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GetAClue 02-18-2020 08:19 AM

The Real Problem With America's Healthcare System
 
As I have been saying for a while now, the real problem with the rising costs in Healthcare is the system where a Third Party pays the bills. This article does a good job of describing that.

Quote:

The Real Problem With America's Healthcare System

The main problem with America’s health care system is government intervention (Medicare, Medicaid, the tax code’s healthcare exclusion, etc).

The main symptom of all that intervention is pervasive “third-party payer,” which is the term for a system where people buy goods and services with other people’s money.

And pervasive is no exaggeration. According to government data, nearly 90 percent of health care expenditures are paid for by someone other than the consumer.

And that means buyers are not sensitive to price. Which means sellers have little incentive to be efficient and keep prices under control.

The net effect is that the free market is not allowed to operate in most parts of the health care system. So it shouldn’t be a surprise that we have ever-rising costs and lots of bureaucracy.

Let’s look at an example.

One of my former colleagues, Michael Cannon, recently wrote about what happened when Obamacare mandated that birth control be covered by insurance (third-party payer) rather than being directly purchased by consumers.
The Affordable Care Act (ACA) dramatically expanded insurance coverage for prescription contraceptives such as “the pill.” From August 2012 through January 2014, the federal government phased in the ACA’s requirement that nearly all private health insurance plans must cover all Food and Drug Administration-approved prescription contraceptives with no cost-sharing. …As a result of these changes, the share of consumers who are sensitive to the price of contraceptives plummeted. …among women with large-employer coverage who use oral contraceptives, “the share experiencing out-of-pocket spending…declined from 94 percent in 2012 to 11 percent in 2017.” …The ACA’s reshaping of the market for oral contraceptives precisely coincided with a dramatic increase in prices for those items. …As the mandate began to take effect and as the ACA made oral contraceptives seem “free” to more purchasers, prices for hormones and oral contraceptives began to rise. …Once the mandate took full effect, prices began to rise rapidly. From May 2013 through May 2019, while real prices for non-prescription drugs and prescription drugs overall rose just 12 percent and 37 percent, respectively, prices for hormones and oral contraceptives rose 108 percent. …these data suggest that trying to make oral contraceptives “free” for insured consumers had the unintended consequence of making them far more expensive.
Here’s the chart, which is a powerful – and depressing – illustration of how government intervention leads to rising prices.

Notice how birth control costs (the orange line) begin to skyrocket as the Obamacare mandate took effect.

Another depressing thing to consider is that consumers get tricked into thinking that birth control is free.

In reality, of course, the higher costs get built in to the price of health insurance, which then means less take-home pay for the people who thought they were benefiting. But since they don’t understand that this is what’s happening, they decide their employers are too greedy or that compensation is stagnant.

Sigh.

Needless to say, the companies selling birth control lobbied to get their product automatically covered. After all, they knew they could raise prices (as shown in the chart) once customers started buying with other people’s money.

P.S. Several years ago, Sandra Fluke got her 15 minutes of fame by asserting that she had a right to third-party-financed birth control. That led to some clever jokes, including this cartoon, this cartoon, and this video.

P.P.S. When markets are allowed to operate in healthcare, relative prices fall.

P.P.P.S. Government-created third-party payer is also generating higher costs and needless bureaucracy in higher education.
https://finance.townhall.com/columni...source=thdaily

GottaGo 02-18-2020 09:11 AM

Re: The Real Problem With America's Healthcare System
 
Quote:

Originally Posted by GetAClue (Post 984628)
As I have been saying for a while now, the real problem with the rising costs in Healthcare is the system where a Third Party pays the bills. This article does a good job of describing that.

https://finance.townhall.com/columni...source=thdaily

Why people still have no idea what insurance actually is, I can't understand. Mandating insurance was the worst possible thing that could happen, which is of course why the government chose to do it.

