I believe mandated healthcare insurance for all Americans is a bad idea. My opinion has nothing to do with political ideology. I actually do believe the Medicare system is broken and needs to be fixed. I also believe finding affordable healthcare coverage for un-insured and under insured people is a good idea. My opinion is based on my own personal experience and basic theories of economics. Let me explain.
A few years ago as a result of a job change, I switched from being in a highly subsidized group health plan to having to purchase my own private insurance policy. Under the old insurance plan, the most I was going to be out of pocket for drugs was $30. Similarly a visit to the doctor was going to cost me $25 or a whopping $60 if I went to a specialist. It cost me nothing to go to the emergency room. If things were really bad and I had to go to the hospital, I was never going to be out more than $2,500 no matter what the actual cost of the hospital stay was. Preventive procedures cost me nothing. My father had colon cancer when he was in his early 60's, so I got a free colonoscopy way before then.
Now the job change. No more group health insurance, I have to buy my own personal policy. If you want to experience true sticker shock, go shopping for medical insurance in your 50's. It probably helps that I have friends and family in the insurance business, so I have a fairly good understanding of how insurance works. It is a numbers game. Group health insurance is cheaper, because the insurance company gets to lump all those healthy 20 and 30 year old folks in with us old geezers who might actually go to see the doctor. It is cheaper for us old folks, because the insurance company averages out the cost and they know that with the exception of the young women who may end up pregnant, the 20 year olds are not likely to a be net cost to them.
The game changes when the insurance company is just looking at you individually and it cost more to buy health insurance for a 50 something than it does for a 20 something. I know this may come as a shock to you, but insurance companies are in business to make a profit. They need to charge you more in premiums than what they expect you will spend over the long term in actual health care. Ok they average everybody together and look at their entire population of policy holders, but still they basically need to bring in more than they pay out. This is basic economics and totally logical, but still expensive. Thank you EHealthInsurance.com, I was able to find a policy for under $500 per month with a $10,000 deductible. I can afford $500 per month for the peace of mind that if I do ever have some serious health issue, I won't go bankrupt from the medical bills. What a $10,000 deductible and no co-pay really means is that I am going to be paying for pretty much all of my health care costs in a normal year and my insurance is exactly what insurance was intended to be-protection in case something really bad happens. (Ok I am a CPA so here is my tax tip-with the high deductible insurance you can get a Health Savings Account and use pre-tax dollars to pay for your medical expenses)
Think about the insurance on your house. You don't expect your homeowner's policy to fix every maintenance issue you have with the house. You do the little things to keep the house in good repair so little problems don't become big problems. Still you do want the insurance there if a tornado comes through and moves your roof to the next block. That is how I had to start thinking about maintenance of my own body.
I also had to become a better consumer of healthcare and through this I learned that in the past I have done a very poor job shopping for heath care services. I believe by extension, that there are a whole bunch of other Americans out there who are poor consumers of health care also. When something cost you very little, you tend to not care about what you are getting. I know that I spent more time shopping for a new grill, than I did shopping for a physician to do my colonoscopy. My primary doctor gave me a name and number, I called, made an appointment. I spent a week and went to 5 different stores looking for a new grill. Neither item was going to cost me anything because my family was going to buy the grill as a father's day present and the insurance company was paying for the colonoscopy. Guess what, I care that my family got a good deal on the grill, but I care a lot less about the insurance company's money. Plus I knew I would regularly use and look at the grill. I hope to use my colon every day, but I sure don't want to see it.
We have been conditioned to be poor consumers of healthcare, because we have no economic incentive to care. Sure we have a quality of life incentive, but I find that to be very intangible. If we really thought about our quality of life every day, we would be much better about watching what we eat and how much we exercise. As it is, too many Americans just sit on their rears eating McDonald's french fries and wait to have their insurance company pay for the gastric bypass surgery.
The flip side is we have also conditioned our health care providers to not care about cost. After being on the new insurance for a while, my primary doctor tells me he wants me to have a prostate exam. I am not talking the standard digital exam. Let's just say they insert a device in the same place they do for the colonoscopy. The difference is the prostate device is exponentially larger and you are awake the entire time you are being violated. Thankfully, they don't go nearly as deep.
