Well, it seems that health care in this country costs about 2½ Trillion dollars per year. There are about 130 million employed people in this country. Now a BOTE (Back-Of-The-Envelope) calculation gives us about $19,000 per year for each employed person, or about $1600 per month.
Now somewhere, somebody has to come up with this money. Many of us pay just a couple hundred a month to cover the family and the employer picks up the rest. Some pay nothing, some pay many hundreds. In any event, the money comes from somewhere. We blame "big pharma", blame the doctors, blame the hospitals, blame the Republicans, blame the Tea Party, blame the "rich", blame the president, blame Congress, Blame It On the Bossa Nova.
Suppose we actually put the blame in the right places, carefully parceled out in percentages to the correct parties (23% on Big Pharma, 14% on the doctors, 19.4% on the Republicans and so on). OK, so now what do we do with that information?
It's as bad as spreading blame around for high gas prices. Yelling, screaming and regulating has not done a bit of good; as I write this, cars last evening were lined up four deep at a couple of stations where it was $3.929 a gallon before it went up to $4.179 within the hour. I felt fortunate to get it for a mere $4.059 a gallon at a station across town. Blame all you want, but the price is still outlandish. (I expect it to be $5.00 or more within weeks.) Most folks don't remember Nixon's wage-price controls. All they did was cause shortages; prices went up and my wages stayed the same. During that crazy decade, college professors lost 20% of their purchasing power. (While tuition pretty much kept up with "inflation" -- actually the Consumer Price Index -- and I know personally that I didn't get in on the increase!)
Same argument about health care costs. They just keep going up.
Last year I had cancer treatments. The actual billed cost was a bit over $100,000.00 but the insurance company "allowed" about $1000.00 per radiation treatment for 42 treatments. Another BOTE calculation shows that I, as a wage earner, used up roughly 2 years' worth of "my share" of the total annual cost. On the other hand, I have never in my 67 years been admitted to a hospital as a patient. (In all fairness, I admit that my wife has, but she's also been a wage earner most of the time since the kids started school; she has her own "share" of the total annual cost.)
So where does the money come from? I pay premiums (not to mention the Medicare deduction from my paycheck that I have yet to see any benefit from) and my employer pays a large part. In fact, my employer is "self-insured" so that for a "nominal fee for shipping and handling" an insurance company (some form of Blue Cross I think) handles the paperwork and my employer writes them a check each month for whatever the employees "spent" on health care, including dental, eyeglasses and several other categories. We, of course, have a co-pay thing that doesn't amount to a hill of beans, like $20.00 or so, which is really just an addition to the premiums we pay. (I'm not complaining, mind you; the extra "burden" falls on the people who use the services, which is only fair.) Also, we pay 100% up to some amount, then 20% up to some other amount, then nothing. With my treatments, we paid a few thousand and the insurance paid many thousands. We even got beyond the co-pay stage!
Now so-called health "insurance" is more like a service contract on your car or computer system. You pay so much a month and they agree to furnish repairs or at least pay for them. You have a Mercedes? No charge for roadside service? But believe me, you paid for it when you bought the car. It's just a premium built into the price.
The real "insurance" kicked in when my treatments started. $5000.00 or so we can handle. It's not pleasant but we didn't have to sell the car and we didn't lose our house. That could have been a different story had we paid the whole $100,000.00. From our perspective, regardless of the contractual finagling, we received $100,000.00 of value from the insurance, like when your house burns or you wreck your car.
Now there must be some reasons that health costs are so high. Let's do a little thought experiment here.
I injured my back and needed an X-ray. Should have been about $100.00 I figured. Bill was nearly $1000.00 and the insurance paid around $400.00. What gives? Well, my friend Jay works in the diagnostic radiation area over there and he can't work for nothing. Several other people work there. On the day I came in, there was maybe one other patient and about a dozen workers, all of whom must be paid. None of them is driving a Cadillac, although they're not exactly starving either. So my half-hour or so had to pay for probably half a dozen salaries for a whole hour. That's just for starters. Then you have to amortize the X-ray machine, the construcion costs of the hospital, cleaning, maintenance, computers, training and on the list goes. And then they have to cover the costs for indigents who pay nothing. (Somebody told me once how many indigents us "paying customers" have to pay for. Ridiculous!)
So why didn't I go to my local "doc in a box" as they call them (walk-in clinics they have in larger towns)? Sure would have been cheaper than the hospital! Well, we don't have one of those. This is an economically depressed area. We celebrate when a business employing 50 people comes to town, but that doesn't replace the 450 jobs that ended when the TV picture-tube factory closed some years back; and a local auto transmission manufacturer is going to close within a year, throwing 150 more out of work. Many if not most patients are indigents or Medicaid/Medicare and they don't pay anything out of pocket, so why not take little Suzi with her fever to the Emergency Room ("E.R.")? Then, because the E.R. isn't paid much if anything for these visits, it cost me and my insurance company $1000.00 the one time I needed it for a 20-minute visit, and I didn't even see a doctor, just a "physician's assistant"! (Google "cost shifting".)
Isn't that weird? We're economically depressed so everything costs more?
