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Health Care Debate - Part 2
Jan 19, 2009
Your comments on health care on this morning's show (January 17-18, 2008) were a little off. The problem we have with health care in this country is the method of insurance. You are correct that we expect $100 of health care for $10 premium but what we get, as a society, is $50 or health care for $100 of premium. The other $50 goes to administrative overhead in the insurance industry. The dirty, hidden little fact is that our insurance premiums don't just pay for health care but also support the insurance industry.
This occurs because we have been trained to believe that health insurance means that no health care costs must be borne by the individual. If we ran automobile insurance the same way, we would insist that fuel, tires, new windshield wipers would all be paid by insurance. Imagine how much it would cost to gas up if we first needed to see an automotive generalist who would refer us to a fueling specialist who would diagnose the type and amount of fuel we should get, this specialist would then give us a prescription which we would have to shop around to determine which gas stations participated in our insurance plan and what our co pay was . . . you can see the lunacy.
In our current system the insurance industry has replaced an overbearing socialized medicine government bureaucracy in everything from setting rates to determining what health care will be provided and otherwise deciding for us what our needs are. A far better solution would be the health savings account plan where insurance is basically to cover major medical and there is a very high deductible. My wife and I have had one of these for years. Our current status is that we have a $7000 deductible and a monthly premium of just under $150, part of which goes into our savings account. Most young people have little or no medical expense and could use those years to build a substantial savings account. Even as one gets older, the fact that you are spending your money for the first several thousand makes you a much better consumer.
As an example, I needed minor outpatient surgery a couple years ago. I told the surgeon that I would be paying cash and why. He offered a discount for cash and switched the procedure to a different nearby hospital which would also offer cash discounts. He mentioned to me that not having to go through the hoopla and delay of billing an insurance company, arguing about what amount would be covered, etc. saved his practice hundreds of dollars in administrative overhead and delays in payment (he needs to pay his staff and overhead today but insurance may not reimburse him for up to 6 months) and he was happy to share. That, of course, made me a better consumer. My wife and I now shop medical procedures for value. If everyone were doing that,competition alone would drop most medical costs.
Starting with the diagnostic phase, I regularly refuse tests based on what I determine the necessity of that test to be and the probability that it will add value to my situation. Our current family medical practice was selected based on that practice's willingness to work with us. In truth, they love working with us and with others who have the same insurance. When I go in for a problem, the doctor and I discuss what it could be and what tests would be most likely to determine the actual problem, if indeed tests are necessary. By participating in that discussion the doctor and I can avoid unnecessary tests and expense. The doctor has also mentioned to me that, in the event I am dissatisfied with the outcome, having elected not to have a particular test will weaken any malpractice suit I may wish to bring. Golly, I am responsible for my health care. I accept. I know that this still leaves the problem of indigent health care and elderly health care when costs rise. But I believe, and health care professionals I've talked to about this agree with me, that the overall savings from such a plan would mean that health care providers would be able to do more pro bono work and costs would be more affordable to more people anyway.
For seniors and truly catastrophic, the government could act as an payer of last resort. The insurance system for automobiles is messed up enough as it is in a lot of states but with owners paying for maintenance and insurance covering catastrophes the system works. Some drive Yugos, some drive Cadillacs, some take the bus and some have to bum rides but there is no transportation shortage and the majority of our populace is pretty mobile.
I enjoy your show. Sorry for the length of this note.
Darrell Vande Hoef
Editor's Note: Below is John's response to Darrell's comments...
I agree with virtually all you say - and my own health care approach is similar to yours (high deductible, etc.) But the unpleasant reality I have had to face is my (our) approach is far in the minority after decades of separating health care costs from health care consumers. There is virtually no chance of moving toward a more transparent, consumer-vendor mechanism to health care after this recession and with Boomers hitting Medicare.
That said, means-testing such entitlements could perhaps allow the emergence of s secondary system for those who choose to pay. While I am persuaded access to care (especially primary care) is an important goal, the system need not be unbounded by cost constraints. Complaints about the Canadian system center on long waits and refused procedures - which is what cost containment looks like in practice. But the fact that anyone can see a doctor without cost for primary care does wonders for their overall health outcomes. It also makes a marked difference in the labor mobility.
I think we are heading for double digit unemployment, and hence millions more without health insurance of any kind. The pressure to make radical changes in our system will be irresistible. Like you, I am not optimistic we will get a well-run program in the end, but it is fair to say our current system is doing little to reform itself.
All across our economy we are about to make some regrettable choices - from finance, to health care, to energy policy. And the blame can be laid in large part at the feet of shortsighted capitalists (among whom I count myself) who chose immediate gains over commitment to the future. This is why I weary of those shouting "Socialist". They appear to me to be trying to distract us from who was driving the bus when it went off the cliff. We had our chance, and did not produce good results.
Thank you for watching and for your thoughtful reply. Your willingness to discuss these complex issues makes me more hopeful for our future.