The study is saying that the reason aspirin costs $5 a pill in the hospital is that many people don't pay for care, so hospitals pass along higher costs to those who can pay, ie, the insured. Health insurance companies then pass those costs along to people as premiums. So when people don't pay for their care, those who are insured pay more.
Basic things that need to happen for costs to come down:
1. More transparency in costs. Doctors, hospitals, etc. should publish exactly how much they charge for everything.
2. More people should carry catastrophic insurance, not the kind that covers everything like well-patient visits and most prescriptions. The reason drug companies and doctors charge so much is that most people are not paying full freight-- so there's no price sensitivity. Insurance should cover low probability high cost events like hospital visits, not high-probability low-cost events like doctors visits.
3. Malpractice reform. It's not as big a part of the cost structure as many people think, but it's there, and adds to costs by more tests.
4. More doctors -- the AMA artificially holds the numbers low to keep salaries up. We need more medical schools and residency slots.
5. More nurses/physicians assistants/nurse practitioners doing more things doctors used to do. Also pharmacists. All these people can diagnose most ailments, so there's no need for people to see a doctor for a sinus infection.
>>Basic things that need to happen for costs to come down:
>>1. More transparency in costs. Doctors, hospitals, etc. >>should publish exactly how much they charge for
>>everything.
Except for private practitioners who do not take insurance what is charged by doctors is academic. What is important is the reimbursement. Every medical procedure has a CPT code and the federal government and insurance companies set a reimbursement fee for each procedure. Typically insurance companies follow the governments lead and simply reimburse at some percentage of the governed rate, often lower.
http://www.cms.hhs.gov/providers/
>>2. More people should carry catastrophic insurance, not >>the kind that covers everything like well-patient visits >>and most prescriptions. The reason drug companies and >>doctors charge so much is that most people are not paying >>full freight-- so there's no price sensitivity. Insurance >>should cover low probability high cost events like >>hospital visits, not high-probability low-cost events >>like doctors visits.
The reason drug companies charge so much is they need to support research and development- getting a drug to market can easily run a company 500 million to 1 billion dollars with all the required trials, paperwork, R&D. They also advertise on TV now and that costs money and sell meds abroad at cut rate prices compared to the US because foreign governments give them no other choice.
Office visits are reimbursed at rates guided by the government, see the link above.
>>3. Malpractice reform. It's not as big a part of the cost >>structure as many people think, but it's there, and adds >>to costs by more tests.
A relatively minor component at least in my practice.
>>4. More doctors -- the AMA artificially holds the numbers >>low to keep salaries up. We need more medical schools and >>residency slots.
Its a bit more complicated than just that- medical schools are a money loser for universities (law schools are a money maker). Medical students choose career paths for many reasons but for many reimbursement is key. More popular (and often better compensated) areas of medicine include orthopedics, ENT, CV surgery, Cardiology. Less popular areas of medicine include psychiatry, pediatrics and compensation is historically lousy in these fields.
>>5. More nurses/physicians assistants/nurse practitioners >>doing more things doctors used to do. Also pharmacists. >>All these people can diagnose most ailments, so there's >>no need for people to see a doctor for a sinus infection.
Good for garden variety stuff but these folks can get in over their heads for the rarer stuff that pops in now and then. They need to know when to refer on and many don't.