It's the Prices, Stupid: Consumers Don't Drive High Health Care Costs

[sparky]

 

[Zander]

Higher deductables will have some SMALL effect (I think, don't have evidence to support this theory) on HC costs overall.

But overused HC is not generally the fault of the consumer.

If anything its the providers who make THAT happen since it is they who DECIDE what services will be provided.

The disconnect is not just on the consumer side. It's the whole system. Why do you think drug manufacturers advertise directly to the consumer? If enough people call and demand BONIVA be covered by Medicare what happens?? If I have a fancy new medical device that costs $1,000,000 how can I sell a bunch of 'em? Have my lobbyist convince the gubmint that is should be covered by medicare. BOOM - I'd sell a 100,000 of them. Then throw in the mother who brings her sniffing children to the Doctor at the first sign of anything (why not? It's FREE!) and you can see how things happen. All of these things increase the cost exponentially. The providers are stuck in the middle. The disconnect is systemic.

 

[rdean]

lot's of factors involved here, but the overwieght middleman surely isn't helping.....

You have the CEOs of some Health Care Companies making a hundred million dollar plus paychecks and people on this board want to blame "lawyers" and "doctors" for the high cost?

A single 100 million dollar check will pay the total medical insurance costs of 34,000 people. Imagine how many policies you actually have to skim to make a paycheck that large.

Add in private jets, stock options, administration costs, company retreats, all the other high level salaries, and you have to begin to ask yourself, "For every dollar paid into that policy, how much actually goes to the patient?" For the VA, it's around 96 cents on the dollar. Does anythone think it's close to that for market Health Care?

The number one cause of bankruptcy are medical bills.

All you have to do is "connect the dots".

Large insurance companies continue to press for higher premiums, even though their reserve coffers are flush with profits and shareholders have been rewarded with new dividends. Many defend proposed double-digit increases in the rates they charge, citing a need for protection against any sudden uptick in demand once people have more money to spend on their health, as well as the rising price of care. (PressTV file image)

Health Insurers Making Record Profits as Many Postpone Care | Common Dreams

What he said.

 

[sparky]

It's not astretch of immagination to consider what mandatory insurance is like folks

any of you that have to deal with workers comp, for instance, can probably attest to thier insistent , and often one way doctrines being foisted at the public

see, the house never looses, especially when they have the law in their back pocket

so, in step with it, is it that outlandish to predict the downsizing of the average Joe's HC in such a system?

hey, you think payin' for all those uninsured sorts is a bear now, wait a generation for all of us who put off what would be normal routine preventative measures here

~S~

 

[lizzie]

The theoretical laws regarding supply demand are tested when it comes to health care.

First, consumers do not decide their treatment in most cases, the doctors do.

Secondly, few consumers actually pay for their HC.

Now I am not saying that the supply demand plays no role in HC costs, but HC certainly isn't remotely like that widget market so many of read about in ECON 100

The supply and demand market are at play, it's just that the bottom line consumer has no idea what the cost is, because he's left out of the loop in driving costs. We severely overutilize resources in this country, because we are ignorant of the forces at work. Since most people don't have to pay out of pocket for basic needs such as physician office visits and drugs, we aren't aware of the demand we are placing on the supply end.

If we were required to pay for these basic health care needs out-of-pocket, market forces of competition would drive costs down.

 

[iggy pop]

The theoretical laws regarding supply demand are tested when it comes to health care.

First, consumers do not decide their treatment in most cases, the doctors do.

Secondly, few consumers actually pay for their HC.

Now I am not saying that the supply demand plays no role in HC costs, but HC certainly isn't remotely like that widget market so many of read about in ECON 100

The supply and demand market are at play, it's just that the bottom line consumer has no idea what the cost is, because he's left out of the loop in driving costs. We severely overutilize resources in this country, because we are ignorant of the forces at work. Since most people don't have to pay out of pocket for basic needs such as physician office visits and drugs, we aren't aware of the demand we are placing on the supply end.

If we were required to pay for these basic health care needs out-of-pocket, market forces of competition would drive costs down.

I think that is a key. Most don't pay out of pocket so they don't really care. If they were paying the full amout they'd scream

 

[uscitizen]

1. I thought you were leaving?

2. The USA is the only nation that let's its lawyers feast on its health care system

3. Government is the biggest consumer of health Care and they never give a fuck about what anything costs

Yep the VA/Military is that way on it?

 

[uscitizen]

Higher volume is supposed to lower costs right?
Why then do we pay more sor the exact same medicine than other countries do when our volume of healthcare is so much higher?

 

[Steve Hanson]

The theoretical laws regarding supply demand are tested when it comes to health care.

First, consumers do not decide their treatment in most cases, the doctors do.

