34. The Economics of Medicine
Today a political debate rages over the entitlement of nationalized medical care for the 20 percent of the population who is not covered by some form of Federal or private medical insurance. Moreover, certain states are exploring legalizing statewide medical coverage and in that regard are watching Massachusetts, who recently passed a law requiring medical coverage and is presently sorely over budget, in its implementation.
These debates, discussions and legislations have lead to broad disagreements over the efficacy of whether or not state sponsored medical coverage is an entitlement, a right, of all citizens? It clearly was not mentioned in our Constitution.
Healthcare has not been considered an entitlement for the first 200 years of our republic; however, in recent decades the notion that healthcare is an entitlement has gained increasing popularity. Many politicians have garnered political power by making promises to provide national healthcare, usually arguing that our healthcare system “overcharges”, is “for the wealthy” and finally “needs more government oversight” or regulation.
After food and water, medical treatment is near and dear to the sustenance of life. This paper will attempt to answer the question of whether or not nationalized medical care in its present form is an entitlement or even a benefit. However, if we focus on certain, unasked vital questions (both direct and indirect) to identify the source of costs that make our health care system the most expensive in the world we may begin to understand its value. We will determine whether or not these costs are necessary to deliver medical care. In this discussion, third-party payer systems will include both the governments and private insurers. Regulations include by state and Federal oversight of medical services whether the service is provided by government or merely administered over.
Questions of interest in understanding the paradox of cost or benefit include the following areas of inquiry:
1. What are the direct costs to administer the third-party payer system?
2. What are the indirect costs that directly result from the administration of the third-party payer system?
3. What are the direct costs of government oversight and regulation on a Federal and state level of both the physicians as well as the private insurers?
4. What are the indirect costs resulting from these regulations?
5. Do these government intrusions in the traditional doctor-patient relationship help explain increased litigation?
6. How then can we decrease the costs of medical services and maintain or increase the level of medical care?
7. What information from this discussion of medical costs should be applied to the debate over entitlement? Is there common ground underlying this divisive argument of entitlement?
Traditional Medical Care System
Before discussing the questions we raised lets introduce a definition of the traditional doctor-patient medical transaction, unencumbered by other government or private interventions. It may prove helpful to compare and contrast the present system with its predecessor.
The traditional medical transaction posted the doctor as the sole determiner of how he or she allocated and valued their medical services. The doctor was required to take the Hippocratic Oath and was obliged to always provide treatment to people who did not have the ability to pay. This oath of medical service also required hospitals to treat those in need without payment. However, the treatment was determined by the physician and/or the hospital and was markedly uneven, when compared to the patient that could pay for their treatment. Moreover, the doctor was an informational incumbent and could, in theory, create demand for care.
It is helpful to discuss further how this uneven doctor-patient relationship manifests itself in direct doctor-patient transactions absent the third-party payer umbrella. Only then can we best understand and compare it to the present system of third-party interventions.
In the traditional transaction the patient would have some ailment and either they, or their immediate family on their part, would seek treatment from a caregiver, usually a physician. Seeking immediate treatment was often the same for patients that could afford to pay as well as for patients that could not afford to pay. Although there was no law forcing treatment, doctors as a general rule saw and diagnosed all patients whether they had money or whether they did not. If the patient’s problem was immediately life-threatening, the doctor would perform essentially the same treatments and services necessary to stabilize the patient whether or not they had the ability to pay. However, the treatment to sustain life in various fashions, to various degrees, and for various periods varied in accord with ability to pay and desire to pay. For example, often times after suffering the onset of life-threatening conditions persons have chosen a less than maximum regimen of care to avoid consuming ostensibly all assets accumulated in their lifetime. Also in instances where people could not afford care they would receive only the diminished care their environment would provide. Even though this level of diminished care may be greater than the level of care received by 80 percent of the external population it was less than the level of care received by those who had excess assets, the rich, or those who chose to consume assets to purchase excess life-sustaining care. In some instances, patients chose not to consume their assets.
