# Why is healthcare so expensive without health insurance, and was it always this way? **URL:** \ **Category:** Factual Questions\ **Created:** [August 16, 2012, 10:18pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717 "2012-08-16T22:18:54Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 18, 2012, 4:58pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/41 "2012-08-18T16:58:33Z")
> [@Magiver](#): > > I agree that you could lower the wages of doctors by reducing the insurance costs associated with malpractice law suits. Do you know what the cost of malpractice lawsuits adds to health care? ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [August 18, 2012, 5:18pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/42 "2012-08-18T17:18:14Z")
> [@Fear\_Itself](#): > > Do you know what the cost of malpractice lawsuits adds to health care? Lawsuits or insurance? Then again, because the insurance company handles the details, they may settle for smaller amounts instead of fighting on principle. Oddly, that seems to attract more, and more frivolous, lawsuits. This does not bother the malpractice insurance companies - they just charge higher premiums. Annoyed Guy: “If I give you a quarter, will you go away?” Clueless Iggy: “Why would I go away from someone who’s giving me money?” ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [August 18, 2012, 6:04pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/43 "2012-08-18T18:04:37Z")
According to the CBO, tort reform would save up to $54 billion over a decade. > **[CBO Says Tort Reform Would Bring $54 Billion in Savings](https://www.washingtonpost.com/wp-dyn/content/article/2009/10/09/AR2009100904271.html)** > > Congressional budget analysts said Friday that lawmakers could save as much as $54 billion over the next decade by imposing an array of new limits on medical malpractice lawsuits -- 10 times more than previously estimated. It would reduce total national health care spending by about 0.5% according to the report. Single payer would reduce it $400 billion a year. The Vermont experiment in single payer is predicted to reduce costs by 25% in a decade. You get 50x more savings from single payer than from tort reform. So not a lot. I tend to think Tort reform is a red herring promoted by the right because it fits into their political philosophy, not because there is evidence it will save money. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [August 18, 2012, 6:04pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/44 "2012-08-18T18:04:51Z")
> [@Fear\_Itself](#): > > Do you know what the cost of malpractice lawsuits adds to health care? From what I’ve read it varies widely depending on the specialty. [It’s literally driving obstetrics doctors out of that field of practice](http://www.usatoday.com/news/health/healthcare/2002-07-01-malpractice.htm). From conversations with my family doctor his operating costs costs have risen to the point that he says he could not open a practice today if he was starting out. He’s been practicing medicine for at least 47 years. He listed insurance costs first followed by paperwork costs. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [August 18, 2012, 6:15pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/45 "2012-08-18T18:15:08Z")
> [@Wesley\_Clark](#): > > According to the CBO, tort reform would save up to $54 billion over a decade. > > [http://www.washingtonpost.com/wp-dyn/content/article/2009/10/09/AR2009100904271.html](http://www.washingtonpost.com/wp-dyn/content/article/2009/10/09/AR2009100904271.html) > > It would reduce total national health care spending by about 0.5% according to the report. Single payer would reduce it $400 billion a year. The Vermont experiment in single payer is predicted to reduce costs by 25% in a decade. You get 50x more savings from single payer than from tort reform. > > So not a lot. I tend to think Tort reform is a red herring promoted by the right because it fits into their political philosophy, not because there is evidence it will save money. Just crunching the numbers there is no way that article is accurate. That would be an average savings to doctors of about $80,000 a decade or $8,000 a year. There is no way that is a make or break number even considering the varying degree of costs associated with different medical specialties. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [August 18, 2012, 6:22pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/46 "2012-08-18T18:22:01Z")
> [@Magiver](#): > > Just crunching the numbers there is no way that article is accurate. That would be an average savings to doctors of about $80,000 a decade or $8,000 a year. There is no way that is a make or break number even considering the varying degree of costs associated with different medical specialties. Are you saying the CBO article isn’t accurate or the article written by health care economist William Hsiao about a 25% savings in health care isn’t accurate? You’ll have to take your criticisms up with them. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 18, 2012, 6:23pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/47 "2012-08-18T18:23:38Z")
