Tuesday, September 18, 2012

6. Government Price-fixing in Medicine

So why are healthcare costs are so high?

First of all, We don’t really HAVE health INSURANCE—we have prepaid healthcare. Our car
insurance doesn’t pay for oil changes or tire rotations, we pay cash for those services. In
healthcare, we have everything paid for by insurance, less maybe a small copay. The more we
use, the more we get our money’s worth. If we have back pain, we don’t want to exercise, or
lose weight, or just get an xray—we want an MRI. As patients we don’t even know how much
most of our healthcare costs. I’ve got news for you—neither does your doctor! And it’s not
because we’re stupid, or because we don’t care. It’s because the cost is different for every
patient! The cost of a spine MRI will be different for a patient with Medicare, Medicaid, Blue
Cross/Blue Shield, or someone who’s paying cash. Why all the difference? Because of the
Government! Let me explain…

The government decides how much money they will pay doctors for services they provide
to Medicare patients. Their payments, about half the time, do not cover our costs as
providers…we frequently lose money when we see Medicare patients. Why is that? Because
we have to pay employees to fill out piles of complicated paperwork and pay employees
to make sure that we abide by all of the government regulations. Then we have to submit
and often re-submit charges, hoping that we MAY be paid within 90 days. Medicaid is much
worse—doctors and hospitals lose money on every Medicaid patient they see. In other words,
we PAY to see these patients. In spite of that, most doctors continue to care for Medicare and
Medicaid patients.

So the government is actually FIXING the price of healthcare in this country! Providers are
limited in what they can charge and how competitive they can be because of the overhead
expenses incurred in complying with an insane regulatory load, and they even prevent us from
being flexible in pricing.

So tell me again, how MORE government regulations, MORE government program patients,
MORE price fixing by government, and MORE government bureaucracy is supposed to LOWER
the costs and improve the quality of healthcare! Later, we’ll talk about how we can do better
with real market-based reforms. Obamacare is NOT the answer!

(Note: This commentary is by Dr. Jill Vecchio.) 

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