I’ve been in the heart of our health care delivery system for 30 years and here’s my advice regarding Health Reform. Forget the politics. Ignore the hype. Health care costs will continue to rise (regardless of what politicians say). Health Reform won’t/can’t stop it…and here’s why:
Health care costs simply reflect supply and demand…and politicians can’t change it. Insurance companies don’t drive prices or make premiums rise. The prices of services and numbers of health claims drives prices, which then drive insurance premiums. Insurance companies simply add their overhead and profit projection (around 3%-5%) to the claims that they expect to pay out in order to come up with premium.
Most (80% – 90%) of the money paid into insurance premiums (in both public and private plans) gets paid out…directly… to providers (doctors, specialists, hospitals, surgeons, pharmaceutical companies, durable medical equipment companies) for actual services delivered.
As long as the demand for health care continues to rise, ALL prices associated with delivering it will also continue to rise. Health Reform doesn’t address ANY prices for angioplasties, surgeries, radiation, hospital rooms, emergency room visits, ambulance calls, IVs, chemotherapy, gastric bypass surgery, amputations due to diabetes, lung transplants due to lung cancer, coronary bypass surgery, etc.).
The word “affordable” in the Patient Protection and Affordability Act is relative. The argument that with Health Reform, small companies and individuals will have the “buying power” of large companies is meaningless in the face of rising prices (& premiums). If you can get a better deal (5% – 10%) on a mansion (because you have the buying/negotiating power of Donald Trump), how much more afforadable (for you) is the $2 million dollar mansion? If the cost of the mansion goes up 10% every year, will it be any more affordable in the future? Health care costs are rising…period.
Mark my words…regardles of who pays, health care (sick care) costs will continue to rise…no matter how anyone spins it. The ONLY way to stop it is to reduce demand. The only way to reduce demand is to NOT need health care services. Unless we, as a society get dramatically healthier, demand (and therefore, prices) won’t start dropping drop until enough baby-boomers have passed away that the number of sick people (supply) is significantly reduced.
We paid $2,300,000,000,000 ($2.3 trillion) in health care costs in 2007. We’re projected to pay $4,600,000,000,000 ($4.6 trillion) in health care costs by 2018.
Regardless of who pays…health care costs are going up, no matter what anyone says…period.
This post is intended, solely, to refute claims that Health Reform will positively address future costs in any meaningful way. I DO support many provisions of the Act, including the rights of all individuals to have/be able to get health insurance, regardless of “pre-existing condition”.
Dismissed!
