.
If I had not known the prices, which are hidden from Medicare and most private insurance patients as well, I probably would have gone to the more expensive places by default.
As far as the article goes, quoting Peter Orszag, Obama’s budget director is unintentionally hilarious, since one of his prior jobs was as adviser to the Central Bank of Iceland, which didn’t seem to work out too well.
Clearly people who pay directly, or are least exposed to the costs are the answer, not another huge Federal boondoggle.
There is a reason why one of the only medical procedures to be massively cheaper now than 5 years ago is … LASIK. Insurance doesn’t cover it, so patients must pay for it on their own.
Subject to market forces – supply, demand, and consumers free to find the best price/service/outcome – prices have been driven down many times from where they started just a few years ago.
Good object lesson for the rest of the health care sector.
Shopping for health care sounds great, but seems to me totally unworkable. Imaging you’re typing on your computer when you develop the worst headache of your life and realize that your right side is weak, and you can’t speak…Time to go shopping! Or your kid is desperately sick…time to haggle over prices! The main problem with health care is that people mistake if for a commodity that will follow the rules of regular markets. It just is not the same as other service industry. Sure there may be sectors that are like any other service, i.e. the lasik example, but on the whole it is different than getting your hair cut…