Health Economics 101: What Most Don't Know
You cannot apply basic economic theory and free market principles to health care. Health care is fundamentally different and should be considered a public good.
First, health care is completely self-regulated and controlled. A person does not have free choice when choosing a provider. Due to an unholy alliance of provider networks, insurance underwriters, pharmaceutical conglomerates and private for profit hospital corporations such as HCA.
By negotiating with providers and developing one-size-fits-all prescription formularies and treatment protocols, we remove the ability for the consumer to make independent informed decisions about the value of various treatment options.
We rely upon one the ratings of physicians who have a self-interest in controlling access and information to accurate information through their reliance upon Certification and Licensing Boards. By limiting access into the profession, health care costs are inflated and it is near impossible for the consumer to determine the fair value of a health care service.
Second, the consumer is far removed from the negotiating process, so we do not have a good sense of the fair, free market value of one particular service in comparison to another. All you need to do is look at any EOB (explanation of benefits) report for your last trip to the hospital.
Billing codes are used and assigned through various service departments and the insurance carrier then decides which services are covered and at what rate. They use the terms like "Reasonable and Customary Rates" and then choose to pay 80% of that. So by definition, that 20% must be built in to the billing rates to adjust for the actual (and expected) rate of reimbursement.
Such complicated billing procedures and methods are so complicated and technical that the end recipient of services (the consumer) really has no idea if an X-ray costs $90 or $73. Add into that a separate fee for the radiologist, and sometimes a charge just to use the facility, and even smart people find it difficult to understand.
The bills are then processed by an insurance adjuster who must determine primary and secondary (supplemental) plans and determine who is responsible for what, the end cost and intricate design is truly "priceless."
A false sense of security is unfair and unjust. I would rather have nothing than false expectations and disappointment.
Without regulation, intervention and enforcement, many people will continue to believe they are prepared and protected from that ultimate for "just in case" scenario that results in major, catastrophic medical loss.
Yeah, right. The administrative cost alone on the part of the "Responsible Party" is probably more costly than the initial service they received at whatever hospital for whatever condition.
The bottom line is this, we can pass laws, we can file injunctive, pass symbolic legislation, and spew feel good if oration about public programs that fall short if their promise to assist those in crisis. However, unless we demand accountability from state and federal agencies (1) demanding a timely response; (2) create and external entity to do an independent audit to ensure compliance, (3) enforce those laws through whatever means necessary; we have no recourse.
As more and more people continue to lose their benefits, and their unemployment benefits run out... the state will continue to be overburdened, and people in crisis can only go so long without before it is too late. Social Security and DHS MUST be held accountable, and we must pressure our legislators to create a separate entity to conduct external reviews IMMEDIATELY.
I would write more, but I have some forms that MUST be filed out and faxed immediately to appeal the termination of my benefits. Since the Dept of Human Services only have 20 days to appeal, they should be required to respond in a timely fashion.
It is on us to see that this happens. Regardless of whether we chose a public or private option, without regulation, accountability and strict enforcement... we have no recourse. Please fix it. I can't do this alone!