Why Is This So Hard to Understand?

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I have spoken about my catastrophic insurance plan for a long time.  Here is the highlights from my Sept 2015 entry:

They are all trying to reimagine healthcare by leaving the insurance industry and the government in the equation. That problem is unsolvable because they are the problem! Now remove the insurance industry. Remove the government. Let’s say everyone has some catastrophic plan that is reasonable in cost. You can’t tell me this is impossible to do. And let’s say that for a cheap monthly fee the only thing that is covered is after you pay $5000 of your own money (and maybe that is less depending on income). Let me repeat that. NOTHING IS COVERED! Guess what would happen? Patients would shop around. Doctors would be paid in cash and the prices wold come down because there is no more coding, no more billing, no more accounts receivable. Since overhead is less, the cost is less. If doctors don’t lower their cost, patients will go elsewhere. Also, patients would only get prescriptions that are reasonable in cost. The cost for diagnostic studies and MRIs come down. This is capitalism and it works.

Americans are the best shoppers in the world.  They are on the internet all day getting things on Amazon, etc.  Let them shop around their healthcare costs. We can do this!  This Boston Globe article finally talks about this:

  • Americans are forever being told that health care costs are out of control and that only sweeping government intervention can bring them back to earth.Any health care “reform” that intensifies government regulation or enlarges the role of insurance companies only makes a bad system worse.
  • When Americans rely on a third party — private insurance, Medicare, or Medicaid — to pay most of their medical bills, they forfeit their power as consumers.
  • Our ill-conceived system of subsidized health plans provided by employers and taxpayer-funded “free” treatment through the government ends up stripping patients of their economic clout.
  • Doctors and hospitals have little incentive to compete by lowering prices, because patients rarely bother to ask about prices. By and large, health care providers in the United States do most of their negotiating with insurers or the government. After all, they’re the ones paying the piper.
  • It’s only when medical services aren’t reimbursed by a third party — think of Lasik eye surgery or veterinary care or the growing number of direct-pay “concierge” practices that don’t accept health insurance — that the consumer is king. When providers are paid directly by customers, transactions are transparent, prices fall, choices proliferate, and consumer convenience becomes a priority. Bills reflect actual prices, not inscrutable codes and deductibles and “adjustments” negotiated way over patients’ heads.
  • The purpose of insurance is to protect policyholders from unforeseen or catastrophic expenses. Nobody taps auto insurance to pay for tuneups or new tires; we use it when the car is rear-ended or stolen. We shouldn’t be using health insurance to pay for routine checkups, either. If it seems odd to say so, that’s only because we’ve convinced ourselves that normal medical expenses shouldn’t be treated normally. If we want health care to cost less, we should pay for it ourselves.

Remember, I said it first.

  12 comments for “Why Is This So Hard to Understand?

  1. Seth Ruderman MD
    May 3, 2016 at 7:48 am

    I have been saying this for the past 20 years. I am an EM doc and probably get about 30% of billing because people come expecting not to pay. e.g “I came here for a CT because I didn’t get approval from my insurance company” I recently returned from China where they have to pay with insurance or cash or it’s out the door. We have more socialized medicine than them.

  2. drG
    April 27, 2016 at 9:56 am

    The current system must “crash and burn” before there can be any meaningful reform. This will happen after people lose confidence in the government. They will then transform to zombies to someone with thought. No one will like the solution but that is the only way you will get meaningful reform. Wake up zombies.

  3. David Devonis
    April 27, 2016 at 8:31 am

    Big health insurer pulled out of Iowa today because it says it’s losing ‘hundreds of millions of dollars’. So sad! Hail insurance works because hardly anyone (comparatively) gets hit by a catastrophic hailstorm. Other types of property/casualty insurance, same–they pay for the big stuff only. Why is health insurance any different? Yet , practically and legally, it’s in the same class as life insurance. That alone should make anyone shudder.

