Let’s just say the OP is a bit unclear on the concept. Insurance companies negotiate from a position of strength. They have tons of data, experts, tons of time, and the ability to steer their customers to other hospitals. (My insurance company does not cover the local hospital - which is a plus in my book, since I don’t trust them.)
If you come into the ER with a heart attack you aren’t going to be doing a lot of negotiating. And you can shop around, but given the diversity of prices per procedures, you can only make an optimal choice if you know how you are going to get sick.
And the hospitals go out of business, which will be fine so long as people choose not to get sick.
When I was born the cost of a birth was pretty small, but besides doing a C-section if the baby had a problem, you just hoped everything was okay. When my kids were born it was a bit more expensive, since the birthing room had monitors which detected that my daughter had a heart problem which clued the doctor into getting her out of there fast. Today I see ultrasound pictures of my soon to appear grandchild, and they can tell how far the fetus is progressing much better.
I don’t think I want to go back to the way things were the time I was born just to save money. Shit, having the mother squat in the break room would save a ton.
Most pet owners don’t have insurance. Why not? Because most will have the seriously ill animal put down if treatment would cause them to go bankrupt (though there are exceptions.) Want grandma put down if she costs too much.
Ditto car insurance. You’ve got a strong cap based on car value. You don’t hear about $6 million cars. We can rebuild it after the crash. We can make it better. Nah, to the junkyard it goes and you get a new one.
You don’t understand how we value insurance. Do you have term life? At the end of the year, do you think it is a ripoff because you are still alive and so no one got anything from it? If you did, if everyone did, they wouldn’t buy it.
Insurance is valued based on the expected value of the return times the probability of getting that payment, plus a psychological value of not worrying about going bankrupt due to medical bills or your family being left penniless. So most people feel quite happy about not using their insurance. Some years we got back more than we paid - we could have done without those years, thanks.
But that’s where market thinking doesn’t actually work all that well: when you’re sick, you don’t necessarily feel inclined to take the time to make well-informed choices (even if you were already in possession of all the relevant information, which most of us aren’t when it comes to medical care).
It does not have to be perfect to be better. Take automobile insurance, when you are broken down by the side of the road with cars zooming past inches away at 70 mph do you call up each towing place and negotiate prices? Of course not, in an emergency you take whatever company shows up first. Yet, we still have a thousand commercials a day promising low cost insurance.
What percentage of medical care is truly emergency? You can find estimates of 2-10%. Most medical care is deciding which pharmacy to use or which doctor to see.
Don’t want to get rid of insurance, but I would love to see some form of blanket single payer insurance.
The health care provider insurance billing system in the US is completely off the rails. It’s not at all unusual to receive a ‘bill’ 6 months after a routine treatment that states “you may owe this amount”. WTF?
The professionals that handle the billing can’t even figure it out
If you have surgery in the US. The first thing you need to do is buy a file cabinet, and set up some spread sheets to tackle the amount of confusing paperwork that is going to come your way.
So sad, yet so true.
If we did single payer, I would want the Euro model, not the Canadian one; that way there will be a private system around for those who don’t want lowest common denominator government care.
Going back to the OP, if we assume UHC instead of private insurance, I ran the numbers in an earlier thread some years ago: if America were to switch to UHC based on the UK’s NHS, then it would save around $1T. More, in fact, because we in the UK can buy private insurance on top of the NHS cover.
It would be helpful if there was a chart of charges for common medical tests and services from that provider that was easily accessible to consumers. (I think the government has been pushing for this, but it hasn’t happened yet.)
One problem is that what the provider ostensibly charges is only tangentially related to what they are willing to accept. I have a bill here from the lab that did some blood and urine testing for me – the stated amount of the bill was something like $500, but the amount they were actually paid was under $50.
Another problem is that hospitals have little to no idea what various services actually cost them. The amount charged by the hospital is presumably related to what it costs them, but no one knows how. Seriously, no one knows why the stated charge for a CT scan is $800, while an echocardiogram is $1200. Hospital charges are set by a software program called a chargemaster and the odds are overwhelming that not a single person at the hospital can tell you why any service is billed at the rate it is.
Huh? Private insurance certainly exists in Canada. Did someone tell you it doesn’t?
Three letters - AAA. People don’t join AAA for the maps, you know.
What percent of the cost of medical care is GP visits or standard drugs?
Not all emergencies involve the ER. The cardiologist or cancer specialist with a first time customer on the phone has a lot of negotiating power. And low introductory visits don’t mean low costs throughout. Not to mention the problem of estimating a cost without a diagnosis.
If this nutty idea ever comes to fruition, my advice would be to invest in the funeral business.
Something similar could be available for ER trips. There is no reason to think people would be negotiating prices in the midst of a heart attack. People could join a health organization that includes benefits such as ER trips.
Physicians plus prescription drugs makeup around 30% of healthcare costs. Alot more than emergencies.
Sounds an insurance company.
