Health care. Everybody wants it, nobody wants to pay too much for it. "Too much," is an indefinable term. Any amount is "too much" to someone. How many times has a person heard "I wouldn't take that for free?" In that instance even free was "too much."
I am going to make the following assumptions. My entire treatise is based on these assumptions.
Now the funs stuff begins. I will state a few challenges.
How many of the protesters at the town meetings have health care, through jobs, unions or other?
How many of these are subject to assumption B?
Currently the health care delivery system has three basic payers for services.
These players all charge and bill and pay each other and ultimately the nation's health care system continues. Payers #s 2 & 3 negotiate or impose fee schedules for services based on "usual and customary" charges. There is some controversy as to how those are computed, which I will not get into here. The end result is 2 & 3 pay what they pay, and the provider must write off the rest. Its not unlike having a coupon. A shopper with a coupon is like a patient with a 3rd party payer. The example is not 100% true because retailers can treat some of those coupons like vouchers in which the manufacturers reimburse the retailers for the discount. But from the customer standpoint the experience is the same.
So if a provider has a price for a procedure of $1000 and payer number 2 only pays $800 and payer number 3 only pays $750, why does the self payer still get billed the full $1000? Same reason you don't get double coupons if you don't bring the coupons. Because.
The $1000 price is a result of the provider needing to pool all the payments received for that service against all the costs associated with providing that service. If there is not enough profit (or reserves in the case of NonP), then something must happen. What about the self pay people that do not actually pay? Noncollectable debt is factored in as a business expense as well. Perhaps for example, of every $10,000 billed to patients, the provider can expect $7000, then $3000 is an expense of doing business. Not unlike sales commissions, visa charges or license fees.
So in a simple example of three patients, John uninsured, Beth insured, Chris Medicare each get the $1000 procedure. The provider can expect $2250 of the $3000 billed.
But there is another more insidious price policy other than the time honored supply and demand. What the market will bear. Supply and demand is great when people pay attention to prices. But when someone is paying for you, it is real easy to ignore inflation. Plus since the providers are really not getting 100% of their prices anyway, the "real price" is the average price after discount not the posted price. in my example $750. Think Manufactures List Price on a car. The price above the "real" price at Wal-Mart. Have you ever been to a department store to see a 25% off sign on something that months ago cost 30% less at full price?
So people with Insurance are not sensitive to price increases. This is the main reason behind co-pays. To put a price of transactions so that consumers will remember they are spending money, if just a nominal amount.
OK, so what is my fly in the ointment?
Forbid health benefits with employment or union membership. Require all providers of said benefits, to put that money in a tax free account for the recipients and let the consumers shop around for their own health care. My idea is once people realize HOW EXPENSIVE it really is, even though they will be no worse off in the end run, they will be more sympathetic to the plight of those without benefits. There may be an added benefit to the self pay insurance market with this too. Risk pooling will be out of whack. Currently large corporations with vast numbers of employees get preferred rates from insurers because of pooling the risk across the board of the smokers, the women of child bearing age, the healthy young guns and what have you. But when someone like me, applies for insurance, I may be considered a poor risk because of th mere fact I am applying for it. Am I simply that risk averse, or do I know something.
I am not sure if anyone knows the feeling of finding out I had heart disease, 2 months after letting my health insurance lapse due to a temporary budget crisis. But it was pretty horrible. I racked up 6 figures of debt with no realistic out. I was being responsible, right up until I made a fateful decision that I was "healthy enough" and I would catch up in a few months, better pay for my heat instead this winter. I am not bringing this up to garner sympathy, in fact it may have the effect of tainting the reader's view of my position as being self serving. Currently I live on disability and receive Medicare parts A,B & D.
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and so it goes
###
I am going to make the following assumptions. My entire treatise is based on these assumptions.
- A) People want everyone to have access to health care.
- B) Nobody wants their own access to health care compromised.
- C) Nobody wants to pay "too much" for it.
- D) People want superior health care.
Now the funs stuff begins. I will state a few challenges.
How many of the protesters at the town meetings have health care, through jobs, unions or other?
How many of these are subject to assumption B?
Currently the health care delivery system has three basic payers for services.
- 1) Self-pay
- 2) Private 3rd party payer (Insurance through work or self policy)
- 3) Government (Medicare, Medicaid, VA Chp etc).
These players all charge and bill and pay each other and ultimately the nation's health care system continues. Payers #s 2 & 3 negotiate or impose fee schedules for services based on "usual and customary" charges. There is some controversy as to how those are computed, which I will not get into here. The end result is 2 & 3 pay what they pay, and the provider must write off the rest. Its not unlike having a coupon. A shopper with a coupon is like a patient with a 3rd party payer. The example is not 100% true because retailers can treat some of those coupons like vouchers in which the manufacturers reimburse the retailers for the discount. But from the customer standpoint the experience is the same.
So if a provider has a price for a procedure of $1000 and payer number 2 only pays $800 and payer number 3 only pays $750, why does the self payer still get billed the full $1000? Same reason you don't get double coupons if you don't bring the coupons. Because.
The $1000 price is a result of the provider needing to pool all the payments received for that service against all the costs associated with providing that service. If there is not enough profit (or reserves in the case of NonP), then something must happen. What about the self pay people that do not actually pay? Noncollectable debt is factored in as a business expense as well. Perhaps for example, of every $10,000 billed to patients, the provider can expect $7000, then $3000 is an expense of doing business. Not unlike sales commissions, visa charges or license fees.
So in a simple example of three patients, John uninsured, Beth insured, Chris Medicare each get the $1000 procedure. The provider can expect $2250 of the $3000 billed.
But there is another more insidious price policy other than the time honored supply and demand. What the market will bear. Supply and demand is great when people pay attention to prices. But when someone is paying for you, it is real easy to ignore inflation. Plus since the providers are really not getting 100% of their prices anyway, the "real price" is the average price after discount not the posted price. in my example $750. Think Manufactures List Price on a car. The price above the "real" price at Wal-Mart. Have you ever been to a department store to see a 25% off sign on something that months ago cost 30% less at full price?
So people with Insurance are not sensitive to price increases. This is the main reason behind co-pays. To put a price of transactions so that consumers will remember they are spending money, if just a nominal amount.
OK, so what is my fly in the ointment?
Forbid health benefits with employment or union membership. Require all providers of said benefits, to put that money in a tax free account for the recipients and let the consumers shop around for their own health care. My idea is once people realize HOW EXPENSIVE it really is, even though they will be no worse off in the end run, they will be more sympathetic to the plight of those without benefits. There may be an added benefit to the self pay insurance market with this too. Risk pooling will be out of whack. Currently large corporations with vast numbers of employees get preferred rates from insurers because of pooling the risk across the board of the smokers, the women of child bearing age, the healthy young guns and what have you. But when someone like me, applies for insurance, I may be considered a poor risk because of th mere fact I am applying for it. Am I simply that risk averse, or do I know something.
I am not sure if anyone knows the feeling of finding out I had heart disease, 2 months after letting my health insurance lapse due to a temporary budget crisis. But it was pretty horrible. I racked up 6 figures of debt with no realistic out. I was being responsible, right up until I made a fateful decision that I was "healthy enough" and I would catch up in a few months, better pay for my heat instead this winter. I am not bringing this up to garner sympathy, in fact it may have the effect of tainting the reader's view of my position as being self serving. Currently I live on disability and receive Medicare parts A,B & D.
---
and so it goes
###
