As the Democratic presidential candidates argue about “Medicare for All” versus a “public option,” two simple policy changes could slash U.S. health-care costs by 75% while increasing access and improving the quality of care.
These policies have been proven to work by ingenious companies like Whole Foods and innovative governments like the state of Indiana and Singapore. If they were rolled out nationally, the United States would save $2.4 trillion per year across individuals, businesses, and the government.
The first policy—price tags—is a necessary prerequisite for competition and efficiency. Under our current system, it’s nearly impossible for people with health insurance to find out in advance what anything covered by their insurance will end up costing. Patients have no way to comparison shop for procedures covered by insurance, and providers are under little pressure to lower costs.
By contrast, there is intense competition among the providers of medical services like LASIK eye surgery that aren’t covered by health insurance. For those procedures, providers must compete for market share and profits by figuring out ways to improve efficiency and lower prices. They must also advertise to get customers in the door, and must ensure high quality to generate customer loyalty and benefit from word of mouth.
That’s why the price of LASIK eye surgery, as just one example, has fallen so dramatically even as quality has soared. Adjusted for inflation, LASIK cost nearly $4,000 per eye when it made its debut in the 1990s. These days, the average price is around $2,000 per eye and you can get it done for as little as $1,000 on sale.
By contrast, ask yourself what a colonoscopy or knee replacement will cost you. There’s no way to tell.
Price tags also insure that everybody pays the same amount. We currently have a health-care system in which providers charge patients wildly different prices depending on their insurance. That injustice will end if we insist on legally mandated price tags and require that every patient be charged the same price.
As a side benefit, we will also see massively lower administrative costs. They are currently extremely high because once a doctor submits a bill to an insurance company, the insurance company works hard to deny or discount the claim. Thus begins a hideously costly and drawn-out negotiation that eventually yields the dollar amount that the doctor will get reimbursed. If you have price tags for every procedure and require that every patient be charged the same price, all of that bickering and chicanery goes away. As does the need for gargantuan bureaucracies to process claims.
ht/ pd
When asked for a response to this article, C. Steven Tucker said, “HELL YES!”
HELL YES!
I don’t know of a single thing, that ever got better with government control. Sooner or later, it turns to shit. Obama Care started out shit. No competition means no control in prices.
Auto insurance is mandatory, why do I still have to pay “uninsured motorist” coverage.
Ethanol is about big business, not environment.
If auto manufacturers can offer $10k off the price, how much are they making.
Capitalism built American, Socialism builds dispare.
I had to take my wife to the emergency room recently. She’s OK now but the hospital charged my insurance over $13,000.00. All they did was two cat scans, blood work and two Tylenol tablets.
The problem is that there’s no patient to doctor transaction. We don’t pay directly for services {most of us} it’s handled through a third party. That’s where the mischief starts.
Does anyone know why LASIK became price competitive but braces didn’t? Years ago 2 of my kids required braces and it was a $5000 price tag no matter what doctor you chose.
our elected professional politicians can only come up with government controlled health care for reduction of costs.
that’s the best they can come up with.
out elected president from private business, never involved in politics before, has driven our economy to new heights.
by not following the group think of our elected representatives.
now we get a great idea for lowering health care costs from who?
a professional politician?
not hardly.
professional politicians claim to have all the answers but never get the results they claim they get.
we really need to rethink the political construct in this country if we are to save it.
I’d be willing to bet that half of medical costs can be attributed to some form of administrative overhead not actually related to actual medical treatment.
And most of that is being forced on the health care system by the actions of government and lawyers.
So nothing can be done about it.
Ever notice that the more government gets involved with anything, prices always go up, up, up?
Anon @7:48 am, “…half of medical costs can be attributed to some form of administrative overhead… Back in the day Medicare was considered the accountants right to work act.
Bill @7:08 am “…but never get the results they claim they get…” Not only do they not get the results promised their plans always cost twice as much than planned.
Go one step further and outlaw all health insurance. Every dollar kept from the middle men. Is a dollar saved. Docs could cut staff and would be forced to charge what the market can actually bear.
I’m a 70 y/o ale who has lived in Mexico for 10 years. Yes, Mexico is full of issues, but their healthcare is why I am still here.
A couple of issues. When a Mexican doctor prescribes pain pills, they give you a few days worth, not endless supplies of addictive meds. A friend went home from a Minneapolis hospital with over 100 opioids.
A procedure I had here was conducted by 3 people, in a state of the art, hospital. Cost was $340. Six years earlier, in Cincinnati, the same procedure was over $3500, with everyone, shy of the janitor, poking their head in for a look, and no doubt, adding another charge to the bill.
In fact, a friend recently had a hip replacement, out the door for $25000. Sadly, the US will NOT allow Medicare to be used here. The savings could be in the millions. Sad state of affairs in my mind.
The gov’t doesn’t WANT to solve the problem!
HEY!
Wake the fuck up!
The Demonrats want to control everything in order to oppress you and the Republicrats want to siphon off some bucks. Those are the ONLY reasons the gov’t is involved in medicine. Check out your Constitution – I’ll bet the word “medicine” doesn’t appear once – which means it’s NOT AN APPROVED AUTHORITY – it has no Constitutional and NO moral basis.
In 1965 we sucked into the “free shit” lie and got saddled with Medicare, and the resulting explosion in medical costs and gov’t interference was pre-ordained.
Regardless of the “intent” of ANY gov’t program, it immediately becomes a source of income for thousands of “politically connected” maggots and con-men.
The gov’t is NOT involved in medicine for any altruism.
Just another (in a long litany) outrageous lie.
izlamo delenda est …
I’m a healthcare provider and see it from the other side. Gin Blossom is right.The third party payment system jacks up the price. This proposed plan is a variation of Milton Friedman’s idea from the 1970’s (I think) of a high deductible catastrophic plan combined with an HSA so the patient directly pays for their care. People will start shopping and the price will come down once it is their money and not someone else’s. Additionally, have one set of rules for the whole nation so the insurer doesn’t have 50 things to figure out. The idea of every patient paying the same is excellent as well. No more discount plans where one group of people pays more so another group can pay less.
There’s a third option…make politicians use the same healthcare we’re stuck with.
Don’t forget what ambulance chasers add to the cost! We need tort reform. 1.1 million doctors and 1.3 million attorneys? Shouldn’t those numbers be reversed?