Secondly, few consumers actually pay for their HC.

Now I am not saying that the supply demand plays no role in HC costs, but HC certainly isn't remotely like that widget market so many of read about in ECON 100

The supply and demand market are at play, it's just that the bottom line consumer has no idea what the cost is, because he's left out of the loop in driving costs. We severely overutilize resources in this country, because we are ignorant of the forces at work. Since most people don't have to pay out of pocket for basic needs such as physician office visits and drugs, we aren't aware of the demand we are placing on the supply end.

If we were required to pay for these basic health care needs out-of-pocket, market forces of competition would drive costs down.

I think that is a key. Most don't pay out of pocket so they don't really care. If they were paying the full amout they'd scream

No one bitch's about the copay.

 

[auditor0007]

1. I thought you were leaving?

2. The USA is the only nation that let's its lawyers feast on its health care system

3. Government is the biggest consumer of health Care and they never give a fuck about what anything costs

Government is not the biggest consumer of Health Care, but it is close. It's interesting though that the government covers two specific groups, those who are poor and all retirees, which of course are the two most expensive groups to cover.

 

[auditor0007]

I will say one thing....it's not like the Insurance companies do not negotiate for the absolute best price they can get from the hospitals.....they DO NEGOTIATE for cheaper prices and they do get much lower prices and rates than the person who does not have insurance.

20-25% of the cost of medical care comes from all of the paperwork involved....i had read once that a hospital like John Hopkins has over 100 different payment plans because of all the different insurance companies that they deal with and have negotiated prices with.....

What a waste of money.....

Although they do negotiate for the best prices they can get, that doesn't always translate into the cheapest prices an individual can get. Here is an example. I need certain lab tests done on a regular basis. Now that I have insurance through Ohio's high risk pool thanks to "Obamacare", I get my lab work done through my local provider. The thing is, I still have to pay out of pocket because it is part of my $2500 deductible. The first time I went this route, and the last, my labs cost me $235, after the insurance company's discount. I can get the same labs done on my own for $125.

Now this isn't always the case. My treatments now cost me around $100 out of pocket. When I was without insurance, I was paying $145. So there I save a little. Of course, I still have to pay my $400 per month for my insurance. The only thing it pays for is my doctor's visits which I have three per year, and I still have a co-pay. All other services are part of my deductible, which I will never meet unless I have something catastrophic happen.

 

[Care4all]

I will say one thing....it's not like the Insurance companies do not negotiate for the absolute best price they can get from the hospitals.....they DO NEGOTIATE for cheaper prices and they do get much lower prices and rates than the person who does not have insurance.

20-25% of the cost of medical care comes from all of the paperwork involved....i had read once that a hospital like John Hopkins has over 100 different payment plans because of all the different insurance companies that they deal with and have negotiated prices with.....

What a waste of money.....

Although they do negotiate for the best prices they can get, that doesn't always translate into the cheapest prices an individual can get. Here is an example. I need certain lab tests done on a regular basis. Now that I have insurance through Ohio's high risk pool thanks to "Obamacare", I get my lab work done through my local provider. The thing is, I still have to pay out of pocket because it is part of my $2500 deductible. The first time I went this route, and the last, my labs cost me $235, after the insurance company's discount. I can get the same labs done on my own for $125.

Now this isn't always the case. My treatments now cost me around $100 out of pocket. When I was without insurance, I was paying $145. So there I save a little. Of course, I still have to pay my $400 per month for my insurance. The only thing it pays for is my doctor's visits which I have three per year, and I still have a co-pay. All other services are part of my deductible, which I will never meet unless I have something catastrophic happen.

my insurance is not much better, i pay about the same each month as you, ( a little more) I only get 1 visit to the doctor a year covered without having to use my deductible and my deductible is 2500/5000k for the 2, as well...only this is for both Matt and me....matt's company pays the first $400 of the deductible.

the rest up to us, and then the insurance company will pay...so basically catastrophic insurance....

it stinks to high heaven....we only had this one plan to choose from.

 

[Spoonman]

The theoretical laws regarding supply demand are tested when it comes to health care.

First, consumers do not decide their treatment in most cases, the doctors do.

Secondly, few consumers actually pay for their HC.

Now I am not saying that the supply demand plays no role in HC costs, but HC certainly isn't remotely like that widget market so many of read about in ECON 100

The supply and demand market are at play, it's just that the bottom line consumer has no idea what the cost is, because he's left out of the loop in driving costs. We severely overutilize resources in this country, because we are ignorant of the forces at work. Since most people don't have to pay out of pocket for basic needs such as physician office visits and drugs, we aren't aware of the demand we are placing on the supply end.

