Map of life expectancy at birth from Global Education Project.

Wednesday, October 22, 2014

Yes, we Americans are weird

An essay in the new JAMA by health economist Uwe Reinhardt, which alas is for subscribers only so you pitiful rabble can't read it. He discusses the movement (much beloved by conservatives) to make people may more of their medical costs out of pocket, which Republicans call ""consumer-directed health care." Ha!

As Uwe informs, and as everybody should already know but hardly anyone does, in the civilized world health care providers - doctors, hospitals, nursing homes, pharmacies - are all paid the same amount for a given product or service based on published fee schedules. In countries where there are multiple insurers, they all pay the same price.

Here in nutso land, every private insurer negotiates with every provider, which means that different providers receive different fees from the same insurer, while simultaneously the same insurer pays different fees to various providers (or none at all if they can't come to an agreement in which case the provider is "out of the network.) If you don't have insurance, and couldn't get in on the negotiations, of course, you will be charged an outrageous amount. Also, too, Medicare and Medicaid don't pay enough to cover the full cost, which means costs get shifted onto private payers.

As wacky as this is, making people pay out of pocket just makes matters worse because a) many people can't afford their medical costs at all. If you have a high cost-share policy, you could end up spending more than $10,000 a year, which lots of people don't have. Second, telling people to shop for their own health care is ridiculous. There can be thousands of separate items on a hospital's or physician's menu of good and services, most of which are completely uninterpretable to almost everyone. And the only way we really know, or think we know, what we need or how much we'll benefit from a medical procedure is because our doctors tell us so. We can't meaningfully make our own choices as we can in markets for say, cheese. We know what we like and what we're willing to pay for it. In the case of medical care, not a chance.

There is no such thing as a "free market" in health care, and pretending that is like other goods and services is transparent nonsense.

We need universal, comprehensive, single payer national health care. Oh, have I said that before?

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