Healthcare in America has gotten ridiculously expensive as I will demonstrate. The "easy" answer to go to government healthcare, like European countries, but this is a worse option.
So my wife went to the hospital to get 5 stitches in her knee. The stitches were sewn by an LPN (a not quite an RN). She also got a teatnus shot. This ended up costing $1320. This took less than 1/2 hour plus 1 1/2 hours waiting.
How on Earth does a half-hour work cost $1320?
To begin the first problem is that you don't know the price until you are done. I think the healthcare industry is the only industry where you do not know the price of something before you get the service. The receptionists "can't tell you." So you have no idea what you are going to be charged. You can't say, "$1320?! I'm going elsewhere!."
Most companies charge as a rate, about 2-3 times what the person is paid per hour. If you take your car to get the transmission fixed and they charge you $70/hr for labor, that means that the mechanic probably gets about $28/hr. Another $28-35 dollars go to overhead (receptionist), the rent, the lights, the accountant, etc. The small balance is profit. Even law firms generally charge 3 times what they pay their lawyers, and they have fancy furniture, expensive subscriptions to LexusNexus, etc.
How much can a shot of teatnus cost? When drug companies come out with a new medication, you can expect the price to be high because you have to pay for the drug development, along with all of the failed drugs. The teatnus vaccine, on the other hand, has been around for a long time. Thus it shouldn't be very expensive. Similarly, the swabs and alcohol should be minimal.
An LPN can't be that expensive. They only need 1 or 2 years of schooling, without any degrees. Hiring lesser trained employees, to do simpler tasks, should reduce the overall cost of healthcare. Perhaps they make $35 / hour. That would be over $65K/year if they worked their standard 36 hour weeks all year.
So if the shots and supplies cost a generous $50, that means the labor rate for an LPN is over $2500/hr. Even if you got billed for a full hour, that is still 36 times the hourly rate!
Now, I took my new kitten to the vet to get a checked out and get all of its shots for about $120. A vet sees the cat. While a vet is lower on a totem poll than a doctor, he requires a lot more school, and hence costs a lot more, than an LPN. So a vet can see a cat, give it shots, and run some other minor tests, for $120.
So the first question people reading this might have, is "Did insurance pay for it?" It shouldn't matter whether "insurance pays for it." (which is hasn't). You either pay for it then or pay for it in premiums... or your company pays for it in premiums which meanst they can't give you as good of a raise. Half the problem with healthcare is that some people don't see the cost directly as cash out of pocket, so they don't care. They only care when rates go up, but that is only at the end of the year. After a few weeks, they stop caring.
The problem is that there is little to regulate demand. If you only have a $25 copay, you might go to the doctor for every sniffle. Then the doctor might recommend an MRI. Since you are only paying $25, you say sure and get the MRI. This all gets billed to the insurance company who, in turn, raises your premiums.
Illegals and degenerates cost the system as well. This attitude would be considered, by some, as "mean" and "cheap." However, if you declare that other person should pay for someone else, that is not generosity. You can't spend other people's money and consider yourself generous. True generosity, would be donating your own money to charities which would pay for other's healthcare.
Lawsuits have also increased the cost of care. If a jury awards $48 million to someone, where do you think that money come from? However, there isn't much risk in doing stitches as there is in surgery. So, stitches, shouldn't carry any cost due to risk.
With government healthcare, it gets worse. It gets hard to regulate demand. Thus you have hypochondriacs who might get seen quickly, but someone who needs heart surgery waits for 18 months. Some have their cancer surgeries pushed back repeatedly until the cancer becomes unoperable. (That's the European way to reduce healthcare costs... let them die!) You also get a quality deteioration. If you compare American hospitals to those in Britian, you will see British hospitals are much dirtier, and have antique equipment.
So what to do?
Make people pay the first, perhaps, $1500 per year, of everything. Cover the rest. There is no reason why people should expect not to pay anything for their healthcare.
Require hospitals to be more upfront with their charges. If you find out your trip to the doctor for a cold might cost you $400, you might wait and see if it gets better on its own. This will also keep the people who are hypochondriacs at bay.
However, you are still covered from the catostrophic accidents or cancer. So for every 1000 people there is 1,500,000 paid in to cover the big claims. At $1500, you can take advantage of risk pooling and handle this.
Allow for tax deductions, regardless of income, AMT, standard deduction, to charities that deal with healthcare. Have "accelerated deductions"... i.e, for every dollar you donate, you can deduct, a $1.25.
Of course, the big problem to overcome, is that many do not want real solutions. They want socialism, and government controlled healthcare.
2 comments:
Socialism is the way to go. for health care anyway...although, as you say, it's not a real solution, its a complete revision of the system. The thing is though, the insurance companies are making so much with this system, they have no reason to change, and they could, potentially just bribe anyone who tried to change it. I dont want to be a cynic, but a lot of people can be bought. So, although things probably will never change, i think that you are right, without completely overhauling everything, complete upfront charges would be the best way of keeping health care affordable.
PS i'll have to pick that up. I do know that there is not a finate amount of wealth in the world, because, you could just mine something, or grow crops, and there you are producing wealth without taking it from anyone. but there is a finate amount of currency in circulation at any one time, and most of the people who end up with the wealth were not the ones who created it, no? i could be completely wrong, but just from common sense, a person's pay has to come from somewhere...
haha, yeah, that cereal killer was pretty bad, i suppose ill have to edit twice now.
Socialism for healthcare will produce disastorous result as it has in Britian and Canada. Monopolies are a bad thing, whether it is from one company or the government. Without competition, there is no motivation to improve service or quality.
The problem isn't all with insurance companies. Insurance companies make money, but that is independent of the costs. If they must pay out $15 billion to hospitals and doctors, they will charge all of its customers $16 billion. Their net margins are actually about 5-6%. They at least have some competition in the industry. Private companies routinely switch health insurance companies yearly to go with ones that give them the best rates for services. I've had Cigna, United Health, etc.
It would actually be better for insurance companies and people if costs stabilized. Right now, they set the prices at the beginning of the year. So they must accurately must predict the $15 billion in the expenses at the beginning of the year in order to set their price so they make a revenue of $16 billion. They must do that while competiting against other companies.
The problems are not limited to one issue. It's a combination of lawsuits, people that don't pay, and unregulated demand. Insurance should be for catastrophic costs. You don't have car insurance to cover getting your oil changed.
As for wealth: The amount of currency comes from the government. That is why there is rampant inflation in third world countries. The government just keeps printing money to pay its bills.
In America, many people who create wealth end up with it. Look at the wealth (and jobs) created by the work of Michael Dell or Howard Schultz (Starbucks). The original 1982 Forbes 400 list of the richest Americans have few original members left. They have been replaced newcomers. However, as income tax rates rise, you have less of a chance to do that. When income is the primary source of taxation, those without wealth and wish to acquire it, have a harder time doing so. That is why the "old rich" in Europe have stayed the richest, but in America there is higher turnover.
I have lots of typos as well, which is what happens when you try to write quickly.
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