Skip to main content

Health Care is not Like Buying a Car

Rant for the Day:

I prefer buying a car by comparison shopping and then selecting the dealer who gives me the best price. But a classic dealer tactic is high-pressure negotiation in which they push the buy-now special to keep me from comparing prices and included accessories elsewhere. How frustrating to buy a car and then find your neighbor bought the same car from the same dealer the next day for $500 less. Dealer invoices don't help, because they don't show dealer incentives and rebates. Neither do they show the influence of the bank that actually owns the dealer's stock.

If you think that buying a car is complicated, consider buying healthcare.

Despite claims to the contrary, IMHO, you can't reliably comparison shop hospitals and doctors. You may put off buying a car for a week while you compare prices, but that emergency bypass is not likely to wait. Moreover, surgeons and hospitals don't have the brand-name consistency of Ford or Toyota. I've yet to see a hospital procedure that came with a sticker price.

Looking over the hospital bills for my sister-in-law, I notice that the hospitals billed insurance for more than a half-million dollars, but the private insurance "negotiated" the price down to about $80K: Obviously, a disconnect in what the services are deemed to be worth even more spectacular than car prices. After the negotiation, I don't deny that money was still made by both organizations, but I sincerely don't believe (See SCOTUS recent decision on sincere beliefs) that much of that money went to doctors and nurses.

Making huge profits on healthcare has evolved from being a dysfunctional nuisance into a diseased system. Why can't we have a sanity? Because corporations who benefit from the current system like to stir up fear and resentment like "you can't see your own doctor" or "someone undeserving might get medical care."

If you don't want to pay for another person's hospital visit because you don't approve of that person, then #1. You don't understand the way insurance works either, and #2. Shouldn't you worry that others with more influence might likewise disapprove of you?

Some physicians have come out in favor of a single payer plan. I agree. It is a sensible way to control costs, something the other schemes are incapable of doing. It doesn't encourage insurers to profit by denying me coverage, but then I'm distrustful of a profit motive for healthcare when it is virtually impossible  to comparison shop. Besides, it makes actuarial sense to require that every one is covered and everyone pays.

On the downside for politicians, a single payer system eliminates a large source of campaign funds from private insurers and other special interest, and perhaps that best explains the fiery rhetoric in Congress against any such a plan.

I don't mind if a single-payer plan is bare-bones (excuse the pun) and allows those who wish to add "premium" coverage from private insurers:that's pretty much how Medicare works now.


Comments

Popular posts from this blog

Tariffs Explained by the Shirt Off Your Back

Who Pays for Tariffs Explained by the Shirt Off Your Back.   Whether you are a fan of tariffs or not, it could be useful to discuss how they influence the price you pay for some simple item, like for instance, an inexpensive polo shirt. First, we need to know something about calculating retail prices. If you don’t give a damn about calculating retail prices, skip the next four paragraphs*. *Retailers usually determine the retail price of something they sell in terms of the markup , which is the amount added to their cost for the item. That markup is usually expressed as a percentage, and a common markup for items such as polo shirts is 40%. However, the base for that percentage markup should NOT be the cost of the item. Rather, it is almost always the selling price. Here’s why: *Suppose a seller’s cost for a package of underwear is $6.00 and he bases his 40% markup on his $6.00 cost. Calculating 40% of $6.00 produces 40% X $6.00 = $2.40. Add the $2.40 to $6.00: $2.40...

A Modern Parable based on a Very Old Joke.

John talks to Clem about skydiving. Clem is hesitant because jumping out of plane just for the sake of falling doesn't make a lot of sense, but John insists that such a stunt will make a big difference in Clem's life. Clem says, "You wouldn't lie to me would you, John."  John says, "No way. I guarantee your life will be better, and jumping will be the greatest experience of your life. And better yet, all those people who made fun of you over the years will look at you in awe and Tweet 'OMG, he jumped out of a plane. LOL." So Clem says, "Well, maybe ... How does it work?" "First," John says, "we go up in a plane--" "What kind of plane?" "Why the very best of planes. Big luxurious seats. Drinks served. It will be the greatest experience of your life. Then the instructor will give you a parachute--" "What kind of parachute?" Clem asks. "The very best kind of parachute. ...

Wealth and Taxes.

Recently, I've read a few comments, primarily from very wealthy people, about the proposed wealth tax . I haven't decided whether this is a good idea or not, and so I did some shallow investigation beyond newspaper headlines. Most of us already have a good idea about what tax  means, but wealth is not immediately obvious. I've checked several sources on what  wealth  usually means. The most common interpretation of wealth I've encountered is that it's equivalent to Net Worth . Basically, N et Worth = assets - liabilities, where assets include the value of all your cash and things you own, and liabilities consist of your obligations and the money you owe. Hence, if you bought a house for $250,000 and the house is valued at $250,000, then you have a $250,000 asset . If you took out a $200,000 mortgage to finance your purchase of the house, then you also acquired a $200,000 liability . If you also have $5000 in your bank account, then that is an asset.  If yo...