Thursday, March 5, 2009

A modest proposal for the health care industry

America has a so-so healthcare system. Or rather, it has three healthcare systems: one, for those with great insurance, is first rate: on a par with anything anywhere in the world. The other two, the ones that the vast majority of Americans have access to, are not so good.
The fortunate amongst us in the two latter categories have insurance. Unless self-employed, most people with insurance are covered by their employer, and the plan, while expensive (typically in the single thousands of dollars a year for employee costs) is merely relatively bad compared with, say, Canadian or European plans. The insurers negotiate with health providers, and typical costs for care are merely high, with the insured paying a substantial (5-20%, say) of the cost as a co-pay, deductible, or other charge.
The uninsured, on the other hand, are screwed. Completely. Not only do they not have an insurance company covering a substantial portion of the bill, but they face bills that have bottom lines two, three, five or ten times as high as the bottom line for an insured patient. Yes, a typical scenario, with completely made up figures, might go as follows:
Removal of thrumbical glands:
Platinum insurance: total bill: $1000. Covered costs: $1000.
Ordinary insurance: total bill: $1000. Covered costs: $600 ($200 deductible, and 75% coverage of the rest)
No insurance: total bill $9500. Covered costs: none. The uninsured patient is stuck with a huge bill. Because the care provider can.

Now, when I walk into a store to buy something, I understand that some few privileged customers get a discount: perhaps they are frequent shoppers, perhaps they have bought a customer loyalty card, perhaps they get a state discount, or are of retirement age. Typical discounts range in the 5-10% area.

So, here is a modest proposal. Care providers should be allowed to negotiate lower costs with buy-in-bulk plans: but they should only be allowed, say, a 25% range in which to negotiate: let's be generous to them: the lowest price they charge can't be less than %75 of the highest price they charge. If that's too mean of me, give me another range. But don't tell me that giving a 90% discount to an insured patient, or more stunningly, charging an uninsured patient 900% more, is reasonable, fair, or humane.

Yours, in a modest mood this evening,

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