Tags: Health Topics | Healthcare Reform | government | insurance | premiums

Government, No Transparency, Overuse Drive Up Healthcare Costs

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Supporters of single-payer healthcare march in Sacramento, Calif, on April 26, 2017. A bill, SB562, sponsored by Democratic State Sens. Ricardo Lara, D-Bell Gardens, and Toni Atkins, D-San Diego, that would guarantee health coverage for all California residents, including people living in the country illegally is to be heard in the State Senate Health Committee soon. (Rich Pedroncelli/AP)

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Wednesday, 10 May 2017 11:57 AM Current | Bio | Archive

Bloomberg reports Obamacare premiums are scheduled to skyrocket up to 59 percent in Maryland, 38 percent in Virginia and 34 percent in Connecticut. In Baltimore, a 40–year–old would pay $715.00 a month for a plan with a $2,500 deductible.

Health insurance is costly for three reasons: Government interference, lack of price transparency, and consumer overuse.

Here’s what would happen if we used car insurance like health insurance.

We’d expect oil changes to be covered after our $20.00 co–pay. There’d also be a long list of routine checks and diagnostics run each time your ride was in the shop, because the Departrment of Transportation (DOT) requires mechanics to treat every vehicle like it was a 1961 DeSoto that never had the oil changed.

Your $250.00 invoice would have itemized charges for GoJo, shop rags, coveralls, disposable ratchets, oil, opening the oil, oil filter and about 100 other entries.

But that doesn’t matter, since after the co–pay, everything is free! Besides you feel sorry for DeSoto owners.

Later the car breaks down on the highway. You tell the CarFlight pilot to drop it off at the Mercedes dealer. Cost doesn’t matter once the deductible is paid, but you do demand a nice loaner while your car is in surgery.

Before leaving, you tell the mechanic to check the tires and see if they need replacing, because after all that’s what insurance is for, isn’t it?

Car insurance usage at that level would end our obesity crisis, because we’d soon be a nation of pedestrians. Obamacare would be joined by "Obamacar."

Real Obamacare reform would require the health market to operate like the auto market.

I don’t mean the patient goes in the doctor’s office, negotiates for six hours and agrees on a price to have his appendix removed. Then, in his weakened state, the finance manager pressures him into breast implants for his wife.

What I do mean is allowing consumer choice and provider accountability.

Smart consumers get an estimate before their car is serviced. If it’s too high, they talk to another shop. If it’s too much money to sink into an old car, you start shopping for new.

That’s price transparency. In healthcare we have price opacity. If you ask the hospital what it costs to have your appendix removed you get one of three replies: Uproarious, table–pounding laughter. Dead silence. Or, thinly veiled contempt at such an ignorant question.

Price uncertainty might make sense if it was a brain transplant. Plenty of variables there, but that’s not the case with appendectomies.

The "Annals of Surgery" estimates 280,000 are performed each year. Producing a reliable cost estimate should be routine — give or take a sponge left inside.

Yet you can’t get an estimate because consumer knowledge is consumer power.

One way to begin imposing market discipline would be to require any hospital taking federal money to post turnkey prices for the 25 most common hospitalized surgical procedures; the 25 most common out-patient procedures and the 25 most common tests. All charges must match the best price offered insurance companies.

The howls this would generate from the medical-industrial complex prove how useful the information is. (More details on this in an earlier column here.)

And speaking of sponges, if you take your car in to the shop for an engine overhaul and a mechanic leaves a wrench in the crankcase, that car is going back to the shop. The subsequent repair to fix the repair is free.

That’s not the way it works with hospitals. Hospitals make money on their mistakes and get away with it because consumers send the bill to the insurance company.

That means higher premiums in the long run and it encourages incompetence. If the guy who works on your car has to fix his mistakes for free, the guy who works on your heart should, too.

People should pay for routine doctor’s visits out of their own pocket and save insurance for major expenses. When my family was between insurance policies I negotiated the cost of doctor’s appointments and lab tests by offering to pay in full right before I left. I saved 30 to 40 percent by taking the insurance company out of the equation.

Putting a middleman between the provider and the patient adds another layer of cost and bureaucracy. Hiding the cost of medical services encourages overuse.

Consumers can choose health insurance coverage options just like they can choose auto insurance coverage. Government "experts" requiring coverage simply guarantees a lifetime income to lobbyists and treats citizens like serfs.

My car market analogy isn’t perfect. Legislators protect in-state auto dealers from out of state competition, just like health insurance companies are protected now. It is certainly a start, though, and a vast improvement over what we have now.

Michael R. Shannon is a commentator, researcher for the League of American Voters, and an award-winning political and advertising consultant with nationwide and international experience. He is author of "Conservative Christian’s Guidebook for Living in Secular Times (Now with added humor!)." Read more of Michael Shannon's reports — Go Here Now.

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Health insurance is costly for three reasons. Government interference, lack of price transparency, and consumer overuse.
government, insurance, premiums
846
2017-57-10
Wednesday, 10 May 2017 11:57 AM
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