I’m starting to think a big part of the problem is health insurance itself. After people got used to insurance picking up the tab for their health care, they lost all incentives to keep the costs down. They weren’t even paying for their insurance, for the most part; their employers were.
Your back is sore? Go to the doc and get an MRI, just to be on the “safe” side. People didn’t know it cost $1200 and didn’t care. The doc owned the MRI, so he had his incentive to use it. The insurance was picking up the bill, so what the heck? I had a friend who was a secretary at a personal injury law firm, and part of her job was to collect medical bills for the clients’ settlement packages. She said that 95% of the people had no idea what their medical bills were when she called. It was just not a concern.
Now that the whole system is breaking down because of the spiraling costs, people want the government to step in and let the government do what it does best: give us something for nothing. Like the prescription drug bill, that required not one extra cent in taxes. Like medicare and social security, which are ridiculously underfunded and will someday bankrupt this nation unless we figure out how to undo those promises made in the heat of electoral politics. Of course, actually paying for them is out of the question.
Health care expenses family and friends have racked up from sports and exercise injuries are beyond comprehension. Shouldn’t that be considered part of the lifestyle choices also?
I’m starting to think a big part of the problem is health insurance itself. After people got used to insurance picking up the tab for their health care, they lost all incentives to keep the costs down.
That is exactly what the problem is. Insurance is a means of spreading risk out so that a catastrophic event doesn't financially impact the individual all at once. Cost is spread out over time and over the multiple individuals purchasing insurance from that company. The company is free to manage risk and pricing so as to stay competitive and profitable.
Instead we have "insurance" that covers even the most routine and mundane aspects of health care. It's completely removed the free market forces from the equation.
And the reason we have this system, is because Congress made employer-provided health insurance tax deductible.
“I’m starting to think a big part of the problem is health insurance itself. After people got used to insurance picking up the tab for their health care, they lost all incentives to keep the costs down. They weren’t even paying for their insurance, for the most part; their employers were.”
This is absolutely true, and it is why HSAs were such a great idea when proposed by President Bush, and why the Dems want desperately to kill HSAs.
They’re not perfect—they tend to cherry-pick the young and healthy, who have time to accumulate savings in their HSA—but they point in the right direction. Stop insulating patients from the true costs of healthcare. This does not mean to throw them out on their own, but to make some common-sense reforms: stop employer-subsidized healthcare, and give everyone a tax credit to buy insurance; open insurance markets across state lines; develop ways for the self-employed and small businesses to join larger risk pools; and implement tort reform, which is a huge cause of “preventive medicine,” where doctors run CYA tests.
In this sense, healthcare is like university tuition, in which many if not most students get grants, subsidies, low-cost loans, etc. The resulting is skyrocketing costs, because students and their parents are insulated from the true cost.