Neither YAY or NAY -- but FACEPALM

Government policy has already made it customary and relatively cheaper (if not easier) to have medical insurance cover and pay for every medical service. So insurance dominates the finance and provision of even the routine medical services market -- e.g. seeing a doctor for an earache and obtaining medicine.

The consumer situation in medical care has become radically different from other types of transactions; under a regime of medical insurance, there is little to no incentive for people to care about or respond to price, outside of copayments and coinsurance; there isn't even a simple and widely accepted way to talk about price of most medical services; bills are written to get insurance companies to pay up, not to provide a clear record of the services performed, and at what prices.

The situation is so different from other transactions based on people paying their own way, that some people without insurance are actually scared just to go see a doctor, and rightly so. This is a terrible madness. And while at first glance, it looks like a subsidized insurance mandated appears to solve the problem, I think in the future, it will further empower Congress, not the people. The consumer will become ever more reliant on other people to make decisions about what care he can access.

Medical insurance was already heavily regulated. It will now be further subsidized by taxation and even higher premiums for others. This will increase "access", as some people will now get insurance (and medical services) who otherwise wouldn't, but at a real cost to others.

But while this policy will increase the quantity of medical services that will be provided, it will increase prices. While some people will now use insurance to get necessary services, many more will get even more unnecessary services. What is necessary? We are already at the point that insurers and regulators determine this more than a consumer advised by a doctor. Is it not plainly obvious that fewer and fewer people will have personal financial incentives to keep cost down?

The only way to lower cost is to simply let almost all people pay for the vast majority of their own routine medical services, like almost all pay for their own food. Of course, the entire medical culture would have to shift towards a framework of clarity in price and competition in quality.

I yearn for a future where people can find out the price of an MRI just as easily as the price of an iPad.


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This page contains a single entry by Kevin published on March 22, 2010 7:04 AM.

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