One of my first questions is "how much should this cost?". I know I am paying for this and I want to consider the options and to get a good deal. The doctor is almost offended I even asked the question. His only answer is "your health insurance should cover it". I am not questioning his recommendation, I am going to have the procedure done but the money is coming out of my pocket, so I want to know the approximate cost. This time before I make an appointment I call the urologist who my doc recommended and ask "about how much should this cost?" Scary thing is the people in the office of the person performing this procedure have no idea of even a range of what they are going to charge me for the services I am purchasing from them. Would you go to a restaurant where the waiter just brings you the meal without you even looking at a menu and says "we will send you a bill in 30 days"? No knock on this particular doctor because after shopping around, I was only able to get some general ideas of cost from one clinic's website. Not only has full coverage health insurance conditioned us to be poor consumers of health care, but it has conditioned the health care providers to be poor merchants of health care services. We should be thankful that in general most doctors are pretty decent upright folks who truly do care about their patients, because they certainly don't have much economic incentive to be that way,
I know that the first time I speak with a new client one of their questions is going to be "how much will a tax return cost me?". Even if I can't give them an exact answer, I damn well better have a pretty good estimate of the range of what the cost is going to be. If I don't, they will not hire me. I think we need an incentive for health care providers to be able to do the same thing. Instead we keep taking away the incentive for a health care providers to be smart business people, because we take away any incentive for us to be smart health care consumers. It doesn't cost us anything or it costs us very little, so we don't shop around and consider what we really need and what is the best deal. I know purchasing health care services is a lot more critical than buying tax preparation services and we don't want people to not get the services they need, but our current system also provides no incentive to even do the routine maintenance by taking care of the bodies we have and it certainly does not prompt us to shop for the services before we buy. It is cheaper and easier to buy fast food and have our insurance pay for drugs and medical procedures to "cure" our obesity. Fruits and vegetables and a gym membership cost real money.
I certainly don't have the answer, but it just seems to me that dumping more people into healthcare insurance with no motivation to be smarter about the health care they purchase is not going to make us better consumers. I am a free market capitalist and I have to believe if we were smarter consumers of health care, the basic economics of the marketplace would provide a better solution than government bureaucracy will.
A few years ago as a result of a job change, I switched from being in a highly subsidized group health plan to having to purchase my own private insurance policy. Under the old insurance plan, the most I was going to be out of pocket for drugs was $30. Similarly a visit to the doctor was going to cost me $25 or a whopping $60 if I went to a specialist. It cost me nothing to go to the emergency room. If things were really bad and I had to go to the hospital, I was never going to be out more than $2,500 no matter what the actual cost of the hospital stay was. Preventive procedures cost me nothing. My father had colon cancer when he was in his early 60's, so I got a free colonoscopy way before then.
Now the job change. No more group health insurance, I have to buy my own personal policy. If you want to experience true sticker shock, go shopping for medical insurance in your 50's. It probably helps that I have friends and family in the insurance business, so I have a fairly good understanding of how insurance works. It is a numbers game. Group health insurance is cheaper, because the insurance company gets to lump all those healthy 20 and 30 year old folks in with us old geezers who might actually go to see the doctor. It is cheaper for us old folks, because the insurance company averages out the cost and they know that with the exception of the young women who may end up pregnant, the 20 year olds are not likely to a be net cost to them.
The game changes when the insurance company is just looking at you individually and it cost more to buy health insurance for a 50 something than it does for a 20 something. I know this may come as a shock to you, but insurance companies are in business to make a profit. They need to charge you more in premiums than what they expect you will spend over the long term in actual health care. Ok they average everybody together and look at their entire population of policy holders, but still they basically need to bring in more than they pay out. This is basic economics and totally logical, but still expensive. Thank you EHealthInsurance.com, I was able to find a policy for under $500 per month with a $10,000 deductible. I can afford $500 per month for the peace of mind that if I do ever have some serious health issue, I won't go bankrupt from the medical bills. What a $10,000 deductible and no co-pay really means is that I am going to be paying for pretty much all of my health care costs in a normal year and my insurance is exactly what insurance was intended to be-protection in case something really bad happens. (Ok I am a CPA so here is my tax tip-with the high deductible insurance you can get a Health Savings Account and use pre-tax dollars to pay for your medical expenses)
Think about the insurance on your house. You don't expect your homeowner's policy to fix every maintenance issue you have with the house. You do the little things to keep the house in good repair so little problems don't become big problems. Still you do want the insurance there if a tornado comes through and moves your roof to the next block. That is how I had to start thinking about maintenance of my own body.