In all instances in our traditional care model, whether the patient had modest assets, was rich, or had no money, the responsibility for their health was vested in the individual and the responsibility for their care was vested with the physician and the medical profession, by oath.
In the traditional medical model in America, lets call it pre-1965, pre-Medicare, there was little if any oversight or intervention in health care by government. Unlike today, health care was the responsibility of the individual and not the society in general. For the astute observer, the record would show that from 1866-1965 health care costs did not increase appreciably more than general overall costs during medical care doctor-patient transaction period. Other then costs inflicted by regulating the number of doctors. Since the passage of Medicare in 1965, the government has had an increasing direct involvement in medical care. Over the last 43 years, as government involvement increased, the costs increased.
Now let’s briefly discuss the questions we raised earlier and contrast and compare medical service oversight and administrations today with the traditional American medical transaction by focusing on the costs as well as the presumed benefits. First let’s consider:
What are the direct costs to administer the third-party payment system?
Let’s say that the vast majority of doctor-patient appointments do not require hospital care and are not life-threatening and require on average about 10 minutes of the physician’s time per appointment. This would mean the doctor would see six patients an hour, 48 patients in an eight-hour day, 240 patients in a five-day week, and 1,080 patients in a four and one-half week month.
Since the present third-party payer system has taken the monetary transaction out of the traditional doctor-patient relationship, the doctor no longer determines either cost of service or method of payment directly with the patient at the time of his treatment. The doctor does not receive direct payment for treatment rendered. Therefore, the doctor must hire and train sufficient clerical staff to submit on a monthly basis about 1,080 claims for payment to various third-party payment entities. These entities then must train and employ a countervailing clerical work force to administer and process the 1,080 claims for every doctor submitting under the category of routine outpatient visits and treatments. Both the doctors in-house clerical and the third party payers clerical staffs are irrelevant to the actual medical treatment and only exist in the third-party payer environment. These claim administrators must be versed and updated on the tables of allowed expenses which, although similar, individual claims are invariably different among respective third-party payment entities. Often requiring multiple claim submissions incurring added cost and time.
Although one may assume that the majority of the claims submitted would be informed of the allowable expenses and paid within 45 days of submission of the previous month’s medical service or within 75 days of the original treatment date, a substantial portion (lets say 30 percent) might be returned with partial payment or denial of payment and therefore would require a repeat of the clerical cycle in a different, more acceptable form to be acceptable to the third-party payer. If the claim fails or partially fails, the clerical staff for the physician must attempt to bill or partially bill the patient recipient.
This process of collection must be repeated 1,080 times per month. Let’s assume a success rate of collecting about 70 percent of the medical bill on average. Therefore, the expensive process of collection in outpatient treatment visits would most likely include:
· Expense of pre-qualifying patients before appointment
· Expense estimating whether third-party payer will cover claim and if so how much
· If affirmative booking the appointment making a record for the physician’s review
· When patient presents for appointment documenting the third-party payer X or certification
· Following the appointment taking the doctor’s actual diagnoses along with the prescribed medication and treatment and copying the information on to any claim form with care to have both the actual payment claim accepted as well as maximizing the amount of payment received of the bill submitted.
After the 1,080 invoices are submitted there are three possible outcomes:
1) The third-party payer pays the invoice requiring no more time
2) The third-party payer partially pays meaning the physician’s office must make a decision whether to resubmit the difference to the third-party payer or bill the patient
3) The third-party payer for a myriad of reasons rejects the submission and refuses to pay
Again, the physician’s clerical managers must make a decision to resubmit and/or send the bill to the patient. Moreover, the clerical administrators’ process -- which is solely required to oppose the third-party payer system -- requires infinitely more documentation than the traditional doctor-patient transaction, which occurred in a manner of seconds between the doctor and the patient and often much of the record of the appointment was stored in the doctor’s self-serving note and his memory. Consider that the doctor-patient transaction requires only a minute of time at the point of service. Then compare this simple transaction understanding to the myriad of costs sustained in administering the third-party system. For example, patient says, “Doc, I have a bad pain in my side, I don’t have any money now…can I pay you later?” The doctor replies, “Yes, where does it hurt?” The traditional doctor patient relationship usually completed the monetary agreement on services to be rendered in a matter of seconds.
