How to do health care right:
The American health care system is socialism without a central plan, and capitalism without markets or prices.
In America, the health care system is disturbingly expensive, and sucking up alarming and rapidly increasing amounts of taxpayer money. America has the best health care system in the world for the very rich and the very poor, but for those in between, not so good. For the non working and part time working affluent (me) it is woefully bad.
Bryan Caplan points to Singapore: Health care that is cheap, and, to best of my knowledge, very good - even the poor in Singapore are guaranteed reasonable care, yet the system costs the government very little.
Because there are no prices in the American health care system, there is no competition, so costs rise to absurd and astronomical heights.
Stuff that is offered on a fixed price basis, for example dental surgery and laser eye surgery, works well, but almost all health care is offered on the basis of that they will do it, then afterwards make up a price on the basis of political power. For example my family has catastrophic coverage, which means we pay most ordinary medical charges out of our own pocket, but the insurance kicks in when we actually come down with something expensive. My wife was advised to get a colonoscopy. We shopped around, got a reasonable price at a doctor with a good reputation, negotiated with the insurance company, did all the stuff one does in an environment which actually has prices. Then after the colonoscopy was done, the hospital pulled a huge list of stupendously expensive charges out of their ass, most of which were obviously ridiculous or completely made up out of thin air, just trying it on to see what they could get away with, and all of which were charges we had definitely not agreed to, nor consented to in any way, formal or informal, written or unwritten. They just were not used to doing stuff on the basis that one has a definite price, and that the price one charges affects demand for one’s services. The concept seemed alien and incomprehensible to them. Mentally, they were socialists.
In Singapore, they advertise prices.
Some years later, I had the following conversations with various US health care providers. I recorded the conversations:
Conversation with Stanford Hospital:
Me
My wife needs a colonoscopy: Could you give me a price on it?
Stanford Hospital: (businesslike tone)
Twenty five hundred to thirty five hundred.
Me
You do this all the time. Can’t you give me a
specific price?
Stanford Hospital: (cooler tone)
Sorry
Me
Is $3500 the all up, all included price to both
myself and my insurance?
Stanford Hospital: (businesslike tone)
It only includes the doctors fee, and does not include any additional services
Me
So after I have this done, any number of people could then charge me any fee they like in addition to the thirty five hundred?
Stanford Hospital: (distinctly chilly tone)
I am afraid so.
O’Connor Hospital
Me
My wife needs a colonoscopy: Could you give me
a price on it.
O’Connor Hospital
Do you have a primary physician?
Me
Yes, my primary physician has advised this procedure, but it seems expensive. I am looking for a price.
O’Connor Hospital (outraged and indignant)
We don’t give out prices!
Mercy General Hospital
Me
I am looking for a price on a colonoscopy.
Mercy General Hospital hangs up without a word.
Saint Joseph’s medical center of Stockton:
I am transferred to financial counselling, who transferred me to “Estimates” The estimating lady appreciated my problem and made sympathetic noises.
She then asks me for a CPT code. I then research what CPT codes are, and discover that an operation can result in any CPT, and any number of CPTs. I discover that no matter what CPT I give, it is unlikely to be correct or sufficient, that additional CPTs can show up any time. A CPT would only be useful if it was possible to know in advance what CPTs would result from a colonoscopy, but the CPTs are only decided after the colonoscopy, usually long after the colonoscopy.
Tags: health care, markets, singapore, socialism
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DOCTOR HAN SOLO
May 29th, 2008 at 7:38 am
THE IMPERIAL MEDICAL CENTER ON CORUSCANT IS VERY UPFRONT WITH THEIR PRICING!!! LooL361
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Troy Camplin
May 29th, 2008 at 7:54 am
This is the result of third party payers. If most people bought “hotel insurance” to pay for hotel stays, the hotel industry would act the same way if a customer called. Hotel prices would also be 10 times what they are now.
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Dr. T
May 29th, 2008 at 9:36 am
Dr. Camplin is only partly correct in this example. The inability to quote a specific price is inherent in the procedure. The hospital or ambulatory surgery center could quote an accurate price for a colonoscopy where no abnormalities are seen and no problems occur during the procedure. However, during colonoscopy, suspicious areas are photographed and biopsied (which generate charges). Polyps (abnormal growths) may be removed (generating more charges). Biopsies and polyps are sent to pathology for examination (to make sure they are not cancerous) which generates more charges. Since the numbers of suspicious areas and polyps cannot be predicted, a colonoscopy charge cannot be predicted.
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Benjamin
May 29th, 2008 at 10:11 am
Dr. T:
Given what you say is true the hospital could very well list the price per photograph, biopsy, Polyp removal, and lab test. Given those prices they could generally list the average price per procedure. The last time I was in the hospital they had such a price list available in booklet form with the average cost per trauma posted on the wall.
Regards,
-Benjamin
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Etniks
May 29th, 2008 at 11:05 am
My girlfriend needed a colonoscopy as well and she DID HAVE US medical insurance at a cost of about $ 4,700 per year, plus all the co pays, deductibles etc.
She inquired how much she had to pay out of her own pocket for the colonoscopy in Houston TX, and she was told US$1,200 including her deductible and co pays (on top of her yearly fees).
A Mexican friend of hers recommended her to go to a Mexico city doctor who had done it for her in the past. My lady called the doctor long distance, made an appointment and off we went (we had to go to รก family gathering there)
She saw this doctor who passed her on to a surgeon. We went to the hospital and she was under total anesthesia, and later we were explained the results by the surgeon and given a DVD of the colonoscopy exploration.
The general doctor cost US $35.00, and the total cost for the hospital room, the anesthesist, nurse and the surgeon was just over $250.00 (about Mex 3,000.00 pesos total)
But this is not all. My lady has been suffering from diverticulitis most of her life and her mother died from it at age 51.