I also had to become a better consumer of healthcare and through this I learned that in the past I have done a very poor job shopping for heath care services. I believe by extension, that there are a whole bunch of other Americans out there who are poor consumers of health care also. When something cost you very little, you tend to not care about what you are getting. I know that I spent more time shopping for a new grill, than I did shopping for a physician to do my colonoscopy. My primary doctor gave me a name and number, I called, made an appointment. I spent a week and went to 5 different stores looking for a new grill. Neither item was going to cost me anything because my family was going to buy the grill as a father's day present and the insurance company was paying for the colonoscopy. Guess what, I care that my family got a good deal on the grill, but I care a lot less about the insurance company's money. Plus I knew I would regularly use and look at the grill. I hope to use my colon every day, but I sure don't want to see it.
We have been conditioned to be poor consumers of healthcare, because we have no economic incentive to care. Sure we have a quality of life incentive, but I find that to be very intangible. If we really thought about our quality of life every day, we would be much better about watching what we eat and how much we exercise. As it is, too many Americans just sit on their rears eating McDonald's french fries and wait to have their insurance company pay for the gastric bypass surgery.
The flip side is we have also conditioned our health care providers to not care about cost. After being on the new insurance for a while, my primary doctor tells me he wants me to have a prostate exam. I am not talking the standard digital exam. Let's just say they insert a device in the same place they do for the colonoscopy. The difference is the prostate device is exponentially larger and you are awake the entire time you are being violated. Thankfully, they don't go nearly as deep.
One of my first questions is "how much should this cost?". I know I am paying for this and I want to consider the options and to get a good deal. The doctor is almost offended I even asked the question. His only answer is "your health insurance should cover it". I am not questioning his recommendation, I am going to have the procedure done but the money is coming out of my pocket, so I want to know the approximate cost. This time before I make an appointment I call the urologist who my doc recommended and ask "about how much should this cost?" Scary thing is the people in the office of the person performing this procedure have no idea of even a range of what they are going to charge me for the services I am purchasing from them. Would you go to a restaurant where the waiter just brings you the meal without you even looking at a menu and says "we will send you a bill in 30 days"? No knock on this particular doctor because after shopping around, I was only able to get some general ideas of cost from one clinic's website. Not only has full coverage health insurance conditioned us to be poor consumers of health care, but it has conditioned the health care providers to be poor merchants of health care services. We should be thankful that in general most doctors are pretty decent upright folks who truly do care about their patients, because they certainly don't have much economic incentive to be that way,
I know that the first time I speak with a new client one of their questions is going to be "how much will a tax return cost me?". Even if I can't give them an exact answer, I damn well better have a pretty good estimate of the range of what the cost is going to be. If I don't, they will not hire me. I think we need an incentive for health care providers to be able to do the same thing. Instead we keep taking away the incentive for a health care providers to be smart business people, because we take away any incentive for us to be smart health care consumers. It doesn't cost us anything or it costs us very little, so we don't shop around and consider what we really need and what is the best deal. I know purchasing health care services is a lot more critical than buying tax preparation services and we don't want people to not get the services they need, but our current system also provides no incentive to even do the routine maintenance by taking care of the bodies we have and it certainly does not prompt us to shop for the services before we buy. It is cheaper and easier to buy fast food and have our insurance pay for drugs and medical procedures to "cure" our obesity. Fruits and vegetables and a gym membership cost real money.
I certainly don't have the answer, but it just seems to me that dumping more people into healthcare insurance with no motivation to be smarter about the health care they purchase is not going to make us better consumers. I am a free market capitalist and I have to believe if we were smarter consumers of health care, the basic economics of the marketplace would provide a better solution than government bureaucracy will.
Posts
No comments:
Post a Comment