Why is healthcare so expensive without health insurance, and was it always this way?

Pretty much the topic title says it all. I’m only 22 years old, so I don’t really know what the situation was like historically, or even a few decades ago. Was purchasing prescription drugs and seeing a doctor, and other forms of routine health care always so expensive without health insurance, or is this a recent phenomena?

Is there anyone/thing to “blame” for this, or is this just the way things are?

Health care costs have been steadily going up at about 6-10% a year for the past few decades. Divide the annual growth rate by 72 to determine how long before prices double, so if the rate of inflation is 7% a year, in 10 years prices will be double. In 30 years they will be 800% higher. Health insurance rates are going up 10-50% a year. At my employer the rates went up 30-45% a year each year for the last few years.

I have heard people had bones set and gave birth for 3 figure hospital bills just a few decades ago (the birth thing may have been in the 50s or 60s).

Prescriptions, if anything, should be getting cheaper. More drugs are available as generics now than were in the past, so there are more generics to select from if you have a health condition. Twenty years ago if you wanted a statin or an ACE inhibitor you had to buy a brand name one, now they are all generics for $2-5 a month.

I don’t know what the cause is exactly. The generic answer is ‘health care is better’, but in a lot of ways we aren’t much better off than a few decades ago. Life expectancy is a few years longer, death rates and complications from chronic diseases may be down (as a guess) 20-40%, but is that worth a system that costs 4x as much?

I think a contributing factor to hospital care is the larger number of patients without health coverage being admitted via ER visits. It breaks downas such:

[ul]
[li]Hospital/heath care visit costs $x[/li][li]Sick under employed under insured person can’t afford it so they wait until they can’t wait anymore[/li][li]Person goes to the ER for exaggerated health related issue[/li][li]Person is not refused care but applies for deffered payments or as a charitable case[/li][li]Hospital takes a hit on the now more expensive visit due to the greater impacted person who didn;t come in before it was an emergency[/li][li]Cost is now passed on to the rest of the patients[/li][li]Increast cost of health care causes Insurance costs to go up[/li][li]and the cycle beings again[/li][/ul]

Another factor would also be the prevelence of more advanced care options, MRIs vs xrays, Ultrasounds, other advanced methods of treatment where the machines, technicians, upkeep, training all have to come from somewhere.

There are many, many causes. Not the least of which is that medicine is better now so people don’t die as young or as quickly when diagnosed with a critical illness.

Consider AIDS - even 20 years ago it was a relatively quick death sentence. Now infected patients can live for decades, with all of the future medical costs that entails. The story is similar for cancers, heart disease, and various other potentially life-ending illnesses.

I don’t know what the answer is, but I do know that medical bills I receive regularly become much smaller when payed by the insurance company as opposed to paying for them myself. When I check my benefits summary, I see the regular amount is billed, then a ‘network discount’ of between 40 and 70% is applied. The insurance company then settles the bill for this much smaller sum. This makes me think that some providers could sell their services for much less than they are currently billing.

I don’t know what is going on. We are recently retired, hah. We used to pay a 10 or 20 dollar copay to go to the dr. We usually went to the gp once a year for all our meds which consisted of BP, gerd and allergy related stuff. Now it costs us out of pocket $155 to go to the Dr. We can no longer go for all our meds one at at time, it requires a separate appointment for everything. SO multiply 3 meds by 155 by 2. Then it takes a month to get the meds right because the Dr. (who is new because we moved) wants us to try the newest bestest thing which turns out to cost >100 times what we were paying before for stuff that worked just fine. Even after we have told them we want the generics we have been on for years.

In the past 9 months we have paid more out of pocket than we ever did in years past. Over and above our $400 per month insurance we have paid >$2.5k so far this year. I hate Drs and Insurance co’s. And we are not even sick. Just trying to get normal meds.

I’m not sure when HMO’s came into being but when I was a kid my parents had medical insurance akin to something like car insurance. It covered catastrophic stuff and they paid for routine stuff out of pocket.

HMO’s are a paperwork nightmare agreement of what the insurance company is willing to pay for various procedures. The cost, IMO, lies here both in the complexity of administering the policy and also in total coverage instead of catastrophic coverage.

Since I’m currently paying for my own insurance I find it’s possible to get cash discounts for services as well as the ability to shop around for services just like any other commodity. In my area we are knee deep in diagnostic facilities. Not sure the same applies if you live out in the boondocks.

Prescription drugs are a whole topic unto themselves. the cost of my preferred BP medicine is way more than I want to pay. I can get a generic drug that gets the job done for a fraction of the cost. I get a 3 month supply for $10 versus a one month cost of $75. My preferred drug is about to go generic in September so it will be interesting to see what it sells for.

