In the midst of all the debate about health care reform I have begun to wonder: What is it about the system that is broken? Is it really broken? What is it exactly that isn’t working in regards to the health care system in the United States?
The biggest argument right now seems to be in regards to the uninsured. There are approximately 50 million Americans (about 14% of the population) without health insurance. This seems to be the reason the majority of the country wants health care reform.
It goes like this: an uninsured person gets sick or hurt and ends up in the emergency room. They get treated and inevitably get billed. In some cases, the hospital has some sort of charity program so that person would never get billed but that is in rare cases. In the cases of those that get billed, those patients can’t afford it. If they could afford it, they probably would have had health insurance in the first place and all of this could have been avoided. So their bill goes to collection and the doctor or hospital never gets paid. To make up for this the doctor (supposedly) overcharges for their services to those that do have health insurance. Or to be more specific, they overcharge the health insurance company. In turn, that health insurance carrier raises the costs for its members and these are the people (the members) clamoring for reform in the health care system because they feel it is unfair that they have to fit the bill for the uninsured.
The problem with this is what happens when they realize that the doctors are still going to end up overcharging for their services? What happens they realize the doctors have come up with some other reason to charge so much? Who are we going to point our finger at next when we can’t blame the uninsured? And why aren’t these same people clamoring for reform in the welfare system? People using this service are just as much a drain on the economy as those without health insurance.
Another problem with this argument is that the doctors don’t really overcharge as much as the general public likes to think they do. It is a fact that those with health insurance end up picking up the bill for the uninsured. I will not argue that fact.
However, here is what happens in the health care industry. A provider (a doctor, a dentist, a hospital, etc.) decides they want to accept a particular insurance company’s coverage. They do this, by the way, because they want more patients. More volume equals more income. When choosing a particular carrier, that company provides these providers with more patients by encouraging its members to use their “in-network” doctors. So they decide to accept a particular insurance plan. In order to do that, the carrier and the provider get together and actually sign a contract that is mutually agreed upon. In this contract, the two parties go into meticulous detail over every possible diagnosis and every possible type of treatment and agree to a price that the provider is allowed to charge for each service. This way, the insurance carrier can promise its members a reduced rate for services. This is all watched over very carefully by the insurance company too. If a provider charges more than that “allowed amount” on a claim than they agree upon with the insurance carrier, the company will receive the claim and catch and will only pay that provider the amount that they agreed on in the first place.
So you might think doctors are overcharging you but they are only charging you an amount of money that several people have looked at and agreed on.
In addition to this system of checks and balances (sort of) between provider and carrier, there is this public perception against the health insurance companies that they are overcharging their members because they are all about their bottom line. They are running a business, right? They need to make a profit. So they complain that their premium dollars are going to pad the executive’s pockets. So here is some interesting information about that very issue.
Here is a pie chart representing the public perception of where their money is going:
So essentially, the theory of where a person’s health insurance premiums are going is a far cry from where their dollars are actually going.
Now I’m not saying that health care isn’t expensive. Even with some sort of system of checks and balances between doctor and insurance company, and even knowing the fact that the companies are all about profit, it still costs quite a bit to see a doctor.
But why? Let me show you a few reasons why.
One factor is this idea called an entitlement mentality. The thought is that everyone deserves health care. That is, everyone is entitled to affordable, quality health care. Now I’m not going to argue this idea too much but if you think about it, by this logic, everyone also deserves to be independently wealthy.
The problem with that is that not everyone is or will ever be independently wealthy. How are we going to go about fixing that problem? The answer is that we can’t. It is physically impossible to ensure that everyone in the country is rich.
But there is this growing group of people that think they are entitled to everything and this is another group of people griping about the need for health care reform.
But have you ever noticed that these particular groups of people that rise up about their right to health care are people that simply do not take care of themselves? They drink too much. They smoke too much. They eat too much. They get no exercise at all. They spend their lives in front of the television doing to nothing to improve their own health status but at the same time complain when they get so sick that they need to see a doctor.
These people need to get off their butts! Take a walk or something. Eat a piece of fruit. Take some initiative about for your health for pete’s sake!!! These people don’t go see a doctor until they are already so sick that they need extensive care of a hospital and end up having to spend thousands and thousands of doctors for some surgery that could have been avoided by a chance of lifestyle. It costs a lot less to prevent some sort of disease than it does to treat or cure that same disease.
Another factor in the rising costs of health care is the cost of unnecessary tests and medical equipment.
For example, let’s someone’s friend or co-worker tells them about some new condition they read about and this person, thinking they might have found a name for some weird feeling they have (which is probably just caused by stress) and goes to their doctor to have seventeen different tests run on them to determine that they are fine. That doctor’s office has just wasted all that money on tests that did not need to be run in the first place. Therefore, they have to submit a claim for something that didn’t need to be done, which means less money that is available for things that really needed to be done.
And also keep in mind how expensive some medical equipment is. If a doctor’s office or hospital pays half a million dollars on some sort of test equipment that they only use once every five years, they have wasted their money on that equipment. And that is not even taking into account the fact that this piece of equipment is probably taking up much needed space in that office.
The last example I will note as a factor for the rising price in health care is very simple. It is the general decline in health status of the population. People are getting old. They need more medical care to stay alive. Not really calling this a problem but it is a factor. And like I said earlier, people just generally are not taking care of themselves. So this just goes back to the whole prevention is less expensive than treatment.
So yes, there might be problems in the health care industry but are they really so bad that we need to reform the system completely or is this a problem that can be avoided or prevented?
What do you think?