The Forest? Or The Trees…

I was saddened to hear that one of my favorite Libertarians, the wonderful journalist John Stossel, has taken ill. True to form however, he’s taking it in stride (he nonchalantly quipped “seems I have lung cancer”), and I want to take this opportunity to wish him very well indeed. I enjoy his reporting and writing, and have learned a great deal from Mr. Stossel over the years.

But that doesn’t mean he’s always right.

In a great piece about his recent diagnosis and workup at one of America’s “premier” hospitals, Stossel goes to great lengths to praise the quality of medical care he’s received throughout his ordeal. He also uses the article to ruthlessly bash the customer service, or rather lack thereof, that he has experienced during the experience.

In his usual style, Stossel makes point after cutting point by calling out the illogical elements that don’t make sense anywhere but in health care. About how he has to fill out mounds of paperwork but then isn’t filled in with the results of his tests. About how he is kept awake all night by emergency alarms that aren’t emergent after all. About how a fear of being sued means rigid rules get followed instead of common sense.

Well said, John. As usual. Of course he totally gets it right, and for all the right reasons: the American health care system may be the best in the world, but at the same time it can deliver customer service that would make patients rather stand in a Soviet-era toilet paper line. In the cold. Naked.

So what then could this otherwise spot-on, hard hitting truthsayer possibly be wrong about?

To put it simply, the patient’s role as a consumer in the health care marketplace.

At the end of his article, Stossel makes his ultimate point by stating the obvious: that markets only work “when buyer and seller deal directly with each other.” He then goes on to say that, aside from cosmetic and vision correction procedures not covered by health insurance, in health care “there’s practically no free market…patients will have a better experience only when more of us spend our own money for care.”

Well, I hate to be the one to break it to you Mr. Stossel, but guess what? In a world where the average health insurance deductible – never mind the out of pocket maximum – is well into the four figure range, the majority of those who have private health insurance are spending their own money, for their own care.

See, the golden age of health insurance – when patients paid their premiums and their policy “took care every ting” a lá Tony Soprano – is dead and gone. It’s not about a $20 copay any more.

But in what is a most common misconception, the idea of comprehensive health insurance coverage still lingers, and Stossel isn’t the only famous figure to miss this very important point, or its even more important implications.

In fact, no one that I’ve ever heard in the media gets it right. Even that bastion of right wing fiscal conservatism Glenn Beck misspoke last year, when he told me that we’ve never had a free market health care system in the US. But I have to hand it to him, because Glenn did have the chutzpah to change his mind when I pointed out that we do, already, have a free market for health care in this country.

Those in the media aren’t the only ones who are blind to the facts, either. Even doctors, our supposed ultimate authorities in Western Medicine, get it dead wrong when they propose solutions to the status quo.

On the extremely popular KevinMD blog (boy, do I wish I’d thought of that domain name first…), Dr. Thomas Paine wrote an article last year that explores why doctors are burning out. An Emergency Physician like me, Dr. Paine nailed it when he said that physicians lost control by handing over their administrative and financial duties to businessmen over the past forty years.

But he too got it wrong when he threw his hands up and wrote that the idea of “patients paying out-of-pocket…is officially dead in America.”

That just isn’t true – and in fact, quite the opposite exists. The average American worker now has to pay almost $1,500 out of pocket before health insurance kicks in. Which means that the average American worker is now a health care consumer. The problem is that the patients – just like the pundits – don’t understand this.

Or I should say they aren’t aware of it, until they have to pay.

But just as no one – no one – would ever sit down to a meal at a restaurant where the menu had no prices listed, neither should American patients shop for health care without a healthy knowledge of what they will be charged. After they hand over their co-pay.

It’s not just up to patients though. Physicians and other health care providers need to do their part too, before any real change will occur. They need to stop billing health insurance for every routine office visit, lab, or X-ray, which most high deductible policies don’t “cover” any way. Instead, offer a menu of services at reasonable prices and let the free market forces of competition begin!

Only then will prices plummet, and only then will customer service increase, Mr. Stossel.

And best of all, the fix to our Great American Health Care Crisis doesn’t require any new legislation, regulation, or administration. It only requires a change in attitude – and when patients and providers start applying our sense of good old fashioned, American consumerism toward the free market conditions that already exist in health care, we can all breathe easier.

It’s not the COSTS of health care that are outrageous…it’s the CHARGES.

Physician. Health Insurance Agent. Author. Health care humorist. Medical satirist. Disruptor. At your service. My name is Kevin Wacasey, and I’ve been practicing medicine since 1994. When I graduated from medical school, I took an oath to do no harm to my patients. To me, that includes financial harm. But since health insurance took over health care over 40 years ago, health care prices have skyrocketed. And despite what we’re told by the media every day, it isn’t the costs of health care that are outrageous; it’s the charges. So if you’ve ever wondered why we spend so much on health insurance and health care, then come along and join me as I explore the crazy world of Healthcareonomics. Health care doesn’t have to be expensive. Let me show you how. For speaking opportunities and to pass along your questions/comments, please email me at drw@healthcareonomics.com.

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4 Comments

  1. Larry

    Health insurance companies still control allowables with their networks. If a doctor charges for instance $1000 for a procedure and allowable is $600, $600 goes towards deductible not $1000 gross. I know of no doctors who charge less than allowables. Its a price controlled environment where every doctor gets the same amount for a specific code from each insurance company. Its irrelevant what they charge, its the allowable that matters. It make take several thousand dollars in gross charges to even hit a $1500 deductible. No free market there either. Prices negotiated by insurer in contract with doctor.

    • Tim Eggleston

      Isn’t negotiation a process in free markets? If there wasn’t a free market there would be no negotiation.

  2. Interesting how people have become used to whipping out that insurance card well before their deductible. My advice is to hide it and ask for the cash price. In my practice, since I do not take insurance, everyone gets the reasonable cash fee that I charge. I send their blood to a lab with a reasonable cash price. Instead of the usual “network” $600, routine labs are $79. Since 92% of patients do not exceed $5000 in a given year, this works well for the majority. Reserving insurance for major medical makes complete sense as the networks just guarantee higher fees, not VIP treatment.

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