Why the hell does it cost $400.00 for inspection of a sprained arm and the wrapping of a bandage in the emergency room? How come a bag of chemo-chemicals costs $8,000.00? Why is it that a CT-Scan is about $4,000.00? How is it that a simple physical, where the doctor just has to read off a list of questions, perform standard tests and then deduce if anything is wrong, costs over $700.00? These charges are some things I’ve seen or been personally involved in here in Michigan. I agree, they are high. But why? What makes that industry so much more expensive than other businesses?
Why is it that you can buy a computer that has more hard drive space, more memory and more processing power than that which launched man to the moon in 1969? (Incidentally, that extraordinary processing power resides in your cellphone.) Why is it that a two-litre of Coke or Pepsi is still about $1.50 and has been holding there for decades? Why is it that the power of the Internet has increased, we can access it at faster and faster rates and access is in more and more places but it has become cheaper than just ten years ago? Some places, for the cup of a coffee, it’s free!
Why am I asking so many damned questions and answering nothing?
Fine. Here’s why you pay extraordinary amounts in health care that you don’t anywhere else.
Genesis:
In the Beginning, the United States Government attempted to hide the inflation it brought upon itself during World War II by implementing wage and price controls. The inflation was caused by the government printing up more money. Due to said wage controls, businesses found it difficult to hold good employees. The solution was to offer benefits, like health insurance, to keep them around. As time went on, employer provided health insurance became well established and expected. And because someone else was paying for health insurance (employer and insurance company), patients stopped paying attention to how much things costs. (1)
Secondly, government forces insurance companies to pay for testing and procedures for everybody even if the patient doesn’t need it. When you sign up for a health care plan, you may not realize that you have government mandated access to drug and alcohol abuse counseling (even if you don’t use these substances), you have access to some questionable practices like acupuncture or other new age “treatments” (even if you happen to be reasonable enough to know they’re bullshit). You pay for it in your plan because government has forced it to be covered. The government continues to require more and more coverage no matter whether you need it / want it or not or how unlikely most of the population is to suffer from it. You’re plan may cover your abortion, even if you’re a man. And as insurance companies are required to cover more, the premium gets passed on to you.
Thirdly, in the United States, we have the best equipment. Yes, the best machines to diagnose us and look inside us and find out what’s wrong. We have the best research centers and above all other country, we make the greatest advances in medicine. The best will always cost more than the mediocre so we can expect at least a higher cost than, say, your laptop or I-Pad. Only in a free society do we have these advances. It’s amazing we have come this far despite the regulations and controls by the government. Imagine where we’d be without them. (Hold that thought, we’re getting there). Note that there have been zero, zero, medical breakthroughs from oppressive governments like those in Afghanistan, Lybia or Lao People’s Democratic Republic. No one flies to these countries to seek cures. But people come to the United States from all over the world to treat their illnesses. Even privileged people who live in countries with celebrated socialized medicine seem to only give a wink and a smile to it because when they get sick, the come to the States. (2)
So there you have it: Government created the problem and patients aren’t involved anymore in planning their budgets around it because someone else is going to pay for it. And with the Supreme Court’s recent upholding of the Affordable Healthcare Act, it’s going to be more of the same. It’s what two-time Libertarian Presidential Candidate, Harry Browne would call, “An example of how the government breaks your legs, gives you crutches and says, ‘See, if it wasn’t for us, you wouldn’t be able to walk.’”
But what about your third point, Eric? The one about great technological advances here in the States? What does government have to do with that in raising prices?
The government is responsible, just as much as in points one and two.
Let’s compare medical technology to Dell computer, Hewlett-Packard, Linux (my personal favorite because it’s absolutely free) or even the more expensive Apple. While the government constantly meddles in medical equipment, there is no Department of Personal Computing. And because of this, there is true competition and freedom to innovate that isn’t available to the medical community. Because of this, you, the consumer, keep getting more powerful personal computers while costs continue to go down. My first computer, with printer and monitor cost me $2,700.00 in 1996. I now have an HP Laptop (Running Ubuntu Linux 10.04) and a Barnes and Noble Nook Color that, combined, costs me about $600.00. Were there the right App, I could be building a Chuck E’ Cheese on Mars now. (I believe there isn’t yet because the government still regulates and controls the upper atmosphere).
