Why are US health care costs so high? One good reason is “fee for service” medicine. The “incentives” under “fee for service” medicine is to “do as much as can be done” because the “more” the doctor does, the more he or she can charge the patient (or the patient’s insurance company).
The major reason for this state of affairs is that the patient generally is willing to “trust” the doctor when the doctor advises doing something. The fact that the doctor will profit from all this rarely enters people’s minds, but should! Of course most people will do as the doctor wants since they likely have health insurance, and the insurance will pay for whatever is done. And while there are cases where the insurance company will refuse to the cover the doctor’s procedure or whatever, these are rarely the case. The insurance company’s attitude is likely one of well, if we have to pay out more, then we can adjust our premium accordingly. And since the insurance company grosses about 20% of the premium (the net profit is considerably less), there is an incentive by the insurance company to go along with whatever the doctor wants to do, regardless of how actually necessary the procedure really is.
However, if the patient is the one who has to pay the cost of whatever procedure the doctor wants, then the patient is much more likely to question the value of whatever the doctor wants to do. This is especially true if the patient (like myself) knows a fair degree about the issue and what the likely results are going to be. This is of course one reason why doctors don’t like “private pay” people that much, especially if they have some knowledge of medicine themselves. The doctor would much prefer to have a patient who knows “nothing” and will do whatever the doctor wants… Of course when you have a lot of this sort of thing going on, then health care costs are going to be a lot higher than they’d be if patients took the time to educate themselves in matters like this!
It has been my experience that the major reason we have high health care costs here in the USA is that very few people are saying “No! to what doctors want to do. The doctor can always claim that his or her decisions are for the “benefit of the patient”, but when someone stands to earn a fair sum of money if they do get permission to do something raises questions as to the motivations of medical practitioners. Especially as US health care costs are half again as high as health care costs for the rest of the developed world. Obviously there is an issue here that needs further study. The health statistics of Americans are worse than that of most other developed countries. The US medical profession will claim this because we eat too much, don’t exercise enough, and so forth. However, obesity is not limited to just the USA. There are fat people in Europe too. Smoking of cigarettes is more common in Japan than it is in the USA, yet the Japanese enjoy longer life spans. In my own personal opinion, it is likely that the Japanese diet has something to do with this more than the superiority of Japanese health care over American health care. True, the fact that we have tens of millions of Americans who lack health insurance likely has more to do with this than anything else, since Japan, like the rest of the developed world, has a system of national health insurance that covers the great majority of the population. Something the US doesn’t have. And President Obama’s Patient Protection, Affordable Care Act isn’t likely to be of much help here as the health plans under Obamacare are mainly directed to dealing with the large medical costs that some people incur. Instead of being directed towards help paying for visits to general practitioners and paying the cost of generic drugs, lab tests, and so forth. Obamacare is very badly designed, proof if any is needed that those who designed it in the first place simply didn’t know what they were doing! (rather typical with today’s politicians)
One major reason that doctors can get away with these sort of “money making” unnecessary procedures is that they enjoy a government enforced monopoly over access to medical drugs. It is PRESCRIPTION LAWS that give them the power that they have over you! Take away their monopoly, and suddenly their behavior will change from an arrogant “I know everything” to a more reasonable “I think you probably would be wise to have this test or procedure”. More of the sort of relationship that exists between contractor and client. One where the client makes the decisions, not the contractor. This is why Libertarianism is the very best political philosphy there is. In a Libertarian society “YOU” make the decisions. Not the government, not the professionals. When the professions are stripped of their monopolistic powers, I’m sure we will find that the cost of their services will also become more “reasonable” too. Right now, they don’t have to worry about “competition” from those outside their own field of knowledge, and thanks to governmental laws, they pretty much have things the way they like. But under Libertarianism, this would not be the case. There are a surprising number of tasks that professionals today do that could be done by people with far less education and training. Most people, if they were to make the effort, could take care of most of their health needs without a doctor. Especially if they had access to a computer program that could do medical diagnosis for them. Such software is well within our current level of technology. Plus, if we apply the sort of training systems that were put into use during World War 2 to train people to perform tasks that formerly were thought to require much more education, it becomes obvious that our “shortages” of certain professionals is a “manufactured shortage” that was created for the economic benefit of the individuals concerned. And the medical profession isn’t the only offender this way. The same problems exist in all the professions. Take away their government “protection”, and the cost of living here in the USA would drop by over a trillion dollars a year! That’s $3,000 per man, woman, and child here in the United States! Plus we’d be better off. A lot of things would cost less, including services now provided by the “professions”. Again, the professions enjoy their high standards of livings because they have the power of government behind them. Once that government is shrunk back down by a Libertarian administration to its Constitutional size, then taxes will fall by a great deal, along with the costs of many services, consumer goods, giving everyone living in a Libertarian society a far better standard of living than what they enjoy now! You see, government for the most part simply adds “overhead” to almost everything. And it has to tax you heavily to pay for all the things it does. If government isn’t allowed to hand out all its “favors” to some people at the expense of everyone else, then the great majority of Americans will be better off than they are now. Something to think about, my reader…