I could use this as a springboard in multiple directions, but to stay on track, without even going to the site, as well illustrated in the write up, when people can pay for something via someone else's money, they don't care what it costs.

The government seems to think that the taxpayer's are bottomless pockets free for their picking. The 16th Amendment, IMO, was not created for the government to become the center of financial transactions among the citizen and the business, and neither was it intended that the 'general welfare' remove the responsibility of the citizen to make their own path in the pursuit of happiness.

AZRWinger 02-18-2020 09:45 AM

Re: The Real Problem With America's Healthcare System
 
I agree with most all the OP, government needs to get out of the way from most health insurance policies and allow the private market to work. For example, instead of the Elks Lodge or the Urban league being able to ban together to market group health insurance only select organizations like the AARP receive this favoritism.

The OP rails against the healthcare tax exclusion while ignoring tax exclusions for other business related expenses. If you must purchase special eyeglasses to use a computer screen, that cost may be deductible as a business expense. Health care insurance is likewise something that improves job performance and employee availability. As such it should be treated the same as the specialty glasses. :thumbsup

cnredd 02-18-2020 12:12 PM

Re: The Real Problem With America's Healthcare System
 
One big problem is the forms, rules, and administration...:yes

The Average Hospital Administrator Salary is $86,789...That's more than most (if not all) of the nurses...:yes :(

The work hours lost due to paperwork is mind-boggling, the only reason it's this way is due to government interference …:yes :mad

saltwn 02-18-2020 03:20 PM

Re: The Real Problem With America's Healthcare System
 
Quote:

Originally Posted by GetAClue (Post 984628)
As I have been saying for a while now, the real problem with the rising costs in Healthcare is the system where a Third Party pays the bills. This article does a good job of describing that.



https://finance.townhall.com/columni...source=thdaily

“third-party payer” includes insurance, so yeah I'd go for getting rid of all of it. but as long as health insurance companies are left standing with their several tiered offerings, prices will continue to skyrocket. you must include all 3rd party payers for the formula to work. :yes

FrancSevin 02-18-2020 03:29 PM

Re: The Real Problem With America's Healthcare System
 
Quote:

Originally Posted by saltwn (Post 984656)
“third-party payer” includes insurance, so yeah I'd go for getting rid of all of it. but as long as health insurance companies are left standing with their several tiered offerings, prices will continue to skyrocket. you must include all 3rd party payers for the formula to work. :yes

Well, in case you didn't notice at the time, the healthcare program known as Obamacare assured that the insurance industry was secure and well-paid. The Affordable Health Care Act was not about health care. It was about Insurance.

AZRWinger 02-18-2020 11:14 PM

Re: The Real Problem With America's Healthcare System
 
Quote:

Originally Posted by cnredd (Post 984648)
One big problem is the forms, rules, and administration...:yes

The Average Hospital Administrator Salary is $86,789...That's more than most (if not all) of the nurses...:yes :(

The work hours lost due to paperwork is mind-boggling, the only reason it's this way is due to government interference …:yes :mad

Wait a second, what do you think all the bureaucrats administering Medicare for all will cost? In addition to jobs for life no matter what they do like the ones at the VA that buried applications for care so they'd get their bonus. The more paperwork and regulations they create the bigger staff they need, the more staff the more supervisors, the more supervisors the more managers.

Government always increases costs.

FrancSevin 02-19-2020 09:01 AM

Re: The Real Problem With America's Healthcare System
 
Quote:

Originally Posted by cnredd (Post 984648)
One big problem is the forms, rules, and administration...:yes

The Average Hospital Administrator Salary is $86,789...That's more than most (if not all) of the nurses...:yes :(

The work hours lost due to paperwork is mind-boggling, the only reason it's this way is due to government interference …:yes :mad

I have given this personal example for years but, it examples exactly what you are claiming, and bears repeating.

