POLICY: The high cost of health care

I’m giving a talk this morning about consumer health care so not much time for a long post.  Kind of ironic that we’re entering the brave new world of consumer health care at a time when the price of insurance has got so high many people just cannot afford it. The LA Times today has an article called At what cost? which has some horrendous stories of low paid workers having to pay up to a quarter of their income in health insurance premiums. As IFTF/Harris has said for years, the empowered consumer is in general reluctantly empowered, and the basic ethos is pay more, get less.

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  1. >My insurance with Kaiser is now $289/month
    That’s appalling. (I’ve a friend who was with Kaiser, she told me about it, but not the cost.) I have “free” NHS treatment but because the waiting lists in Wales are so long (in England, they’re dropping fast) kept on my private insurance, which is 56 sterling a month. Of course I don’t need insurance for primary care and can see one of my primary care doctors, and with luck, the one I choose, within 24 hours (or less); so, my insurance should be less!
    Not that there aren’t terrible problems here. We share one problem with you, our doctors are well paid, far better than the doctors in Spain, better than French doctors, I heard, sometimes better than German doctors; it’s impossible to do anything about that. What we don’t have is your admin. costs overhead problem.

  2. Data point: My insurance with Kaiser is now $289/month (I’m single). That’s between 20%-30% of my income, depending on number of paying clients.

  3. With over 85% of all healthcare expenditures under a virtual oligarchy it is left to the 15% of patients paying cash (when they can) to make up for the financial losses suffered by hospitals, physicians and other providers. As fees and terms dictated by the government and eagerly copied by the commercial payers are increasingly divorced from the laws of supply and demand, the pressures on this shrinking minority to make up for increasing losses will get worse. Combined with several other equally dangerous trends, we are headed to a perfect storm in healthcare. It is still not to late to try a different path as we are proposing in a pilot program/demonstration model.

  4. The cost of health insurance for low income families has implications for the credit aspects of the economy. There is tremendous social pressure for families to purchase insurance even if a realistic financial analysis would show any other $700/mo. regular payment as living beyond their means. Thus low income families end up being caught between too moral lectures: take care of your family’s health vs. manage your family’s finances prudently.
    I don’t have a family, and I still find the decision to turn to debt-financing incredibly difficult. When I was discussing my own lack of health care with a friend, she advised me to “incur a bill”. Since I know I won’t have the money to pay that bill, that seems like an irresponsible approach to me. When collections costs, bankruptcy, etc., is taken into account, it seems more socially harmful to go around running up bills I can’t pay than standing on the corner and asking for a handout.
    So, in short, I think before anything can be done to address the health care crisis, society as a whole has to be able to work out the contradictions between the various versions of personal and family responsibility.