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There's another thread where someone posted that "insurance is a big cost-sharing pool". It's this kind of complete ignorance of insurance that drives our current health care problems.
Insurance is a financial contract between two parties. Insurance is not health care, and it should be irrelevant to health care. It is a financial service, plain and simple.
There have been many experiments in health care which have attempted to even out the intermittent expenditures involved in health care. HMO's, for instance, sought to make all health care a matter of a single monthly payment. Sadly, it was a bad idea from the start, and always destined to fail.
There are, in reality, only two interested parties involved in health care... the consumer, and the provider. Insurance offers to carry the risk of catastrophic costs and events for a premium - and it is a contract between the consumer and a third party - one that should have no bearing on your health care decisions.
Let's review how each system works.
HMO: In return for a set fee, the organization of providers agrees to provide all your needs. Sadly, the motivation is to have the lowest price - and to provide the least possible services - since they cost.
Single Payer or third party payer: A third party agrees to pay, within limits, for all services consumed. When the funding runs low, either compensation is limited, or services paid for are limited, or a combination of both. Eventually, the system results in rationing, poor quality, and often very inept management which is entrenched by political power and is unresponsive and unaccountable.
Socialized: The government provides services voted on and managed by politicians. This results in politics determining asset and resource allocation - not need. Misallocation and mismanagement is inevitable. Since governments often face budget problems, eventually rationing and shortages. Politicians eventually find a comfortable political groove where more and more services are promised, yet resources enrich the political allies and those who aren't politically favored suffer.
Free Market: Profitability and the customer's ability to pay determines allocation and prices. Few services outside the customer's ability to pay are offered. Shortages create higher prices and profit motives results in investment to meet needs and demands. It's not perfect or orderly, but given time, it works better than any other system.
Previous to World War II, health care was funded like and provided like any other need. Doctors went where they were wanted and needed. Hospitals were built where there was demand and the ability to recoup their cost by patients. Much like food, clothing, etc.
WWII introduced profound government involvement, by the act of limiting employee pay. To attract employees, employers often offered non-monetary compensation as incentive to keep or gain needed employees. Thus, widespread employer purchased health care was introduced. To make them attractive, employers offered small deductibles (even no deductible) plans to their employees. Rather than being actual insurance, some insurers were becoming payment services for health care. Without the individual provided feedback, providers began to spiral their prices upwards. To manage this growth in prices, insurers began to demand that providers give them discounts in order to allow them to participate.
Today, when you visit your doctor, if you have insurance, your provider will do everything they can, every possible change, and price the services as high as they can. They will itemize, break down, or bundle, or even provide unneeded services to raise the contracted compensation as high as possible. The consumer doesn't care. He doesn't pay the bill. He doesn't pay the insurance premium, either. He is completely disconnected to the price / payment transaction.
Today, commonly people believe they should not have to pay for medical services. Pop culture and politicians have convinced them that no individual need pay for medical services. That it is somehow immoral for the individual to pay for his own needs, and that he has a right to demand someone else pay his bills for him.
Obamacare worsens every bad aspect of this disconnection. By treating the population at large as a giant cost-sharing pool, by forcing everyone into defined insurance plans, it seeks to defeat the purpose of insurance, and instead, create a situation where individuals have no idea what anything costs, only that they can't afford any of it.
So, when you have minor surgery done, the doctor, anesthesiologist, hospital, and all others involved compile every possible means of charging the insurance. Increased costs are passed to insurers, who then pass them on to premium payers - who are, again, not the consumers. The paperwork involved, the man-hours required to do the paperwork, the time required to get paid (often with multiple re-submissions) each come with a high cost. This is also paid... but not by the consumer, who is unaware of any of it.
Obamacare includes several new layers of paperwork and regulations, each of which come with large costs of man-hours and delays. Again, this, too, has to be paid for.
To escape all this, you're seeing doctors "drop out" of the system - some by retiring, some by simply refusing to deal with insurance at all. Concierge medicine is gaining traction. You pay the doctor or a clinic of multiple doctors a monthly fee for being available, and there's no additional charges for their time and services. By reducing the number of employees and the financial overhead of dealing with insurance, they're reducing their costs and man-hours. Unconstrained by beaurocracy, they simply accept enough patients to provide the cash flow they need and that is the limitation of their practice.