People have come to expect that medical treatment via insurance should cost anything but a co-pay.

During the post-WWII boom employers started to provide coverage to attract and hold employees. Prior to this gaining a toe hold families used to purchase what was refrred to as “major medical,” otherwise known as “hospitalization.” Basically, anything other than a hospital stay was paid out of your own pocket. Despite the fact I enjoy excellent coverage (nothing but co-pays), I think we’d all be better off in the long run with everyone going the “major medical” route.

My mother has drilled into me that another part of the reason is that medicare happened. During the creation of medicare, the panels did a lot of research into how much each and every doodad, whatchamacallit, thingamajig, and piece of gauze cost. Prior to this new concept of itemization, supposedly it was coverage for an outcome of sorts. It was x dollars for a broken arm, including diagnosis, xray, and casting. Because medicare administrators wanted to understand where the cost was coming from, doctors and hospitals found themselves having to itemize each bandage. This required additional procedures and personnel. They discovered that they could get cost + x% for each item; each procedure.

Previously, diagnostic testing and treatment were bundled. Now the doctor had to itemize when he put his hands on a person, if he used X tool (stethescope, whatever), and got paid more if he used tools X, Y, and Z, even if it was silly to use Z in this circumstance, because the average doctor used X, Y, and Z. Additionally, if he used tool R, he’d be paid more, because obviously this was a more difficult case. So now instead of saying 35 dollars for the broken arm, he has to say 20 dollars for my time, 5 cents for the little plastic cap on the thing they look in your ear with, 20 cents for the two cotton balls, etc. Doctor Sneaky ups the number of cotton balls used by one, or charges 6 cents for the plastic cap, and everyone follows suit. Over time, you add more procedures, more to the “normal” expectation of what is used, and increment the administrative costs.

Insurance companies started covering more to compete with medicare and each other, and at the request of businesses to make those jobs more attractive. Escalate these over multiple years, and you end up with our current hodgepodge.

I want to say this is a myth, but perhaps it varies by state law.

I know that every hospital I have ever seen in the US will flat refuse to treat or admit you except for life threatening conditions without either proof of insurance or credit card/cash in hand for it in full. Some won’t even accept cold hard cash, the thinking being that anything can happen during your stay or prochedure and costs can spiral far beyond your ability to pay.

The waiting room in the ER I was in with my father was filled people being turned away and told about low cost urgent care clinics affiliated with the hospital they could pay cash at(you’re not seeing a doctor there either without money).

I think the biggest item is the technicality of medicine over the last few years. In the 50’s or 60’s, they poked you and prodded and maybe took an Xray. Today there are dozens of tests. Many tests aredone routinely, where diagnosis was more by guess and then direct tests. The tests were less simple, so were only done if thought necessary. Things like AIDS tests (and a lot of other tests) for all donated blood is a relatively new concept. Machines that monitor people and go beep, electric pumps for this and that, even the range of drugs (and especially their cost) has increased. Penicillin and tetracyclin were about the range of antibiotics you would be prescribed. Drugs were rarely expensive asmost were not new and had been around long enough that everyone made them. People did not get prescriptions to lower cholestorol or other non-life-compromising conditions. Insulin was about as drug-dependent as most long term patients got.

Cancer treatement is a good example. WHen I was a kid in the 60’s there was the old joke:
“Mommy, mommy, what’s Santa doing here in September?”
“If I told you once, I’ve told you a thousand times, Sheldon - you have leukemia.”

Sadly, based on real life. There was not much in the way of treatment, a child diagnosed with leukemia died in a few months. The news occasionally showed some pathetic kid getting one last Christmas early. No expensive radiation treatments, no fancy drugs, no donor matching and bone marrow tansplants.

Same with heart attacks; not much more to do except bed rest and blood thinners. No angioplasty, no stents, bypass surgery was rare.

Lifestyle expectations were lower. A rural doctor would sometimes be paid in chickens, they could not expect a rich lifestyle.

One thing that was cited as a large recent cost contributor was malpractice insurance. IIRC, it was a huge cost by about 1990; some professions like anesthetist were saying half their gross income went to malpractice insurance.

md2000 has it I think.

When I was a kid, an exam involved listening to my heart, taking my blood pressure and a wooden stick to depress my tongue. Now the doctor, and the nurse, first put on gloves (which will be throw away) and even the most basic exam might include a number of other disposable items. Then, when a doctor actually finds something wrong, there is a much greater chance, these days, that he can do something about it or at least order a test that might provide some useful information. That all costs.

We could go back to the “good 'ol days” when medicine was cheap, we would just have to live with medicine also being much, much less effective. That isn’t to say that medical treatments aren’t often over priced and over prescribed, I think there are lots of places where a little oversight would save a lot on costs, but when we all want the very best treatment in the world it is going to cost a lot.

