The cost of medical insurance in California (and nationwide) has spiraled out of control. It is not uncommon for a married couple to be paying more for medical insurance than for their mortgage. And then they can’t afford to use the insurance because of ridiculous deductibles and copays.
Factors:
Unfortunately, it’s a lot like homelessness: there is no ONE underlying cause. There are many factors that drive up the cost of healthcare:
- Fee-for-Service systems: providers (doctors and facilities) are paid per procedure so it incentivizes them to utilize many procedures and tests, even if it isn’t warranted by the diagnosis. On the flip-side, underpayment or low reimbursement of these procedures also encourages over-treatment because the providers don’t make enough to cover their costs.
- We have an aging population. Over 70% of the medical services you receive in your lifetime will be received in your retirement years. As we age, we become less resilient to disease and physical injury.
- We want the latest drugs, technologies, services, and procedures to keep us healthy. But new on the market usually equates to higher priced treatment.
- Mergers and Acquisitions of health organizations have created near monopolies in the various areas of medical care. When there is no one to compete against, you can set your prices wherever you want. M&A’s have caused the price of medical services to rise at a rate much higher than inflation.
- We live in a litigious society. People know that doctors and hospitals have to carry malpractice insurance and see them as a ‘deep pocket.’ Doctors are afraid of being sued (sometimes ‘again’), and so there is a propensity to utilize defensive treatment: prescribing something “just in case” there may be a medical issue, so they won’t get sued.
- With the rate of reimbursement falling for Primary Care Physicians (your general/family doctor), there are more specialists in this country than there are Primary Care Physicians. Specialists are paid much more than a family doctor. Hence, we have a serious shortage of family physicians.
- The cost of medications keeps going up – even the ones that have been on the market for years. This one, the politicians probably COULD fix. America is one of two countries worldwide that allow drug companies to advertise. We are paying for their advertising expense through our high drug prices. That’s why other countries don’t have a problem with high drug prices.
And I’m sure the list goes on and on. So let’s just PICK ONE, and fix it. Then we can work on the next one. Focusing on one problem at a time allows more resources to go to its solution instead of just doing a little here and a little there and so nothing gets completed. It’s just like eating an elephant – you can only do it one bite at a time. When the elephant has been consumed, everyone will have access to AFFORDABLE HEALTHCARE.