There's only one way to make health care affordable
The Senate is trying to repeal, reform, or replace the Affordable Care Act. But nothing they're thinking of doing will make health care affordable, because they're leaving us out of their equations. You and I are consumers of health care, but we're not customers of the system. That makes all the difference.
I came to this realization a couple of months ago when I opened a hefty envelope from Medicare. I'd gotten these notices before (I know this because of the familiar jolt of anxiety I felt until I got to the "This is not a bill" line) but I'd never paid much attention to them because, of course, they were not bills. This time, however, I examined them closely.
The several pages were filled with columns and dollar amounts and descriptions of medical services provided, and they referenced a routine procedure that I had had a few weeks earlier. Two columns caught my attention, one entitled "Amount Provider Charged" and another "Medicare Approved Amount."
Over weeks, I received several more such notices, each itemizing additional charges or appeals to previous billings or corrections. I also received corresponding notices from my insurance carrier and the hospital. After they stopped coming and my file had approached the size of a small-town telephone book, I added up the numbers. The "Amount Provider Charged" reached $14,647 – outrageously high, I thought, for a routine procedure that took less than half an hour.
Used car salesmen and Arab rug merchants are famous for quoting a high asking price, and when you offer a low-ball counter, they'll wail, rend their clothing, and gnash their teeth. They're simply doing what ritual demands, and in the end, you'll probably agree on something in-between.
But doctors and hospitals aren't supposed to operate that way. Yet my "Medicare Approved Amount" came to $3,612 – seventy-five percent less than the "asking price." Doctors and hospital administrators may have wailed and gnashed their teeth when they received only twenty-five cents on the dollar, but I don't think so. I think they were expecting it.
So what's the purpose of this charade? These charges must serve some useful purpose (I dunno – maybe to scare the bejeezus out of us consumers), but they're fiction. They don't reflect prices paid by anyone.
The real customers of health care providers are those who set their prices and pay their bills – the insurance companies and government agencies. We consumers are mere observers of an opaque system, wherein an absurdly high price is reduced, almost magically, to an excessively high price ($3,600 for my half-hour routine procedure? C'mon!) to which we can gain access only by making large payments for insurance policies with large deductibles, or with government "largesse."
There's only one way for Congress to "fix" health care, and it doesn't entail spending more money on "coverage." One new law should do it: require every health care provider to publish a price list of services to apply whether paid by the consumer himself or by his representative – i.e., a government agency or an insurance company. Compel doctors and hospitals to compete among themselves.
This would return us to our proper role of consumer-customer and revive the once traditional relationship between doctor and patient. It would keep government and health insurance companies out of the price-fixing business and return them to their traditional roles of providing subsidies or selling financial risk abatement. You'd be able to keep your doctor because health care networks would disappear.
Free-market competition has improved services and lowered prices everywhere it's been tried. Health care would be no exception. Just look at prices for cosmetic and Lasik surgery.
One thing wouldn't change, though. Medicare and Medicaid patients probably would continue to receive telephone book-size stacks of "not bills." There's no law I can think of that would abate bureaucrats' love of paperwork.