October 6, 2009
By Ari Armstrong
What was the total cost of your last doctor’s visit? If you’re like most Americans, you have no idea, because somebody else is paying most of the bill.
Patients directly pay only about 14 percent of medical bills. The rest comes from insurance or government. This is the fundamental reason why health costs have skyrocketed. Patients have little incentive to monitor costs and look for good value, and sending routine expenses through third parties adds paperwork and administrative costs.
When somebody else pays the bill, many doctors think of their client as the insurer, not the patient. Likewise, insurers cater to employers, not you. The patient often gets cut out of the medical loop.
While Barack Obama pretends that insurance companies are at fault, the reality is that federal tax distortions drove insurance into the expensive, non-portable, employer-paid system. This tax distortion explains why Americans tend to use insurance as pre-paid health care, rather than to cover unexpected, high-cost treatments.
Even as Obama demonizes the insurance companies that federal policies have coddled and favored, his policies expand political favoritism. Obama wants to force you to buy politically controlled insurance, on penalty of huge fines.
If you want to control your health care, you should advocate free- market reforms that expand medical competition, not more political controls. The experiences my wife and I have had with a Health Savings Account (HSA) and high-deductible insurance illustrate the benefits.
We pay $148 per month for high-deductible insurance. We buy it directly, not through an employer. It’s not ideal insurance, but it’s as good as we could find in today’s politically stifled market. We save money for routine care through our pre-tax HSA.
I select my doctor based on who best serves my needs, not who my insurance company happens to like.
My doctor, who came highly recommended by friends, gives me a 20 percent discount for paying at the time of service. I paid $128 for my recent physical, an outstanding value for her high level of care.
Not only does my doctor knowledgeably answer all my questions, she’s also sensitive to my budget. For example, she wanted to see blood tests for my cholesterol readings and glucose levels. Rather than order up expensive tests, she looked at my cholesterol readings I got at no cost at King Soopers just weeks ago. She suggested that I get follow-up blood work in three months.
That is not to say that cheaper is always better. In 2006 I paid my Boulder dentist $925 for a gold onlay for a back molar. I could have paid somebody else less. But I love and trust my dentist, and his onlay is a work of art worth every penny.
In health care, as in much of life, you get what you pay for. If you advocate taxes and insurance premiums for politically controlled medicine, don’t act surprised when politicians and their insurance stooges call the shots. If you want quality care from your doctor, then fight for your right to pay your doctor directly for the routine care you receive.
The article originally appeared in the Colorado Daily, October 1st, 2009.