But, as we all know, "Money doesn't grow on trees."
Someone else--in fact, "many others else" in the form of those who pay increased premiums as well as the 48% of Americans who pay taxes--is picking up the tab. Americans currently spend 20% of their pre-tax income on healthcare, including healthcare insurance. And, with Harvard and Dartmouth researchers projecting that healthcare costs will grow faster than the U.S. economy for the next two decades, guess who's going to be picking up those costs? Yep, those "many others else."
Didn't President Obama promise that Obamacare would bend this cost curve down? Yes. But, Obamacare will not halt this trend, according to a study conducted by Jeffrey Singer, a general surgeon and adjunct scholar at the Cato Institute.
Why? Healthcare insurance is one of the largest factors contributing to high-cost medical care because healthcare insurance introduces third-party payers--insurance companies or the government--into the mix, making affordability and frugality take a back seat. How so?
- The concern of healthcare Insurance providers isn't making medical care affordable, because they pay for it with their members' premiums...those "someone else's." When insurers contract to set prices with providers and facilities, there's little incentive for hard bargaining. As long as they agree to a price that's "good enough," the insurers pass that price along to their policyholders in the form of increased premiums. Policyholders are held hostage because without adequate healthcare coverage, they'd be liable for the costs incurred.
- When insured patients seek medical care, they spend money inefficiently. How so? Having a third-party payer creates the illusion that someone else is paying for the cost for that medical treatment. It's called "spreading the wealth around" or "income distribution."
As this cycle continues, the cost of healthcare increases and increases and increases...ad infinitum...unless--some people wrongly think--third-party payers are replaced with a single payer system (which, by the way, is the ultimate objective of Obamacare). Just consider how the single-payer, government-run healthcare for the Veterans--administered by the VA--works and expand that nationally through Obamacare.
Dr. Singer is adamant. A single-payer system is not the answer. Why? In the attempt to keep costs down, single-payer systems create unnecessarily longer wait times and rationing as well as reduced choice and access to healthcare. In contrast, dentistry, cosmetic surgery and Lasik eye surgery have demonstrated that a robust healthcare market without third-party payers works quite well. They don't accept third-party insurance, yet these healthcare providers save their patients money by driving down costs and providing great customer service.
It's called the "free market" and it works every time it's tried.
Let the discussion begin...
To read Dr. Singer's research, click on the following link:
"The Health Insurance Trap."