I want the free market to transform healthcare. Direct Primary Care is part of it. And I believe prices will come down….to a certain point. You see, there is one elephant in the room that needs to be exposed, the good old insurance companies. As this article in Bloomberg points out:
- But the thing that few people talk about, and that no serious policy proposal attempts to fix—the arrangement that accounts for much of the difference between health spending in the U.S. and other places—is the enormous administrative overhead costs that come from lodging health-care reimbursement in the hands of insurance companies that have no incentive to perform their role efficiently as payment intermediaries.
It’s like the cost of colleges. Since I went to UVa thirty years ago the tuition for out-of-state students went up 600% or more. That’s not inflation, folks. That’s greed and it’s not coming back down. Since Obamacare started the premiums for people who actually pay went up 40% to 300%. Do you think that’s coming back down? Are you kidding more? More from the article:
- More than 20 years ago, two Harvard professors published an article in the prestigious New England Journal of Medicine showing that health-care administration cost somewhere between 19 percent and 24 percent of total spending on health care and that this administrative burden helped explain why health care costs so much in the U.S. compared, for instance, with Canada or the United Kingdom. An update of that analysis more than a decade later, after the diffusion of managed care and the widespread adoption of computerization, found that administration constituted some 30 percent of U.S. health-care costs and that the share of the health-care labor force comprising administrative (as opposed to care delivery) workers had grown 50 percent to constitute more than one of every four health-sector employees
- Because insurers are paid a fixed percentage of the claims they administer, they have no incentive to hold down costs.
Unless there is some plan to break these insurers monopoly and create competition then overall healthcare costs will still hurt the common man.Tweet