They call it unprecedented. Private groups are pledging to cut health care costs by up to $2 trillion over 5 years, translating into a savings of $2500 for a family of 4 over that time, assuming that all the savings leaks back into the private sector.
This sounds great, except for a few things. First, I’d like to know how. That’s a lot of money and there are no specifics on how the insurance companies plan to save this kind of money. So while we wait for an answer, I’ll leave a brief list of reasons why health care is expensive today:
1) Added personnel. Doctors don’t have time to fight with insurance companies. As a general rule, it seems that all claims (or at least a large percentage of them) submitted by private physicians are immediately denied for one reason or another. This requires time to resubmit, or make phone calls, or do any number of things to get paid. Most doctors have to hire additional personnel since this can be a full-time job in itself. That means higher overhead, which means increased cost.
2) Tort Reform. Lawsuits drive up malpractice insurance cost, which drives up overhead. Additionally, the “fear” of being sued leads many doctors to practice defensive medicine, which means unnecessary tests are ordered, which means care is more expensive.
3) Declining reimbursement. Doctors are getting paid less for their time. So a basic clinic visit yields fewer dollars, while overhead costs are going up. This means more appointments must be added to cover the cost, which means less time with the doctor. Ultimately, basic problems that could be addressed if more time were available aren’t getting addressed, and those basic problems grow into bigger, more expensive problems.
4) Prevention. Screening for chronic disease may be more expensive in the short run, but the diseases that can be potentially prevented cost much more in the long run
If these things aren’t changed, then costs can’t be reduced. It’s as simple as that. Otherwise, the only way to reduce costs would be to ration care, which is not something we want.