According to an article in the June 26, 2008 Wall Street Journal, more and more Americans are delaying medical care because it costs too much.
More than 1 in 6 patients who have health insurance either delayed or went without medical care in 2007 while almost 40% of those without insurance delayed or went without medical care.
People delay or forgo care because the markups are huge, and the only way we can get “realistic” pricing is to purchase overpriced insurance.
The manner in which we pay for medical care in this country must fundamentally change.
1. There has to be transparency in pricing.
Consumers need to be able to compare costs for a free market to work. I just received the first bill for the surgery I had earlier this month. The total hospital costs (not including doctor charges) were just under $30,000. In the span of 24 hours, I received hospital care worth more than the amount of money many people take home in a year. But that isn’t what the hospital got paid.
After insurance discounts, the total paid to the hospital was $6,500. I’m sure that Medicare would pay even less for the same surgery done by the same surgeon.
In other words, I got an 80% discount for surgery just because I had medical insurance. Same thing with my radiological testing - about a 70% discount. Someone else with Medicare could get the surgery for free and the physician/hospital would get stiffed even more for their work.
Of course, if the hospitals would get smart and start charging reasonable prices to everyone, they wouldn’t have to fight with the insurance company middlemen. Offer financing like a car loan if you have to. Some money is better than no money at all.
2. People must stop expecting free health care.
The public generally doesn’t think anything about paying $70/month for cell phones. We don’t blink when we pay a mechanic $85/hour to fix our car. Plumbers charge us before they leave the office and they kick up their rate when they come out in an emergency. We know up front that if we go to see an attorney, we’ll pay a large hourly rate and may have to come up with a several thousand dollar retainer before the attorney will even talk to us.
But if someone saves our life in an emergency department or if someone fixes our mangled arm, a lot of times the care is just expected - because many times someone else is paying for it. If we walk into a physician’s office, many of us expect to pay a $20 co pay. That’s it. “Don’t know how much it costs, don’t care how much it costs, all I know is I’m not paying for it.” Maybe I’m paying a $50 copay for the ED - and even that’s too much. Oh, and if the care isn’t darn near perfect, that’s OK, because then you don’t have to pay an attorney to represent you - they’ll do so on a contingency for free.
Until people begin treating medical care like any other service that is provided to them, the problem won’t change. In fact, the problem will get worse. Fewer and fewer doctors will be willing to provide services for lesser and lesser payments. If anyone reading this got paid 10% less this year and was expected to be more productive at what they were doing, how many would look for another job?
3. Stop Using Insurance For Basic Health Care
Many people may not be paying for their medical care, but the third parties that do pay are paying out less and less, then pocketing the difference.
Our family’s insurance rates just went up again. Now we’re paying about $14,000 per year for health insurance with $1000 deductibles. I’m coming to the point that I am strongly considering switching to $10,000 deductibles, paying $2,000 per year, and putting the other $1,000 per month into a money market account. If our family needs the money to pay for health care, it’s there. If not, then we’re $10,000 per year ahead.
Let insurance be there for the truly major medical expenses like it is now for home insurance and auto insurance. This gets back to the discussion we had earlier about Tier IV medications. We are getting to the price point where people may take their chances without insurance and negotiate with medical providers directly. To me, that’s the way it should be.
Insurance should be there to prevent bankruptcy, not to pay for a storm window that was broken with a baseball or a flat tire. Use insurance as it was intended and let the free market prevail.
As more physicians retire early or leave medical practice, less physicians enter primary care, and the baby boomers hit retirement age, we’re heading for the perfect storm - too many patients with multiple medical problems and not enough physicians. Like I mentioned in a previous rant on Kevin’s blog, even if the practice of medicine was made more appealing, it will take 4 years of medical school and 3-5 years of residency before more physicians will be ready to treat patients. We’ll be behind the curve with disastrous results.
When enough people pay nothing for their medical care, that’s just what they’ll get in return. Of course, you won’t be told that you’ll get nothing. You’ll just have to wait so long to get the care that either you’ll get worse to the point that you need emergency care or you’ll just die while you wait. Covert rationing is a simple way to avoid paying for a product.
Quality care, quick care, free care - pick any two.
Will people see the value in medical care before it is too late?
Not keeping my hopes up.