Medicare doesn't even pay a doctor's costs for providing services. Anyone who is a medicare patient is a charity case by the provider. The Obamacare squeeze with it's large cost increases is causing many doctors to drop or refuse accept more Medicare patients.
So what's the answer?
Undo the bastardization of insurance. Your car insurance is straightforward. The insurer has to treat you decently, or you will leave for someone who does. It is competitive - you shop for it. YOU need to shop for the insurance you need. YOU need to know the cost of services you buy and shop between competitive providers, just like you do for car repairs, tires, food, clothes, etc.
Basically, if we divorce insurance from health care, returning it to a simple financial service provided to the consumer, instead of a gatekeeper of services, we can return price competition and provide incentive for providers to LOWER, not raise, prices. By removing several layers of paperwork and totally unneeded decisionmakers, actual costs will fall.
Every provider needs to be required to tell you what the costs are BEFORE you buy, not after.
And, you need to buy insurance that protects you from catastrophic events... and you need to budget your money, just like you do to pay your payments and bills and expenses like food and gas.
When a storm hits and causes massive damage, everyone's house insurance goes up. Just ask those who live in Florida.
Insurance can charge more for those who are higher risk, however, all of those in the insurance pool are charged according to the cumulative risk and payout.
Therefore people who have extremely high medical expenses, cause everyone in that insurance pool to pay more. Why do you think health insurance premiums have gone up a lot in the past 20 years for healthy people?
BTW, healthcare costs much more than a new car or home and we don't go without car or home insurance.
Imagine you go to your favorite restaurant and after being seated, you're informed that tonight, all checks are averaged, rather than itemized.
Will you be price conscious when you order? Nope. Nor will anyone else.
In the end, the restaurant will make out like bandit, and everyone will have sticker shock, because they all think that someone ELSE will pay the bill and it won't matter if they indulge.
Economics is a study of human behavior, not analysis of numbers. And, it is why every single payer and socialized system sucks badly. Because rationing must occur, and people must be denied and decisions about what to treat, what to not, what services to deny by someone other than themselves - their decisions have to be made by someone else, who protects the payer from abuse.
Imagine you go to your favorite restaurant and after being seated, you're informed that tonight, all checks are averaged, rather than itemized.
Will you be price conscious when you order? Nope. Nor will anyone else.
In the end, the restaurant will make out like bandit, and everyone will have sticker shock, because they all think that someone ELSE will pay the bill and it won't matter if they indulge.
Economics is a study of human behavior, not analysis of numbers. And, it is why every single payer and socialized system sucks badly. Because rationing must occur, and people must be denied and decisions about what to treat, what to not, what services to deny by someone other than themselves - their decisions have to be made by someone else, who protects the payer from abuse.
Some people can't help the diseases they get. You cannot order your disease from a menu.
When a storm hits and causes massive damage, everyone's house insurance goes up. Just ask those who live in Florida.
Insurance can charge more for those who are higher risk, however, all of those in the insurance pool are charged according to the cumulative risk and payout.
Therefore people who have extremely high medical expenses, cause everyone in that insurance pool to pay more. Why do you think health insurance premiums have gone up a lot in the past 20 years for healthy people?
BTW, healthcare costs much more than a new car or home and we don't go without car or home insurance.
I think you should think more carefully about every statement above. Try to understand why. And then ask yourself how every person could possible pawn this cost off on someone else.
I think you should think more carefully about every statement above. Try to understand why. And then ask yourself how every person could possible pawn this cost off on someone else.
One example:
Quote:
Sherry Collier, agency owner of Brightway Insurance in North Fort Myers, is frequently asked: Why is my homeowner's insurance so high?
There are factors people can control and those they cannot to keep those rates down, she said.
"Once upon a time, homeowners insurance for a typical home was around $500. Then along came Hurricane Andrew that forever changed homeowner's insurance in Florida, and then came the infamous hurricanes in 2004-2005. Hurricane Charley's damages amounted to $13 billion just in Florida alone."
Not every country has so many on the dole, not contributing to pay the costs of their existence.
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