Let’s throw some numbers at this rather lengthy discussion of costs that may occur in the third-party payer system. For purpose of simplification, let’s say the doctor sees 500 patients a month and each patient takes 45 minutes of clerical services to acquire payment for the doctor and 15 minutes of clerical services required by the third-party payer for a total of 60 minutes of clerical involvement for each 10 minute appointment. Moreover, the clerical support also requires benefits and retirement allowance and might well cost one-eighth the cost of the doctor per minute.
Therefore the direct cost incurred in administering and collecting payment for outpatient treatment would be one-fifth of one hour plus 10 doctor minutes or approximately 12 doctor minutes of administration and collection for every 10 doctor minutes of patient treatment. In this example the direct costs of the third-party payer system would more than double the cost of the doctor-patient visit. Hence the costs of most outpatient medical treatment would increase from 100 percent to 220 percent merely incur the administrative requirements for collecting on the bill.
What are the indirect costs that result from the administration of the third-party payer system?
The indirect costs incurred when we take payment out of the doctor-patient transaction and ship it to an entity that is not a party to the actual medical treatment areas X as the direct costs of administration and include the following:
· The loss of the responsibility for payment of the service changes the individual’s behavior toward his health in general and toward the physician who administrated the treatment. His demand for costless care is infinite and his expectations from that care are unrealistic.
· The relief of being dismissed from the responsibility of payment is often indistinguishable from the lack of maintaining diligent care by practicing ongoing prevention. Hence, costless care diminishes active prevention.
· When healthcare is costless, individuals who no longer pay are unable to associate the source and valuable nature of the service with a price.
· Moreover, since the individual no longer directly and viably bears the cost and agrees to the price of medical services or the cost of treatment, they are lulled into the false belief that care is free and therefore of reduced value.
· Moreover, the separation of payment from the transaction to the distant third-party depersonalizes the traditional doctor-patient relationship. First, doctors are either less reliant or are no longer reliant at all on patients for payment therefore they become increasingly accountable to the third-party payer system as opposed to the patient they are serving. On the other hand, patients who often bear little or no cost for their treatment other than time and travel costs wish to maximize their treatment against an obtuse and invisible third-party constraint.
· Also, the rub is the patient is only aware of the constraint through the doctor who is compelled to comply with the determinations of the third-party payer, who never sees the patient.
Therefore when the patient, desirous of infinite costless treatment, presents to the doctor who is constrained in treatment by a distant third-party payer system, no monetary agreement for services rendered luring the patient to determine the value received absent price. Hence perceived value becomes distorted and the transaction is incomplete.
The patient in a costless world for medical care is billed into unrealistic demands and expectations which are prone to disappointment and often result in increased litigation. Also when agreement with an oversight of the actual service is shipped to an absentee third-party payer the patient who is at all time present no longer as an investment in their treatment. All these differing and varied outcomes from the transactions are riddled with indirect costs that add to the cost of medical service.
In summary the indirect costs imposed on medical care by the third-party payer system include:
1) The loss of responsibility of the patient for their health care
2) The unrealistic expectation of infinite costless care by the patient, distorting the perceived value of the care
3) Doctors’ distraction toward third-party payer schedules as an absentee determinant of one that may vary from the particular diagnosis specific to the individual
4) Finally distorted expectations and impersonal relations lead to increased litigation
5) The patient’s notion of free or costless care negatively influences prevention and self-care
6) Patients’ unrealistic expectation of costless medical coverage invites disappointments, depersonalizes the traditional doctor-patient relationship resulting in loss of trust and increased litigation
The fact that we are unable to precisely calculate the direct and indirect costs of the third-party payer system does not mean that revealing and discussing certain aspects of these costs in contrast with the traditional medical transaction are not of huge value. If the indirect costs of administering the third-party payer system increases costs another 30 percent that means that the third-party payer system increases medical costs related to medical treatment by 250 percent.