There are two issues. The question being answered is why does medical care in general cost so much now but I am not reading that as the question the op has asked. The op is asking why routine health care is so expensive without health insurance.

The op is experiencing one of the perverse ironies of our current system. There are retail prices for routine care and the discounted prices that insurance companies and the government have negotiated. Those payment schedules will vary from payor to payor (averaging out to being fair but each one way low for one code and higher than average on another) and providers will get the lesser of that amount or what they charge each accepted schedule. The result is that no provider is going to charge less than what any payor will pay for any individual service.

So who is actually asked to pay full retail? Only the people who can afford it the least, the uninsured. (Please note: some offices will ask for a lesser amount, usually on par with the discounted price the insurance companies have negotiated, in return for full payment at time of service. Ask about it.)

And yes there is the factor that doctors in America are a little test and intervention happy; the fear of lawsuits certainly doesn’t help even if it is not the only or even the major factor but the fact is that consumers expect and want tests and interventions and often are not happy with a provider suggesting watchful waiting. Explaining why doing nothing for now is the better option takes lots of time, uncompensated time.

Drug costs are another story. Usually there are more cost effective options that often are not used as a result of many consumers having no motivation to use the less expensive choice and physicians having little motivation to prescribe it. And of course new medicines do have to be the blockbuster profit maker to justify the investments (gambles) in the development process. As consumers, perhaps especially as an uninsured consumer, you need to force a conversation with your provider asking more cost effective options or even if the medicine is actually absolutely necessary or if a non-drug approach can be considered.

Some times, it can be cheaper.
[**
Many hospitals, doctors offer cash discount for medical bills**

The lowest price is usually available only if patients don’t use their health insurance. In one case, blood tests that cost an insured patient $415 would have been $95 in cash.](http://articles.latimes.com/2012/may/27/business/la-fi-medical-prices-20120527)

“It frustrates people because there’s no correlation between what things cost and what is charged,” said Paul Keckley, executive director of the Deloitte Center for Health Solutions, a research arm of the accounting firm.

I found an old bill of my mothers from 1980.

The doctor visit was $10.00

The ER visit was $55.00

The overnight charge for the room in the hospital was $195.00 (Semi private)

According to Google the minimum wage in 1980 was $3.10

So it was 3.22 times the minimum wage to see a doctor.

In Illinois today the minimum wage is $8.25. So 8.25 X 3.22 = 26.56. I paid $50.00 to see my doctor last June, I have no insurance.

So just using that one metric to measure it, it seems the costs have went up

Just to add that of course the insurance company does not pay full retail there either … but you do.

In fact, I recall an interview with a doctor about the “retail price”. He said that his agreement with certain health insurance companies demanded that they received the lowest price (plus a discount) in return for being an allowed doctor under their plan. So basically, if he offered an uninsured person a discount at all, he would be in breach of contract and liable to pay back hundreds of thousands of dollars to the insurance companies, so as to match his new “lowest price”.

maybe that’s one loophole Obamacare needs to fix now that they’ve fixed pre-existing conditions, lifetime maximums, etc. A medical insurance plan should not set their rates based on what the doctor charges other patients not in that plan.

As for drug costs - they are significantly higher in the USA than here in Canada. To prevent people from benefiting from this, the big pharma, or rather their lapdog, the US government ,there has used every tool available. They spread FUD (Fear, Uncertainty, Doubt) that the mail order pharmacies are selling garbage, when in fact the vast majority were legit and selling real genuine pharmaceuticals. they have leaned on the Canadian government to disallow remote consultations by phone (a licensed Canadian doctor needs to write the prescription). You can’t get your drugs by mail, or evn bring them in yourself in bulk.

Most recently, an operator of one such pharmacy service was arrested while in Florida. The business was supplied fake drugs somehow and then they and the owner were charged with distributing fakes. It seems the fakes were supposed to be legitimate generics by a manufacturer in India. Looks like a setup to me.

Well, there was a time in healthcare when your Doctor came to your house to see you and then you paid him for the visit with a chicken and some corn. But in those days, there really wasn’t a whole lot that the doctor could do for you anyways. When my Grandfather was a physician it was like that. His “office” was just his house and people would just “drop in” at all hours according to my Dad. And often they would just pay with food stuffs from the farm or whatever.

As the technology of medicine improved though, the costs went up. CT scans, MRIs, drug research and testing. All those class action lawsuits cost a lot of money. The pharmaceutical companies being sued aren’t the ones absorbing the full cost of the settlement, they pass a lot of that off onto the consumers who have to use their medications. Plus a lot of the big health care companies are publicly traded and “For Profit.” They are going to charge as much as the market will bear.