> [@Magiver](#): > > From what I’ve read it varies widely depending on the specialty. [It’s literally driving obstetrics doctors out of that field of practice](http://www.usatoday.com/news/health/healthcare/2002-07-01-malpractice.htm). > > From conversations with my family doctor his operating costs costs have risen to the point that he says he could not open a practice today if he was starting out. He’s been practicing medicine for at least 47 years. He listed insurance costs first followed by paperwork costs. How do you propose to reduce malpractice premiums? ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [August 18, 2012, 6:43pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/48 "2012-08-18T18:43:58Z")
> [@Wesley\_Clark](#): > > Are you saying the CBO article isn’t accurate or the article written by health care economist William Hsiao about a 25% savings in health care isn’t accurate? You’ll have to take your criticisms up with them. I’m taking up the accuracy of the CBO numbers here because we’re discussing it here. The .5% savings (.005) simply doesn’t make sense when applied to insurance rates. I can save an exponentially higher percentage on health insurance simply shopping around. I’m pointing out a simple math mistake in the article. I don’t know about the 25% savings quoted but that seems like a more reasonable number to throw out and not a number easily discarded by applying it to real life situations. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [August 18, 2012, 6:46pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/49 "2012-08-18T18:46:41Z")
> [@Fear\_Itself](#): > > How do you propose to reduce malpractice premiums? tort reform. Just like the thread on the gas can law suit it’s something that would benefit more than just the medical field. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 18, 2012, 8:13pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/50 "2012-08-18T20:13:16Z")
> [@Magiver](#): > > tort reform. Just like the thread on the gas can law suit it’s something that would benefit more than just the medical field. There is no evidence that limiting malpractice awards will reduce premiums. And even if there were, I would not favor capping awards without a mandatory cap on premiums. Otherwise, you are artificially limiting the legal remedies available to patients, with no guarantee the insurance companies will lower premiums. I will not leave it to their discretion; if they want the government to lower awards, they must accept a cap on premiums. ---
**Author:** ![clairobscur](https://avatars.discourse-cdn.com/v4/letter/c/839c29/32.png) [@clairobscur](https://boards.straightdope.com/u/clairobscur)\ **Post date:** [August 18, 2012, 8:14pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/51 "2012-08-18T20:14:30Z")
> [@Magiver](#): > > tort reform. Just like the thread on the gas can law suit it’s something that would benefit more than just the medical field. There has been tons of threads about the huge cost of healthcare in the USA. When figures and cites were provided, malpractice insurance wasn’t by far the main issue, even though it does contribute, of course. Things like overhead were playing a major role. What seem absurd from this side of the pond are the prices charged for medical care. For instance, the $2 500 bill for a dog bite. If I was visiting the emergency room and somehow forgot my insurance card, the whole thing would cost me about €25. But that’s cheating, because it would be a public hospital, which receive public funds. So, lets assume the worst possible scenario. I see my doctor who wants the exact same things done, and for some reason I decide to pay everything out of my pocket. It adds up in the following way : -First visit to my doctor (private practitioner) : €23 -Visit to a nurse office to have the wound cleaned up (of course, my doctor would do that himself in reality, but let’s assume) : €19 -X-ray (as another poster said :what for 😕 .Again, let’s assume) : at a private imaging facility I went to recently, IIRC : about €30 -Tetanus shot. I bought one this year but can’t remember the price. Let’s be generous and say : €10 -Second visit to my doctor so he could see the X-ray and do the shot (in practice, the radiologist would have told me about the X-ray, and the nurse done the shot):€ 23 Total : € 105 and I had to go out of my way to spend as much as possible, and have been seen by 5 different people, two of them doctors, and one of them twice. All of them being private practitioners, without an ounce of public funding.The only “cheat” I can think of is that doctor education is free hence they don’t have any university loan to reimburse. (and the real price would be tetanus shot+ doctor visit for €33 and no X-ray) So, in the example given, the patient was billed 25 times the maximum expense I could figure out with French _private_ healthcare. You’re not going to tell me that malpractice insurance is 96% of the cost of medical care in the USA. If you want to reduce the American health expenses to an European level, you’ll have to be more creative than that to divide them by 25. By the way (and it’s just a guess), I’m wondering if a large part of the expenses aren’t related to totally overpriced basic care like that. Because I somehow doubt that, say, a heart transplant or a cancer treatment is going to cost much less here than in the USA. At least not 25 times less. ---
