Friday, July 03, 2009

Healthcare Costs Explained

Doctors are expensive, but so are plumbers. Granted a plumber bill rarely exceeds $2000, but for a lot of people that is expensive. Yet nobody is advocating for "Plumbing Insurance", and I think that we should look at the reasons why. So imagine that plumbing insurance was as wide-spread as medical insurance...

First off, you would need to find a plumber who took your insurance. Then after that you would need to make an appointment, since your insurer is one of the more popular ones it will be about ten days until the plumber can see you. Because people have plumbing insurance they call the plumber for all kinds of little things that they never would have dreamed of before plumbing insurance. So the plumbers are all over-worked. So you'll have to use the kid's bathroom until the plumber can come.

Thanks to plumbing insurance, the plumber's rates have gone upwards to almost 15 times what they were before insurance covered them. This is because the insurance companies simply refuse to pay for certain plumbing procedures because they feel that they are unwarranted. The people at the insurance companies who make this judgement calls have no plumbing experience, or have a plumbing advisor who was a plumber in Guatemala back in the 1960s.

Since insurance companies have lawyers, plumbers have to carry malpractice insurance, and this also adds about 35% to 60% to the cost of fixing your sink.

As plumbers become over-worked, they begin to specialize. Some do toilets, some to garbage disposals, and others do water heaters. So what happens next is that you will have a primary plumber, whom you will see first, and then he will refer you to a specialist plumber. So now you can tack on another week to that initial ten day wait.

Then the government will be pressured to step in to cover those who can't afford plumbing insurance. With the government plan will come a ton of new rules for the plumbers to follow. The government will negotiate with plumbing supply companies to get lower prices for replacement parts. The insurance companies will also do this too. In order to cover costs that they lose under the government plans they pass a higher rate along to the insurance companies AND the general public. So a copper elbow joint that was once $1.37 before insurance and government plumbing assistance will now run around $12. Americans anticipating plumbing repairs would soon turn to purchasing replacement parts from Canada or Mexico. In Canada, they have a single-payer plumbing care system, but they don't regulate replacement parts. In Mexico, you're never sure if you are buying counterfeit plumbing parts. After a while the elected officials hold public hearings to get to the bottom of the plumbing costs that are now skyrocketing. They will make a big show out of it and blame the plumbers for being greedy.

Right now, if you go into your local plumber's office you will see maybe one or two administrative staff. Someone to answer the phones and someone to do the billing. Some plumbers have no office , and they work from home. After the advent of plumbing insurance they will need a staff of for or five administrative people for each plumber. The paperwork will be overwhelming otherwise, and this staff will also drive up the cost of plumbing. Then when the government steps in, the plumbers will need to hire at least two additional administrators just to deal with government paperwork.

Fun right? Way to go, right?

I didn't think so. Yet we have done this with our doctors , and our hospitals.

Doctors have a mountain of paperwork that they need to file to get paid. Then the insurance companies pick and choose what they feel like paying for; which precipitates a back & forth battle as each side haggles over how much a treatment should cost. Insurance companies make no such options available to their customers.

Because people have insurance they can get treatments that they could never pay for themselves. What most doctors tell me is that these treatments are unnecessary, but they have to provide the treatments/tests because they run the risk of lawsuits AND the treatment/tests are required by the insurance companies for payment. So we have people taking up the doctor's time getting tests or treatments that they don't need. We also have people who need tests or treatments but cannot get them. This is all due to insurance companies.

This is going to sound weird but the single best way to get health care costs down is to get rid of general health insurance, and end government programs like Medicare. Then once the prices have settled, offer a catastrophic medical insurance for car wrecks and cancer. Then look at what the government can do to help poor folks pay, but without the red tape.