Rethinking Healthcare Reform

In November 2009, David Goldhill in an article in The Atlantic, made a convincing argument about how health insurance is the root cause of our exorbitant healthcare costs. He explains that health insurance (as well as Medicare) has replaced the patient as the consumer and, consequently, the patient has no concern of the costs. He sites the cost of his dad’s death, a result of a hospital acquired infection. His bill was over $650,000 which was for the most part paid by Medicare. If he was the consumer, rather than Medicare, he doubts very much that the bill would ever get paid. Can you imagine getting a bill after the hospital killed you loved one? I think  the lawyers for the hospital would be begging you not to sue. We are not the consumers and don’t care about costs and this is reflected in the report which showed only 11% of folks ask about costs  of healthcare.

Unlike any other types of insurance, we’ve come to expect health to pay all our costs of healthcare, and, it was in fact created back during WWII with that expectation. As a result, because of rising insurance rates, largely paid by employers, salaries have remained stagnant. For the majority of us, our premiums are going into this huge Ponzei scheme to pay for those who actually get sick. Think about how much money you and your employer have paid in premiums over the years. In my case it’s well over $500,000, without accounting for inflation. Outside of the births of my children, there were only two hospitalizations. Mean while, the insurance companies have invested my $$$ and made huge profits. I think you would agree that we would all better off with increasing salary and a mechanism to save and pay for our own healthcare.

However, instead of reforming this antiquated system, we have added $1 trillion to expand it. I encourage all of you to read (or reread) Mr.Goldhill’s article. It is truly enlightening. In the next post I will discuss how we can still lower healthcare costs even within the current system.

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