A Healthcare Economist's Perspective on Free-Market Competition
Employers should be allowed to contribute to their employee's Health Savings Account where the employee can purchase his or her own healthcare. The lack of price transparency, free-market competition, and administrative and government interference are preventing physicians from caring for the patient.
On December 6th, 2019, I was attacked unconscious by three thugs. I don’t remember anything; only awaking in an ambulance. I was treated in the Emergency Room, and eventually discharged. Several weeks later, I got the bills.
I was fully insured. Between my premium share and that of my employers, I was paying over $1,200 per month. In spite of the high premium, my deductible was $10,000.
A few weeks after the incident, I received five bills. I received a bill from the hospital, the physician that cared for me, the ambulance, the radiological center partnered with the hospital, and my pharmacy. In total, my bill came to just under $10,000. In other words, I had to pay the entire medical bill out of pocket.
A few months prior to my tragic incident, I had undertaken a research project. I had personally and randomly called over a thousand healthcare facilities. I told them I was uninsured and in need of surgery. I told them my wife was pregnant.
I told them I just needed a wellness visit. I called Acute Hospitals, Skilled Nursing Facilities, Long-Term Care Facilities, Urgent Care Centers, Urology Centers, and so on. Every facility I called offered me a 30% to 89% discount if I prepaid for the service.
Well, inside the ambulance I could not negotiate to prepay. I had a concussion and did not think to negotiate a discount. Fast forward to August 26th, 2020 …
I was restless that night. I had been experiencing severe abdominal pains and had to make some decisions. I could wait for an Urgent Care facility to open (where we are all instructed that we could save money), or I could go “right now” to an Emergency Room. Beyond the concept of receiving “immediate care," it occurred to me that the hospital would have all the necessary technology needed to quickly find out exactly what was wrong and respond accordingly.
I went to the hospital and negotiated an 84% discount for my Emergency Room, 50% for my Radiology Service, and a 30% Physician discount. Since I drove myself, there was no ambulance bill.
By this time, I had changed jobs. I was self-employed and subscribing to a Health Share. My deductible was $1,750. Since I negotiated to prepay, I saved my Health Share provider over $7,000 as my total cost was less than my deductible.
As an Executive Healthcare Economist, I have long preached the value of price transparency, free-market competition, and limited administrative and government interference (call it what it is, a costly roadblock preventing physicians from caring for the patient).
Look at the original insurance from Lloyd’s of London in the 17th Century. Insurance was designed for catastrophic care only, not oil changes and polish. We must re-open the flood gate we call the free-market. We need to allow physicians and healthcare facilities to compete based on quality and transparent pricing.
Our last World War forced us to implement Employer Sponsored Health Insurance. It was a mistake. We need Individual Pools. Let each individual negotiate with the insurance industry what the individual wants in care coverage and how much the individual will pay. By itself, individual pools will drive costs down (no more bottomless corporate pockets limiting consumer options).
According to the Kaiser Family Foundation, employers are paying over $14,000 per year per employee for health insurance (and that is only between 71% and 82% of the total premium). Instead of paying the premium, employers should be allowed to contribute $14,000 per year into their employee’s Health Savings Account, where the employee can purchase his or her own healthcare plan.
Allowed? When did we, as a nation, lose the right to choose for ourselves how we manage our own healthcare? We say healthcare is a right, and yet our government places over reaching limits on how we manage the care they so adamantly claim is a right.
Physicians experience the most strenuously vigorous training among all professions. Why are they not the one’s managing our care?