Now let’s briefly discuss additional costs surrounding government oversight (regulations), both state and Federal.
What are the direct costs of regulation on all aspects of the medical service industry?
State governments have traditionally:
a) Defined the practice of medicine
b) Determined who can practice
c) Determined how the practice is conducted and require application and issuance of license to practice
Government also determines the grounds for suspension and revocation of the license to practice.
In 1966 the Federal government intervened in health care when Congress passed the Health Insurance Portability and Accountability Act (HIPPA) and required all private insurers to sell all their small group policies on a guaranteed-issue basis. HIPPA prevented pricing based on health and forced healthy participants in medical plans to subsidize the unhealthy group members. Later, COBRA insured extended coverage for those who leave plans. Although HIPPA did not penalize an insurer from leaving the market there is a penalty for market reentry for five years. Moreover, HIPPA imposed uneven privacy laws that allowed medical professionals, government, education, and legal authorities to review records but denied family members access.
Prior to HIPPA, the Employee Retirement Income Security Federal Law Act (ERISA) legislated in 1994 allowed states to regulate health insurance policies that employees may purchase. In 1986 Federal law that regulated employers of 20 or more employees was legislated under COBRA allowing workers to continue job-based coverage for 18 to 36 months regardless of medical condition.
The myriad of varied state regulations over private medical health insurers, as the record will show all the way back to the first regulation has predictably invited a recent host of proposed new Federal regulations that promises to unjumble the interstate regulations of health care by the states. They include the Small Business Fairness Act of 2005 and the Health Care Choice Act of 2005 revised to the Health Care Choice Act of 2007. All these bills if they passed would greatly reduce the red-tab and also provide insurers to sell across state lines. Another, the Health Insurance Marketplace Modernization and Affordability Act of 2006, intends to amend Title One of ERISA by creating small business health plans. Although unpassed, these plans appear to be precursors of future Federal intervention in medicine.
Direct Federal regulation adds at a minimum the level weight cost of administration of the regulation to the cost of medical services. The current proposed Federal regulation serves as testament to the Federal unwillingness to allow the states to be experimental laboratories for change. Recent results of the failures in California initiatives towards statewide coverage coupled by the cost explosions in the Massachusetts plan of statewide coverage will likely further open the door for Federal involvement or more regulation of health care in the future.
Most markets are not perfect, but work well enough to deliver appropriate prices that effectively signal the resource costs and demand for a good or service. At this point in our regulated environment for medical care competition is not sufficient to deliver efficient prices and market outcomes differ from those desired from a social viewpoint therefore there is a temptation for government to crease its intervention in the 50 percent of the market for medical service that is not already federally funded. Private health insurance is a heavily regulated industry. If price regulations were removed, private health insurance funds would have a greater incentive to act competitively. Moreover, if more healthy citizens weren’t forced to pay excessive premiums for less health, we may rediscover an ethic of prevention and self-responsibility that would reduce cost.
Prevention will prove less effective by removing the cost from the traditional doctor-patient relationship then endeavoring to reward the patient in an environment where medical care is essentially costless, medical service intervention, present and future, promises increased federal regulation by adding to the current dysfunction. To decrease cost price controls in a minimally competitive environment invites the further abridgement of the basic concept that insurance varies costs in accord with risk. Omission of risk in pricing insurance lowers accountability for individual care and significantly adds to expense. By extending and expanding insurance for uninsurables at a standard rate the basic precept of an insurable risk is irreparably violated. Proposals abounding in the current political atmosphere regarding the expansion of federally administered medical care are a testament to the triumph of hope over the reality of economics, and invariably are doomed to dysfunction and insolvency. Advocating increased government involvement as a cure will only make a broken medical system worse.
