US Health Care Reform

health care

When I heard that the health care reform bill passed, my stomach did a slow flip.

Not because I’ve checked my brain at the door and I toe one party line or the other. I think both the Democrats and the Republicans have it wrong.

No bill in front of Congress thus far has addressed the root cause of escalating health care costs in the US. It’s really quite simple.

Health care costs a lot because it doesn’t cost enough.

I know, I know, that doesn’t make any sense… but if you think about it, it will. Let’s consider the MRI. Costs for MRIs vary around the world, but they tend to be pretty pricy in the US, especially if your health insurance picks it up and you have a doctor that doesn’t want to be sued, so he or she sends you to the most advanced MRI lab within miles. It might cost your insurance company twice as much as the older MRI down the street, but it’s more advanced. It’s better. Right? Well… maybe. There are certain times when adding 5% resolution to a scan will actually help in your diagnosis, but most of the time, the cheaper MRI would work just as well. It doesn’t cost 5% less. It’s costs 30% to 50% less.

But you don’t know that. And unless your doctor has an ownership stake in that expensive new MRI machine, neither does your doctor. All anyone thinks about is, “what’s the best care possible?” Not what is the most logical decision for this patient’s care.

We’re all so removed from the cost of our treatment, we demand the best. Yet this is practically the only time any of us behave this way.

I don’t demand the best car. I look for a car with specific features that are important to me, then agree to pay a reasonable price. I drive a used Infiniti. It’s a really nice car, but it cost me less than a brand new tricked out Honda Civic (and has more and better features)… and a heck of a lot less than a brand new fully loaded BMW.

My Infiniti has all wheel drive, just like the BMW… but it’s not quite as good at redistributing power. But it cost 20% of what the BMW cost. It has heated leather seats, and when you live this close to the Arctic circle, that’s a nice win. But it still cost 20% of what the new BMW cost. I get to work safely, even in blizzard conditions.

What if those types of decisions were applied when you needed health care?

Don’t say, “Well, my insurance pays for it, and I pay premiums, so I deserve the best!” If everyone goes to the fancy MRI (when only 5% of us need it), we all pay more premiums. If half of us go to the less expensive MRI, we all pay lower premiums. If most of us go to the less expensive MRI, the operator of the fancy MRI suddenly has incentive to do what can be done to lower their costs and prices.

In a market where the consumers feel no immediate impact from the costs they are incurring, there is no incentive to keep costs low.

Don’t get me wrong, there’s a lot going for health care in the US. I’m glad I live here. Still, there’s a lot wrong with health care, and the bill passed this weekend will fix none of the major issues. Costs will continue to escalate.

We need to return to bearing more of our own health care costs. Our grandparents didn’t expect free health care when they were young. Why do we all expect it now?

The solution is simple. Higher deductible plans. Higher co-pays. Tax sheltered savings for medical costs. Yes, I know these things are available to some people now, but it’s the exception, not the rule.

I’ll save my rant on mandatory coverage for another day.

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