Health Care Reform IS Important

Shepard on Politics and Policy

In the current debate over health care reform I believe both of the typical sides (left/right, liberal/conservative, statist/statist-lite) are completely missing the mark.

Wednesday night, at the Indianapolis North Side Libertarian MeetUp, I heard the story of a young man the other night who said that repair of his broken arm cost around $4,500. He said when he went to the emergency room they couldn't tell him what treatment would cost. Interestingly, I also was recently looking at a procedure and the surgeon had no idea what the total cost would be, he couldn't tell me. Huh?

Anyway, broken arm guy ended up at a med check place and after some questioning indicated that, including getting a couple of different casts over the healing cycle, he spent no more than 3 or 4 hours with an actual physician and did not require anesthesia.

Let's put this in perspective of other vocations.

A well paid Telecommunications or IT Consultant might make $120 to $220 an hour depending on what they are doing and whether it is 'after hours' work. It would not be unusual for a lawyer to charge $200, $230 or for an experienced partner or specialist (but perhaps not Johnny Cochran or Mark Garagos) up in the $300 or $400 an hour range. So, let's just use $250 an hour as a fair figure.

Four hours of time = $1,000 + materials (orthopedic cast, an x-ray).

So, maybe, worst case this should have cost less than $1,500 and maybe very close to $1,000 even ... CERTAINLY not $4,500.

Now, we know that since Medicare/Medicaid underpay physicians for services so much that it drives up costs on the rest of us by at least fifteen percent and potentially up to one third and that over reliance on "prepaid healthcare" separates consumers from the actual cost of each unit use of services. We also know that a high default rate on (far too high) medical expenses shifts the burden of those bills to those who do not default. We also know that the AMA has leveraged a lot of government protectionism of physician services into the marketplace which limits supply, specialization, innovation and other things that could drive changes in the industry or increase the supply of doctors.

So, when we talk about health care "reform" can we please talk about it outside the scope of just having somebody else (like the government) pay for everything and instead focus on why it costs $7,000 to lay in a hospital bed for two days with a kidney stone (arguably not a good use of the bed) or $4,000 to put a cast on a broken arm? How about $6,000 for an out patient procedure to fix an umbilical hernia? I'll bet, physicians or hospitals who declined to accept insurance or government payments for services could easily drop their costs down to $2,000 or $3,000 for the stone (including the MRI and the IV bags of fluid) and $1,000 or less for the arm.

The point is, libertarians and conservatives are not opposed to health care "reform". But, as is typical in arguments with more left leaning big government folks we just have a much better grasp of the root of the problem and the economics of it rather than just not caring and begging for our woefully inept government to come sweep the problem under the rug.

The cost problem in health care must get resolved before any kind of dialog on how to cover the 8.6 to 12.5 million chronically uninsured people is addressed.

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