The direct costs resulting from regulation have largely disabled our private insurance industry by omitting or regulating its cornerstone concept of placing a value or price on an insurable risk. This regulatory process has caused private carriers to greatly increase the cost of coverage for many above the appropriate risk. It has made private coverage risk insensitive. Moreover regulations have overlapped into price controls and schedules of treatment that impinge on the doctors ability to administer personalized care. Now we must consider the next question to further expand our understanding the extent of our self-inflicted wounds on the increasingly lofty expenses associated with our medical service industry.
What are the indirect costs resulting from these regulations?
Much of the development and entrenchment of regulation over recent decades has been developed to reduce, curb, or monitor the demand induced model of medical services. The theory goes that the physician who is an expert is in a position to unknowingly oversell his services to the patient hence requiring oversight or regulation. Price controls on medical services are often presumed to be a method of controlling physicians’ prices for a particular service. Therein the argument becomes that physicians will generate demand for other services to merely make-up the lost money the price controls on the needed services cost them, hence then increasing the quantity of services to compensate for regulated low prices, requires protocols and medical process regulations to manage quantity of services. Traditionally physician induced demand was held in check by doctor-patient agreement on the complete transaction before the service (services rendered and price). Today the sad reality is that private sector medical insurers today have been reduced to price setting monopolists, forcing doctors to act at times to capture lost payments due. Also physicians may be forced to under perform in cases involving Federal programs of Medicare and Medicaid where government compensation is below the market price.
The proper question is not whether the patient in the traditional pay for service model wasn’t a periodic victim of physician-induced demand, most likely he was. The question should be have the costs of the labyrinth of oversight, both by government and private plans, dwarfed any costs inflicted by improper physician-induced demand? Moreover the price controls inflict huge opportunity costs on the most talented physicians who opt for early retirement. While scheduling of treatments by the provider may have guided the administration of care of services and the diagnoses on a costly unnecessary course. Hence the real world effort to reduce physician-induced demand solely created by the provider results in price controls and scheduled care that results in unintended early physician retirement. This suggests other significant indirect costs related to the exercise of absentee third-party control. Over the last 20 years as well increasingly transitioned from a pay for services industry to a third-party payer industry, enrollment in medical schools declined (from 1992-1996 more than 6,000 fewer doctors enter medical school than in the prior period).
As society has increasingly chosen to implement regulatory overhead presumably to protect the consumers from the doctor, who is an informational incumbent, we have clearly repriced the quality of care and indelibly changed the quantity of care as physicians’ treatments increasingly are presumed to default to remote insurance schedules. The serial costs in lost welfare derived from regulation defies precise quantification but it is apparent in our declining roles of medical school entrants and our increasingly early retires among our most gifted doctors, that oversight and administration have resulted in a reduction of care. Allowing numerous foreign-trained doctors to fill the void conceals the loss in quality of treatment. There is nothing on the present horizon to suggest that the indirect costs of regulation will retreat and to the contrary, the political class seems committed to increasing its regulation of health care. Hence the direct and indirect costs estimated at 250% for the third party payer system are inestimably inflated by the direct and indirect costs of regulation.
A large part of the increases in medical cost are directly due to the increased litigation expense which has caused malpractice insurance to increase tenfold over approximately 40 years even though medical science has significantly improved over the same period. If medical knowledge is significantly improved, what explains the increased litigation?
Do these intrusions and multiple interventions by government in some way offer an explanation for the huge increase in medical litigation expense?
