John Galt's Answer for Health Care? 'Get Out of the Way!'
Recently I wrote about my visit to the doctor's office, in which I found out the total cash price for $740 worth of blood tests was only $62.
Which was a surprise.
Of course, the ongoing health care "crisis" — can it really be a crisis when it's been going on for at least twenty years? — is a topic of constant debate, and constant attempts by governments to solve the crisis, which somehow never goes away. In that, it's very much like Lyndon Johnson's War on Poverty — after 50 years and trillions of dollars, it seems poverty is still winning.
Let's consider a radical idea. Perhaps the health care crisis is not being solved by government attempts to solve it; maybe the government is instead the cause of the healthcare crisis?
Use my recent experience as an example. Now, for those of you who didn't read that column, the basic point was that I went to the doctor, and thanks to the combination of intermittent freelance employment and the rampant destruction of a rational health care market wrought by the Affordable [sic] Care Act, I don't currently have health insurance. So I'd been resisting the need to see the doctor because of what I expected the visit to cost.
Much to my surprise, the cash price for the tests I needed was only $62, as I mentioned. This was only surprising because I was used to seeing Explanation of Benefits forms when I had insurance that listed much higher prices.
Now, on second consideration, the $62 price seemed pretty reasonable, not just in the sense of being inexpensive but in the sense that it stood to reason. Most of these tests are carried out now by completely or nearly completely automated test machinery. Actually drawing the blood cost $5, and the tests each cost between $10 and $20. So, you figure the test instruments are expensive, but they're being amortized across thousands of tests, and without resorting to actual, you know, research, that $10-$20 neighborhood for a minute or two of an expensive machine's time seemed pretty plausible.
That's the point at which I got curious: why would the "insurance price" be a 1200 percent — yes, twelve times — markup?
I asked some of my insurance sources, and the general agreement was that it was administrative costs of one sort or another. I also had several commenters mention that their Explanation of Benefits forms showed that the insurance companies then paid at a significant discount from the listed insurance price, and sometimes that left the patient with a pretty significant co-pay. (I plan to investigate this more: I'm suspicious that the amounts I would have paid as the co-pay on the insurance price were, at least sometimes, more than the full cash price.)