Let's be honest: if you are on Medicare, Medicaid, Obamacare, or any other kind of health insurance, you are paying a fraction of what your healthcare actually costs. That's reality. If insurance disappeared today, very few of you could pay even a minor medical bill out of your own cash, and certainly not a major one. Lets stipulate that up front: either other taxpayers, your employer, or your fellow insured are paying the vast majority of your medical bills. Got it? If you don't have health insurance of some kind, everyone else is paying your bills. Got it? Good.
The only alternative to this approach is to refuse to give you care because you can't pay in full. Nobody likes that and most care providers will refuse to do it.
Yet folks still complain that health insurance 'costs too much' even though they are getting a fraction of the bill in most cases. Why?
Because health care is expensive. The actual care, the doctor and nurse and EMT labors, the medical devices, the medications, the facilities... the frickin cotton balls. This stuff costs a lot of money.
Now, you probably think 95% of health care spending is insurance company greed. They're just upping the prices by magnitudes in order to milk you out of your money so they can buy yachts and so on. But here are the facts :
Because both medical claims and administrative expenses increased more than premiums in 2014, health insurers’ overall operating profits (known as underwriting gain) diminished noticeably from previous years. This was especially pronounced in the individual market, where the 4.2 percent underwriting loss was three points greater than the underwriting loss two years earlier. Insurers overall showed a small profit margin in 2014 of 1 percent, aided by offsetting gains in the group market, but this was well less than half of the profit margin in prior years. This does not include any additional, nonoperating profits that insurers earned from investments, which are not reported in this brief.
That's right, the operating profit private health insurers make, after deducting the cost of care and administration, came to about 1%. One frickin percent. They make the vast majority of their profits from their investments. That's how most insurers make their money, from their investments. So this idea that all you have to do is eliminate insurance company profits and BOOM, cheap healthcare is just bullshit.
Also bullshit is the idea that if you decrease administrative costs from 8% to 5%, somehow you're going to enjoy a windfall of extra cash. Nope.
To cut the cost of healthcare, we have to cut the cost of healthcare. Its that simple. Somebody who works in caregiving has to take a kick in the teeth. The question is deciding who?
Will doctors and nurses take pay cuts or staff cuts? (not likely that high income white collar health workers see any cuts whatsoever) Will medical devices manufacturers get less orders for equipment and maintenance? Will hospitals have to close certain wings? Will drugmakers sell less product or get their revenues cut in some other way? Will they fire the cleaning staff? (the blue collar medical workers like maintenance and orderlies are almost certain to get the chop first.. they have less clout)
Obamacare didn't address these issues in detail because it was mainly designed as insurance market regulation coupled with subsidies to expand coverage. Controlling the cost of care is still now mostly left in the hands of administrators at the provider level and insurance companies. For politicians to begin making the kinds of decisions usually made by a hospital administrator and claims adjuster requires a whole lot of political courage, as mostly what you're going to be doing is delivering bad news. Someone has to say 'ummm, you're going to have to leave this bed in pain. Sorry, we've got people waiting.' Or 'sorry, we just can't afford but two home health aides. you're gonna have to bathe yourself somehow.' If you want that person to be your Governor or someone your Governor appointed, I suspect you're going to get people who say yes to absolutely everything. There goes your cost controls right out the window.
So we need to start making some tough, ugly calls about who is going to suffer if we're going to cut costs, no matter what kind of payment system is in place. Personally, I think we spend way too much on the terminally ill. I think at a certain point, folks should just accept fate and die instead of costing the rest of us a fortune. Obviously I won't be appointed to any sort of pricing and care decisions board. But someone will have to do it.