In other words, health insurance. It doesn’t stop being health insurance just because you call it by a different name.
If people can and should join a health organization that includes benefits such as ER trips, what happens when a homeless guy shows up at the ER with a stab wound? Does he get sent away? Or do the docs treat him?
If we say that the docs should treat him, then we’ve decided that nobody can ethically be turned away from the ER, no matter how much they pay. But the services at the ER aren’t free, they have to be paid for in some way. And since the ER is by definition emergency treatment, it’s impossible for patients to negotiate for a better price. And so the argument for public funding of emergency services makes itself. Everybody pays to keep the ER open, even if you never use the ER.
And then there are things like public health. Everyone benefits if the poor aren’t riddled with HIV and cholera and malaria. And so public funding of public health makes sense, we can’t rely on the homeless guy to pay for his own whooping cough vaccine, because he won’t do it. So because we don’t want a whooping cough epidemic we just pay for everyone to get immunized against whooping cough, because everyone benefits when everyone is immunized. Everyone benefits from sewer systems that treat human waste. Everyone benefits from clean food and water and air.
So what’s left? Your everyday checkups where the doctor tells you to quit smoking and lose a few pounds. And the day when you go for a checkup and your doctor tells you that you’ve got cancer.
It certainly is true that if your insurance company is going to pay for your chemotherapy you don’t have much incentive to hunt for the lowest cost course of treatment. On the other hand, if you have to pay out of pocket most people don’t have tens of thousands of dollars sitting in the back waiting for a medical emergency. Cost wise, this sort of thing is in the same bucket as emergency treatment, in the sense that it is unplanned, not routine. Even if you aren’t literally rushed to the ER to get your chemotherapy you still need to be treated in a timely manner, the sooner the better. And as a patient you are totally unqualified to choose between treatments. Oh, you wanna go with the budget chemotherapy? Or save even more money by trying apricot pits?
The bottom line is that health care by nature results in huge information asymmetries. It’s one thing when the use car salesman knows more about that 2009 Subaru than you do. But how is a patient supposed to decide on a course of treatment for lung cancer?
Noting that elective procedures haven’t gone up in cost compared to mandatory procedures tells us nothing. There are thousands of types of elective procedures that haven’t seen significant cost reduction either. You can’t negotiate the price of your cancer treatment. You either pay the price or die in the gutter. Is the price higher than it could be? Yes it is, but this is not due to third party payments, nobody consumes extra chemotherapy just because they don’t pay for chemotherapy out of pocket. Will people take extra pills? Maybe, but we shouldn’t let people take extra pills even if they’re willing to pay for them. So the moral hazard arguments don’t exist. We’ve all heard of rich hypochondriacs that get medical treatments they don’t need. But health care providers have a different ethical obligation than caviar salesmen. It’s fine if a rich person spends too much money on caviar and champagne and fast cars. But doctors and nurses shouldn’t perform unnecessary procedures on rich idiots just because the rich idiot is willing to pay for it.
And so the free market model for health care breaks down completely. We have to provide health care for people who can’t afford it, we have to deny some procedures even for people who can afford it. We can’t ethically have a completely free market health care system, so pretending that we can is just silly. Can some cost savings be achieved by providing incentives for patients to use the health care system less? Sure. But you can’t just decide that everyone should pay out of pocket and let the market decide, because we’ll end up with people literally dying in the streets.
Without regard to benefits of a single-payer government health care system for the U.S., I’d expect that health care costs would climb significantly unless there were rigorous efforts to enforce limits on access, including tests/procedures lacking what regulators perceive as solid evidentiary backing.
I don’t see that happening.
Remember when federal officials and companies selling electronic medical record systems claimed that converting to EMR would save a pile of money ($81 billion annually by one estimate)? Hasn’t happened, and actually may have increased health care costs.
Single payer is coming eventually. It will not be cheap.
Personally, I loathe health insurance companies. In coming years (if I’m still around) I expect to loathe government health care agencies at least as much.
Huh? Private insurance certainly exists in Canada. Did someone tell you it doesn’t?
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There is private insurance, but it’s supplemental. There are no private hospitals, as GulfTiger seems to be wanting, and it’s very rare for a doctor to be operating solely under private insurance. Private insurance covers things like ambulance rides, semi-private rooms, prescription costs, etc. - things that aren’t covered by the medicare system.
Surely, that’s a sine qua non? How can you possibly have a fair market if no-one knows what the costs are? How can anyone manage a service? And it can’t be beyond the wit of man to establish an agency to (a) advise on cost-effectiveness of treatments and (b) collate cost information to identify outliers and inefficiencies across the system.
I find that really shocking. The doctor’s there to treat, not to gauge how much they can gouge the patient for.
But they went to school for a long time, worked hard, and want to reap a profit from their efforts; totally understandable.
My PCP is contemplating early retirement; his job no longer pays enough to make it worth his while to deal with all the crap.