The Messy Healthcare System
On the Books vs Real Price
The first topic I would like to discuss is about Dr. Flynn’s point that an open heart surgery costs 130k in the US but only 18k in Singapore. I think that there are a multitude of reasons with one being what he mentioned in that competition drove costs down significantly. One that I think is important is the real vs book prices of hospitals and health care providers. This is a system that has developed in America due to the existence of insurance companies and the massive amount of money that they control. The real price is the price that the provider wants to get out of their time and resources, ex a heart operation. The book price is the price that is shown to the insurance company and the customer up front. This is because insurance companies require massive percentage write offs from the provider in order to allow their service to pay for healthcare there. This leads to situations where the real cost might be 10k but the book cost ends up being 15k because most insurance companies have a 30 percent write off policy in order to provide service to that healthcare facility on a particular operation. I have experience in this as my mother is a licensed psychologist which means that my father and I help her with her booking and insurance work while she sees clients. We typically try to get around 110 dollars for an hour-long session but on the books we write that a session costs 145 dollars because most insurances won’t work with us unless we discount a certain percent even if the end result is the same. This doesn’t seem like a problem until someone is out of network or does not have insurance and so gets billed the full 145 dollars. We legally can’t give them a lower price even if we only want to charge them the normal 100 dollars because we could get charged with insurance fraud for not giving the same price to the insurance companies
Costly not Quality
Dr. Flynn makes an excellent point that many doctors offices and hospitals will bill a crazy amount of things to an insurance provider even if they are unnecessary. This is a major problem in the healthcare industry where doctors may over treat a patient because they are seeking more insurance bills or they undertreat a patient because they do not believe that insurance will pay for the procedure and so leave the person to suffer their injuries. This is a major problem in compounding pharmacies which are individual pharmacies that make your prescription specifically tailored to your needs if your problems are too niche for a mainstream medicine to cover. For example if you have a pet that needs a general type of medicine but is allergic to one of the compounds in that medicine then a compounding pharmacy can look at your prescription and create a pill to suit your needs. The problem is that insurance agencies will just look at the cost of the materials used and pay based on that which leads these pharmacies to put massive amounts of unneeded chemicals into pills to jack up the price even though it could have adverse effects on the patient. Another problem in the medical field that is not explicitly tied to insurance are medical kickbacks. These occur when a doctor prescribes a certain amount of patients to a specific drug and the creator of that drug gives a kickback to the doctor in return for using their product.
Potential Solution
A solution that I think could be implemented and not adversely affect companies or consumers too much is to implement a price cap on profits. For example, the government could implement a law that hospitals, medical companies, and other healthcare providers can’t charge more than 300% of the cost to make, deliver, and provide the service or item. This would still allow companies to make a good amount of profit while also stopping competitive practices that would cause greed to take more importance than the health of the client. The goal of this amount would be to allow the company to provide the service and make profit which would encourage innovation and competition but keep it low enough that if a company tries something like kickbacks they will shrink their profit margins too much to stay competitive. This would also almost erase the need for insurance companies all together in the medical field as most drugs and procedures are nowhere near costly enough to justify the expense for having insurance. They might still exist for severe and life saving things like cancer treatment and such that even at this lowered price might still be too expensive for most Americans. It would completely get rid of book price vs real price though as most practitioners would just post the maximum amount and remain in business as they would not have to worry about insurance companies pulling their coverage as most patients could just pay out of pocket for the expenses.