Todays’ House action shows that when it comes to health reform, our elected representatives know one song Everything Old is New Again. Whether it’s called Obamacare or Trumpcare, healthcare is the only consumer product or service sold in the USA that is exempt from ‘legitimate’ pricing or any form of consumer protection.
Considering that the U.S. government has officially determined that rapidly rising prices of medical services are the core problem, today’s House action is the shameless audacity of crony capitalism:
Throughout the 2016-25 projection period, growth in national health expenditures is driven by projected faster growth in medical prices.
Insurance premiums are a direct function of the cost of medical services. Politicians spew nonsense about premiums while steering clear of the actual problem.
Healthcare pricing has been rigged by the industry that spends more on lobbying than the defense, aerospace, and the oil and gas industries combined.
Ask the price of any medical service and you always receive the same answer: “What insurance do you have?” Billing is determined by how much can be extracted from each patient on a case by case basis, often taking advantage of people at their most vulnerable.
Hospitalization for chest pain can result in a bill from the same hospital, for the same services, ranging anywhere from $3,000 to $25,000 or more. A simple blood test for cholesterol can range from $10 to $400 or more at the same lab.
We are price gouged by design. Nobody knows what their bill is supposed to look like; or, what it would be in an actual free market system with legitimate pricing. We can’t shop for value.
Make no mistake, the problem is not a mere lack of price transparency. The problem is far more diabolical – it is the lack of any ‘legitimate’ prices at all.
The solution is simple: The only thing necessary to slash healthcare costs is to require healthcare providers to have real prices just like sellers of all other consumer goods and services. Allowing prices to depend on each individual’s insurance coverage serves no purpose but to exempt medical providers from free market price competition.
Nobody would tolerate being charged $10 per pound for bananas when their neighbor’s price at the same store is 10 cents per pound.
Legitimate pricing means networks would be obsolete, along with the tremendous limitations on patient choice they impose. We could patronize any healthcare provider in the nation without being price gouged for the crime of being out of network or uninsured.
Everyone would be empowered to shop any medical procedure online and see real, nationwide, competitive pricing.
If the sum total of all medical bills remains unchecked by market forces, it is patently obvious that no replacement insurance scheme has any chance of controlling total healthcare costs, which are 18% of GDP – $10,000 per man, woman and child.
Sophisticated investors know “repeal and replace” will not reduce the cost of healthcare. It’s why the stock of healthcare companies is sky-high. Those in the know are betting on future growth in revenues and profits (i.e. higher healthcare prices).
Each iteration of health reform continues the same pricing scam. Today, like the song says, everything old is new again.