President-elect Donald Trump promises to repeal and replace Obamacare, but there may be another way to drastically lower the cost of healthcare for millions of Americans.
The market for healthcare in the U.S. is horrendously obfuscated, meaning that prices are not set by normal forces like supply and demand. Rather, prices are set behind closed doors by federal regulators and insurance providers. Americans have seen the cost of their healthcare skyrocket more in the past year than any other time since 1984. Adding to consumers woes is the rising cost of obtaining insurance on the exchanges has become almost prohibitive. (RELATED: This Key Government Mandate Is Driving Up The Cost Of Healthcare In America)
Florida attorney and former hospital president, Steven I. Weissman, sent President-elect Donald Trump a petition to end predatory pricing in the healthcare industry. The petition, signed by more than 104,000 Americans, was delivered Wednesday evening to Trump Tower in New York City. It is the first petition of its kind, and the first one the president-elect has received regarding healthcare.
Weissman became the president of a Miami hospital when a friend, who founded the hospital, passed away. During his tenure as president, Weissman was able to get an inside look at how healthcare operates in the U.S., and, in his own words, it was “sickening.”
“The biggest problem in healthcare is that there is no pricing at all,” Weissman tells The Daily Caller News Foundation. “It is not a coincidence that the only product or service permitted to be sold in the U.S. without legitimate pricing, is the one which has imposed tremendous financial hardship.”
What Weissman claims is an accurate depiction of what is going on under the noses of consumers, and it can actually be corroborated. Take the cost of sending a simple blood test to a laboratory for analysis. The cost of that one blood test can range from $10 to $400 at the same lab. The differing rates for the same blood tests causes the system to waste an enormous amount of money. For instance, Medicare paid $910 million more than it would have had it paid the rates of state Medicare plans and private insurers in 2011, according to a 2013 report by the Department of Health and Human Services’ Office of Inspector General.
There are even more dramatic examples. Say a patient is presented to an emergency department with chest pain, a condition that could prove serious as it is an early sign of an impending heart attack. The bill incurred by the patient for hospitalization for chest pain can range from $3,000 to $25,000, or more.
Even if a patient actively sought prices for a given healthcare service, they would have no means of obtaining accurate, valid information.
If a patient were to ask what the price of any healthcare service costs, they would be met ubiquitously with one question: What insurance do you have? Gouging occurs because the cost to the patient is not set, it’s determined by “how much can be extracted from each patient on a case by case basis,” Weissman explains to TheDCNF. Effectively, what Weissman is spelling out is that there is no base price for any service in the healthcare industry. Because billing rates are not set, the industry is essentially able to prey on patients at their most vulnerable.
Weissman thinks Obamacare needs to be repealed and replaced in order to help fix the problem of rising costs, but in conjunction with legitimate pricing measures.
“Until there is a requirement for legitimate pricing, we will really never know what prices are supposed to be,” Weissman tells TheDCNF. “Whether we have single-payer, Obamacare, or free market healthcare, we need to know what a legitimate price is or we can never solve the problem.” In our current system, “there is no going rate,” Weissman explains.
Pricing occurs through insurance providers. Patients purchase a health insurance plan, either on the Obamacare exchanges or through a private company, and then enter into a network of hospitals and physicians that are covered in their package. Patients can find out what physicians might charge within their network, but is the extent to which there is any price transparency in the healthcare market.
“If my neighbor’s paying half as much, I’m not entitled to know that,” Weissman explains. “Eliminating networks would be such an unbelievable improvement.”
The problem networks pose for pricing in the healthcare market are easily seen in the working relationship between hospitals and insurance companies. Typically, a patient is presented to a hospital in need of medical care and comes in to talk about the finances and an insurance plan. The person asks, “how much money do I need for this?”
The hospital system has to spend hours getting on the phone to get all the necessary information from insurance companies. Essentially, the physician can’t get the patient an accurate figure until they consult their insurance provider.
“This causes billions of dollars, and thousands of wasted hours,” Weissman tells TheDCNF. “Insurance companies employ entire teams of people to work with physicians and hospitals on pricing, and this could be eliminated by having a posted legitimate price.”
If there were legitimate prices posted, instead of being limited to just a few hospitals and limited number of physicians in a given network, “patients could go to any doctor in the United States,” Weissman exclaims. If networks were eliminated and prices were set by the free market, “no one can charge a patient these fantasy prices that are currently the norm, because they would be violating the law,” Weissman says. “It should be illegal to not have a real price.”
“When Americans can shop competitive pricing for good value, our system will become the world’s role model for efficient healthcare. Total U.S. healthcare costs as a percentage GDP will be slashed and health cost misery will end,” Weissman concludes.
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