liveonearth (liveonearth) wrote,

Cutting Healthcare Costs, and Avoiding Health Insurance

These authors inform my thoughts about how I will practice medicine, arguing some perspectives you are probably not hearing in the news: one by Michael Cloud on ways to reduce costs, one by Carla Howell on why insurance isn't worth it.

6 Simple Ways to Dramatically Cut Costs of Medical Care - at Zero Expense to Taxpayers
by Michael Cloud

Imagine that the federal and state governments imposed laws, regulations, restrictions, and mandates on medical care that drastically increased the cost - without improving medical care.

What if it were possible to cut your medical care costs by 20% or 30% or even 50% now - while keeping current levels of quality and service - by repealing and removing these government-created burdens and barriers?

If this were possible, would you want it?

Would you want the U.S. Congress to repeal and remove these laws, regulations, restrictions, and mandates?

Would you want your state legislature to do the same?

Yes? Well, these government-imposed burdens and barriers DO exist - and your federal and state legislators CAN repeal and remove them.

Would you like to see a small sample?

1. Allow price advertising. Let pharmacies, doctors, hospitals, and laboratories to publish their prices for goods and services. Eliminate all laws, regulations, and government provisions that hinder or prevent medical providers from posting their prices.

Charges for the same medical procedure can vary 30% to 300% within a 100-mile radius. But without price information, patients can't shop for the best value.

In the 1970's, U.C.L.A. Economist Sam Peltzman compared the costs of eyeglasses in states that allowed price advertising and states that outlawed it. Results? Much lower prices in states that allowed price advertising.

2. Let all Americans buy prescription drugs outside the United States. Do NOT force them to travel abroad. Allow them to have the prescription drugs shipped to their homes.

I've seen the 30% to 60% savings in prices of prescription drugs purchased in Mexico.

International competition for prescription drugs will drive down domestic prescription prices.

3. Let all people buy medical insurance across state lines. In New Jersey, a single man would pay $4,000 for medical insurance. If he lived in Pennsylvania, he'd pay $1,500. If the New Jersey man could buy medical insurance from a Pennsylvania provider, he'd save $2,500 a year.

Imagine this all across America.

This would cut medical insurance costs for millions who already have needlessly overpriced premiums.

AND, if the American Enterprise Institute study is correct, this would make medical insurance affordable for 12 million uninsured Americans.

4. Let doctors and patients negotiate discounts for paying cash. If a patient saves a doctor the time, trouble, delay and cost of dealing with insurance companies, Medicare, or Medicaid - let the doctor and patient share the savings.

5. Let patients, doctors, and hospitals enter into into legally binding, limited-liability contracts. This would reduce the cost of medical treatment by reducing the cost of malpractice insurance.

Just as Prenuptial Agreements limit marital risk, limited-liability contracts will limit medical risk.

6. End all government mandates that require businesses or individuals to buy medical insurance. End all government mandates that punish and tax those who do NOT buy medical insurance. Make insurance companies earn our business with lower prices and better quality - rather than lobby government to compel us to buy medical insurance by force of law. (See Carla Howell's excellent essay below.)

This is just a sketch of small government proposals to UN-do the government-caused high prices of medical care.

A glimpse of small government proposals to come.


Why We Need More UNinsured Americans
by Carla Howell

This column was originally published April 13, 2006. The cost of insurance premiums have risen steadily since then.

Socialized medicine's true believers - who dominate the ranks of mainstream news reporters and politicians - try to bludgeon us into believing that the lack of medical insurance is a crisis, a disaster, and a never-ending emergency.

Here's an example of how a news report typically casts the "uninsured":

"The number of uninsured or underinsured people in the United States is estimated to be about 46 million... they sit on the edge of catastrophe." (Journal Times, Wisconsin, February 27, 2006)

But "uninsured" Americans are usually nowhere near "catastrophe." They have plenty of access to urgent care when they need it.

Moreover, they save themselves a boatload of money by steering clear of one of America's biggest money pits: health insurance.

We don't need more insurance in America. We need much less.

The black hole of medical insurance

Americans who don't have health insurance are often neither poor nor do they lack access to medical care. They simply choose not to buy insurance because they believe it's a bad use of their money.

In Massachusetts - the Overpriced Health Care Capital of the World - young, healthy families can spend over $9,400 a year for the cheapest HMO policy they can find, and over $19,800 for a broader coverage plan. Families with middle-aged parents can spend over $30,000 - every year - to be insured. The older you are, the more unaffordable it gets.

What's worse, these exorbitant prices don't even guarantee that you'll be covered. A policy's fine print gives insurance companies the option to terminate your coverage if your care drags on too long. The insured who suffer from a serious disease or medical trauma have to turn to the same government welfare programs they would if they had no insurance at all. What's the point of buying an insurance policy that doesn't insure you in your times of greatest need?

"Uninsured": Down & out? Or smart investors?

The "uninsured" are portrayed as poor, desolate souls on the brink of "catastrophe." But contrary to media propaganda, they have access to the health care they need.

The wealthy don't need health insurance. Their money is better spent on investments that provide a return. They can easily cover the cost of treating a serious medical condition.

Many above-average wage earners don't need insurance either. They're better off investing their money in their retirement and withdrawing funds for health care only if there's a need.

