United Liberty

Note: I intended to merely comment on this chart when sharing it via my Posterous. During the 5 or so minutes I was commenting, it grew to be something more substantial, and at the urging of others, it has been cross-posted here.

Since the 1960s, the percentage of total healthcare cost paid directly by the end consumer, aka patient, has dropped drastically, but out of pocket costs have risen and the cost of healthcare has risen drastically over that same period.

What has happened between then and now? The intervention of government into the marketplace. Insurance regulations, government mandates about what MUST be covered, Medicare/caid, and inflation make costs skyrocket, but the opacity of the prices keeps patients from seeing what each visit, prescription, and procedure actually costs. With that opacity, there is no competitive pricing, because the prices paid by patients are merely co-pays and the withholding from their paycheck for employer-sponsored health plans, insurance companies, and government programs that pay negotiated rates. Without competition and price transparency, prices will continue to rise.

In addition, patients largest out of pocket expense is their insurance coverage, which does not fluctuate to accommodate the amount of healthcare services consumed. The patient knows they only pay $10-$50 for each office visit, but the overall costs of those visits can be thousands of dollars. The patient rarely, if ever, sees the actual cost… Usually only if their insurance claim is denied.

Without seeing the ACTUAL cost of their visit, the out of pocket expense is the only one considered when choosing if a doctor’s visit is in order. For the uninsured, a trip to the doctor for the sniffles is wasteful, but the insured do not think twice about scheduling an appointment… After all, it COULD be the Swine Flu (whose death rate is smaller than the regular annual flu virus).

Contrary to popular belief, this is NOT a free market system for healthcare. This is a shell game where the doctors charge whatever they want, insurers and the government negotiate it down to a generalized “one size fits all” pricing schedule, rewarding those that overcharge to be negotiated down while paying claims in full for doctors with lower costs who charge less than the deemed “acceptable standard.”