Imagine if there was a Department of Personal Computing. Harry Browne does a wonderful job telling us exactly what that world would look like. Each computer would cost a few million dollars, be bigger than your residence, each new model would be less efficient than the last and “…every computer would come with software that shows you how to put on a condom.” (3) The reason why almost everyone is able to engage in the wonderful world of personal computing and the Internet is because government is not involved. You and you alone get to choose from several computer companies, get to choose how much computing power you want (video game race horse or web surf / word processing machine) and how fast you want to access said information on the Internet, if you want to be involved online at all. You can choose to have a huge desktop or an I-Phone. You can choose to unplug and not get involved at all.
Imagine what we’d have if we let patient/doctor/insurance company custom tailor a plan instead of government forcing everyone into a one-size-fits-all. Imagine if you could engage in medicine and health plans like you do when you go shopping for a computer. You and your doctor could decide if you were at risk for drug abuse or sickle cell anemia or AIDS or cancer or Alzheimer or whatever and choose, ala carte, what you’d like to get covered. You could plan and budget for health maintenance like you do with oil changes, your cable bill, water bill, grocery bill, etc. Instead of using health insurance to pay for simple doctor’s visits, well-visit physicals, immunizations, etc, you could buy a catastrophic plan to assist only with the heavy hitters like cancer or any major accident that may fall upon you. (Pun intended). In other words, you’d be using insurance for what insurance is for. Not for every time you engage with your doctor, but, like in car insurance, when something major happens. Not for adding air to your tires or car washes but in the event of a sixty-two car pile up.
In the end, if the government got completely out of Health Care, we could all engage in it on an individual level and all be able to afford whatever we felt was best for us.
On a final note and something related, let’s discuss something I like to call the myth of “I Can’t Afford Health Insurance!”
Since we do live in a United States with regulation and control of health care which forces costs to sky rocket, I keep hearing people say that they can’t afford health care unless they get their employer to do it. Some complain that it’s too expensive to engage in. I am skeptical of this claim. I think that despite the high cost of health care, you can afford at least some kind of coverage; catastrophic at least, if you really, really want it.
I’ve heard complainers say, “I Can’t Afford Health Care!” yet they have an I-Phone on their hip with unlimited voice, text and data plans: $130.00 a month. These same complainers drive vehicles they’re paying $300.00 a month. The same bitchers have cable television with HBO, Showtime and the ultimate-super-duper Football Package: $150.00 a month. Do the math. That’s $580.00 a month. These are just three examples of luxuries you don’t need. You could have a cheaper cellphone plan, you could drive a cheaper car and you could cut the cable monster entirely. You could cut down to a $45.00 cellphone plan and a $150.00 a month, cheaper car. That would save you $385.00 a month. Now consider what else you could live without. I’m asking you to decide not what you want but what you need.
For fun, I went to Atena.com (because it was the first company Google threw at me when I searched for health plans), I plugged in what it would cost for a twenty-two-year-old, single male with no children. The best plan, with dental, only costs $189.00 a month.
For extended fun, I plugged in my own stats, a forty-two-year old, married male with a thirty-one-year-old wife and two children of six and four years old. The Cadillac plan (like that noted above) was $918.00. If all you had was our $385.00 in the stats above, you couldn’t afford that. But, you could still afford a plan, with dental as shown below.
If you were to continue to examine your monthly expenses (Saturday pizzas, soda pops, fast food every day for lunch, designer clothing, name-brand-ketchups, etc) I’m betting you could afford an even better plan. And you don’t have to go with Atena. You get to shop around and compare plans, just like you would for any other kind of insurance.
So why don’t these complainers do that? Why don’t they give up the luxuries to insure themselves and/or their families on what I consider to be the most important thing to spend money on? I don’t know. But it’s clearly not as important to them as it is to me. And that’s the way it is with everything in life. While I cherish a speedy computer with high speed Internet access (let’s face it, it’s really about being able to play Left4Dead2 with faster load times than my opponents) some people are fine with a graduated word processor. And while I cherish a health plan for my family, some people choose not too. I think most people who drop out of health insurance do so because it’s not as important as an I-Phone or fancy clothing or a $5.00 latte. Or they think they will be lucky enough to avoid a hospitalization or major health problem. That’s the risk they take. And in a free society, it’s their risk and not mine.
Risk is a part of life. Whether you choose to speed on the highway or eat fatty foods or abuse drugs or listen to Europe’s, The Final Countdown, you’re taking risks. If you choose to not have health insurance or, at least, build something of a savings account for accidents and acts of God, that’s your choice. Government should never be handing you crutches after breaking your legs. That’s something you, as a responsible person, should be planning for.
1. David Boaz, Libertarianism – A primer, P. 225: 1999
2. Vivek Rajasekhar, The Canadian Patients’ Remedy for Health Care: Go to America! 2010
3. Harry Browne, Free The Schools! 2004
Freedom Cocktail 