While doing research for an upcoming video, I found an excellent study from the National Center for Policy Analysis that explains how “third-party payer” is largely preventing markets from operating in health care. Government policies (including tax distortions) are the cause of the problem, yet the polticians want to expand third-party payments. Here’s an excerpt from the paper, and I also reprint below a key chart from the paper that shows how most medical prices rise faster than the overall price level, but the opposite result occurs when consumes are in control (for things such as cosmetic surgery):
Long before a patient enters a doctor’s office, third- party bureaucracies have determined which medical services they will pay for, which ones they will not and how much they will pay. The result is a highly artificial market plagued by problems of high costs, inconsistent quality and poor access. …Can the market for medical care be different? Interestingly, in health care markets where patients pay directly for all or most of their care, providers almost always compete on the basis of price and quality. And because they are not trapped in a system that pays for predetermined tasks at predetermined rates, providers are free to repackage and reprice their services — just like vendors in other markets. It is primarily in these direct-pay markets that entrepreneurs are creating many innovative services to solve the very prob-lems about which critics of the health care system complain. …Cosmetic surgery is rarely covered by insurance. Because providers know their patients must pay out of pocket and are price sensitive, patients can typically (a) find a package price in advance covering all services and facilities, (b) compare prices prior to surgery, and (c) pay a price that has been falling over time in real terms — despite a huge increase in volume and considerable technical innovation (which is blamed for increas- ing costs for every other type of surgery). …In 1960, consumers paid about 47 percent of overall health care costs out of pocket. …In 2006, consumers paid only 12 cents out of their own pockets every time they spent a dollar on health care.
[…] far less than prices for the parts of the health care system where government plays a big role (in the […]
[…] far less than prices for the parts of the health care system where government plays a big role (in the […]
[…] third-party payer is the main problem with America’s healthcare system, and I was making that point well before Obamacare was imposed upon the […]
[…] payer is the main problem with America’s healthcare system, and I was making that point well before Obamacare was imposed upon the […]
[…] out that there are a few sectors where consumers are still in charge. And in those areas, such as cosmetic surgery and abortion, prices are falling in relative […]
[…] to operate and consumers are in charge of spending their own money, and in these areas – such as cosmetic surgery, laser eye surgery, and abortion (regardless of whether you approve or disapprove) – we find stable prices and […]
[…] to operate and consumers are in charge of spending their own money, and in these areas – such as cosmetic surgery, laser eye surgery, and abortion (regardless of whether you approve or disapprove) – we find stable prices and […]
[…] in 2009, before Obamacare, the United States had a healthcare system that was plagued by excessive government intervention, which led to a third-party-payer crisis and massive […]
[…] in 2009, before Obamacare, the United States had a healthcare system that was plagued by excessive government intervention, which led to a third-party-payer crisis and massive […]
[…] in 2009, before Obamacare, the United States had a healthcare system that was plagued by excessive government intervention, which led to a third-party-payer crisis and massive […]
I’m gone to convey my little brother, that he should also go to see this webpage on regular basis to get updated from latest news.
[…] operate and consumers are in charge of spending their own money, and in these areas – such as cosmetic surgery, laser eye surgery, and abortion – we find stable prices and rising […]
[…] P.S. Speaking of breast augmentation, one of the few well-functioning parts of the American healthcare system is cosmetic surgery. Why? Because consumers largely pay out of pocket and, as a result, costs are restrained. […]
[…] States healthcare system is nowhere close to a free market (with a few minor exceptions such as cosmetic surgery and – regardless of what you think of the procedure – […]
[…] third-party payer is the main problem with America’s healthcare system, and I was making that point well before Obamacare was imposed upon the […]
[…] third-party payer is the main problem with America’s healthcare system, and I was making that point well before Obamacare was imposed upon the […]
[…] third-party payer is the main problem with America’s healthcare system, and I was making that point well before Obamacare was imposed upon the […]
[…] narrated a video on the fiscal nightmare of Obamacare and written several times about the serious problem of government-caused third-party payer – including just as few […]
[…] narrated a video on the fiscal nightmare of Obamacare and written several times about the serious problem of government-caused third-party payer – including just as […]
[…] Williams column and this Margaret Thatcher video. If we want to help people live better lives, restoring a free market to health care would be a good first step, as explained in this video. […]
[…] we want to help people live better lives, restoring a free market to health care would be a good first step, as explained in this […]
[…] Obamacare was enacted. In the health care sector, free markets are only allowed to operate in very rare cases, such as cosmetic surgery, laser eye surgery, and (for better or worse) abortion. The rest of the […]
[…] Obamacare was enacted. In the health care sector, free markets are only allowed to operate in very rare cases, such as cosmetic surgery, laser eye surgery, and (for better or worse) abortion. The rest of the […]
[…] like to talk about how to keep medical care costs in check, as they’ve increased faster than the consumer price index. Perhaps the cost of abortions can provide insight as to how […]
[…] Obamacare was enacted. In the health care sector, free markets are only allowed to operate in very rare cases, such as cosmetic surgery, laser eye surgery, and (for better or worse) abortion. The rest of the […]
[…] Obamacare was enacted. In the health care sector, free markets are only allowed to operate in very rare cases, such as cosmetic surgery, laser eye surgery, and (for better or worse) abortion. The rest of the […]
[…] Obamacare was enacted. In the health care sector, free markets are only allowed to operate in very rare cases, such as cosmetic surgery, laser eye surgery, and (for better or worse) abortion. The rest of the […]
[…] that this is not true, and proponents of liberalization usually cite cosmetic surgery [chart here] and laser-eye surgery as examples of treatments that generally are financed by out-of-pocket […]
[…] as examples of treatments that generally are financed by out-of-pocket payments. Not surprisingly, prices for these treatments have been quite stable – particularly when increases in quality are added to the […]
[…] as examples of treatments that generally are financed by out-of-pocket payments. Not surprisingly, prices for these treatments have been quite stable – particularly when increases in quality are added to the […]
Excellent research.
CEO/EjW Inc. Magazine