It’s Not Just About Insurance Coverage… It’s the Costs of Healthcare That Is Killing Us

It is hard to find another major industry that provides something to its customers without disclosing the cost of the product before you receive the service or goods. Imagine if you did not know how much your airline flight and hotel cost you until you received a bill four weeks after your trip. What if that bill varied wildly in total fees depending on your perceived ability to afford it? The guy next to you in seat 8C paid $50, yet you paid $500 for the same flight because he enjoyed a pre-negotiated rate and you had to pay cash. Only in healthcare can these crazy pricing practices thrive. Patients routinely receive care, testing and medication without knowing how much it will cost them and how much of the bill will be covered by insurance.

By only focusing on how we fund government sponsored insurance plans like Medicaid and Medicare and on who gets to have health insurance, we miss the opportunity to address the root cause issues of unregulated pricing and discretionary cost-shifting that fuels all of this mess. America’s healthcare system does not support price competition between providers, hospitals and specialty testing facilities. There are no posted prices, and fees are routinely increased or decreased depending on the provider’s assessment of how much you could pay them. “How much does this test cost?” It depends on what insurance you have. The more you can pay – the more they will charge you.

Whether your government, employer or you pay directly for your health insurance, you will have little or no power to shop for quality or value in healthcare. You are relegated to seek care only in a narrow and restrictive provider network. Go outside your insurance network and you will experience a crippling penalty of higher fees. Both ObamaCare and TrumpCare focus mainly on tax rules, insurance mandates and health insurance market structures which only serve to shift the burden of cost between the federal and state governments, and various socioeconomic groups of citizens.

To create lasting and meaningful reform we must find the political will to require transparency of charges and prohibit healthcare  providers, pharmaceutical suppliers and hospitals from changing the price of a good or service for each patient they see. Provider networks may no longer be needed if we had honest pricing practices. Patients could shop for quality and price online to find the best values. Health insurance can then truly be a means to cover the cost of rare major medical interventions, driving down the cost of premiums and increasing the number of citizens with insurance.

Unfortunately there is little hope that we will get to experience the effects of free market competition any time soon. This current healthcare reform proposal will only perpetuate the cycle of cost-shifting and reduced care.