**Author:** ![snowthx](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowthx/32/10660_2.png) [@snowthx](https://boards.straightdope.com/u/snowthx)\ **Post date:** [August 18, 2012, 9:03pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/52 "2012-08-18T21:03:17Z")
> [@badger5149](#): > > The writing is on the wall for health care. It has allready far exceeded a sustainable level of purchaseability. As much as I hate the thought I believe the government will need to set up fully staffed and equipped hosptitals in all metro areas. Possibly including housing for outpatients with long term care such as cancer treatments who live in rural areas. It would have to be cheaper. Set limits on Mal practice and only in cases of gross negligence. I bet we could get healthcare down to about $2,000 per year per person. 10% of family incomes in not unreasonable. I think it could easily be brought into that range. Plenty of Dr’s from other countries would come over here and work for $200,000 a year. I do not think we will see govt-run hospitals any time soon. What I think we WILL see in the near future, as consumers, is something called a “Narrow Network”, or “Preferred Network”. These offereings to large employer groups will restrict the doctors, hospitals, and/or pharmacies you can go to to get the best out of pocket cost. If you go somewhere outside of that network, you will be expected to pay more out of your pocket. These types of offerings will not necessarily lower health insurance premiums, but they will stabilize them (meaning they will not rise as swiftly). It will limit choices, but who needs access to thousands of doctors and pharmacies, when a few close-by will do. ---
**Author:** ![griffon502](https://avatars.discourse-cdn.com/v4/letter/g/cdc98d/32.png) [@griffon502](https://boards.straightdope.com/u/griffon502)\ **Post date:** [August 18, 2012, 10:24pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/53 "2012-08-18T22:24:26Z")
If you ever read into Austrian economics you will know why. ---
**Author:** ![Mdcastle](https://avatars.discourse-cdn.com/v4/letter/m/958977/32.png) [@Mdcastle](https://boards.straightdope.com/u/Mdcastle)\ **Post date:** [August 18, 2012, 11:06pm UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/54 "2012-08-18T23:06:25Z")
Comparing care at a doctors office to a doctors office you have figures a lot more closer to each other. An American doctor would charge more than E32, most likely a couple of hundred dollars for that level of care, but E30 for a simple X-Ray and E10 for a tetanus shot are closer to the costs at a private physicians office in the US. Emergency rooms, as noted and by contrast are fantastically more expensive, which is why insurance companys are building in disincentives for using them. ---
**Author:** ![Clothahump](https://avatars.discourse-cdn.com/v4/letter/c/51bf81/32.png) [@Clothahump](https://boards.straightdope.com/u/Clothahump)\ **Post date:** [August 19, 2012, 12:13am UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/55 "2012-08-19T00:13:28Z")
> [@Magiver](#): > > 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. The major issue with new Rx drugs is that the length of protection of the patent process is too short. By the time experiments and human trials are complete and FDA approval is received, the company has only a few years to recover a staggering amount of R&D costs. And not every drug pans out, so they have to recover the costs of those drugs as well. ---
**Author:** ![Nametag](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nametag/32/406_2.png) [@Nametag](https://boards.straightdope.com/u/Nametag)\ **Post date:** [August 19, 2012, 1:22am UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/56 "2012-08-19T01:22:07Z")
In 1975, California passed MICRA, the Medical Injury Compensation Reform Act. This law was one of the first medical tort reform laws in the country, if not the first. It limited both awards for non-economic damages and lawyers’ fees, and in its wake, defendants’ costs did go down dramatically. Malpractice premiums, on the other hand, continued to rise until 1988, when Proposition 103 forced a rollback of all insurance premiums, and gave regulatory authority to the Department of Insurance to keep them low. Nonetheless, loss ratios (the quotient of payments to premiums) for California malpractice insurers have been incredibly low – never over 40%, usually below 25%. In 2009, The Doctors Company, California’s largest medical malpractice insurer (and a major insurer in all 50 states), reported an estimated loss ratio of 10%. When we compare this to the 50% - 60% range for the largest insurance markets, auto and workmen’s comp, or to the 65%-70% that insurance experts claim assures an adequate profit, we can see that the need for reform is great – but not tort reform. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [August 19, 2012, 1:48am UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/57 "2012-08-19T01:48:23Z")
