Monday, October 2, 2017

Why are health care prices outrageous?

This was originally a comment at Peter Grant's blog.  Go check him out.  He's a very good writer of science fiction, western, and fantasy novels.


Regarding health care - That which can not continue indefinitely, must eventually stop. The predicted stop date is between 2032 and 2034. By that time, social security expenses will occupy 100% of the federal budget. Medicare/aid expenses will occupy 100% of the federal budget. Debt payments will occupy 100% of the federal budget.

That's a lot of 100 percents there.

Health care expenses are driven by various factors - the relative paucity of trained doctors, ridiculous regulations (did you know that medicare forced over half of all hospitals in America to close?), ridiculous lawsuit, and the corrupt death spiral of the insurance industry.

I'm not an opponent of insurance. I think it's pure, free market capitalism. What I'm upset about is the rampant corruption that the health insurance industry, and this most definitely includes medicare/aid, forces on the health providers. Over half of all medical spending is simply insurance processing/compliance. Prices are artificially inflated (massively, in some cases) so that insurance companies (remember, this includes the government) can show that they negotiated huge price concessions.

Large hospitals, pharma companies, etc. can afford the kickbacks and bribery to play the game and win. The traditional neighborhood practice can not - that's why so many of them have closed. Doctors don't have individual practices now - they've organised to share administrative expenses. There is a reason why you can't get an estimate of how much a procedure will cost - the doctors simply don't know, because so much billing is tied up in red tape corruption. They doctors don't generally like this, but it is how the game is played, if they want to survive.

This is one of the reasons that America isn't training more doctors now than we were in the 1960's. Another is the AMA, which like all unions wants to keep the supply of skilled labor low so that wages can be kept high. Did you know that the US has added exactly one new medical school in the last 50 years?

With all the expenses that doctors have, which includes student loans, general practitioners simply don't make enough money. Most of them would be better off as plumbers. "Rich doctor" is a myth these days, unless you're an in-demand specialist or practicing in Beverly Hills.

So many problems, no simple solutions. Everything goes to hell in a hand basket within the next 15 years or so, and we can not count on the current quality of politicians to do a single blessed thing about it until it is far too late to make any positive difference. We can assuredly count on our "friends" on the left to make everything worse, though.

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