We are frustrated by the lack of expertise now being published in every media outlet–written and spoken about the reasons for this cost increase. Yes, drug and insurance company profits, admin costs, MD protocols, labor costs, new equipment costs, the cost of malpractice insurance–all those factors add to the cost but the main problem is us. Think supply and demand. Basic economics tells us that when demand exceeds supply prices increase. So poor living habits like eating, drinking, drug use, smoking and all the other actions that our population engages in daily are the main causes of demand. WE create the need for care by living unwisely. But in the case of healthcare costs the supply side also contributes to the problem. In 1946–right after World War II ended–the Federal Government was concerned that Americans would not have access to needed healthcare so Congress passed the Hill-Burton Act. Essentially Federal dollars were provided to build hospital facilities in every corner of the US. That caused doctors to latch onto those facilities and justify them by filling them with as many patients as possible. (Your blog editor was a member of a “PEER REVIEW BOARD” that evaluated these facilities.) That same mentality is carried forward today. Docs, Hospital Administrators, lab owners, and all the of medical industry constantly tries to expand usage to justify cost structures. Bottom line: BOTH SUPPLY (of medical resources) AND DEMAND (careless living) MULTIPLY THE COST OF HEALTH CARE. Historically, medical inflation has been roughly 2.5 to 3 times the rate of general CPI. The best way to address the cost issue is to live healthier lives. As my father once told me “the best kind of insurance is the kind you don’t ever use”. You wouldn’t think of risking your life right after buying a huge life insurance policy. Why do people continue to drink and drive when they know it’s unhealthy? Why smoke two packs a day? Until our culture sees insurance as a partnership and not a safety net–we can do very little to hold the line on costs.
Comments are closed