Yes. An unfortunate byproduct of our transition from pay for service to third-party payer has been to leave the patient with costless medical services. Since costs, if any, under third-party payer are constant whether the insured uses them or not, the demand for medical treatment is infinite under managed care and is only constrained by time and travel expense. This costless unlimited demand for treatment has led directly to unrealistic expectations on the part of the patient as they view their medical provider and their medical treatment as entittled. These lofty ungrounded expectations often result in disappointments and increased litigation. Moreover, the doctor-patient relationship is no longer keynoted by trust. Doctors too are forced to take actions to mitigate potential litigation in response to the patients’ unrealistic care expectations that were unnecessary in the traditional pay for service world. The protective posturing supports more unwanted costs born by the system. These subtle changes in the personnel relationship of the traditional Doctor Patient relationship coupled by costless environment of third party payer care have greatly contributed to a lack of trust and increased litigation causing increased malpractice expense. Given these unintended consequences of the present state of affairs in medical services raises another question.
How then can we decrease the costs of medical care while increasing the quantity and quality of medical services?
This is a stated objective of virtually all manner of members in the ruling political class today. First and foremost, we must stop hurting ourselves. We must recognize that the third-party payer system has miserably failed. The political class works for us we must take a direct responsibility for the creation of the dysfunction in government administered medical care and understand the origins of the dysfunction. Only then will we avoid huge future disappointment when its promises aren’t realized. We can not afford to be fooled by politicians with an agenda nor lulled by an unsustainable status quo. The regulation of the cost and the process of medical treatment have chased the brightest and most promising of our medical profession out, forcing us unwillingly to plod toward mediocrity of care. In 1997, Congress passed legislation restricting the number of positions in medical school, in essence restricting the number of doctors. Moreover, by implementing price controls through the third-party payer system, our most talented and brightest doctors, unable to charge for their quality of care, have opted for early retirement. Ironically, our country, based on free enterprise, has created the largest medical monopoly in the world. This has resulted in reduced medical welfare for all.
As is true with all monopolies, the first casualty is cost and competitive price. Incidentally, monopolies are purportedly illegal in America. As a first step to returning to medical care sanity it would be nice if the anti-trust division of government would act on its mandate and brake up the medical monopoly caused by government intervention. The irony is that the very interventions and medical services promoted by government are the causes of the unsustainable cost overruns we experience in medical care. Once multiple government interventions are correctly identified as the cause of runaway costs and declining quality it becomes apparent that more government planning will not yield greater medical care.
What information from this discussion of medical costs should be applied to the debate over entitlement? Is there common ground underlying this divisive argument of entitlement?
One does not have to enter the debate of whether “the pursuit of happiness” meant healthcare without also including a car, television, disability income, paid-for grave site, or a four-day work week. It can’t be overstated that we live in a world of scarcity. Every time we conveniently defer one of our traditional responsibilities to government we forfeit the corresponding freedom that accompanied it and always incur more cost to sustain the intervention and its elusive benefits. To point we cannot realize significant medical health benefits by deferring medical care to government without incurring significant personal costs and these costs will reduce the benefits. The process of adding bureaucracy to defer or deflect the cost and endeavor to gain the benefit always results in staggering price increases that causes staggering declines in the overall medical services and will only exacerbate the dysfunction. In all instances, when increased oversight is used to parse out medical services it increases the decline and the devolution of the service itself.
Hence if society, for whatever reason, wishes to obtain improved health care, it should remove government, an absentee decision maker, from any involvement in medical services and allow our great health care system to recover from 40 years of unabated government intrusion. This extraction could reasonably occur over a two-year transition period. Extracting government from health care would yield immediate and increasing benefits. The subsidized service would be left to the physician who took the Hippocratic Oath. First in recovery will be for individuals to reinstitute the personal element of the doctor-patient relationship by empowering doctor and patient to transact and determine treatment. With the dissolution of the government monopoly in medicine the price for medical care will plummet by as much as 80 percent and as talented physicians that left due to price controls return the horizons will expand along with audit of care.
