My experience with health care has frankly been few are far between, only involving one inguinal hernia, and two children. I count myself as one of the lucky ones. The premise for paying for these in modern day America is that insurance will pay most, and the patient will pay the rest.
Medical insurance companies and health care providers work out amongst themselves how much each procedure will cost. With different insurance companies securing different rates for their customers. All the while telling the insurance customer how much they are being “saved”. The customer/patient is left in the dark as to what procedures, medicines, surgeries, etc. will cost until it is time to pay the bill. Only to be hit with sticker shock about how much something costs, when being told that “insurance will cover most of it”. The whole thing runs on the premise of if we pay health care providers more money, they will charge less for their services. As though there is a limit to human greed. However, calling it greed is a little disingenuous. People are motivated by profit and doctors and health care professionals are no exception. They do provide a valuable service to society, and they should be compensated for that service.
Many have spent years to study and train to learn all the medical knowledge that they need to provide a necessary service. Their time and services are valuable, and the should be compensated. However, the existence of health insurance has perverted and distorted the behavior that would normally take place in a healthy competitive market. Customers are left blind because they do not know the prices for the services that they are needing. One can argue that such and such procedure is needed. If someone needs a hip replaced they only need one hip, but is there only one hospital or doctor who can perform it? Of course not. There are a multitude of hospitals in large metropolitan areas, with a multitude of doctors who can perform this operation. This goes for all operations.
The two basic reforms that is needed in health care is getting rid of all health insurance and transparent pricing for all services. No one should have to guess what something is going to cost them at which hospital and at which doctor. If people know the price and the services that were provided the open market would do its job in setting a market price for all procedures.
Now there would be differences in prices and quality of care, but that is normal in a free market. Hospitals and doctors would be driven by market forces to keep prices low and quality high.
Implementing this does create several problems; one, how do people get there money back they put it, two, how can people pay if they have no money, and finally, what about emergency service.
To break up the insurance companies would mean to dissolve them completely. Money given back to shareholders, bond holders and even customers proportionally. Basically, liquidation bankruptcy.
How can people pay that have no money? This was one of the reasons for the start of health insurance. Readers might be surprised to know that insurance is a scam that only works if people put in more then they take out, a Ponzi scheme. However, the solution is simple. People pay for services all the time and medical services should be no different. If people know what they should pay, and they choose to go to have that service. They are more likely to pay the full amount owed when the bill comes due. The health provider should work directly with the patient to come how to pay for the service. Cutting out the middle man of insurance. People could use health saving accounts if they wished to prepare for emergencies or defer medial costs. However, this time they can make an informed decision on how much they need to save, since they would know the prices that they would be paying. People’s resources would be better allocated, and hospitals could work on better services for people since they will be paid directly by them. This isn’t brain surgery… ohh wait it is. People who have 8 to 10 years of education can figure out a way to get paid.
Finally, emergency services. While there are many planned medical expenses, there are those that are unplanned. Here market forces could still be at work. People should have access to how much emergency services would cost. In this way competing ERs can compare amongst one another. This would also drive down prices and increase quality. The same payment structure could apply as planned services.
There is no need to have government be overly involved in this process when it comes to negotiating prices or being the only provider of health insurance. Of course, basic regulations on health and safety should apply. Places should be sanitary and safe, but the market needs to determine how much services cost.
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