If we were required to pay for these basic health care needs out-of-pocket, market forces of competition would drive costs down.

absolutely. no one complains about a $15-20 copayment. but if they were forking over $250 for a 5 minute visit they would be revolting.

 

[lizzie]

The theoretical laws regarding supply demand are tested when it comes to health care.

First, consumers do not decide their treatment in most cases, the doctors do.

Secondly, few consumers actually pay for their HC.

Now I am not saying that the supply demand plays no role in HC costs, but HC certainly isn't remotely like that widget market so many of read about in ECON 100

The supply and demand market are at play, it's just that the bottom line consumer has no idea what the cost is, because he's left out of the loop in driving costs. We severely overutilize resources in this country, because we are ignorant of the forces at work. Since most people don't have to pay out of pocket for basic needs such as physician office visits and drugs, we aren't aware of the demand we are placing on the supply end.

If we were required to pay for these basic health care needs out-of-pocket, market forces of competition would drive costs down.

absolutely. no one complains about a $15-20 copayment. but if they were forking over $250 for a 5 minute visit they would be revolting.

So true. Another way it would bring down costs of physician office visits is that paying up front not only guarantees the doctor that he/she will be paid, but it also cuts administrative costs for billing and paperwork. When the consumer of a good are all expected to pay up front, costs equalize in relation to the actual market, and competition forces prices to be geared to the actual economy. Competition is a good thing for costs because it gives buyers a choice. As an example, if you have 20 local neurologists in your city, and you are paying out of pocket to see them, the market for them is strictly regulated by demand and quality. If one of them is a jackass that nobody likes, his competitors will benefit. He is pressured to either provide a good product that people are willing to pay him for, or he has to lower his price to attract other customers. If insurance companies are negotiating prices, then the quality of the service doesn't come into the equation.

 

[Spoonman]

The supply and demand market are at play, it's just that the bottom line consumer has no idea what the cost is, because he's left out of the loop in driving costs. We severely overutilize resources in this country, because we are ignorant of the forces at work. Since most people don't have to pay out of pocket for basic needs such as physician office visits and drugs, we aren't aware of the demand we are placing on the supply end.

If we were required to pay for these basic health care needs out-of-pocket, market forces of competition would drive costs down.

absolutely. no one complains about a $15-20 copayment. but if they were forking over $250 for a 5 minute visit they would be revolting.

So true. Another way it would bring down costs of physician office visits is that paying up front not only guarantees the doctor that he/she will be paid, but it also cuts administrative costs for billing and paperwork. When the consumer of a good are all expected to pay up front, costs equalize in relation to the actual market, and competition forces prices to be geared to the actual economy. Competition is a good thing for costs because it gives buyers a choice. As an example, if you have 20 local neurologists in your city, and you are paying out of pocket to see them, the market for them is strictly regulated by demand and quality. If one of them is a jackass that nobody likes, his competitors will benefit. He is pressured to either provide a good product that people are willing to pay him for, or he has to lower his price to attract other customers. If insurance companies are negotiating prices, then the quality of the service doesn't come into the equation.

I pay like nothing for my healthcare plan. I think $60 a month for a family of 4 includung vision and dental. maybe it's $60 a paycheck so $120 a month. But that's all I pay. We have a $10 copay with a primary care physician and $15 copay for others. no deductible for services. So I never really even think about the cost of healthcare. or see it as an issue. My wife had spine surgery and it cost like $110,000, but it cost us nothing. now if I was expected to fork that over I'd be all over it.

 

[sparky]

and you hail from where spoondude?

 

[auditor0007]

I will say one thing....it's not like the Insurance companies do not negotiate for the absolute best price they can get from the hospitals.....they DO NEGOTIATE for cheaper prices and they do get much lower prices and rates than the person who does not have insurance.

20-25% of the cost of medical care comes from all of the paperwork involved....i had read once that a hospital like John Hopkins has over 100 different payment plans because of all the different insurance companies that they deal with and have negotiated prices with.....

What a waste of money.....

Although they do negotiate for the best prices they can get, that doesn't always translate into the cheapest prices an individual can get. Here is an example. I need certain lab tests done on a regular basis. Now that I have insurance through Ohio's high risk pool thanks to "Obamacare", I get my lab work done through my local provider. The thing is, I still have to pay out of pocket because it is part of my $2500 deductible. The first time I went this route, and the last, my labs cost me $235, after the insurance company's discount. I can get the same labs done on my own for $125.