  4. dr(Lucky)Phil
    April 26, 2016 at 10:24 am

    Imagine if for the first $5000 the government was the soul (deliberate) negotiator… imaging their bargaining power – thats a nationalised health system,… if you don’t believe me ask the Canadians

    • Doug Farrago
      April 26, 2016 at 10:36 am

      I do not believe the government should be in charge of negotiating healthcare. You are on the wrong website for that. Check out givememorefreesshit.com run by Bernie.

      • sheila chambers
        May 2, 2016 at 11:43 pm

        That pay your own medical expenses may work OK for those with a six figure income or better but not if your laboring for the minimum wage with no health or dental insurance. For most of my working life I didn’t even have $5,000. in the bank or anyplace else.
        What I did was avoid doctors, dentists & eye doctors because I couldn’t afford them.
        I went through school unable to see the chalk board & thus the lessons being taught there because I couldn’t see, I got poor grades because of that. That had a very negative affect on my ability to get a decent paying job & I’m a female so I was also discriminated against in school & at work.
        In my working years, my teeth rotted out because I couldn’t afford to see a dentist.

        Nothing is “free” we pay for it one way or another.

        Private for PROFIT insurance pays too little to health care providers, denies too much needed care & pays too much to the CEO’s & shareholders, at least the Gov. gives us a better deal because it’s not gouging us & denying care for PROFIT.
        Without Medicaid or Medicare, millions of us would have to continue to suffer & even DIE because we can’t afford to see a doctor with only our own income.
        In the richest country the world has ever known, people are DYING on our mean streets because they couldn’t afford to see a doctor in time you don’t see them because they aren’t dying in your upscale, gated communities. Many live in small towns like I do with few doctors, we have to take what’s available, no “doctor shopping” here!
        I can’t afford to live in an area with better access to health care.

        We don’t even have a HOSPITAL! We have to drive 30 miles to reach a small, local, hospital.

        This is not the 1940’s anymore, health care is much more complex & thus EXPENSIVE, most of us need some help to pay for health care.

        • Doug Farrago
          May 3, 2016 at 6:34 am

          If you had read the whole piece, which you obviously didn’t, then you would have seen where I mention that NOT everyone would have the same deductible. You went into it with your eyes shut thinking that I am a rich ivory tower doctor and you built your agenda off that. You know not of what you speak. It’s a bummer that Bernie is out of the race now because it is giving his lunatics nothing to do now but blindly attack others. Go away. I will block the rest of your idiotic responses.

          • sheila chambers
            May 3, 2016 at 4:14 pm

            OK, us “lunatics” will go away & leave you to your delusions.

            BTW, Bernie is not out of the corrupt, fake “race”.

          • Doug Farrago
            May 3, 2016 at 8:27 pm

            LOL. Goodbye

      • sheila chambers
        May 2, 2016 at 11:49 pm

        NOTHING is “free”, we do have to PAY for it, insurance spreads out the risk, even Bernie’s plan is NOT “free”, we pay taxes to pay for that benefit & the government has far more negotiating power than some poor worker on minimum wage.
        Climb down from your ivory tower Doug & see how the lower classes exist.
        Our lives are very different from yours!

        • Doug Farrago
          May 3, 2016 at 6:29 am

          You are clueless, Stella.

  5. Steve O'
    April 26, 2016 at 9:41 am

    “Medical Insurance” is like fee-for-service, if you have absolutely no idea what your checking account balance is. Such a model makes for incredibly high uncertainty – and the market shows that the cost of underwriting risk is proportionate to how well the risk is calculable. What will your ER bill be? $10? $10,000? Who knows?

    When you’re rolling the dice with twenty-K income for a family, that’s an intolerable risk. Direct Primary Care is a contract which minimizes risk, and the cost of underwriting minimum risk is minimal.

    Insurance companies profit when you keep your chest pain at home, and underwrite your own risk because of uncertainty. Who can complain about that, at least on a corporate level?

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