Drom1990 to 2010, I was self insured. We had a catastrophic policy, but doctor visits and prescription meds were handled out of pocket. I always did and annual physical. The doctor told me that if he turned it in on insurance the bill was $1,800. If he billed me with an invoice to pay off overtime it was $1,200.

"What if I paid cash today?" I asked He quickly responded, "$660.00 because I don't have to pay someone to do all the paperwork. And, I don't have to wait 90 days for my money."


2012 I went on Medicare because Obama cancelled our catastrophic insurance. 6 months later Cathy had emergency surgery and I got a $30,000 bill. But my annual physical cost only a $45.00 Co-Pay. So, I shouldn't complain, right?


Here's another example. When I first went on ADVAIR in 1990, the monthly disk cost $59.00. Today, the over the counter cost at the pharmacy is now $690.00.

But thanks to Medicare, I have a co-pay of ,get this,$58.00 I save a whole dollar. This because as a mandated program, I the customer have no say in the overall pricing. There is no competition or accountability to force down costs and the final price because the Gubmit just agrees to pay for it.

Big Pharma and Big Insurance benefits. The Taxpayer pays big time.

thanks

GottaGo 02-20-2020 09:18 AM

Re: The Real Problem With America's Healthcare System
 
Quote:

Originally Posted by FrancSevin (Post 984690)
I have given this personal example for years but, it examples exactly what you are claiming, and bears repeating.

Drom1990 to 2010, I was self insured. We had a catastrophic policy, but doctor visits and prescription meds were handled out of pocket. I always did and annual physical. The doctor told me that if he turned it in on insurance the bill was $1,800. If he billed me with an invoice to pay off overtime it was $1,200.

"What if I paid cash today?" I asked He quickly responded, "$660.00 because I don't have to pay someone to do all the paperwork. And, I don't have to wait 90 days for my money."


2012 I went on Medicare because Obama cancelled our catastrophic insurance. 6 months later Cathy had emergency surgery and I got a $30,000 bill. But my annual physical cost only a $45.00 Co-Pay. So, I shouldn't complain, right?


Here's another example. When I first went on ADVAIR in 1990, the monthly disk cost $59.00. Today, the over the counter cost at the pharmacy is now $690.00.

But thanks to Medicare, I have a co-pay of ,get this,$58.00 I save a whole dollar. This because as a mandated program, I the customer have no say in the overall pricing. There is no competition or accountability to force down costs and the final price because the Gubmit just agrees to pay for it.

Big Pharma and Big Insurance benefits. The Taxpayer pays big time.

thanks

When I was first diagnosed with Type 1 diabetes, I made several inquires about paying cash for the insulin. $136 (?) I believe it was for a bottle of Novalog. That was 14 years ago. Now, I believe it is up to $400+. I've posted several articles on here regarding Big Pharma and their scalping.

The latest game of Big Pharma is to 'subsidize' their own prices so people can afford their meds... my test strips went from $65 (not on my insurance's preferred formulary) a month to $35 when I had contacted my new insulin pump company and complained about the cost of the strips needed for the proprietary meter linked with their pump. They reached out to the test strip company and *ding* I was subsidized.

So, was I truly subsidized on the back of other consumers, or did the test strip company reduce their profit margin to keep a user 'hooked'? I can (and do) use an inexpensive non-linked meter that takes test strips I already have, and can get for a fraction of the cost.

Games Big Pharma plays, and will continue to do so as long as they are guaranteed customers.

pjohns 02-22-2020 12:59 PM

Re: The Real Problem With America's Healthcare System
 
Quote:

Originally Posted by GottaGo (Post 984735)
[M]y test strips went from $65 (not on my insurance's preferred formulary)...

Sometimes one can negotiate successfully with the insurance company.

For instance, my wife has Medicare. And Celebrex--which her doctor prescribed--is not on Medicare's list of approved drugs. But she contacted Medicare, and noted that it is what the doctor insisted upon; and Medicare then approved it for her.


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