There is a specialist near here who has something like 5 doctors and 15 employees in the practice. Each doctor has an assistant. OK. Somebody keeps the appointment book. OK. The rest of them do paperwork for the insurance companies, Medicaid and Medicare. I go to a specialist where there are 2 doctors and at least 4 employees. (Note: Billing/insurance is done in another office.)
It takes a small army of clerks to keep the doctors busy and paid for what we want them to do, which is to keep us alive and (hopefully) healthy. Somebody has to pay all these clerks. Many times you won't even see some of them because they do transcriptions at home like one of my close relatives did until she retired. And then, of course, our premiums have to support another small army of insurance company/Medicare/Medicaid clerks whose main job is to pay the doctors as little as possible.
So why not just have the patient submit the bill and have the insurance company pay them? Well, they used to do it that way, but there were two kinds of problems:
Way back when ("in the day"), hardly anyone had health insurance. About the time our daughter was born, and she cost $400.00 as I recall, we had some friends who needed a Caesarian to deliver their baby. It cost them $700.00 out of pocket and the insurance paid the rest. I mentioned this to our doctor, that it cost them $700.00 at the "big city" hospital and he said that it sounded about right for a C-section. He was very surprised that the insurance paid in addition.
The point is that insurance itself has caused some of the rise in costs, even while trying to keep costs down. (A good example is denying claims to save money, resulting in more cost for the clerk who keeps re-submitting the claims plus the clerks who have to process each claim.) There is more money available for services (because more people have insurance), so the price tends to rise for several dozen reasons. Admittedly, the safeguards, improvements in treatments and so on has something to do with it, but if the cash flow had been restricted (fewer people with insurance), we would make do with last year's X-ray machine instead of a CAT scan. Much of this is caused by "defensive" medicine, caused in turn by malpractice suits. However, a simple X-ray often does the job. And we have MRIs, PET scans, ultrasounds and so on. If so much money were not available, the fancy scans would be used a lot less. On the other hand, the assorted types of scanners would be less plentiful and scans would be more expensive when actually needed. (Personally, I think the total cost would be lower.)
I need to take a certain medicine daily. (we used to have "acid rock", now we have "acid reflux".) In generic prescription form, it's $85.00 for 30 days, or nearly $3.00 per pill. Over the counter (OTC), it's $18.00 for 28 days. Looks like it costs $65.00 to count 30 pills and type a label. Oh--and the OTC version is the brand name, not generic. Brand name is $130.00 prescription. So why get the prescription? Because I only have a $5.00 co-pay so it only "costs" me $5.00 and the insurance pays $80.00. (OK, under the contract, they probably pay about $35.00 but it's a lot more than the $18.00.) Anyhow, like an idiot, I stand on principle and pay the $18.00 instead of $5.00. The other part of it, of course, is that the doctor figures that you'll follow directions when taking the medicine if it's a prescription, and he's probably right in most cases. And, of course, to renew the prescription after 3 months, I have to see the doctor and there's the expense of another $20.00 co-pay for the office call, plus my time and inconvenience, and waiting 3 hours for the pharmacist to get around to my prescription every month, and the $18.00 about covers all the extra costs, fuss and bother. It's just easier.
I had to take a certain very common drug during my cancer treatments. $5.00 per pill, twice a day. This is insane! $300.00 a month? Half the guys I know have been on it at one time or another. It's a "guy thing"; women aren't even supposed to handle the pills!) They should have amortized the R&D costs long ago. I got it "free" of course because my deductible was used up the first week of treatments; but I was acutely aware of the cost to "the system" as my specialist calls it. (She really tries to save on costs when she can, like my next blood check will be with the nurse only unless I have some kind of problems like cancer treatment after-effects.) This particular drug is dosed in micrograms, much too powerful to be OTC. It can have dreadful side effects which is why I stopped it as soon as the doctor said it was safe.
So the solution is obviously to pay less for services. Medicare is going to start doing this. So what happens? It costs my family doctor about $79.00 to see a patient. (Why? See above.) Medicare currently pays $80.00 so he pockets a whole dollar for each patient for the princely sum of $4 to $6 an hour. Medicare is going to cut payments by 30%. It will now cost my doctor $23.00 out of his own pocket every time he sees a Medicare patient. Are you still wondering why he isn't accepting any more Medicare patients? ("We lose a little bit on every sale, but we make up for it in volume....")
It won't be long before I'm on Medicare. My doctor will keep me as a patient, out of kindness and professionalism, but Lord help me if I should do something silly like move to Florida and even worse get sick there. So we have some form of medical shortages looming, and what will we have to do? Go to the E.R., which costs more. So now we have shortages as well as higher costs, just like during the Nixon era. Some people never learn, and most of them are in government.
So it looks to me like the cause of high health costs is all bound up in
So how does government health care solve these problems?
So, now, where will the $2½ Trillion come from? We're still going to pay $19,000.00 a year per wage earner.
Ultimately it will come out of the pockets of the wage earner, even as it does today. All that is changed is where the payments are sent.
Looks to me like you can't win, can't break even and you can't quit the game.