Why are health care costs increasing so fast? Did you ever wonder about that? We keep hearing about how health care costs, Medicare, Medicare, Obamacare are going to bankrupt us, but why is that? Why are the cots going up so fast? It is an important challenge for local officials and utilities who generally pay the health insurance costs for their workers. There is more to the story that we are not being told.
One problem that get identified quickly is that only 80% of the population is included in the health care system. Many who are not are “healthy” young people who don’t demand the services. The concept of the health care bill was to solve this problem by spreading the costs of health care across the entire population using private and public providers. First, I think there are way more unhealthy people included in the 20% than we realize because the political dialogue keeps focusing on the few that want to live off the grid – I feel great so I don’t need insurance. That guy is part of the problem. That guy gets into a car accident, gets taken to a public hospital, gets treated, gets a bill for $26,000 to fix his broken leg, refuses to pay anything, and the taxpayers get stuck with the bill. My solution to that guy is if you don’t want to pay for health insurance, bring cash. Otherwise, “no soup for you!” to paraphrase a famous Seinfeld episode. Of course my doctor, nurse and therapy friends think that’s a little cold hearted.
The next argument is the cost of doctors, therapists and nurses. Okay, I know a bunch of them, and that’s not where the money goes. These people have lost money in the past 10 years. Many are going form full-time to part-time employments as Medicare, Medicaid and health insurance bureaucrats decide services are no longer needed. They will tell you the major change in their lives is paperwork….hold that thought for a moment.
The cost of drugs comes up. Medicare and Medicare are the largest purchasers of pharmaceuticals in the world. So in other works, they set the lowest price by supposedly bidding the “contracts” for services. Only there is often only one provider, so exactly how does that work? Sounds like we don’t get a good deal there, which is why the arguments for importing Canadian drugs or drugs from Mexico keeps popping up. They get a better deal than we do and most of these are supposedly AMERICAN companies. No home town discount (I guess I know where free agent baseball players get the idea). And my medical friends confirm this as an issue. Check out the comments from Mr. Falloon at Life Extension (www.lef.org) for discussion.
So let’s go back to the paperwork discussion. Once upon a time doctors simply sent a little paperwork to the health insurance company or the federal government and said you needed some service. And the insurance company processed the bill for the services. The cost was paid by insurance premiums collected by the insurance company. Everyone was happy. But then someone at an insurance company said, “wait we could make more money if we asked more questions and paid less for these services. It would help our bottom line.” So you hear the complaint that the folks at the insurance companies are deciding whether you need that procedure or not. And contractors decide if someone needs Medicare or Medicaid services, not the government, not your doctor, your nurse or your therapist. Not any person that knows you, but some unseen, private sector bureaucrat who’s goal is to minimize the amount of your premium spent on services so they can enhance their bottom line. And apparently they are very effective because the health insurance industry is very lucrative. So maybe we have stumbled onto something here. Maybe the cost of medical coverage is more related to drugs and bureaucracy (and it is not government bureaucracy!!) than the actual cost of services. Maybe the old system, even if there was some fraud in it, wasn’t nearly as bad as it was made out to be. It reminds me of one of the 4 laws of City management I developed years ago: Never give elected officials a bad alternative – it becomes a magnet. It always worked (hence a law). I didn’t learn why until years later when I realized, that the worst option was the one all the lobbyists lobbied for even at the local level. It was the option where they could make the most money “fixing