Even people with no cash savings to fall back on - average and below-average income families - are often able to insure themselves. They may have an IRA or equity in a home or business they can borrow against in the event of an emergency. Although a serious illness could wipe out their assets, they at least have a chance of building wealth - and not depleting what assets they have by forking over huge sums for an overpriced medical insurance policy.

Individuals and families that invest the money they would otherwise spend on medical insurance can build a nest egg worth over $100,000 in just 5 years. In 10 years it could grow to over $250,000 - enough to cover a major health care catastrophe. Or buy a house. If they continue to enjoy good health, they can retire as millionaires.

Hazards of medical insurance

There are other good reasons to avoid medical insurance.

Whenever an insurance company pays for health services, it drives up everyone's cost - yours included - and renders health care services clumsy, inefficient, and even dangerous.

Neither patients nor providers have incentive to keep costs down. This encourages doctors to prescribe procedures you don't need - raising costs for insurance companies. They respond in turn by raising the price of your premiums, raising the amount you must pay for co-pays and deductibles, and reducing the services they cover.

In addition, excess treatment can put your health at risk. Patients who undergo unnecessary tests, operations, and drug regimens sometimes end up with worse medical problems than they started with.

At the same time, insurance rules forbid practitioners from giving you services you actually need. Again, your health suffers.

When you pay directly for services, you or someone you trust is in the driver's seat. You and your health care providers have direct incentive to give you high quality care at a reasonable price.

Medical insurance co-pays, deductibles, and coverage denials make medical bills confusing and hard to read. Billing errors are common - and difficult to correct. You're forced to either pay what your bill instructs you to pay or to try to avoid overpayment by submerging yourself in paperwork that can be as complicated and infuriating as filing taxes.

The best way to minimize billing hassles is to forgo medical insurance and pay your providers directly for medical services.

If insurance is such a bad investment, why do so many people have it?

Many Americans have insurance because Big Government mandates it, subsidizes it, and provides tax incentives for it.

Seniors are forced to sign up for Medicare or they forfeit their Social Security checks. Taxpayers are forced to fund high-priced health plans for government employees.

Employers are forced to provide their employees insurance. If employers were free to use the tax-free money they now spend on medical insurance to pay tax-free wages instead, many employees would far prefer the higher wages. It's a much better deal.

Others buy insurance, or seek a job that provides insurance, because of the horror stories they've heard about how expensive medical bills can be. A catastrophic care episode can cost tens, even hundreds, of thousands of dollars and leave a family in dire financial straights.

Big Government is directly responsible for these high costs. Thousands of state and federal laws, regulations, mandates, and subsidies drive up the cost of health care. What should be a minimal part of the family budget is a backbreaking expense. If we end Big Government Health Care, prices will drop dramatically. Far fewer people will need or want insurance.

Rather than end these disastrous Big Government Health Care Programs and allow prices to drop, Big Government Politicians seek to expand them. They keep the demand for insurance artificially high.

People also seek insurance because Big Government outlaws health care charity, leaving poor people with medical problems nowhere else to turn but to Big Government welfare programs.

Years ago, medical special interests convinced politicians to shut down free clinics for the poor, once common in the United States. Rather than allow them to reopen, socialized medicine advocates claim that the high cost of health care is the fault of people who refuse to buy insurance and who run to a hospital emergency room instead every time they have a problem. What they never admit is that Big Government Politicians cut off poor people from life-saving zero cost, tax-free alternatives.

Bemoaning the "uninsured" is a ruse. Big Government Politicians drive up the cost of health care. They drive affordable free-market alternatives out of business. Then they blame the taxpayer for not buying health insurance - made unaffordable by Big Government. It's a scam.

Get Big Government out of health care

We must reject calls for more insurance. Rather, we should celebrate every time Americans free themselves from unnecessary and oppressively overpriced government-mandated health insurance.

What we need is to bring down the high cost of health care by removing Big Government health care prohibitions, mandates, regulations, and subsidies. We must vote against every politician who refuses to tear them down. Who deny us our health freedom.

We must vote out of office politicians who blackmail voters by threatening to cut needed subsidies - while leaving in place the legions of health care laws and regulations that drive up cost and reduce access to medical care.

We must replace them with candidates who will remove all Big Government laws and regulations that escalate medical care costs or that block free care FIRST and who will cut back subsidies that people depend on LAST - after free market alternatives, including free clinics, are in place.

When we separate health care from government, we'll dissolve the government-created, artificial demand for needless, high-priced medical insurance. Those who need insurance will be able to buy affordable policies that protect them in their times of greatest need. Those who can't afford care at all will have access to lovingly-donated free care services. We will enjoy higher quality, cost-conscious health care. We'll take $1 trillion every year from overpriced medical spending - and put it back in the pockets of working Americans.

Note: Since original publication of this column on April 13, 2006, it was learned that Tennessee is relatively lax about permitting the operation of free medical care clinics. However, free clinics appear to remain effectively prohibited throughout most of the United States. If you find a clinic that is neither sanctioned by government nor free of government subsidies, i.e., an unencumbered health care clinic charity, please let us know by contacting the Center For Small Government.

It is worth noting that while free clinics unaffiliated with government are largely prohibited, many individual medical professionals generously donate their services and/or give price breaks to those in need who lack financial means.
Tags: healthcare, insurance, libertarians, my practice

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