Apparently, I have spent a lot more time thinking about the healthcare system in the U.S. than Donald Trump, Tom Price or the majority of the GOP Congress Critters in the House and Senate. There is a clearly visible pattern in the provision and cost of healthcare if you care enough to look, and I suspect the intellectuals in government may already know it.
Take plastic surgery: if you want to boost your bosom or trim your belly it is all on you. Very few procedures performed by plastic surgeons to improve your appearance are covered by any insurance. So you know what happens? Plastic surgeons set their prices according to what the market will bear to ensure they have enough business to make money. That’s right: the cost of procedures trends down during economic recessions. In the last four or five months of the year you will see sale ads for certain procedures, or offers for zero percent financing on your new nose. Note also that the cost of procedures is lower in Peoria than it is in Los Angeles. When was the last sale on colonoscopies? Mammography? I think it was the 12th of never and both are critical to preventive health and early diagnosis.
Now some will say, “Don’t be ridiculous!” To which I say, “How so?” But I digress. An actual doctor who also happens to be a Senator, Rand Paul, gives another clear example. Senator Paul is an eye surgeon, so he has seen the trend with Lasik and other corrective surgeries. Again, these procedures are rarely covered by insurance, and hence needed to find a way to market success. When my friend had the procedure in the 90’s, she paid $3,000 per eye.
Searching for prices of this surgery in metro Atlanta, near where I live, here is what I found.
In other words, 7.5% of patients may pay as much as my friend did almost 20 years ago, but the vast majority will pay less. Less than what it cost 20 years ago. Pretty wild if you think about what you paid for other things two decades ago and if you look at inflation in healthcare prices for just about everything else. Even more stunning is the fact that vision correction surgery has gotten better, faster and more effective as the prices have dropped. Again, since these doctors have to be sensitive to the market, you also see signs like this:
So what is missing in both of these cases? You got it! Insurance companies: that behemoth of a middleman that began as a service to help individuals and families deal with catastrophic health care costs, much in the way that life insurance helps protect families from the life-altering effects of the unexpected death of a breadwinner. Yet now they are comprised of a limited set of for-profit entities responsible to shareholders, not consumers of healthcare. You know this all too well if you have ever dared to dial the 1-800 number on the back of your card.
The problem was compounded in the 80’s and 90’s by “managed care”, when we all paid $20 for everything and $10 for every prescription. The good old days, right? Not really. That was when the insurance companies decided we were all stupid and needed them to function as “gatekeepers”. Because you don’t know what kind of doctor to see if your back hurts, you needed permission from your primary physician to go to the orthopedic specialist you needed to see. So you paid for two doctor’s visits to get the assessment you really needed.
It also insulated consumers from the actual cost of care. That is why as employers and insurance companies moved away from the managed care model to newer, higher deductible plans, it felt like a sledgehammer to the gut. An office visit cost what? My blood pressure medicine is how much? And your insurance company still wants to function as a gatekeeper, deciding whether you can actually have the care your doctor thinks is appropriate. This happens on employer-based plans, exchange plans and government-funded plans.
So how do we “fix” the healthcare system? If you look at boob jobs and improving your vision the answer seems pretty straightforward. Give individuals the power to be consumers of the healthcare services they need. We need deregulation, tort reform and flexibility. None of this is reflected in the current GOP proposal.
There are some good ideas out there. Senator Rand Paul has been one of the most vocal opponents of the GOP plan because he feels it does not do enough. While his plan still involves insurance companies in the process it goes much further toward freedom of choice than the current GOP plan.
However, the most interesting ideas I saw came from Ben Carson during a town hall.
Bottom line, the Republican “Better Way” is not the full repeal we are looking for. It does not dismantle enough of Obamacare’s costly provisions or create a market that will have price and quality of care competition. Think about it: should you do as much research into your healthcare provider and the price you pay as you do for the car or refrigerator you want to buy? We have given the management of our health to bureaucrats in Washington and for-profit insurers. Costs will neither level nor reduce, and neither access nor quality will improve until we remove these two costly, disruptive barriers.