SOCIALIZED MEDICINE

THIRD PARTY PAYERS: THE CAUSE OF MEDICAL INFLATION

Many years ago in the late 1950's my family took a trip to upstate New York and my oldest brother (he was 9 at the time) while running down the slope of a steep hill fell and hit his head on a rock and lost consciousness for a moment. My parents rushed him to the nearby small town in search of a hospital or doctor. In those days small town were lucky to have a General practitioner. This town (and my brother it turned out) was lucky, but it was Sunday afternoon and Doc was down at the river trout fishing. Some one went out to get the Doctor, Doc came back to town examined my brother observed him for an hour or so while he and dad discussed trout fishing, released him and handed dad the bill. The charge $5.00, not $50, not $500 but $5. Why? Cash payment. With an adjustment for inflation probably the equivalent today of at most $75. Not to bad for a Sunday afternoon.
The Spiraling inflation of health care began in the 1960s (come to think of it the spiraling inflation of everything started in the 1960s) when health insurance and of coarse that wonderful savior Medicare started becoming a prominent force in medicine. Those great third party payers that were going to "make health care more affordable for all of us" backfired in a big big way. Without going into a lot of details and history on the subject let me just allow some food for thought.
I practiced foot and ankle surgery for a number of years, when a patient came to my office and it was determined that a procedure was decided on the first question asked was "Does My Insurance Cover This?". If the answer was yes the response was no more questions. If the answer was no the response was what will it cost. When told the cost the response was "Why So Much?. Well my fee is ___ dollars. And since we need to stabilize the bone fragments we create we need to use a surgical screw (no pun intended). In my day the screws were stainless steel a lot like some of the screws you would buy at the hardware store for 85 cents each. Well how much is the screw? $300.00. $300.00 FOR A SCREW? Whats the difference between that screw and one I could buy at a hardware store? Nothing really.
Can you see where this is going. Now insurance companies are demanding more coast accountability but the insured has no or very little incentive to ask tough questions and demand competitive pricing. By definition third party payment cannot hold cost down because the consumer does not care about the cost. If you think it's bad now if the government becomes the third party it will be a lot worse. To illustrate this point please take a look at the link below. It will take you to an excellent article on the Massachusetts Romneycare debacle


SOCIALIZED MEDICINE