Readers Respond On The Cost Issue

03 Dec

For some reason, not too many people leave comments on here, but when I post things over at the Huffington Post the floodgates are opened and people say all sorts of things. Sometimes it requires thick skin on my part, but more often than not, it’s interesting to read what they have to say. My recent posts on health care costs have drawn a lot of attention, so I thought I’d share with you some of the comments I’ve received. Paraphrased, of course.

Most comments served the purpose I had hoped: They tried to explain why the price of health care in the U.S. was so much higher than it is in other comparable countries. The usual suspects surfaced: Medical education costs, malpractice costs, and the private insurance system. But how well do these things explain the price difference?

The point was made by several readers that it is quite expensive to attend–not to mention difficult to gain entry to–a medical school in the United States. Together, these factors drive up costs, they argue, because doctors graduate with enormous loan debt (the average is well into the six figures) and the rigorous admissions criteria limit the supply of physicians–in the name of patient safety and health care quality–which drives up prices.

This is true to some extent. Yes, doctors typically graduate owing a lot of money. However, the interest rates on these loans are not typically “high” as one reader commented, because they are educational loans. People also were quick to point out that medical school is “free” in other countries. Not so fast. Yes, the government may largely subsidize the education system, but that subsidy is provided through tax revenues. It seems we could try to solve one of our problems by taking the debt load off of individual physicians, but that would require spreading it evenly across the population through additional taxes, and that, friends, sounds a lot like the dreaded socialism we despise in this country. (Please note that italics in this case connote sarcasm.)

And what about malpractice insurance costs? Give us a little tort reform, many said, and the price of health care would drop like a rock. Really? Sure, there’s the whole “defensive medicine” thing, but I’m just not buying too much of this argument. Malpractice insurance and awards for damages amount to a drop in the bucket–less than 2% of national health care expenditures by even the most conservative estimates–and many states have already enacted tort reform to no avail.

Finally, there’s private insurance with its unintended consequences and perverse incentives. Someone else is treating you to lunch, so why not order the filet mignon and lobster tail and wash it all down with a couple of martinis? As one person put it, we are forced to have insurance because the prices charged by doctors and hospitals–even for relatively simple procedures–are impossible for an average person to pay on their own.

My money’s on insurance as the primary driver of exorbitant health care costs. One reader writes in about her hysterectomy, which would have cost her $9,000 out of her own pocket in the U.S. to cover her co-pay and deductible. She went to Mexico and was quoted a total price of $5,500 to cover the anesthesiologist, three days stay in the hospital and the surgeon’s fee. Another reader shares his experience of undergoing surgery in Australia. Opting to use a private surgeon and pay the costs rather than waiting for a public surgeon at no cost, the individual underwent a 2-finger fasciectomy and joint release–a 3 hour operation–at a cost of $3,700. The Australian Medicare system reimbursed him $800, bringing his out-of-pocket cost to $2,900. He has tried to find out what all of this would have cost him had it been done here at home, but no one’s giving him an answer. Ah, the joy of the “allowed amount”–private insurer’s well-guarded trade secret.

So there you have it, some thoughts to ponder. And hopefully you’ll see that I do read your comments and that they can be quite interesting. After all, no man is an island. I feed on your thoughts. Keep them coming.

1 Comment

Posted by on December 3, 2009 in Uncategorized


One response to “Readers Respond On The Cost Issue

  1. Eric Dishman, Intel

    December 4, 2009 at 5:05 pm

    Our healthcare system does indeed operate under a series of perverse incentives, and not just for the consumers, but also for doctors, nurses, hospitals, medical offices and many more. Doctors are encouraged not to provide ongoing, flexible care; hospitals can sometimes be punished for keeping patients out of their hospital beds; medical offices don’t benefit from offering preventive care measures. These incentive problems run throughout the system, which encourages experts and policymakers to engage in finger-pointing and avoidance. All of us need to take responsibility and raise ourselves above this level of blame.


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