There’s been a lot of buzz lately about the costs of medical care. I first noticed the trend with an op-ed by Steve Olsen in the Standard Examiner last month and the resultant follow-up from The Deseret Spectacle. Since then, it seems like everyone in the bloghive has an opinion on what to do to solve the problem. Now the United Way is getting in on the game by proposing a universal health coverage system a la Massachusetts. Just like the plan from back east, it doesn’t do a thing to actually make health care cheaper.
I’ve already written at length about what we can do to try and drive the costs of health care down. If we look at how Europeans with their “ ehic” have managed, maybe we can learn a thing or two and leave the heavy politics aside. A combination of patent reform (read: stop granting 20+ year government monopolies), greater HSA options, reduced educational requirements for low-level doctors, and doctor-run cooperatives for malpractice insurance would go a long way towards dropping the costs of medical care. Plans that simply subsidize the current high costs of medical care, like Romney’s plan and its sister plan from the United Way, do nothing but try and mask the true costs behind a mountain of tax dollars. An ostrich approach isn’t going to cut it on an issue of this level of import.
Even after we’ve cut down the costs of health care, it’s going to take more than just availability to get them used. After all, you pay $15 to see the PhD with 20 years of medical experience. Even if the visit to a lab tech was free, you’d probably still spring for the Cadillac treatment even though the insurer would save a bundle otherwise and you’d be getting the same standard of care. Simply put, we don’t feel enough of the cost difference to want to change our habits and end up being yet another drop that doesn’t believe he is responsible for the flood.
When I was without insurance and needed to see a doctor, I frequently paid a lot less than what I would have with an insurance policy. “Wait,” you might say, “that can’t be possible.” Not so fast, slick. If you only need to see a doctor once or twice a year, out-of-pocket visits will probably run about $150 without insurance and $30 with insurance. That, however, doesn’t include the cost of the insurance you aren’t even using. Add on the $120/mo that your employer withholds and now you’ve just spent nearly ten times what I spent out-of-pocket that year. It’ll go even higher when you figure in the portion of your health care costs that your employer covers which, in my case, adds about $6,000 per year. Holy wasted money, Batman. Paying $7,500 a year for $150 worth of use? That’d make anyone feel kind of scammed.
Even with CoolestWifeEver’s semi-recent health issues, we would have still saved a couple thousand a year in medical costs had we been free to manage all of that money ourselves. That’s taking into account an MRI, a spinal tap, numerous visits to a neurologist and a bunch of medication. Of course, we might have been able to get a better deal on medical care had we dropped a wad of Benajmins on the table. Every doctor I’ve ever gone to has done cash discounts. We probably would have also shopped around for places to fill prescriptions and checked out MRI pricing from a few different tech labs. Because pricing no longer mattered after the $500 deductible, what would we care if it was $1,500 or $2,500 for an MRI? It wasn’t our concern anymore.
And it’s not going to be our concern so long as our consumption of medical care is driven by grossly-deflated medical costs. I don’t like waste, but I have a hard time finding motivation to comparison shop medical services to save my insurer money. They don’t give me any special rates for picking cheaper doctors or service providers. Until I’m in charge of all of the money, I’m just another drop in the flood, albeit one that acknowledges that I’m part of the problem.
I like what Frank over at SUMP has come up with: get us on HSAs and put us in charge of pricing. Once we’re actually consumers of medical care and not consumers of medical insurance, we might get around to demanding some real and lasting changes that benefit all of us, not just a select few of us. Once you treat people like responsible adults, you’d be amazed what you end up with.