In 1964, health care was one-third the cost of an average family’s housing and utility bills. Today, health care is equal to the entire cost of housing and utility bills. This disaster has been enabled by ongoing political corruption. The industry spends more on lobbying than the defense, aerospace and oil and gas industries — combined.
Congress will only modify the current system if a change is profitable for the health care industry. Criticism of the proposed repeal of the individual mandate mistakenly focuses on the projected increase in the number of uninsured.
However, there is a different cruel mandate and it is financially devastating to both insured and uninsured patients. It is existing law which effectively serves as a mandate requiring individuals to pay whatever predatory price is charged by their health providers. The pricing of medical services is untouchable and never publicly discussed by any politician on either side of the aisle.
Ask any hospital, lab or physician the price of anything and all you get is a question: “What insurance do you have?” A simple blood test for cholesterol can range from $10 to $400 or more at the same lab. 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. If you are out-of-network or uninsured you pay the highest prices.
Insurance premiums are 100 percent dependent on the cost of medical services. Citizens are stunned by exploding premiums, while the health care industry laughs all the way to the bank and rewards our elected representatives with “contributions.”
Without legitimate pricing, health providers arbitrarily raise prices every year and consumers are helpless. The U.S. government has officially determined that rising prices for medical services is driving faster growth in national health costs and premiums:
“Throughout the 2016-25 projection period, growth in national health expenditures is driven by projected faster growth in medical prices.”
A study by the American Medical Association published November 7, 2017 re-confirmed that the largest factor in rising medical costs is “Changes in service price.”
Meanwhile, Congress feverishly works toward repeal of the individual mandate to fund a 43 percent cut in the top federal income tax rates of extremely profitable, highly subsidized hospitals, pharmaceutical companies and insurers. There is no societal upside to this crony capitalist giveaway. It cannot stimulate construction of new hospitals because just 60 percent of existing hospital beds are occupied, health care workers will not get raises, insurance companies and health service providers will continue to jack up pricing and no factories will move from China to our shores.
Under the current predatory system an uninsured patient may be billed over $25,000 for a hospital visit due to chest pain while an insured patient is billed around $3,000 — by the same hospital.
Industry apologists claim that everyone is actually “charged” the same amount but that we each receive a different “discount.” In actuality, this is a sleazeball scheme that prevents comparison shopping and competition, rendering patients defenseless against overcharges. The only people who are actually charged “list prices” are the uninsured and those patients who may be out-of-network.
The problem is not, as some theorize, a lack of price transparency. The problem is far more diabolical. It is the lack of any legitimate prices at all. Your price is completely dependent on how much can be extracted from you on an individual basis, often at your most vulnerable.
Congress must change the status of existing law because it is in substance a mandate that forces citizens to pay whatever amount is billed to them for medical services. This is the core problem in health care.
Health care providers should live by the same rules that apply to all other sellers of consumer goods and services. They should remain free to set their own prices. However, each patient should not be billed a different price for the same service. The current medical pricing system is precisely what has put the middle class into a depression and wrecked U.S. competitiveness.
Legitimate pricing would mean patients are free to choose the best doctor or hospital without worrying about network affiliations. Nobody would ever be price gouged for being out-of-network or uninsured. You could google the price of any service. Medical pricing would be competitive and our artificially inflated health care prices and insurance premiums would plummet overnight.
As far as the individual mandate goes, that is the least of our problems. It’s just a sideshow while the industry continues to avoid price competition and milk the American cow.
Steven Weissman is a former hospital president.