The issues and arguments surrounding limited recipients of treatment from gifted doctors and whether the expansion of medical quality brought by gifted doctors will trickle down to general medical care are only hypothetical because gifted doctors have either cut back significantly or opted out of the price determined by both the third-party payment system and state and federal regulations. Government can endeavor to allocate diminishing medical assets but it can not make a gifted doctor work a full week or keep that doctor from retiring early.
Conclusion
First and foremost it should be understood that within the vitriolic debate of opposing views regarding the entitlement of medical services there is a common threat that bridges the polarities of opinion. Simply put, it’s that both sides believe in holding medical costs down while maximizing the benefits of medical care for the greatest numbers of our citizens. Hence there is no disagreement in the objective merely in the method to achieve the objective.
For those who might jump to conclude that abolition of government involvement in all aspects of medical care would constitute an immoral hardship on the elderly, the uninsured and the poor and would violate an entitlement a caution, don’t assume there would be less medical care for the elderly and indigent just because the political class tells you so. Once the government is disengaged the various costs of their interventions will disappear. The price for the same medical care should drop by as much as 80%. At that point the availability of medical service for a given dollar spent will be as high as five fold the present level.
Many Times vitriolic rhetoric is wielded most virulently by politicians who fashion themselves as overseer for the uninsured and elderly. These class attacks offer shallow cover for the astute observer for the origins of the costs that permeate the systems they fashion themselves defenders of therefore these ill-conceived actions sustain the very structure that is the cause of the inferior care. Once sustained the dysfunctional system will be viewed as inadequate and the political class will merely move to supplement it when in fact the system needs to be revoked. Only then will these groups have enhanced care.
Oftentimes we idealize a pristine world of allocation of services through actual intervention and impose such systems with the best of intentions. Wherein our purposes include the repression of venal self-interest the results often suppress or disallow those aspects of our human nature that breathe economy and efficiency into the medical transaction when we, as involved partners, receive benefits, make decisions, and bear costs. In short, intervention although well-intended comes with derogatory baggage, overhead and unintended consequences. These conditions exacerbate the very cost spiral government professes to regulate and are chronically increased by the costs intended to contain them.
Hence purposeful government interventions into medical care, although well-intended, by their nature will always fail when compared to the efficient and mutually agreed doctor-patient transaction. These interventions will always remove and predetermine the payment obligation from the patient and will, through regulation, exercise large influence over the doctors’ treatment decisions that may not have been decisions he would have made in a normalized doctor-patient transaction. Regardless of the intent the intervention adds to the dysfunction. All activities surrounding the third-party payer intervention, including price controls, requiring coverage, enhanced litigation and regulation restricting the number of doctors only increase cost and reduce affordability and add no benefit to the actual doctor-patient interaction.
In relieving the doctor of the responsibility of the course of treatment and the patient of the responsibility of the payment for treatment, the intervention has depersonalized the relationship. This depersonalization, along with the direct costs of administration and oversight, largely explain our spiraling medical bills and are directly caused by the interventions.
Our political class’s lack of focus on the origins of these costs may well be self-serving and does not fit their agenda. It is a tragic testament to their power-grabbing deception that wrongly conceals the true affects of lost welfare from the public that result from the promises of medical care pedaled by politicians to win favor. When in fact medical care has become a casualty of their political agenda. The political class works for us and therefore we must remove our rose-colored glasses, rest our vitriolic rhetoric, and soberly stare down the origins of those medical costs if we truly wish to maximize our social welfare regarding the availability of medical services for the greatest numbers. We must work to wean the system of unnecessary cost and cannot afford to have our doctors reduced to going to the internet and incurring more unrelated costs to download instructions of how to increase their reimbursements from a price regime instituted by Medicare, Medicaid, or government surrogates mutated by regulation in the so-called private sector.
Only then, after staring down the origins of these excessive medical costs, will we be able to attain our common medical goals and at that time we the people will have the strength to discard the present political class’s false promises regarding present and future federally-managed medical care.