Most of us know cars, and there's plenty of information on quality and price. Since you're paying for it, you'll bargain for the best price you can get. If
Competition keeps quality up and costs under control. That's free market economics. It doesn't work in health care.
Imagine you need surgery. If you're like most of us, you know little about medical quality measures, and you trust your doctor. So, a hospital with a so-so surgical record still draws patients -- quality doesn't count much.
You probably have no idea what your surgery will cost -- and good luck trying to find out. But once it exceeds the out-of-pocket limit on your insurance, you don't care. You won't walk over to Chevy for a cheaper price.
The result is a fun-house mirror reflection of free market economics. People don't understand what they're buying, and insurance is paying most of the bill. So medical providers don't really have to compete on quality or price.
The things they do compete on -- convenience, whiz-bang technology, heart-tugging TV ads -- push prices up, not down.
We've surrendered cost-control efforts to private health insurers, who have failed at it. None have enough clout to force real efficiency on medical providers. Instead, the insurers themselves milk the system and add flab.
To understand how things might be different, look at two figures: 2 percent versus 17 percent.
The first is original
Seventeen percent is the overhead for the typical private health insurance company. It includes profit, executive pay, marketing, negotiating with medical providers, and the bureaucracy that decides what medical bills get paid.
That doesn't count the cost of counter-bureaucracies set up by hospitals and doctors to deal with dozens of insurance companies and bill patients.
So, when you buy health insurance, you're financing flab.
Next, look at the miniscandal involving some kidney dialysis centers. Dialysis is covered by both
The Affordable Care Act, passed in 2010, punted on cost control, putting only a 15 percent to 20 percent limit on private insurance overhead and no limits on the price of care. Instead, the law known as Obamacare extended insurance coverage to 16 million people. A plan for a government insurance option was rejected.
So, let's look at how things are done in a couple of other rich nations,
During the Democratic debates, Sen.
Taxes finance it, and patients rarely see a medical bill. (Canadians buy private insurance for drug, dental and vision care, which the government doesn't cover.)
The government bargains fee rates with doctors, sets budget for hospitals, and controls drug prices. Canadian pharmacies do a lively business mailing cheap drugs to Americans.
As the owner of the big checkbook, Canadian government calls the shots on cost, and it keeps costs low. Costs are so low that Canadian patients have to wait for nonemergency treatments -- specialist appointments, cataract surgeries, hip replacements and the like. Waits run from under two weeks to begin radiation therapy, to as long as six months for a knee replacement.
Patients have small co-pays, about
It's clear that the American system of financing health care makes no sense at all. The solution from the right -- and from corporate America -- has been to push more costs on to patients. The average insurance deductible is now
The theory is that we Americans will seek less care and shop for cheap services if we have to pay more for them. How's that worked out for you?
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