Have you ever wondered why it costs so much to see a doctor? After all, a Doctor's time can only be worth so much, right? Still, medical care has gotten so expensive that most are willing to pay a 3rd Party to pay the bill instead. Somehow, it's perceived that paying someone else to pay the Doctor will decrease the cost of seeing the Doctor. They call it "insurance," but the definition no longer fits the reality. Insurance is designed as numerous individuals paying a little into a fund that covers catastrophic but unlikely events, while modern "health insurance" pays for routine events and common ailments. But, for the sake of clarity, I'll refer to it as "health insurance," as it is commonly referred to as such.
Let's begin with just a visit to the Doctor's office. The fee charged doesn't just cover the Doctor's time. It also has to pay the time of the Nurse who prepares you to see the Doctor and asks the questions he needs answered to optimize his time with you. It also has to pay for the time of the receptionist who schedules your appointment, pulls your records, and makes sure the Doctor has time to see you, prioritizing those with the most urgent of needs. It also has to pay the mortgage on the building the doctor had built to see you. It also has to pay for the chair you sit in waiting to see the doctor, and the table he examines you on, and all the equipment he needs to have on hand. It also has to pay the costs of those loans he took out to gain that medical knowledge, and the costs of the loans of his Nurse.
Costs are going to snowball quick in this reality, and this is going to get long, while only touching on the generalities of those costs.
Now, your Doctor's Office has set up a fairly efficient system where by he sees many patients in a short amount of time, with each phase of the visit using the lowest cost labor needed, and requiring you to wait a little while longer for his time. So, in a normal free enterprise system, where it was a business and a customer relationship, the visit would probably only run $20 to $40, but we've added a lot of paychecks and infrastructure that has no part in actually providing the service.
Rather than just writing a check, or paying in cash or plastic, we've added the insurance company, which means the Doctor's office has to process the paperwork to justify the charges to someone that wasn't there. The insurance company has to pay someone to ensure the justification is correct, because they weren't there. It has to pay for a building and filing cabinets and phones and cubicles, not only for the verifiers, but for the salesmen, and those that bill the patient for the coverage. It has to pay for lawyers to make sure the paperwork is correct with the State. And it has to charge the patient enough to pay for all of those costs, and to pay the Doctor for his time, and the costs of running the Doctor's office.
In effect, we have just doubled the number of paychecks and infrastructure it requires to pay for the Doctor's visit, just by adding the Health Insurance company to the mix. And many will notice that their co-pay is very close to what the cost would have been otherwise. Of course, we also "added jobs" to the equation, but there is still only one Doctor giving the care, and still only one Nurse checking vitals, and one receptionist helping to maximize efficiency in that care.
A sad reality is that many in America today believe that their best opportunity to "strike it rich," is through a lawsuit. The lottery is high on the list as well, but business ownership is too low on that list. "Medical malpractice" lawsuits are way too common, and combined with this belief that a lawsuit is the most likely means to riches, there are many frivolous lawsuits against Doctors and Insurance companies. That's not to say that all are baseless, but the more common the lawsuit, and the more money awarded, or spent on a defense, or both, the higher the cost of insurance to protect the Doctor in the case, no matter how good he is. The cost of that insurance becomes a part of the Doctor's Fee and is passed on to the patient in the cost of higher insurance premiums.
And then we have all these pills, that companies now advertise to the patient, on TV and patients now demand the magic pills from their Doctor. It may be that each and every pill does exactly what the corporations claim, including the side effects, such as suicidal thoughts. But, those pills require chemists, and scientists, and researchers, and laboratories to test them in. They require test subjects, and then proof to the FDA that they are what they say they are. All of those things cost money, and lots of it, and that's before it goes to production in a sanitary factory, or TV advertising. Doctors can't know every pill made and the companies that make them pay a lot of money to ensure they do know their latest greatest. They pay salesmen to woo the Doctor and educate them on the latest thing out. The patient demands not only a prescription written by a doctor, but also "coverage" for the cost of the pills, and that adds time to the Doctor's billing as well as to the Insurance companies costs, which are again added to the costs of those premiums, while the co-pays likely cover the costs of actually manufacturing, and the rest has to cover the cost of all those middlemen.