> [@Fear\_Itself](#): > > There is no evidence that limiting malpractice awards will reduce premiums. Yes there is and I cited it. We’re losing OB doctors because the premiums are too high. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [August 19, 2012, 2:29am UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/58 "2012-08-19T02:29:11Z")
> [@Magiver](#): > > Yes there is and I cited it. We’re losing OB doctors because the premiums are too high. You posted an article about one doctor in Nevada. Nevada has among the highest premiums in the US, and OB-GYNs have among the highest premiums of any medical profession. That is hardly something you can extrapolate throughout the medical profession. A study on Texas found no lowering of health care costs due to tort reform (which they enacted in 2003). [http://www.statesman.com/news/local/new-study-tort-reform-has-not-reduced-health-2402096.html](http://www.statesman.com/news/local/new-study-tort-reform-has-not-reduced-health-2402096.html) ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [August 19, 2012, 2:33am UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/59 "2012-08-19T02:33:39Z")
> [@Wesley\_Clark](#): > > You posted an article about one doctor in Nevada. Nevada has among the highest premiums in the US, and OB-GYNs have among the highest premiums of any medical profession. That is hardly something you can extrapolate throughout the medical profession. > > A study on Texas found no lowering of health care costs due to tort reform (which they enacted in 2003). > > [http://www.statesman.com/news/local/new-study-tort-reform-has-not-reduced-health-2402096.html](http://www.statesman.com/news/local/new-study-tort-reform-has-not-reduced-health-2402096.html) [It lowered the cost to doctors.](http://www.obgynnews.com/news/across-specialties/single-article/texas-has-more-doctors-since-tort-reform/dd227721ce0abce885b311a812d06278.html) ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 19, 2012, 2:56am UTC](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717/60 "2012-08-19T02:56:13Z")
> [@Magiver](#): > > Yes there is and I cited it. We’re losing OB doctors because the premiums are too high. You posted a cite that claims premiums are too high. You still haven’t provided a cite for your claim that tort reform will reduce premiums. In states where tort reform has been passed, [premiums did not come down](http://www.gpo.gov/fdsys/pkg/CHRG-112hhrg63871/html/CHRG-112hhrg63871.htm): > [@Testimony before Congress by Joanne Doroshow](#): > > Second, medical malpractice claims and lawsuits are in > steep decline, according to the National Center for State > Courts and the insurance industry’s own data. Plus, to quote > from the Harvard School of Public Health study that the > Chairman mentioned, `Portraits of a medical malpractice system that is stricken with frivolous litigation are overblown, and only be a tiny percentage of med mal victims ever sue.'' In fact, this is the press release from Harvard, issuing that study, that said, `Study casts doubt on claims that the > medical malpractice system is plagued by frivolous lawsuits.‘’ > > Med mal premiums have been stable and dropping since 2006. > And if you read the industry’s trade publications, you will > find out that insurers so overpriced policies in the early part > of the last decade that they still have too much money in > reserves and that rates will continue to fall. And this has > happened whether or not a State has enacted tort reform. > > As far as Texas, health-care costs did not come down when > caps passed, at all. Applications for new licenses are only > part of the picture. When it comes to physicians engaged in > patient care–in other words, considering physicians who > retire, leave the State, or stop seeing patients–the data > shows that the per capita number has not grown. In fact, the > number grew steadily through 2003 and then leveled off. This is > not a pattern you would expect if 2003 tort reform law was > responsible. [Previous page](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717.md?page=2) [Next page](https://boards.straightdope.com/t/why-is-healthcare-so-expensive-without-health-insurance-and-was-it-always-this-way/631717.md?page=4)