The health care system is a conglomeration of problems, all of which contribute to rising costs. Trying to sum up all of them will take far better writers a lot more space to write them out and I don’t even know very many. For me, these are a sum up of the major problems as I see them. They are in no particular order of importance.
1. Health insurance covers a lot more than insurance should. Insurance (for anything) began with the intent to cover unforeseen costs. The problem with most health insurance today is that they also cover costs that are guaranteed to happen; scheduled check-ups, common sickness, eyeglasses, inhalers, etc. So of course this drives costs up because the insurance company needs to cover those guaranteed costs as well as make a profit.
For example, would you get insurance to cover food when you get hungry? How much more would auto insurance be if it covered standard oil changes, replacing filters and tires, etc? It would be far more expensive, right? Just like getting hungry, those things are guaranteed expenses so trying to get insurance to cover them will only make them more expensive. It’s cheaper to buy your food, oil, filters and tires as you need them. I think the same goes with health maintenance. We should all “pay as we go” for check-ups, glasses, inhalers and all those daily things we know we need. Some people have needs that others don’t so each should plan and pay for those things individually (yes…that means a market based health system). Getting an insurance company to pay for them will only be more expensive in the long run.
(I may be wrong, but I also have a suspicion that anytime we “insure” anything it drives costs up. The health institutions aren’t stupid. When they see an insurance company promise a customer they will pay for something, the health institution will probably push its prices up to get a little more. Why wouldn’t they? If something is guaranteed to be paid why not charge a little more than you would in a competitive market?)
2. The health care industry is one of the most highly regulated industries in America. And each governmental regulation drives costs up a little more. Time is money and the more time health institutions spend trying to cover all their legal bases mean higher costs. They need extra secretaries and personnel to handle the paperwork. They also need specialized lawyers who have the time and understanding to wade through the mass of regulations to prevent the institution from being sued in our sue-addicted society. All these costs get passed onto the consumer, thereby raising costs.
3. Patient Protection Screw-Over and [Un]Affordable Care Damage Act. What would happen to the price of Nike shoes if the Federal government required all Americans to own Nike shoes? Obviously, the price would go up. This is not rocket science and it is very self-evident. Why does everyone expect it to be different with health insurance? Before the passing of the bill, a lot of people knew costs would go up and now they are.
At my work our monthly contributions are going up while the benefits are going down. In a truly competitive market I would drop out. But according to the new regulations it will basically be a federal offense to not have insurance. So we’re all forced to pay for something that isn’t doing us any good anyway.
So what do we do?
I really believe a market based health care system will bring the lowest costs. No one knows how to spend your money better than you do. It won’t mean we all get everything we want, or maybe even everything we need, but that will never happen anyway. The sooner voters realize this, the sooner real reform can happen in our country…and for more than just health care. Nothing in life is guaranteed, especially when its’s “guaranteed” by the government.
A more market based system will mean people will be less likely to abuse the system because there is less incentive to do so. We will take health care as seriously as we take our savings accounts (at least as seriously as we should be taking our savings accounts).
In Switzerland most people have Health Savings Accounts (HSAs). I really like this idea. When not used the money in the account builds higher and higher. If the amount of money that I and my employer pay every month was put into a HSA, by the time a serious illness or accident happened to me there would probably be more than enough money to cover it, especially when the costs are already lower due to a market based system.
To sum up this particular summation:
- Insurance covering guaranteed expenses = higher costs.
- Regulations forcing institutions to waste time conforming and hiring specialized lawyers = higher costs.
- The Patient Protection Screw-Over and [Un]Affordable Care Damage Act requiring people to own something = higher costs.
Add them all up and costs are getting ridiculously high. And that’s just three issues out of many.
Here is Harvard economist Jeff Miron giving his top 3 proposals for the health care system.
“In our system, the vast majority of people don’t choose their own insurance: instead, it’s chosen by our employers, or by the government, on our behalf. We don’t have the option of paying more for a generous plan, or saving with a frugal one. The choice is made for us, by someone whose interests and needs are different from our own.” – Avik Roy