This isn't a comprehensive list of all the costs of healthcare, but it does begin to scratch the surface. And in America, we do have the best Health Care in the world. A part of that is the research and development into new techniques and new equipment. The newest advances always cost more than the old tried and true devices. This is why you pay more for a 72" "smart" 3D TV than the old LED flatscreen, or rear projection TV. It is why the richest can afford the latest greatest technology while the blue collar worker has to prioritize cost versus need. The producer of the new product has to pay for research and development costs before he can get it to mass production. That cost is paid primarily by the rich who are too impatient to wait to be shown up by others of riches, and paves the way to affordability to the common man. It weeds out "good ideas" that don't work from great ideas we all take for granted. And they are literally paying a premium to be our guinea pigs.
Patients today are demanding that the latest greatest medical equipment be available within their medical care coverage. That technology is expensive. Its cost is passed from the hospitals through the billing department to the insurance company to the customer, in the form of premiums.
The higher the demand for health care, the higher the demand for the professionals that provide it, the more colleges charge to train people in it. The more patients that demand more tests, the more it costs the insurance company to pay for those tests, the more they must charge the patient in the form of premiums. It isn't that those companies are "greedy." Those companies cannot pay their employees if they can't charge their customers at least as much as it costs to provide the service. The more payrolls they have to pay, the more they have to charge. And no company can stay in business very long if it doesn't break even. Those that risked the money to pay for the infrastructure to create the company expect, rightfully, that they will be rewarded for that risk. You expect a return for the money you invest in a 401k or IRA, and that's where that money comes from.
And when someone takes their kid to the emergency room for the sniffles, that is a very high cost visit that has to accommodate the paychecks and insurance payments and all that equipment available across that spectrum as well as the advertising for the pills and syrups that the mother will demand. That's not free, whether the mother pays the bill or Medicaid pays.
So, by 2008, the combination of all these costs had taken the small cost of a Doctor's visit and turned it into 1/6th of the US economy, partially because foreigners would travel to the United States to get treatment and partially because those pharmaceutical companies sold their pills overseas as well.
Politicians don't like not getting their cut and anything that makes money attracts the attention of the greedy. The related fields have to pay lobbyists to protect their interests and that too is passed off to the customer, the patient in the form of premiums. But, it wasn't enough that those Corporations, Doctors, Lawyers, and Insurance companies were paying income taxes on the profits, the politicians wanted a bigger piece of pie. They enacted special taxes and fees on the various parts of the operations, and sold the electorate on the need for "compassion" to pay for insurance for those that had been priced out of the market.
Well, to be honest, I don't know that they sold the public. It seems that the DNC"s Obamacare was never really supported by a majority of those polled. But the Democrats did take over the House in 2006 and gained total control of the government in 2008. It had more to do with an effective smear campaign on Bush Jr and the Iraq War than it did with ObamaCare. "Hope and Change" was an effective slogan, but never defined. Obama, Pelosi and Reid abandoned promises of transparency and of giving the American people a chance to read for themselves legislation that was being brought to the floor. It also became apparent that they, nor Obama, had any plan pre-conceived, only an empty promise that they now had to pass. Early bills were a mere hundred pages, but as legitimate problems were spotted, the sponsored bill grew bigger and bigger, with more and more legalese into thousands of pages, passed by Democrats, so "we could find out what's in it," before anyone, including the politicians that sponsored it, could actually read it. But if the sponsors didn't read it, much less write it, who did? Lobbyists.
The basic premise, that health care could be cheaper by adding more payrolls and infrastructure to the process is inherently flawed. The idea that a bureaucracy would be more efficient, and more kind, because it has no profit margin is also flawed. One need only go to the DMV to see that bureaucracy is neither kind or efficient. It certainly places no premium on the "customer's" time. It doesn't need to do so. The bureaucracy is a monopoly which you are forced to use. You will sit in the line as long as you have to, in order to get the documents you need to drive on the public roads. And, if you don't? You'll be pulled over and pay a fine for failure to do so and "offered" the chance to go sit in those lines anyway.
The most cost efficient of government agencies is the Post Office (or Police Force if you really look at it). Still, the USPS is hemorraging money, while attempting to compete with the same companies it pays to do its job. That's right, mostly the USPS is only the face of the service you get. It pays FedEx and other companies to get the letters and packages from A to B while providing the sales clerk in the office and the delivery guy at your mail box. And it really is difficult to pay your competition to do your job, while providing the service for a lower price.
