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.

You have no doubt seen the news. Goldman Sachs and AIG are paying out bonuses bigger than even at the height of the boom. There is too much competition out there to pay any less, they say. This may be true or it may not, but what is certain is that just about every big Wall Street investment house should be busted right now, which would have thrown thousands of well-paid financial wizards out into the street. If things had gone the way things should have gone without government intervention, there would be so much competition for Wall Street jobs that the remaining employers could get away with one-tenth, maybe, of what they’re earning today thanks to us taxpayers. Heck, maybe they’d even have to pay to get a job.

So I can’t resist expressing my frustration.