Now this isn't always the case. My treatments now cost me around $100 out of pocket. When I was without insurance, I was paying $145. So there I save a little. Of course, I still have to pay my $400 per month for my insurance. The only thing it pays for is my doctor's visits which I have three per year, and I still have a co-pay. All other services are part of my deductible, which I will never meet unless I have something catastrophic happen.

my insurance is not much better, i pay about the same each month as you, ( a little more) I only get 1 visit to the doctor a year covered without having to use my deductible and my deductible is 2500/5000k for the 2, as well...only this is for both Matt and me....matt's company pays the first $400 of the deductible.

the rest up to us, and then the insurance company will pay...so basically catastrophic insurance....

it stinks to high heaven....we only had this one plan to choose from.

Well at least you have a choice in the insurance you purchase. Ooops. Seriously, if we are going to stick with insurance companies running the show, I wish we would get health insurance out of the hands of employers and make everyone pay for their own policies.

 

[auditor0007]

absolutely. no one complains about a $15-20 copayment. but if they were forking over $250 for a 5 minute visit they would be revolting.

So true. Another way it would bring down costs of physician office visits is that paying up front not only guarantees the doctor that he/she will be paid, but it also cuts administrative costs for billing and paperwork. When the consumer of a good are all expected to pay up front, costs equalize in relation to the actual market, and competition forces prices to be geared to the actual economy. Competition is a good thing for costs because it gives buyers a choice. As an example, if you have 20 local neurologists in your city, and you are paying out of pocket to see them, the market for them is strictly regulated by demand and quality. If one of them is a jackass that nobody likes, his competitors will benefit. He is pressured to either provide a good product that people are willing to pay him for, or he has to lower his price to attract other customers. If insurance companies are negotiating prices, then the quality of the service doesn't come into the equation.

I pay like nothing for my healthcare plan. I think $60 a month for a family of 4 includung vision and dental. maybe it's $60 a paycheck so $120 a month. But that's all I pay. We have a $10 copay with a primary care physician and $15 copay for others. no deductible for services. So I never really even think about the cost of healthcare. or see it as an issue. My wife had spine surgery and it cost like $110,000, but it cost us nothing. now if I was expected to fork that over I'd be all over it.

This is the problem with employer based health insurance. Some have great plans while others have absolute crap. But the biggest problem is that people like you have no clue how much it actually costs. If you were personally responsible for your own insurance, you would see how bad things are. If everyone had to purchase their own insurance, prices would come down.

 

[Greenbeard]

3. Government is the biggest consumer of health Care and they never give a fuck about what anything costs

"Government" in this example is a price maker, not a price taker. You don't often hear complaints about inflated Medicare or Medicaid reimbursement rates. If there's a problem on that end, it has to be utilization, not prices, the subject of this thread.

The disconnection is pretty simple to understand. The average health care consumer doesn't actually pay for care- to them it is essentially "FREE". Their employer pays the lions share of the insurance premium, and they pay a small portion and possibly a co-payment. So, they over utilize services. Why not? To them health care is "FREE" or almost "FREE". So long as someone else is paying the tab, health care costs will continue to rise.

The fact remains that the median health care consumer (assuming virtually everyone is in some sense a health care consumer) consumes virtually no health resources in a given year. That is, half of all health consumers account for about 3%--combined--of national health expenditures.

That's not to say there isn't a large amount of unnecessary care being delivered in our system but it's not because everyone--or even most people--are running and demanding absurd amounts of health resources. Health spending is concentrated which, of course, is why we use an insurance payment structure in the first place (and if you zoom in just on Medicare spending, spending on a handful of chronic conditions accounts for virtually all of the rise in spending over the past few decades). I've yet to see any evidence that a massive, disproportionate, and growing share of our national health spending is on the "mother who brings her sniffing children to the Doctor at the first sign of anything." Even if those kinds of minutia were a majority of service volume, they would still likely be responsible for only a minority of expenditures. Unless you have some reason to believe that's where most of our money is going, which I'd be very interested in seeing. But this thread isn't about the utilization side of the coin, it's about per-unit prices. That's connected to the utilization issue but they're not identical.

20-25% of the cost of medical care comes from all of the paperwork involved....i had read once that a hospital like John Hopkins has over 100 different payment plans because of all the different insurance companies that they deal with and have negotiated prices with.....

In general that's true, but what's most interesting here is that Johns Hopkins is actually one of the least likely hospitals to have that problem. That's because Maryland has an all-payer rate-setting system in which all payers in the state pay the same prices for the same health services at hospitals in the state. So you don't have the huge amount of price discrimination--with potentially every single insurer paying a different rate for a given service at a hospital--that's so common everywhere else.

But you're getting right at the price issue there, in that the "price" of a health service is whatever a provider in a given market can wring out of each individual payer.

 

[Flaylo]

This thread is still on fucking point, it is the prices and not the insurance, the prices for medicines and doctors visits for shit that isn't even major is still higher in the United States' most private health care system.