So, it really should come as no surprise that insurance prices are going up when you add more regulations and forms to fill out and bureaucrats that must approve them. The linchpin of the politicians' (democrats') plan was to force people that didn't need insurance to buy insurance at prices well above their risk of needing it. If they could force 20-30 year olds to buy a plan they wouldn't likely need, they could subsidize the price of those that actually did need to pay for expensive procedures. And if the youth didn't comply? Well, the politicians turned to the most effective of enforcers, the IRS to fine them for failure to comply with government dictates.
The IRS has an accepted capability of seizing funds without a warrant and forcing Citizens to provide proof of their own innocence. Generally speaking, at the end of the tax year, you've paid the IRS more money than required of you, and they'll write you a check, if you prove to them that you did. Even if you did pay more than you owed, they expect you to file a tax return. You'll be rewarded with a bigger check if you jump through the hoops the politicians want you to do. If you don't, they'll presume you are guilty of tax evasion. They'll "offer" you the opportunity to prove your innocence, by filing the return, but if you don't, they will seize your money, and your property. "You can't beat the IRS," is not just an idle threat. You'll find few allies if you try. Americans have accepted that it is your duty to provide proof of your own innocence every year to the IRS. Most are rewarded by compliance and rejoice that they have a big refund coming, interest free, for providing the government a loan.
If you "didn't file a tax return," not only will the IRS presume your guilt, but most likely the public will as well. Hell, I presume the guilt of Timothy Geitner, who ran the IRS, because he didn't pay his tax bill, and because his defense was that he didn't understand the tax code. Of course, he had been appointed by Obama when he decided to pay the bill, because he was so damned smart.
The Democrats decided that the IRS would make the perfect bill collectors for those "miscreants" that failed to obey their dictates. So, if you are 22 year old man that doesn't choose to pay for "insurance" coverage for your potential pregnancy, it is the IRS that will collect the fine, and that fine will get progressively more expensive each year. The IRS will collect your money, no matter how hard you fight. They'll take your money, unless you prove your innocence, to their satisfaction.
The progressives defend a 22 year old man's potential need for medical care for pregnancy as "only fair," because women do need maternity care. The implication is that forcing men to purchase insurance for a situation that has never occurred in the history of biology, is that it can help decrease the cost of insurance for women who tradition tells us do have a chance of needing that medical care. The reality is that insuring the possibility of a male pregnancy should cost somewhere between a penny and outright laughable. It should rank up there with insuring the cost of a log cabin in Missouri against the attack of Martian invaders. It's just about as likely to happen, and the only reason to charge a premium for it, is the insistence of the customer for coverage of something only found in works of fiction or minds of the insane.
But, if adding an Insurance company's payroll, along with medical equipment manufacturer's, and a pharmaceutical corporation's operations increased the cost of insurance, adding the monopolistic bureaucracy's costs is not going to decrease the price. Government NEVER decreases the costs, nor increases the kindness or effectiveness of a service. No matter how unselfish the motivations of a bureaucrat, selflessness is never implied in the job. No matter how unprofitable government is to citizens, it is never free, or even cost effective. Creating mandatory monopolies does not in any way make the products and services better in cost or quality. Our Founding Fathers knew this. That's why they restricted the reaches of government to the bare necessities that Free Enterprise could not or would not provide.
Adding payrolls, and the cost of buildings they work in, simply cannot reduce the cost of the product or service, not even if they are underpaid and working in shambles, but particularly not if they are overpaid union members working for a bureaucracy in lavish buildings.
If we really want to decrease the costs of health care, we need to step back and see how it once cost so little. We need to buy actual insurance for unlikely events, not pay a 3rd party to pay what is common. We need to set up a system that prevents frivolous lawsuits, while allowing those that compensate those that are truly malpractice. We need to reduce the number of paper pusher jobs that add to the costs, while not providing an actual service. In other words, we need a system that returns us to a doctor-patient relationship, and avoids wasting a Doctor's time on sniffles that only time can heal and paying numerous people to file paperwork in his wake.
That may sound cold hearted, but is it really cold hearted to say that a mother should be able to judge whether it is worth $40 to see a Doctor, rather than pay $20 in co-pays for an insurance company to pay the Doctor $100 instead? Do we really need to pay 10 or 20 people to look or fill out forms in between those two, the mother and the Doctor, and given the natural pre-disposition of Doctors, do we really think it is more advantageous for a paper pusher to decide the value of his time, or the Doctor, who would be able to look at his receptionist to order for a lower charge of the impoverished. In the end, I do believe more in the kind-heartedness of a Doctor than that of an IRS bureaucrat, as well as the cost effectiveness of dealing with him direct.
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