Benefits Blog

The ONLY True Fix to our Healthcare System-Part 1

Posted by Nathan Carlson on Tuesday, September 24, 2013 @ 04:54 PM

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describe the imageAt a time when medical expenses have been rising at twice the rate of inflation, one major medical procedure today costs ten percent of what it cost 10 years ago.  Also, today this
procedure is far better, far safer, life changing, and millions have received this marvelous treatment.


Give up?  LASIK eye surgery. 


If we can understand the economic and market dynamics that have driven the LASIK marketplace, we will also understand why BOTH our present healthcare system and Obamacare are doomed to failure.


Lessons from LASIK


  • Competition:  LASIK doctors are forced to compete if they are going to succeed in this marketplace.  They advertise the price and quality of their services.  Competition also forces technological improvements in the procedure resulting in better equipment and far better surgical results. 

  • Consumerism:  there is no insurance intermediary between the doctor’s office and the patient.  Since the consumer is paying the fee, he immediately acts like a true consumer, innately measuring price vs. quality, its safety, and its medical necessity.  Before receiving the LASIK procedure, the consumer knows exactly its cost and payment for those services has already been arranged.

  • Capitalism:  Hundreds of millions of dollars have been invested in developing and improving this procedure thus improving the LASIK medical devices and driving the cost down.


But, how can this example apply to routine healthcare?


Some are tempted to dismiss my analogy by pointing out that LASIK is a voluntary procedure and thus not applicable.  But, many medical procedures are voluntary or at least quasi-voluntary.  “Do I really need surgery to fix my carpel tunnel syndrome or can I live with the pain?”  “Do I really need to insist on receiving antibiotics for my child’s cold when it is probably caused by a virus which antibiotics cannot affect?”  “Do I really need medicine to control my high cholesterol or should I instead just change my diet?”


The paradox of decreasing LASIK fees, while most other medical costs have dramatically risen, proves that given the right situation even medical costs can be subjected to normal economic laws of supply and demand and react accordingly.


Prior to receiving knee surgery, a friend of mine attempted to “bid out” this procedure to five area hospitals and found that it was literally impossible to receive even a rough estimate of the cost and yet if that same friend had brought his dog into a veterinarian to receive the exact same procedure, the cost of the entire procedure would have been written and explained and payment arranged prior to the surgery. 


Why does the exact medical procedure on an animal cost a fraction of what it costs on a human?  The lazy thinker dismisses the comparison by saying, “Of course there is a difference: one is a human procedure and one is for my dog.”  My friend, think a little deeper!


Face it—although many doctors and hospitals may not want a competitive system, for they instinctively know that such a system would dramatically and fundamentally change the delivery of medical services, they must endorse such a change if healthcare is to survive.  They may not want to advertise, for it is beneath their dignity, but they must anyway.  They may consider that a savvy and educated consumer is an annoyance; however, that is exactly what we need.  They must realize that as long as an intermediary exists, whether an insurance company or the government, this intermediary is distorting the delivery of healthcare and shielding the consumer from the true cost.  The consumer must not blissfully think that a trip to the doctor’s office only costs the $50 copay or the trip to the Emergency Room, only $250.


Using the Lessons from LASIK, the existing medical system must be redesigned so that it fosters competition, enables consumerism, empowers capitalism, and engenders compassion.


It is not as complicated as you would think, but that is the topic of my next blog…

Topics: Healthcare Reform, Health Insurance

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