You Know What Your Car Costs, But Not Your Heart Exam

The health care “debate” is made most irritating by the obvious things ignored. As we have grown accustomed to hearing ad nauseam, health care represents 17% of our economy. I have no idea if that number is accurate. Perhaps one day I will look into it. Whatever the number, we know it is big. Yet health care consumers have no idea what anything related to health care actually costs. For all practical purposes it may as well be free. Consequently, we consume too much of it and will continue to do so unless some simple changes are made.

We pay an upfront cost for insurance (or are given a tax free benefit from an employer or the government) and in exchange we get a plastic card with an insurance company’s name on it. When we go to the doctor, the hospital, or the pharmacy we simply hand them the card upon entering. Whether we fill a prescription for fish oil or get brain surgery we simply hand in the same card. Some administrator fills out forms and that’s that. We don’t even have to sign a form in recognition of the cost of the procedure. How is it remotely possible that such a system can function efficiently? There is no other part of our economy that operates this way. Milton Friedman has written about this topic. Thomas Sowell has written about this (Alice in Health Care) as has John Stossel. Even I have written about this What Next: “Universal Food Insurance”?.

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Comments

[John Lee]

"Soylent Green"

[Mike Rulle]

I tried writing an article on that! But gave up too quickly. Must give it another go!!

[Keepleftblog.blogspot.com]

Mike - I think most true progressives would agree with a lot of this. The current system of tax subsidies for employer-provided health plans is utterly absurd, both from an economic standpoint and in terms of social policy, and reinforces the very worst aspect of the current system - under which what I consider to be government obligations are shunted off onto the private sector.

I also agree with the issue of pricing transparency. I don't think there is any other sector of the economy (with the possible exception of military procurement or shady auto repair shops) where goods or services are furnished without the recipient having the slightest idea how much the bill will be. It's bad enough when the recipient is covered by insurance, even worse when he or she is not.