She has been under US doctors regimes that had not resolved many of her complaints of constant pains in the abdomen, and her constant inability to go regularly to the bathroom. They never gave her any particular diet.
The Mexican doctor solved for her all this by giving her a diet that works and was able to explain what exactly was the matter with the pain in her abdomen. She is regular now and as long as she keeps in that diet she has no more the pains she had to endure for decades.
This doctor said in the US, medicine is concerned with producing test after test, while in Mexico they use more the old style symptoms to come to an analysis of the patient.
Once I went to a doctor here in Houston, and by the time I arrived at my home and went into the Internet, there was a message selling me medicines to solve things I had just told the doctor, things that supposed to be a secret between the doctor and the patient.
I just have to laugh when people criticize the Canadian Medical system which I used for 18 years in British Columbia. It’s fantastic and works similar to here in that you can go to any doctor or hospital you want, except that because every doctor and hospital is under the same insurance company (the Universal Canadian Plan) you have more to choose from. Most are private.
The costs are much lower and there are no co-pays or deductibles.
A family of 4 today will pay about US $85.00 per month but for people whose income is low there are several scales down to zero!!
Moreover coverage is not connected to your job, it’s totally independent and you can change jobs or even lose your job and you don’t have to worry about losing your coverage. As I said if your income is low, your fees come down accordingly.
See the Michael Moore’s film SICKO for more info into other country systems.
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todd underwood
May 29th, 2008 at 11:05 am
dude,
you live in california. in california they publish these rates on the state website:
http://files.medi-cal.ca.gov/pubsdoco/rates/rateshome.asp
almost no other state has those data available, but you do. your point is valid, but you are much better off in california than most other parts of the us.
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Hannes
May 29th, 2008 at 11:42 am
Etniks…
Canadians pay 2nd most in the world in age adjusted percentage of GDP terms of all OECD countries.
If you earn over 200 000$/ year in Canada, expect to pay around 30,000$ towards your health insurance. True, lower income families are highly subsidized by richer families… but our system is plagued by many (different) ailments.
Our hospitals are awarded budgets from which they must provide services. This turns the patient into a burden on the hospital (less patients equals more money for other things)… and this feeling/treatment comes across.
If current trends in BC continue, by 2020, 100% of the provincial budget would need to be allocated to health care. This obviously not happen.
We are in need of reform like everyone else.
May 29th, 2008 at 1:10 pm
[...] Read it. [...]
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Publius
May 29th, 2008 at 1:47 pm
Those are reimbursement rates — not patient payment rates. Patient cost-sharing differs from hospital reimbursement for procedures.
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Health Insurance Song
May 29th, 2008 at 3:36 pm
http://www.fandalism.com/index.cfm?songid=216157
Japan also has a health care system that keeps costs low and the quality of services high.
Something has got to happen here in America because it’s getting really, really bad and the vast majority of people stuck in the middle can’t keep going like this.
Even if you have insurance, you pay like you’re buying something useful but you still can’t avoid getting slammed with massive deductibles, mysterious bills and charges. I hate it.
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Hooty
May 29th, 2008 at 4:59 pm
There are only 2 countries in the world that profit from health care South Africa and America. It’s really quite barbaric…
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LoicL
May 29th, 2008 at 6:06 pm
Hello,
go to France. I need a colo. too. Will do it for free (in some ways). It is free if you are in France but now I am working in the UK and pays about 1500$ to get both countries full coverage (special expat french insurance) that includes every things.
there is a story about an american in Paris getting treatment in France in a private like manner. 45 euros for X-ray (this is what I paid myself before getting my money back from the health service).
Loic
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Dan
May 29th, 2008 at 8:39 pm
The problem with the US is that you guys don’t have a health care system. You have a health insurance system that works very well… for the insurers. That’s not the same as having great health care.
I didn’t want to move to the US because the health care system is simply unaffordable. Now I don’t want to live there because not only is the health care system unaffordable, there’s this whole exasperating global war on terror going on that allows the government to treat anyone it wants as a criminal. I can do without that.
Somebody needs to have the courage to clean up the obscene excesses of the US insurance system. The US life expectancy is declining [in an industrialized country!] and doctors/hospitals charge whatever they feel like. I’m not saying a doctor shouldn’t make a decent living, but there is a difference between a fee and extortion. Rest assured that the US health care system is -not- the envy of the [industrialized] world.
And if US citizens can hardly afford health care, how would someone from the third world be able to afford it?
Nag your congresswo/men -every- day about it. That’s what they’re there for. Stop spending on the military-industrial complex, which yields nothing but misery for countless people, not least US men and women in uniform [who will need health care too]. If the US can’t offer awesome health care to its citizens what business does it have calling itself a super power [and I would like to point out that I have been to the US many times and found it an awesome experience in general, I -do not- hate the US - just to pre empt that response].
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Ben Kalafut
May 30th, 2008 at 8:27 am
Who invited the European pinkos? And why should we take anyone seriously who takes Michael Moore’s film seriously?
Some of us here in the USA have studied the numbers and found that we’re not worse off, especially when it comes to outcomes and patient satisfaction. We don’t have waiting lists, we don’t have shortages of specialists, and we don’t have ministers deciding who lives and who dies.
We could do things better, but going to a socialized system isn’t the way to do it. As for Europeans who think the USA is not a superpower if it doesn’t go pink, they’re entitled to their opinion and it’s no skin off my nose. I’ll “cry all the way to the bank”. That’s like throwing a 1 barrel lawnmower carburetor on a BMW engine when the mechanic says an injector needs replacing. In this case the “mechanic” is economists.
Singapore and Mexico are doing things that work. After their recent pro-market reforms, so is the Netherlands.